EMPLOYERS' LIABILITY ASSURANCE CORPORATION, LIMITED, a British corporation, Plaintiff,
David MADRIC and James D. Madric, Defendants, and Wesley C. Henderson, Intervening-Defendant.
[54 Del. 147] Clement C. Wood, of Allmond & Wood, Wilmington, for plaintiff.
Max S. Bell, Jr., of Richards, Layton & Finger, Wilmington, for defendants, David Madric and James D. Madric.
William T. Lynam, III, of Office of Ernest S. Wilson, Jr., Wilmington, for intervening-defendant.
This is an action for a declaratory judgment to determine duties and liabilities under the terms of an automobile liability insurance policy. The jury could have found the following facts.
David Madric is a somewhat untutored and unsophisticated man. He owned a Chevrolet automobile, for which he took out insurance against liability. The plaintiff, Employers' Liability Assurance Corporation, Limited, wrote the insurance policy, which was sold by plaintiff's agent, Walter Hawke. This policy contained an endorsement which greatly narrowed the insurer's liability; though the premium seems to have been the same as for a regular unrestricted policy. The endorsement stated that:
'It is agreed that such insurance as is afforded by the policy shall apply only while the automobile * * * is being operated by David Madric, and spouse.'
It would appear from the record that at the time this policy was issued neither Mr. Hawke, nor anyone else, explained the policy or its restrictive endorsement to the unsophisticated insured. This was April 1958.
On 3 July 1958, Mr. Madric traded his Chevrolet for a Buick. On 5 July, 1958, his son, James, reached his sixteenth birthday and wished to get a license so that he could drive his father's car. These events provided two incentives for Mr. Madric to once again contact plaintiff's agent, Mr. Hawke. First, to transfer the policy to his new car, and, second, to check upon coverage for his son, for he did not feel able to sign for the boy's license until he was assured that he would be covered. Relative to this second point, Mr. Hawke was uncertain whether his company wrote insurance for minors. At a later date, he reported to Mr. Madric that such insurance was available and that it would cost around $106.
[54 Del. 149] At this point, the facts become vital, and the jury's determination is significant, for it is here that defendants contend that Mr. Hawke interpreted the policy and offered advice upon which Mr. Madric based his decision not to purchase any insurance beyond that which he already had. The record is clear that Mr. Madric wanted his son to be covered. This was his manifest intent as expressed to Mr. Hawke. His dealings with Mr. Hawke concerned how this might best be done. One way was obvious, purchase the $106 policy for his son. However, Mr. Madric testified that Mr. Hawke advanced an analysis which turned upon whether or not the boy would be the principal operator of the car. The inference was that if the boy were to be the principal operator he would have to have the special $106 policy, whereas, were he not to be the principal operator, then the present policy would be adequate. Since his boy was not to be the principal driver, and since he was somewhat pressed for funds, and since he understood that with his son not being the principal driver, his present policy was adequate, Mr. Madric concluded that it would not make sense to buy the special, apparently unnecessary, policy. Feeling assured, he signed for the boy's license. Thus, under Delaware law, Mr. Madric assumed joint and severable responsibility for any accident his son might have up until the boy's eighteenth birthday.
On January 12, 1959, the son, James D. Madric, while driving his father's car, had an accident, wherein Wesley C. Henderson was injured. Mr. Henderson sued the Madrics. Plaintiff insurance company made a disclaimer of coverage and brought this action against the Madrics for declaratory judgment. Mr. Henderson has been permitted to intervene as a party defendant. The case was tried by a jury, which made three specific findings of fact:
(1) The insurer's agent, Walter Hawke, represented to David Madric that if his son, James, was not to be the principal[54 Del. 150] operator of the Madric car, then the son's operation of the car would be covered by the policy then in force;
(2) David Madric believed said representation to be true; and
(3) David Madric acted in reliance upon said representation.
In conformity with these findings, judgment was awarded to defendants.
At trial, plaintiff made appropriate motions for a directed verdict, which were duly denied. At present, we have before us a motion by plaintiff to have judgment entered in accordance with its motion for a directed verdict, or in the alternative, for a new trial.
Plaintiff has offered several arguments in support of its alternative motions. First of all, it argues that the Court should have directed a verdict for plaintiff on the theory 'that no testimony was introduced at the trial upon which a belief could be based that Hawke told Madric or implied that Madric's son, James, would be covered by the policy if he was not the principal driver.' To support this theory, plaintiff devotes six pages of its first brief to quoting extracts from the trial transcript which purport to be 'all the testimony in the record concerning the defendant's contention' of misrepresentation. The remarkable thing about plaintiff's quotations is that they defeat the very point they were alleged to support. For example, plaintiff's counsel cross-examined Mr. Hawke as follows:
'Q. Would you tell us just exactly how you used them. What did you say to Mr. Madric involving the words 'principal driver' or 'principal operator'? A. It was his question as to why the youngsters under age had cars registered in their names and could obtain the insurance?
[54 Del. 151] 'Q. And what did you say to him? A. I told him, in that event, that an under-age driver, as the principal operator of the car, that the premium would be even higher, and named a figure of $106.
'Q. You said that, if the under-age driver were principal operator of the car, the premium for that type of coverage would immediately jump to over $106? A. That is right.' (Emphasis added.)
Thus, we see that Mr. Hawke admitted a discussion with Mr. Madric about the boy being the principal operator of the car. I now quote representative selections from Mr. Madric's testimony about this same conversation.
Direct examination of Mr. Madric.
'Q. What was the next time that there was any conversation with respect to this insurance policy? A. That was along the first of July. My boy become 16 on the 5th of July, and around the 3rd I traded cars; and I went to Mr. Hawke and I asked him about getting me more insurance for my boy, because he wanted to get his license and I couldn't sign his license until I got insurance.
* * *
* * *
'So, he told me, he said, 'Well, we can get it, but is you going to make the boy the principal driver of the car?', and I said, 'No, because we ain't got but one car in the family, and we ain't hardly able to keep that.' He told me what it would cost, and then he explained to me about the insurance.
'He said, 'If you definitely want it, I can get it for you, but, if anything would happen, which we hope it won't, you will ...