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Pearl Assurance Co. v. Watts

Decided: December 16, 1959.


Goldmann, Conford and Haneman. The opinion of the court was delivered by Haneman, J.A.D.


Plaintiff Pearl Assurance Company, Limited brought a declaratory judgment action in the Chancery Division in order to obtain a determination of its rights in reference to a home owner's policy of insurance issued to defendants Milton S. and Bertha D. Watts, husband and wife, on January 31, 1957 for a coverage period of three years. The policy contained a "cooperation clause" calling for the assistance and cooperation of the insured whenever a question of liability under the policy might arise. Plaintiff contended that because of certain alleged inconsistent statements, Mr. and Mrs. Watts had breached the "cooperation clause" and, therefore, that it was not obligated to defend the negligence action instituted against the Wattses by defendants Charles and Jessie Gallagher, husband and wife, nor was it liable to the Gallaghers under the policy. From a judgment in favor of defendants, plaintiff appeals to this court.

Defendants Gallagher, mother and father of Bertha D. Watts, instituted an action against the defendants Watts on October 21, 1957 claiming injuries and damages suffered by Jessie F. Gallagher while descending a flight of steps located at the rear of the Watts' home, which had been purchased new about a year before the accident. They alleged negligence on the part of the Wattses in that they knew or should have known that the railing on said stairway was defective and that they failed to repair it. Plaintiff insurance company undertook the defense of the suit against defendants Wattses. On January 6, 1958 the Wattses appeared at the office of Kisselman, Devine & Deighan, attorneys for the insurance company, and answered inquiries in reference to the accident; a stenographic transcript was taken. As a part of his statement, Mr. Watts said:

"Q. Until the time of the accident did this handrail appear to you to be solidly anchored? A. To me it seemed anchored, yes.

Q. And you yourself never noticed it was other than solidly anchored? A. No."

He further stated that his mother-in-law, Mrs. Gallagher, had probably used the railing prior to the accident, but that neither she nor anyone else had ever complained about its being shaky. Watts said that if there had been complaints he would have had the railing repaired, and that he did not inform the builder of any defects in said railing until after the accident. Finally, Mr. Watts related that he had told an insurance adjuster on September 16, 1957 that Mrs. Gallagher had retained an attorney to represent her and that she would probably institute suit against the builder. Mrs. Watts had been present during the interrogation of her husband, and when asked if she knew of anything that he did not bring out or if she knew of any circumstances that were different from what he had related, she replied in the negative. She did say, however, that she noticed that where the railing was connected to the house, there was a space for four screws and that only two had been inserted.

On April 11, 1958 the deposition of Mr. Watts was taken in the Gallagher action, at the instance of the Gallaghers. On that occasion Mr. Watts made the following answers:

"Q. And up until the day of the accident did the hand rail appear to be solidly anchored in the abutment? A. It never was actually what you would call solid. The one side was very solid but this opposite side never was right.

Q. Which side are you speaking of? A. Coming up it would be on your right side; going down, the left.

Q. That was anchored in the concrete, wasn't it? A. Yes, supposed to be.

Q. As far as you were able to observe, it seemed to be solidly anchored in the concrete? A. It never was right.

Q. What do you mean, it was never right? A. It was loose.

Q. What do you mean, it was loose? A. If you took hold of it it would move. That is not tight, to my estimation.

Q. Did it seem to be anchored? A. There was lead there, it was supposed to be anchored.

Q. I asked you did it seem to be anchored to the concrete abutment? A. Only respects looking at it [sic] it would be anchored, but actually it was loose.

Q. When did you first notice it wasn't solidly anchored? A. After I began ...

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