Minnesota Law Applies.
The first issue presented on this appeal is whether Minnesota law applied in determining the rights of the parties under the Minnesota insurance policy.
Appellant Home Insurance Company asserted, among others, the policy defense of lack of notice of accident by the insured.
Similarly, in the instant case Minnesota law would govern under either rule. Turning first to the "intention" doctrine, it is clear that Hogenson and appellant, through its agent, did not specifically agree to be bound by the law of any particular jurisdiction. This being the case, the law of the place of contracting is presumed to be intended unless the place of performance is different. Hogenson did not testify at the trial. Anderson, appellant's agent, understood that the vehicles insured would be used in either Minnesota, Iowa, or Wisconsin, but added that none of the vehicles would be used exclusively in any particular state. The policy itself contemplated performance in those three states, but there was no indication of what proportion of total performance was to be attributed to each. The truck involved was not confined to Wisconsin. While it is undisputed that some activity was to occur outside of Minnesota, the evidence adduced was insufficient to establish, with any definiteness
"No case has been cited to us from the decisions of this court or any other which holds that the obligation of an automobile liability policy is to be interpreted by any law other than that of the state where the contract was made. Considering the great volume of litigation growing out of automobile accidents this dearth of authority is significant and not to be explained except by acknowledging the principle that the law of the state where the contract is made determines the obligations of the contract, not the law of the state where performance happens to be required."
Other than Knippel, this court has not addressed itself at length to the so-called "grouping of contacts" or "center of gravity" theory in regard to contract law.
"(1) Except as stated in Subsection (2), the validity of a contract of fire, surety or casualty insurance and the rights created thereby are determined, except as to minute details of performance, by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy.
"(2) If the contacts which the contract has with another state are sufficient to establish a more significant relationship between the contract and the other state, the local law of the other state will govern."
The vehicles used in Hogenson's construction business were ordinarily based in Minnesota, or at least it can be said that they were not principally located in Wisconsin. Thus, under sec. 346i (1), Minnesota law should apply. Even assuming that the vehicles are to be considered as constantly on the move from state to state so as to preclude an automatic application of sub. (1), Minnesota still prevails on the significant contacts test. This is because Minnesota was (1) the residence of Hogenson, the insured; (2) the place where negotiations for the policy were carried on;
"The application of the Minnesota Statute to an accident occurring in Wisconsin in no way offends against the public policy of Wisconsin, but it does nurture the integrity of the Minnesota law."
Appellant contends that the Restatement supports its position that Wisconsin and not Minnesota law is controlling in determining rights of the parties. Appellant argues that the following illustration in the Restatement supports its position:
"7. Same facts as in Illustration 2 except that the policy insures A against liability arising from the operation of his automobile. The automobile is garaged in state X but it is understood that the automobile will be in state Y for about one-third of the term of the policy. A has an accident while driving the automobile in state Y and the question is whether the B insurance company must defend the suit and hold A harmless for any damages that may be recovered against him. This question will be determined by the local law of Y."
However, the facts in the illustration are distinguishable from those in the present case in two respects: First,
"2. Same facts as in Illustration 1 except that the insurance is solicited, the premium paid and the policy delivered while A is on a visit to state Y, the state of the insurance company's incorporation. X is the state whose local law governs the validity of the contract and the rights created thereby."
Illustration 1, also referred to, is as follows:
"1. In state X, A is solicited by the agent of the B insurance company to purchase fire insurance on A's house in X. A is domiciled in X while B is incorporated in state Y. A agrees to purchase the insurance and, upon payment by him of the premium, the agent countersigns a prepared policy form and delivers it to A. X is the state whose local law governs the validity of the contract and the rights created thereby."
Thus, under either the "intention" of the parties theory or the "grouping of contacts" theory, the correct law to apply in determining the substantive rights of the parties under the insurance contract was that of Minnesota.
Burden of Proof on Notice of Accident.
The second issue on this appeal is whether the trial court's interpretation of applicable Minnesota law was correct in placing on the insurer the burden of proof as to the failure of notice of the accident.
In interpreting what the Minnesota law was as to the rights of the parties with respect to asserting the insurance
Relying on Juvland v. Plaisance,
"Upon the occurrence of an accident, the insured shall give immediate written notice thereof, with the fullest information obtainable, to the company's home office, or to the agent by whom this policy has been countersigned. If a claim is made on account of such accident, the insured shall give like notice thereof with full particulars."
The court noted that the accident had occurred on September 3, 1913, and the injury complained of was received on that day "and the nature and character thereof, were then known to the superintendent or foreman in charge of the particular work, ... but no notice thereof was given to defendant, as required by the provisions of the policy just quoted, or otherwise, until October 25, a period of 52 days."
The Minnesota supreme court then held:
"The object and purpose of this provision of the policy was to afford the company an opportunity to make an early and prompt investigation into the claim of loss or injury, not only to learn and ascertain the facts with respect thereto, but also to protect itself from a possible fraudulent and fictitious claim. If there be long delay this purpose of the contract may be wholly defeated, and the insurer deprived of the right to early information in reference to the merits of the claim. The facts may be concealed, witnesses scatter and disappear, rendering a delayed investigation without substantial results. We have heretofore held that the requirement of notice is of the essence of the contract, a condition precedent, and if the delay be such as to defeat the purpose of the contract, and deprive the insurer of the opportunity of an early investigation into the loss, there is a breach of the contract
The Minnesota law rule is the general rule.
Based on its interpretation of the Minnesota law that the giving of notice of the accident was a condition subsequent the trial court instructed the jury (following the Minnesota rule) to the effect that the burden of proving that no notice was given to it was on the insurer. As we just discussed, the correct rule of substantive law in Minnesota is that the giving of such notice is a condition precedent. The Minnesota rule on the burden of proof on such condition precedent is on the insured where he is the claimant.
In a further effort to remove from the insurer the burden of proof on the notice of accident appellant contends that the rule as to burden of proof as to this notice is a procedural matter requiring application of the law of the forum (Wisconsin).
The Restatement provides:
"The forum will apply its own local law as to the burden of going forward with the evidence on a particular issue unless the primary purpose of the relevant rule of the state of the otherwise applicable law is to influence decision of the issue rather than to regulate the conduct
Since the primary purpose of the Minnesota rule in the instant case is to influence the decision of the issue rather than to regulate the conduct of the trial, the Minnesota rule applies even if the matter of burden of proof is held to be procedural. In any event the Wisconsin rule on the burden of proof as to conditions precedent is the same as the Minnesota rule,
That the erroneous instructions as given were prejudicial to the appellant follows from what was said in Bengston v. Estes:
". . . a party upon whom an instruction has cast a greater burden than the law requires can justly complain thereof when the answer is unfavorable to him and an erroneous instruction as to the burden of proof upon a material issue must be deemed to affect the substantial rights of the party. . . . The error requires reversal of the judgment."
We must therefore reverse to provide a new trial on the issue of notice of accident, which issue will be resolved on a proper instruction as to the burden of proof.
The trial court determined that the appellant had not received notice of Peterson's suit but the jury found that the insurer was not prejudiced thereby. No issue is made of these determinations on this appeal and they are the law of the case on these questions.
Admission of Testimony Concerning Certain Missing Letters.
The third issue is whether the trial court erred in admitting oral testimony as to certain missing letters.
Shortly after the accident, respondent Peterson retained Attorney James Lindholm to represent him. At this time Lindholm allegedly wrote apprising appellant Home Insurance of the accident and he allegedly received a reply from appellant denying coverage. Lindholm withdrew as respondent's attorney early in 1959 and turned the file over to Attorney Donald Abraham. Abraham gave up the practice of law in Wisconsin in 1962 and left the state. He, in turn, passed the file on to Attorney Donovan Riley, who had been associated with him. Riley accepted a research grant in 1964 and later gave the file to Attorney Robert Perina, who ultimately represented Peterson at the trial. Neither a copy of Lindholm's letter nor appellant's response could be found in the file at the time of the trial. Likewise, none of the correspondence could be found in appellant's files. Riley, who was called as a witness, did not recall having ever seen the two documents and was unable to explain their whereabouts. Lindholm was then allowed to describe the contents of the missing correspondence. Abraham could not be located to testify.
Appellant contends that the trial court erred in admitting Lindholm's testimony, which had a bearing on the notice question, for the reason that a foundation was not properly laid under the best-evidence rule. Appellant does not dispute the contents of the letter and reply, but rather the very existence of the two writings. As stated by McCormick:
"It is apparent that this danger of mistransmission of the contents of the writing, which is the reason for the [best evidence] rule, is only important when evidence other than the writing itself is offered for the purpose of
Assuming that the writings were subject to the best-evidence rule, their contents could be proved by other means, in order to prevent a miscarriage of justice, in the event it is impossible to produce the originals.
Testimony of Defendant Warren's Attorney.
A fourth issue is whether the trial court erred in allowing Attorney Rumpf (counsel for Warren) to testify.
Appellant called Edward Georgeff, its claims superintendent in the Milwaukee area, as a witness and attempted to introduce, during the course of his testimony, a copy of a letter from Rumpf to Warren as evidence to support its position that Warren failed to cooperate with the insurer. The letter was not received into evidence at that time, but a photostat of the letter was introduced in connection with the later testimony of James Riley, a claims adjuster also called by appellant, to show a lack of cooperation on the part of Warren. Rumpf was then called adversely by respondent Peterson (over appellant's objection) to show that Warren had cooperated with appellant. In his summation to the jury, Rumpf broached the cooperation subject by saying:
"Now when it comes to this field called cooperation you might appreciate that I have a little personal resentment when it comes to this idea of cooperation, because I became very closely involved with cooperation."
The court immediately cautioned:
"Mr. Rumpf, you were allowed to testify even though it is not customary for attorneys to testify due to the exigencies of this case, but please don't place your emotions under argument."
Appellant contends that it was error for the trial court to permit Rumpf to testify at the trial and then argue to
In addition, appellant waived any complaint that it was improper to have allowed Rumpf to key his argument to the jury off his own testimony by not making timely objection and then moving for a mistrial.
A fifth and final issue, presented by plaintiff's motion to review, is whether the trial court abused its discretion in finding the jury's award of damages to the plaintiff to be excessive and in reducing the damages from $27,000 to $18,500.
Appellant has won a new trial on the issue of the notice of accident. Thus, the option given to Peterson by the trial court to accept the reduced damage award is to no avail. It has been our practice where a new trial has been ordered on an issue other than damages, and the damages are in dispute, to order the new trial to include the issue of damages.
By the Court.—Judgment reversed and cause remanded for further proceedings consistent with this opinion. One-half costs on this appeal to be awarded appellant as against respondent Peterson; full costs awarded respondent Warren against appellant; no costs awarded to respondent Peterson.