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Fidelity and Casualty Co. v. McConnaughy

Decided: February 23, 1962.

FIDELITY AND CASUALTY COMPANY OF NEW YORK
v.
MCCONNAUGHY, ETC.



Appeal from the Circuit Court for Baltimore County; Lindsay, J.

Brune, C. J., and Henderson, Hammond, Prescott and Horney, JJ. Hammond, J., delivered the opinion of the Court.

Hammond

The appeal is by an insurance company from a summary judgment in favor of a judgment-creditor of an insured under an automobile liability policy. The company unsuccessfully urged below that it was not liable to the judgment-creditor because it had disclaimed liability for noncooperation by the insured before he had been found liable in a negligence suit against him by the judgment-creditor.

Margaret Ritzmann sued James Butler in 1954 to recover for injuries suffered when an automobile in which she was a passenger collided with his car. The appellant, the Fidelity and Casualty Company of New York, undertook the defense of the case under the liability policy it had issued to Butler. Following the accident, the insurance company filed an SR-21 form with the Department of Motor Vehicles (stating that at the time of the accident Butler had in force an automobile liability insurance policy) to satisfy the requirements of Code (1957), Art. 66 1/2, Sec. 122 (codified under the sub-title "Motor Vehicle Financial Responsibility"). The issue in the negligence suit was which vehicle had been to the left of the center of the road when the accident

happened. Miss Ritzmann had several witnesses to her version of the occurrence, but investigation by the insurance company failed to locate any witness to support Butler's defense that he was driving on the right side of the road.

While being interviewed by his lawyers, selected for him by the insurance company under its policy right to control the defense of the suit, Butler said there were two witnesses whose addresses he did not know. Upon request he brought into the lawyer's office one Edward Tillman and one Overland T. Jones, each of whom, in the fall of 1955, signed a statement that he had been an eyewitness to the accident and that Butler's car had been on the right side of the road and the other car on the wrong side.

Miss Ritzmann had submitted an offer to settle her claim for $3,500. The insurance company claimed below and now claims that it rejected this offer because of the statements of Tillman and Jones as to how the accident happened.

In May 1956, on deposition, Tillman testified that he had not seen the accident; that Butler had approached him and asked him to testify that the Ritzmann automobile pulled in front of him onto his side of the road; that his previous statement, given to Butler's counsel, was false; and that Jones had been told to give a similar version of the accident.

Because of Tillman's deposition, Butler's lawyers wrote him a registered letter asking him to come in the office to discuss the case. He was examined under oath by his own lawyer in question-and-answer form, with the questions and answers recorded by one of the court stenographers of Baltimore County. After he had given various answers which the lawyer found unsatisfactory, he was advised several times of the existence of the crime of perjury and of the consequences of its commission, and thereafter he acquiesced in his counsel's repeated suggestions that he had asked Tillman to testify that the other car had pulled out onto the wrong side of the road and that Tillman had "worked on" Jones.

Nine days later the lawyers advised Butler that they were withdrawing from the case and the insurer was disclaiming liability under the policy because of his violation of the cooperation clause.

Thereafter, the settlement offer of $3,500, which the insurer had rejected because of the favorable statements of Tillman and Jones, was withdrawn. Butler secured other counsel but when he failed to appear at the trial, they struck their appearance. A verdict of $10,000 against Butler was awarded Miss Ritzmann (who by then had become Mrs. McConnaughy) on October 17, 1956. After an unsuccessful attempt to execute on the judgment, Mrs. McConnaughy filed suit against the insurance company, alleging that under the policy it had issued Butler it was "legally obligated" to pay the judgment against him.

The insurance company, in answer to the declaration and the plaintiff's motion for summary judgment, set forth Butler's breach of the policy provision to cooperate and alleged that it had been prejudiced by his false statements and his procuring witnesses who made false statements, saying in its affidavit that the plaintiff offered to settle for $3,500, "but in view of the statements obtained as aforesaid from Edward H. Tillman and Overland T. Jones, there was no acceptance of the settlement demand."

Judge Lindsay granted the plaintiff's motion for summary judgment on June 19, 1961, saying: "The motion for summary judgment is hereby granted in the amount of $10,000 with interest from October 17, 1956, and the cost of this suit." On both the law and judgment dockets the clerk made entries indicating that judgment had been rendered for the sum of "$10,000, interests and costs." On June 22, the insurance company filed its order of appeal "from the order granting summary judgment in favor of the plaintiff * * *." On July 3 the plaintiff filed a petition praying that an order be passed "directing the Clerk to amend his entries on the Court and judgment dockets so as to show a judgment in keeping with the opinion of this Honorable Court in the amount of $12,803.29, with interest and cost from June 19, 1961." (The principal figure obviously represented the $10,000 judgment with interest at 6% from 1956.)

The court passed an ex parte order, directing the clerk "to amend his entries on the Court and judgment dockets"

so as to show a judgment of $12,803.29 with interest from June 19, 1961, and costs.

The appellee moved to dismiss the appeal because (1) the final judgment was entered on July 3, 1961, and the appeal, noted on June 22, 1961, was premature; and (2) the appeal was not from a final judgment since it states it to be from "the order" granting summary judgment.

There is no substance to the motion to dismiss and it is denied. The court's action on July 3 was only to correct a clerical error in a final judgment it had granted on June 19, and this was a proper and permissible action. The claim that the appeal was ...


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