THE EMPLOYERS' FIRE INSURANCE COMPANY vs. FRANCIS H. GARNEY & another.

CUTTER, J. The plaintiff (Employers') seeks declaratory

Page 628

relief to determine whether a claim by Garney is within Coverage U set out in part II of the Massachusetts motor vehicle liability policy issued to Garney's father. The trial judge made findings and concluded that any damages sustained by Garney are covered by the policy. He ordered that an appropriate decree be entered and reported the case for the determination of this court. The facts are stated on the basis of the findings.

Part II, par. I, of the policy provided protection relating to injuries caused by "uninsured automobiles," [Note 1] which were defined (Part II, par. II [c] [2] and [d]) as including hit and run automobiles (see fn. 2). Garney claims to have sustained bodily injury as a result of an accident on April 9, 1962, on Route 1 in Norwood. Garney's father's vehicle, which Garney was driving, came in physical contact with another vehicle which failed to stop. Its operator remains unidentified. On April 17, 1962, Garney notified an agent of the company of the accident on a printed form, therein setting forth (a) the policy number, (b) the name of the agent, (c) the name and address of the insured, (d) the date, time, and place of the accident, (e) the serial and license numbers of the insured vehicle, (f) the name and address of the operator, (g) the nature of the injury and the name of the person injured, and (h) a brief description of the accident. This information was not sworn to, but was furnished on a printed form marked, "Form recommended by the Association of Casualty and Surety Companies." One Swanson, an "appraiser and adjuster of automobile losses for insurance companies," notified a company (Employers' Liability Assurance Corporation), which we assume, on the basis of the policy form, to be an affiliated

Page 629

company of Employers', that the insurer (United States Fire Insurance Company) carrying collision insurance on the insured vehicle had paid "$320.60 net" for collision damages arising out of the accident. Employers' acknowledges that written notice of the accident was received. No sworn statement of claim [Note 2] was filed. There was evidence that Employers' investigated the claim and that it never requested Garney to furnish a sworn statement of loss concerning the accident. Employers' apparently concedes that Garney "was an additional insured under this" policy.

1. The principal issue is whether Garney is barred from recovery under Coverage U because of his failure to file a sworn claim. Garney contends that under G. L. c. 175, Section 102 (as amended through St. 1934, c. 110, Section 1), [Note 3] and Section 186B (inserted by St. 1959, c. 168, Section 1), [Note 4] such filing is not necessary, inasmuch as he has given Employers' seasonable notice of the accident. Employers' takes the position that

Page 630

Section 186B applies only to relieve the insured from failure to comply with Condition 2, applicable to Coverage U, [Note 5] requiring the filing of a "written proof of claim," and not from a failure to file the sworn statement called for in the definition of "hit-and-run automobile." See Part II, par. II (d) (2), quoted in fn. 2. Employers' suggests that the Legislature used the term "sworn statement of loss" in Section 186B (fn. 4) to refer only to a somewhat formal, "conventional proof of loss condition," such as that usually required in respect of a fire loss, and not as referring to a notice of accident or claim required by any policy subject to Section 186B.

Section 102 and Section 186B, read together, show a more comprehensive purpose on the part of the Legislature than that suggested by Employers'. The general purposes of Section 102 are, we think, (a) to provide that an insured under a fire insurance policy (who has seasonably notified his insurer that there has been a loss) shall not lose his rights to recover for a loss because of any failure to comply with policy requirements for filing any proof of claim, and (b) to shift to an insurer, which has received reasonable notice that a loss has occurred, the burden of notifying the insured if, and to what extent and in what form, further information about the loss is desired. Section 102 thus indicates to us a legislative desire that a lay insured's failure to comply with policy requirements in fine print in respect of filing insurance statements and proofs of claim shall not defeat his claim to the insurance protection for which the insurer has been paid, provided, of course, that the insurer has been given fair notice that there has been a loss which the insured asserts to be within that protection. The language

Page 631

of Section 102 should not be narrowly interpreted. See Goodman v. Quaker City Fire & Marine Ins. Co. 241 F. 2d 432, 436 (1st Cir.). Section 186B, in respect of other than fire policies, we view as having been enacted with a similarly broad purpose. The sworn statement called for by the "hit-and-run" definition of Coverage U and the "written proof of claim" called for in Condition 2 of Coverage U, if made under oath, are both "sworn statement[s] of loss" and are within that term as used in Section 186B (fn. 4). Employers' received prompt, full, and fair notice of the loss on an approved insurance form. If it needed more information about the accident, or if it desired that the information be furnished under oath, it had the burden under Section 186B of making a request to that effect, and of telling Garney in what form to submit his statement.

We reject Employers' contention that Section 186B relates only "to forms of property insurance constituting indemnity for a loss." Section 186B makes Section 102 "apply in case of claims for loss or damage from any hazard insured against under any policy . . . issued in the commonwealth" (emphasis supplied). The language is apt to include the hazard of becoming involved in an accident caused to an insured by a motorist who cannot be identified or who is uninsured. Cf. Matthews v. Allstate Ins. Co. 194 F. Supp. 459, 464-465 (E. D. Va.). We think Coverage U may reasonably be viewed as insuring against such a hazard and that Section 186B applies to such insurance.

2. It remains for us to determine to what extent a claim under Coverage U must be submitted to arbitration under Part II, par. I, of the policy. See the italicized language in fn. 1. See also G. L. c. 175, Section 111D, inserted by St. 1959, c. 438, Section 2. It was not necessary to decide this question in Fazio v. Employers' Liab. Assur. Corp. Ltd. 347 Mass. 254, 255, for the parties were there "in accord that coverage questions are not a subject for arbitration under" c. 438. The New York Court of Appeals, by a four to three decision, has taken the view that whether the motorist who caused the accident was insured was not a matter for arbitration.

Page 632

Matter of Arbitration between Rosenbaum and American Sur. Co. 11 N. Y. 2d 310, 314. Now that we are directly confronted with a closely similar question, we are persuaded that the three dissenting judges expressed the more logical and practical view, when they opposed (p. 316) reading into the agreement to arbitrate in Coverage U, Part II, par. I, "a provision for piecemeal treatment of a specified area of dispute by two separate and distinct procedures." We assume that the general scope and meaning of the policy provisions may be matters not exclusively to be dealt with by arbitration. Whether, however, a particular situation of fact comes within the policy provisions (at least when their meaning has been determined) seems to us a matter which by Coverage U may be submitted to arbitration. Examples of such matters are whether the other motorist was or could be identified, whether he was insured, whether his acts or omissions caused the accident, whether he was negligent, and whether the insured was guilty of contributory negligence. Were we to decide otherwise, we would be adding, as the three dissenting judges in the Rosenbaum case pointed out (p. 316), "a new type of cause to an already overburdened court calendar with its attendant delay . . . and financial burden, which could be expeditiously . . . disposed of in the manner upon which the parties have agreed."

3. A final decree is to be entered declaring (a) that Garney, in the circumstances, is not precluded from enforcing Coverage U by his failure within thirty days of the accident to file a sworn statement under Part II, par. II (d) (2), of the policy or to file as soon as practicable a written proof of claim under Condition 2; and (b) that, unless the parties agree to dispense with arbitration, the liability of Employers' to indemnify Garney is to be determined by arbitration in accordance with Part II, par. I, of the policy. Garney is to have costs of the proceedings upon the present report.

So ordered.