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Yannuzzi v. United States Casualty Co.

Decided: October 13, 1954.

ALFONSE C. YANNUZZI, MARY T. YANNUZZI, ANTHONY G. YANNUZZI AND MARY C. YANNUZZI, PLAINTIFFS-RESPONDENTS,
v.
UNITED STATES CASUALTY COMPANY, A CORPORATION OF THE STATE OF NEW YORK, DEFENDANT-APPELLANT



Eastwood, Goldmann and Schettino. The opinion of the court was delivered by Eastwood, S.j.a.d.

Eastwood

This appeal concerns the construction of an automobile insurance policy issued by the defendant-company to George and Steve Cherefko. The Cherefkos obtained the policy from one Morris H. Zackowitz, who, at that time, had authority to solicit and submit applications for insurance to the defendant-company and to counter-sign and deliver the policies to the insured after they had been favorably acted upon by the company.

During the period the policy in question was in effect, i.e. , June 20, 1951 to June 20, 1952, the Cherefko vehicle was involved in a collision (December 9, 1951), and the plaintiffs herein sustained injuries and damage as the result of that collision. Notice of the accident was given by the insured to Zackowitz, who in turn transmitted the same to the defendant-company.

The agency agreement between Zackowitz and the United States Casualty Company was terminated as of December

31, 1951. Thereafter, on June 20, 1952, the Cherefkos' insurance policy expired and Zackowitz placed their insurance with another company. During the period Cherefkos' policy was in effect, following the termination of agency agreement with Zackowitz, the United States Casualty Company allowed Zackowitz to process endorsements to be placed on existing policies, which had been issued prior to the termination of the agency agreement.

On or about October 16, 1952 suit papers in the action instituted by the Yannuzzis were served upon Cherefkos and Cherefkos delivered them to Zackowitz' office. Whereupon Zackowitz or his employee forwarded them to the "wrong" insurance company. After default judgments were entered against the Cherefkos in that action, the suit papers were mailed in a plain envelope to and received by the defendant insurance company. The plaintiffs thereafter instituted an action against the defendant based upon the default judgments obtained against Cherefkos.

The trial court granted plaintiffs' motion for judgment against the defendant to the extent of the policy and the defendant-company appeals therefrom.

The defendant contends that the evidence indicates a clear case of forfeiture under the policy for failure to notify the company of suit as required; that the judgment prejudiced the rights of the defendant inasmuch as no notice of suit was received until after default judgments had been entered, and that the insured had failed to cooperate with the insurer as required by the contract.

The plaintiffs argue that delivery of the suit papers to Zackowitz was in accordance with custom and did not work a forfeiture of the insurance contract.

The pertinent provisions of the insurance agency agreement are as follows:

"1. The Company hereby grants authority to the agent * * * to solicit and submit applications for * * * insurance * * *; to issue and deliver policies * * *, endorsements and binders which the Company may from time to time authorize to be issued and delivered."

And the pertinent provisions of the Cherefko policy ...


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