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COURT OF APPEALS DECISION DATED AND RELEASED April 16, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-1037
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
SANDRA PERSINGER,
Plaintiff-Appellant,
v.
CHUBB GROUP OF
INSURANCE COMPANIES,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Milwaukee County:
MICHAEL D. GUOLEE, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Fine, JJ.
PER
CURIAM. Sandra Persinger appeals from a trial court judgment in
favor of the Chubb Group of Insurance Companies. In response to the Chubb Group's motion for summary judgment, the
trial court concluded that Persinger was not entitled to recover under the
uninsured motorists policy issued by the Chubb Group because she did not timely
notify it of the accident from which the claim arose. She contends that she notified the company within the required
time period and that the company was not prejudiced by any delay. We reject her contentions and affirm the
judgment.
Persinger, a deputy
sheriff, was injured in July 1985, when a suspect she was pursuing drove his
car into her squad car. Persinger was
treated at a hospital immediately after the accident, and she did not work for
three weeks. After returning to work,
Persinger continued to experience headaches and vision problems. She frequently missed work because of
headaches. In July 1988, she resigned
as a deputy sheriff based on her belief that the headaches interfered with her
ability to perform her job.
Persinger's unreimbursed
medical expenses prior to her resignation totaled less than $2,000. Because the other driver's automobile
insurance company was being liquidated, Persinger filed a claim with her
employer's insurance company. As a
result of her resignation, Persinger also claimed lost earnings potentially in
excess of the limits of the employer's policy.[1] In June 1989, her attorney wrote to the
Chubb Group asking if it provided liability coverage for vehicles owned by
Persinger or her husband on July 27, 1985.
The letter referred only to “an incident which occurred back on” that
date. In April 1991, Persinger filed an
action against the Chubb Group to compel arbitration of her uninsured motorists
claim.
After investigation and
a physical examination of Persinger by a neuropsychologist, the Chubb Group
filed a motion for summary judgment claiming that Persinger's notice to it was
untimely and that the company was prejudiced by the delay. The Chubb Group contended that Persinger's
duty to notify it arose in 1985 at the time of the accident. Persinger contended that the duty did not
arise until she quit her job in 1988.
The trial court agreed with the Chubb Group's argument and granted the
company summary judgment.
When reviewing a grant
of summary judgment, we apply the same methodology as the trial court. Leverence v. United States Fidelity
& Guar., 158 Wis.2d 64, 73, 462 N.W.2d 218, 222 (Ct. App.
1990). We will reverse the trial
court's decision only if the court incorrectly decided a legal issue or if
material facts were in dispute. Hammer
v. Hammer, 142 Wis.2d 257, 263, 418 N.W.2d 23, 25 (Ct. App. 1987). All doubts on factual matters are resolved
against the party moving for summary judgment.
Grams v. Boss, 97 Wis.2d 332, 338-39, 294 N.W.2d 473, 477
(1980).
The issue in this appeal
is whether Persinger breached her duty to the Chubb Group by failing to give
timely notice as required by the policy.
The purpose of this duty is to allow the insurer to investigate while
witnesses are available and memories are clearer. Gerrard Realty Corp. v. American States Ins. Co.,
89 Wis.2d 130, 140, 277 N.W.2d 863, 869 (1979). Compliance with the duty is a precondition to the insurer's duty
to provide coverage for the claim. Id.
Whether notice is timely
depends upon the language of the policy, RTE Corp. v. Maryland Casualty
Co., 74 Wis.2d 614, 622, 247 N.W.2d 171, 175 (1976), and the
circumstances of the case, Gerrard Realty, 89 Wis.2d at 143, 277
N.W.2d at 870. Additionally,
§ 631.81, Stats., creates a
one-year grace period. The grace period
applies if the notice was given as soon as reasonably possible and the insurer
is not prejudiced by the delay. Section
631.81(1). Where notice is given beyond
the one-year grace period, a rebuttable presumption of prejudice arises, and
the burden shifts to the insured to disprove the presumption. Gerrard Realty, 89 Wis.2d at
146-47, 277 N.W.2d at 872.
Generally, whether an
insured gave timely notice is a question of fact. RTE Corp., 74 Wis.2d at 628, 247 N.W.2d at
178. Noncompliance may be found as a
matter of law, however, where there is no dispute as to when notice was given,
there is no dispute as to when the duty to give notice arose, and no jury could
reasonably find the delay was reasonably necessary under the
circumstances. Id.
Assuming the facts in
the light most favorable to Persinger, the accident occurred in 1985, Persinger
became aware of the need to seek coverage in July 1988, and she gave notice in
June 1989, within eleven months of her resignation.[2] Thus, the question is whether the duty to
provide notice arose in 1985 or 1988.
To the extent resolution of this question involves an interpretation of
the insurance policy, a question of law is presented. See Kaun v. Industrial Fire & Casualty Ins. Co.,
148 Wis.2d 662, 667, 436 N.W.2d 321, 323 (1989) (interpretation of insurance
policy is question of law, subject to appellate de novo review).
Part E of the policy,
identified as “DUTIES AFTER AN ACCIDENT OR LOSS,” contains the following
language:
We must be notified promptly of how, when
and where the accident or loss happened.
Notice should also include the names and addresses of any injured
persons and of any witnesses.
A person seeking any coverage must:
1.Cooperate with us in
the investigation, settlement or defense of any claim or suit.
2.Promptly send us
copies of any notices or legal papers received in connection with the accident
or loss.
3.Submit, at our
expense and as often as we reasonably require, to physical examinations by
physicians we select.
4.Authorize us to
obtain medical reports and other pertinent records.
5.Submit a proof of
loss when required by us.
A person seeking Uninsured Motorists
Coverage must also:
1.Promptly notify the
police if a hit-and-run driver is involved.
2.Promptly send us
copies of the legal papers if a suit is brought.
A person seeking Coverage for Damage to
Your Auto must also:
1.Take reasonable steps
after loss, at our expense, to protect your covered auto and its equipment from
further loss.
2.Promptly notify the
police if your covered auto is stolen.
3.Permit us to inspect
and appraise the damaged property before its repair or disposal.
(Emphasis
omitted.) Part E has four separate
provisions. The first sentence requires
prompt notice of the details after an accident or loss. The second sentence sets forth conditions
required of a “person seeking any coverage.”
The third and fourth sentences impose additional conditions that apply
if the person is seeking uninsured motorist coverage or coverage for property
damage to his or her automobile. Thus,
the notice requirement, which is separate from the conditions for a person
seeking coverage, is not limited to those that apply only to a person seeking
coverage.
Additionally, notice
that an “accident or loss happened” (emphasis added) is in the
disjunctive. Either event triggers the
duty to give notice. Since the notice
is to be given “promptly” after the triggering event, it follows that the
earlier of the two events controls. In
the present case, the accident occurred first, before Persinger was aware of
the extent of her loss; therefore, the accident triggered the duty to notify
the insurance company.
This conclusion is
consistent with Gerrard Realty, which while not strictly on
point, is instructive. In Gerrard
Realty, the insured did not give notice to its errors and omissions
insurance provider when a lawsuit was filed alleging fraud. At the trial of the suit against the
insured, the plaintiff argued fraud and negligence, and the insured was found
to have been negligent. Gerrard
Realty, 89 Wis.2d at 135-36, 277 N.W.2d at 866-67. Notice was given to the insurance company
after the trial, and the insured justified the delay by arguing that the
complaint did not allege covered acts, i.e., negligence. Id. at 136-37, 277 N.W.2d at
867. The supreme court rejected the
insured's argument. It held that the
contractual right to determine coverage rests with the insurer, and the service
of the complaint on the insured triggered the duty to give notice. Id. at 142, 277 N.W.2d at
869-70. An insured who delays notice
based on his or her own assessment of coverage assumes authority that he or she
does not have. Id.
In the present case,
Persinger's involvement in the accident in 1985 triggered her duty to give
notice to the Chubb Group. She did not
do so until well beyond the grace period of § 631.81, Stats.
Under the analysis in Gerrard Realty, Persinger's reason
for the delay was not reasonable; therefore the notice was not timely as a
matter of law.
Further, the delay
created a statutory presumption of prejudice to the Chubb Group. Persinger's assertions that the Chubb Group
had access to all information available to her employer's insurance carrier
does not negate the presumption that the Chubb Group was prejudiced. The Chubb Group could not promptly conduct
its own investigation of the incident and possible claim, and Persinger did not
show that the other company's information provided an adequate substitute.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.