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UNITED STATES CAS. CO. v. LIBERTY MUT. INS. CO.

August 29, 1962

UNITED STATES CASUALTY COMPANY
v.
LIBERTY MUTUAL INSURANCE COMPANY



The opinion of the court was delivered by: WOOD

On February 28, 1957, William W. Simms, Jr., was killed when he was struck by a bucket of cement which was being lowered into an excavation site at Broad and Spring Garden Streets, Philadelphia, Pennsylvania. Simms was an employee of John McShain Company, the general contractor. The crane lowering the bucket was owned by Robert Hawthorne, Inc., and had been leased to McShain together with the crane operator, Walter Hawthorne.

At the time of the accident, the crane was being used to unload concrete from a truck owned and operated by Warner Concrete Company, hereafter called Warner. The cement was poured from the truck into the bucket attached to the crane and then the bucket was lowered by the crane into the excavation site.

 On February 26, 1958, an action, William W. Simms, Limited Administrator of the Estate of William W. Simms, Jr., Deceased, v. Robert Hawthorne, Inc., Civil Action No. 24187, was commenced in which it is alleged that the negligence of Robert Hawthorne, Inc., caused the above-described accident and the resulting death to William W. Simms, Jr., and in which damages therefor are sought under both the Wrongful Death and Survival Statutes. *fn1" In said action, Robert Hawthorne, Inc., has filed a third-party action against Walter Hawthorne wherein contribution or indemnity is sought.

 Defendant, Liberty Mutual Insurance Company, issued a policy of automobile liability insurance to Warner -- this policy was in effect on the date of the aforementioned accident as was the policy of comprehensive liability insurance issued to Robert Hawthorne, Inc., by plaintiff, United States Casualty Company.

 The present action is one for declaratory judgment instituted by summons and amended petition on August 10, 1961, wherein plaintiff requests this Court to determine that defendant's insurance policy provides primary coverage for Robert Hawthorne, Inc., and for Walter Hawthorne in Civil Action No. 24187.

 Defendant's policy provides under 'Conditions' that 'when an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as is practicable'.

 The matter presently before this Court is the motion of defendant for summary judgment in its favor on the ground that plaintiff's claim is barred by reason of the failure of plaintiff and/or Robert Hawthorne, Inc., and/or Walter Hawthorne to give defendant notice of the accident within the time required by defendant's policy of insurance in question.

 Jurisdiction in the present case is based on diversity of citizenship of the parties and jurisdictional amount. Accordingly, the conflict of laws rule is applicable; namely, that an insurance policy is interpreted by the laws of the State where it is contracted and it is contracted where the policy is delivered. As the record fails to disclose where defendant's policy was delivered it will be presumed that it was delivered in Pennsylvania where Warner has its principal office and, therefore, Pennsylvania law is applicable. Buhonick v. American Fidelity & Casualty Co., D.C. 190 F.Supp. 399.

 The law of Pennsylvania is that a provision in an insurance policy requiring that notice of an accident be given to an insurer 'as soon as is practicable' will be strictly enforced. Hachmeister, Inc. v. Employers Mutual Liability Insurance Co. of Wisconsin, 403 Pa. 430, 169 A.2d 769. In Hachmeister, the Court ruled that there was non-compliance with the notice requirement in the policy where notice was given to the insurer five months after the accident and affirmed the entry of judgment n.o.v. in favor of the defendant insurance company. The record in the instant case discloses that defendant received no notice until March 10, 1958, or until one year after the happening of the accident. In such circumstance, we have no hesitancy in holding that such notice was too late.

 Plaintiff's contentions contra this holding are stated, discussed and rejected infra.

 Plaintiff's initial contention is that the notice requirement of defendant's policy applies only to the named insured, Warner, and does not apply to Robert Hawthorne, Inc. and Walter Hawthorne, the unnamed insureds under the omnibus clause in defendant's policy, and to their insurer.

 The policy provision that notice be given to the insurance company 'as soon as is practicable' is designed to enable the insurer to investigate the circumstances of an accident while the matter is fresh in the minds of all, and to be able to make a timely defense against any claims filed. Hachmeister, Inc. v. Employers Mutual Liability Insurance Company of Wisconsin, supra. Upon the happening of an accident, a prompt, as distinguished from a delayed, investigation of the facts of the occurrence can so greatly affect the efficiency of a defense as to change the very character of the risk insured. It follows, therefore, that the notice requirement of defendant's policy applies not only to the named insured but also the unnamed additional insureds under the omnibus clause and to their carrier.

 We have been unable to find any Pennsylvania Court decision on this point, nor has any been cited to us. However, we are satisfied that if said Courts would be presented with the issue of whether or not unnamed insureds under an omnibus clause and their carrier have a duty to give notice of an accident to an insurer which had issued a policy of automobile liability insurance containing an omnibus clause they would decide said issue in the affirmative.

 Another contention of plaintiff is that there may be a material issue of fact in this case which must be ...


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