Kugler v. Industrial Accident Commission

This is a certiorari proceeding brought to this court for the purpose of reviewing an order of award made by the Industrial Accident Commission in connection with a policy of insurance issued by the State Compensation Insurance Fund.

On April 6, 1922, the Fund issued its policy of insurance to petitioner Joe Eugler, doing business as the Broadway Window Cleaning Company, insuring him against all loss or liability to his employees by reason of injuries received by them, or from death resulting from such injuries, sus

On September 11, 1922, one of the employees of petitioner was injured while working at a location neither specified in the original policy nor later accepted in writing by the Fund, nor added to the policy by any indorsement thereto. At the hearing of the matter before the Industrial Accident Commission the evidence tended to show that at the time the policy was procured in the office of the Fund, in reply to an inquiry made by petitioner as to the necessary procedure to properly cover petitioner by insurance as to any locations to be added to the policy, it was stated in effect that all that was necessary was for petitioner to telephone the new location to the office of the Fund, and thereupon the coverage would immediately ensue. The testimony of petitioner on that point was as follows: “They

It further appears from the evidence that in the latter part of the month of June or early in the month of July, 1922, an employee in the office of petitioner telephoned to someone in the office of the Fund regarding a new location (and being the place at which petitioner's employee received the injury) for the purpose of having such new location added to petitioner’s policy of insurance—the testimony being as follows: “Q. When you called the Fund that day did you have any difficulty in getting the right person right away? A. No, there was not any difficulty that I recall; a lady’s voice answered and took the notation and said everything would be O. K.”

In substance it was also shown by the evidence that the place where the accident occurred was not at a private residence but that it was at a business building and came under the restriction quoted in the policy; that the Fund never made acceptance in writing of the new location, nor was any such acceptance ever received by the petitioner. Neither was any indorsement of such new location, signed by the manager and countersigned by a duly authorized representative of the Fund, or by either of them, ever attached to the policy. There was testimony to the effect that other new locations had been telephoned to the Fund, upon some of which there had been written acceptance, followed by properly authenticated indorsements to be attached to the policy. There was also testimony to the effect that the amount to be paid as premium on the policy depended upon the pay-roll of petitioner, and that petitioner paid the premium upon his policy in accordance therewith. But there was no evidence tending to show that any premium was ever paid on account of a pay-roll covering the location where the accident occurred. No direct evidence was introduced by the Fund refuting any of the testimony of petitioner or his witnesses, and the effect of such evidence stands uncontroverted, excepting as to certain claimed

The Industrial Accident Commission reached the conclusion that, as far as the new location was concerned, the Fund was not an insurance carrier for petitioner, and thereupon made its award against petitioner and in favor of the injured employee in a fixed sum as liability for accrued damages and in an additional sum as a weekly liability thereafter until the termination of the disability of the employee, or until further order of the commission.

[1] The principal question here to be determined is that of the alleged waiver by the Fund (as a part of its insurance contract) of the written acceptance of the new location and the indorsement upon the policy of such waiver or alteration, signed by the manager and countersigned by a duly authorized representative of the Fund.

That in certain circumstances an insurance company may waive any of the provisions contained within its contract of insurance is not doubted. It is contended in this case that there was a waiver as to the clause that “insurance covering work in connection with such additional locations will be effective only when, and from the date notice is accepted in writing by the Fund,” and the cases of Carroll v. Girard Fire Ins. Co., 72 Cal. 300 [ 13 Pac. 863 ], and Mackintosh v. Agricultural Fire Ins. Co., 150 Cal. 447 [ 119 Am. St. Rep. 234 , 89 Pac. 102 ], are cited as authority. In the case first cited the contract required the assured, in case of loss, to forthwith give notice thereof to the insurer and to produce a certificate of preliminary proof from a notary—neither of which acts was performed. The insurer, however, joined with the insured in arbitration proceedings which, under the terms of the policy, were to be commenced after proof of loss had been received. It was held that such conduct on the part of the insurance company constituted a waiver, notwithstanding the fact that the policy also contained a provision to the effect that no condition of the policy should be waived except by written indorsement by the president or the secretary of the insurer. In the second ease it was held that a failure of the general agents of the insurance company

It will be remembered that the contract here requires that any added locations must be first acknowledged in writing, to be followed by an indorsement on the policy signed by the manager and countersigned by a duly authorized representative of the Fund. The evidence is not that at the time the policy was issued either the manager or any other duly authorized representative made or attempted to make any waiver of any provisions of the policy, or, indeed, that either of such persons either said or did anything in that connection. The only testimony in that regard is that “they told me when I took the policy out that the minute I got a job I should call up and it is covered right away immediately as soon as I called them up”; also “when I took out the policy I asked them; I took the policy out from a young lady and she told me that is all that is necessary, to call up the State Compensation, and they would take care of it.” No evidence was adduced from which it might be determined what authority, if any, the young lady possessed to make any such statement. Certainly there was none to show that she was either the manager or any duly authorized representative of the Fund. With respect to the telephonic communication regarding the new location, the evidence is also singularly lacking—the evidence being that “a lady’s voice answered and took the notation and said everything would be O. K.” The lady was not even identified as being connected in any way with the office of the Fund, much less as being the manager or a duly authorized representative thereof. Neither is it claimed that any authorized agent of the company was ever notified of any of the facts going to make up the alleged waiver, or that such officer had any independent knowledge thereof.

Such cases as Sharman v. Continental Ins. Co., 167 Cal. 117 [ 52 L. R. A. (N. S.) 670 , 138 Pac. 708 ], Belden v. Union Central Life Ins. Co., 167 Cal. 740 [ 141 Pac. 370 ], and Madsen v.

While the law appears to he well settled that in the instant case the manager of the Fund might have orally waived the condition of the policy which required that additional locations would become effective only after notice thereof had ■been accepted in writing and an indorsement of such locations, signed by the manager, etc., had been attached to the policy, there is no evidence of the fact that he either personally did so or that he ever had any knowledge that any other person had attempted to do so for him. The contract of insurance here specially limits the liability of the Fund to certain locations and to such other locations as it may thereafter accept in writing and subsequently thereto indorse upon the contract. That some unauthorized person in the office of the Fund assumed to alter the terms of the contract, either in the manner of acceptance of new locations or otherwise, while unfortunate in its result upon petitioner, cannot affect the terms of the contract as between the parties thereto. The insurance contract in that regard does not differ from any ordinary contract between individuals. It cannot have new terms inserted therein nor original terms altered or withdrawn, save with the consent of the contracting parties or their duly authorized agents acting within the scope of their authority. The “young lady” in this case was not, so far as the evidence shows, duly or at all authorized to state to petitioner that the notice by telephone of a new location, without written acceptance by the Fund thereof, would be a sufficient compliance with the terms of the policy with respect to new locations, nor could there be any waiver of the condition in the contract to which reference has been

The award against the petitioner is affirmed.

Conrey, P. J., and Curtis, J., concurred.

A petition by petitioners to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on September 27, 1923.