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Barrella v. Stewart

Decided: April 18, 1962.

BARRELLA, OWN USE AND USE OF CALVERT FIRE INS. CO., ET UX.
v.
STEWART



Appeal from the Superior Court of Baltimore City; Carter, J.

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

Sybert

This appeal questions the grounds relied on by the trial court in striking out certain enrolled judgments in favor of plaintiffs in a personal injury action. In addition, we are asked to decide whether or not the defenses of lack of notice and absence of opportunity to defend are available to the defendant's insurer in a subsequent attachment case wherein plaintiffs sought to collect their judgments from the insurer under a policy issued to the defendant as proof of financial responsibility.

The appellants, Pasquale Joseph Barrella and his wife, Mary (plaintiffs below), sustained personal injuries and other damages when their automobile was struck in the rear by a car driven by the appellee, James Edward Stewart (defendant below) on November 30, 1957. Stewart's driver's license, which had been revoked permanently in 1954 after a conviction of drunken driving, had been reissued to him only a month prior to the accident after he had obtained from the National Mutual Insurance Company an insurance policy issued as evidence of financial responsibility, as required by Art. 66 1/2, ยง 118, Code (1957). The requisite SR 22 certificate of financial responsibility, based on the policy, was filed by National Mutual with the Department of Motor Vehicles, on the strength of which Stewart's license was reinstated. Stewart's application to National Mutual, however, had concealed the drunken driving conviction, and instead stated that the reason such a policy was required was that he had been in an accident for which he had not been covered by liability insurance. After Stewart reported his collision with the Barrellas to the insurer, it checked his driving record, discovered the conviction, and cancelled the policy.

The Barrellas' counsel began settlement negotiations with the insurance company. When friction developed between counsel and insurer, the Barrellas filed suit against Stewart in the Superior Court of Baltimore City on March 11, 1958. However, several attempts to obtain service upon Stewart proved futile and, after a report that he had left town, further efforts to serve him were abandoned for the time being after

June, 1958. National Mutual also attempted to contact Stewart, with identical letters on February 25 and April 11, 1958, to instruct him to submit to the insurer "any correspondence, demands, notice of suit". The first letter was not returned but the second came back with the notation "Moved -- left no address." The company made no further attempt to contact Stewart or counsel for appellants, although the file was kept open and periodically reviewed.

In January, 1960, efforts to serve Stewart were renewed by counsel for appellants. The record shows that he first sent a deputy sheriff to attempt service on Stewart in care of National Mutual at its place of business on January 18. Service was refused by the company. On January 21, 1960, Stewart finally was served at his then place of residence, and although he denied at the trial that he had ever been served, the trial court found that service had been made.

It is not disputed that Stewart failed to notify the insurance company of the pending suit, and that no further efforts were made by counsel for appellants to apprise the company of the situation, other than the attempt to serve Stewart in care of the insurance company. Stewart filed no plea and made no appearance, and on March 31, 1960, appellants obtained a judgment by default. On May 5, 1960, an inquisition was held before Judge Harlan. Although appellants had elected to have the case tried before a jury at the time suit was filed, at the inquisition the matter was submitted to the court for determination without a jury. No written waiver of a jury trial was executed or filed. Judge Harlan, who appeared as a witness in the later proceedings to strike the judgments, testified that there had been some discussion at the inquisition as to whether there could be an informal waiver of a jury trial and that he allowed it after satisfying himself that it could be done without a writing, under the appropriate rules of the Supreme Bench. On May 10, 1960, the judgments in question were entered against Stewart in favor of the Barrellas. On June 13, 1960, appellants ordered a writ of fieri facias which was returned nulla bona by the sheriff at appellants' request. On July 26, 1960, appellants filed a written withdrawal of their original election for a jury trial, and the docket entries

reveal that an order granting leave to withdraw was signed by Judge Harlan nunc pro tunc as of May 5, 1960, the date of the inquisition.

In the meantime, on June 24, 1960, appellants issued an attachment against National Mutual on their judgments. The insurer denied liability on the grounds that it had not received notice from the insured or from appellants' counsel of the suit, service on the defendant, the default judgment and inquisition, and the final judgments, and that it had thus been denied an opportunity to defend the suit. In addition, in October, 1960, National Mutual, in the name of the appellee, Stewart, filed a series of motions to strike the judgments in the instant case, contending that the judgments were procured by irregularity stemming from: (1) the alleged lack of notice of the suit and subsequent proceedings; (2) the fact that no written waiver of a jury trial was filed by appellants until July 26, 1960; and (3) alleged lack of personal service upon the insured, Stewart.

The issues raised in the attachment case and the instant proceedings to strike the judgments were tried together before Judge Carter. The trial judge found that Stewart had in fact been served personally. However, the court granted appellee's other motions based upon the first and second contentions, and the judgments were stricken. In view of its holding, the trial court found it unnecessary to answer questions raised in the attachment case, the principal one of which was the effect that lack of notice would have on the liability of an insurer who has issued a policy as proof of financial responsibility and filed an SR 22 certificate. The trial ...


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