Before Duffy, Knoch and Castle, Circuit Judges.
Plaintiff, Hoffman & Klemperer Co., (hereinafter called "Hoffman") sued defendant, The Ocean Accident and Guarantee Corporation, Limited, (hereinafter called "Ocean") in the District Court for declaratory judgment construing the insurance policy issued to plaintiff by defendant.
The District Court found, in favor of Hoffman, that Ocean was obligated under its policy to defend Hoffman in a suit brought against Hoffman by Melvin Wayne McCoy, Jr.; to reimburse Hoffman for monies expended in defense of that suit; and to pay any judgment which might be rendered therein against Hoffman. Ocean appealed to this Court.
Hoffman's business is cleaning and tuckpointing buildings. Hoffman is a contractor selling a service, not a product. The evidence showed that in June, 1958, Hoffman contracted to clean and tuckpoint the front surface of a building owned by H. A. Williams. The work was completed July 17, 1958.
Melvin McCoy, Jr. instituted suit against Mr. Williams for damages arising out of an alleged fall from the second floor front porch of Mr. Williams' building, on October 7, 1958. In April, 1959, at the request of Mr. Williams and his attorney, Hoffman's president, Melvin Hoffman, inspected the premises at which the accident allegedly occurred and submitted a written report, for which he was paid a fee by Mr. Williams.
Mr. Hoffman's inspection disclosed a porch railing which had rusted through at the end where it entered a brick pier. Hoffman's contract had not called for any repair of porch railings and no such repairs had been made by Hoffman. The rusted railing was surrounded by grey cement, and not by the stainless white mortar which Hoffman had used in its tuckpointing.
On October 14, 1959, Hoffman was served with summons, and a second amended complaint in which Melvin McCoy, Jr. had joined Hoffman as a defendant in his suit against Mr. Williams, and in which it was alleged that Hoffman had negligently performed its duty in repairing the property by placing mortar at the junction of the railing and pier, knowing that it would not hold because of its rusted condition, and allowing an inherently dangerous instrumentality to remain in a dangerous condition.
The day after the summons was served, Hoffman, through its attorneys, notified Ocean and tendered Ocean the defense of the McCoy suit against Hoffman. Ocean refused the tender on the ground that it had not been notified of the accident "as soon as practicable" as required by the policy, and that the accident was not covered by the insurance which Hoffman had purchased from Ocean.
It is admittedly irrelevant to this action whether the McCoy suit is or is not groundless, false, or fraudulent.
It was the duty of Hoffman to report to Ocean any injury or accident which a reasonably prudent man would have had reason to believe was covered by the provisions of the insurance policy issued by Ocean, and upon which a claim could reasonably be urged against Hoffman. Nye v. Louis Ostrov Shoe Co., Ohio App.1942, 43 N.E.2d 103; Melcher v. Ocean Accident & Guarantee Corp., 1919, 226 N.Y. 51, 123 N.E. 81; both cited with approval in Star Transfer Co. v. Underwriters at Lloyds, 1944, 323 Ill.App. 90, 55 N.E.2d 109.
Timeliness of notice must be determined by the trier of the facts from all the facts and circumstances of a particular case. On the basis of substantial supporting evidence, the District Court found*fn* that Hoffman had given timely notice to Ocean. We cannot say that finding was clearly erroneous. Dearborn National Casualty Co. v. Consumers Petroleum Co., 7 Cir., 1949, 178 F.2d 277.
The insurance policy involved in this action (Hoffman's Exhibit No. 1) is designated a "Manufacturers' and Contractors' Liability Policy" and provides for two types of coverage. The face of the policy described Hoffman and its business as:
Name Insured: Hoffman and Klemperer Company
No. Street, town or city, county, state: Chicago, Cook County, Illinois * * *
Business of the named insured is Building Cleaning.
Item 3 on the face of the policy provides:
The insurance afforded is only with respect to such and so many of the following coverages and divisions thereunder as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage and division shall be as stated herein, subject to all the terms of this policy having reference thereto.
The table of coverages shows the following:
Coverages Limits of Liability Divisions Advance Premiums
$100,000. each 1. Premises $300.00
$300,000. each 2. Elevators
A - Bodily Injury $aggregate 3. Independent