Interstate Insurance Co. v. Logan

Delaplaine, J., delivered the opinion of the Court. This action for conversion of an automobile was brought in the Baltimore City Court by John Logan, of Dundalk, against Fox Chevrolet Sales, Inc., a corporation operating a garage in Baltimore, and Interstate Insurance Company, a New Jersey corporation. Plaintiff’s automobile, a 1951 Chevrolet sedan, which was insured against loss by theft, was stolen on March 16, 1952. It was recovered on the same day after it was wrecked in a collision in which the thief was killed.

Plaintiff presented a claim of loss to Leo Mayberry, one of Interstate’s insurance adjusters, who offered $1,725 in settlement of his claim. That offer, however, was not satisfactory to plaintiff. Mayberry then asked him for permission to have the car taken to Fox Chevrolet’s garage on South Hanover Street to find how much it would cost to repair it. ⁵⁸⁶ On March 23 plaintiff wrote to Interstate’s home office in Newark, New Jersey, that he preferred to have a cash settlement, as the car had been badly damaged and a man had been killed in it, but he did not think Mayberry’s offer was fair. He felt that he was entitled to $1,950.

Nevertheless, on March 31 plaintiff wrote to Interstate’s Baltimore office giving his permission to have the automobile repaired. Accordingly on April 3 Mayberry ordered Fox Chevrolet to make the necessary repairs. The insurer agreed to pay for the repairs upon submission of proof of loss.' After plaintiff received notice that repairs had been made to his automobile, he asked two men, who were engaged in the used car business, to inspect it. The two men made a list of eighteen items of damage which were still unrepaired.

On June 9 plaintiff’s attorney wrote to the insurer that the automobile had been “merely patched up,” and that plaintiff would not accept it in that condition. On June 12 Robert Fox, president of Fox Chevrolet, requested plaintiff’s attorney to send to him the list of eighteen items. • The attorney did so, and Fox Chevrolet made further repairs. On receiving notice that the automobile was ready for a second inspection, plaintiff asked Francis J. Ilers, one of the men who made the first inspection, to go down to the garage and look at the car again. On that inspection Ilers found that at least four items were still in need of repair.

He testified as follows about the uncorrected damages: “First, the repainting of the car; it still had evidence of having been painted, because the sanding marks were still apparent on the roof. Apparently the corrections made on the part of Fox Chevrolet was to take and buff it with a wheel. I don’t think it had been repainted. * * * The drip rail was not replaced. It was still spliced in half there and still showing. * * * The roof still showed evidence of damage, and the most important thing I remember was the fact that the cross member had not been touched.” ⁵⁸⁷ On July 2, 1952, plaintiff’s attorney wrote to the insurer that Fox Chevrolet had done “a botch job.” May-berry inspected the automobile again, and on July 14 he wrote to plaintiff’s attorney that repairs and replacements had been completed in a good workmanlike manner. “We would appreciate it,” he added, “if Mr. Logan would make a personal inspection of this car and road test it for his own satisfaction.

He enclosed a proof of loss and release filled out for the cost of repairing the car for plaintiff’s signature. When plaintiff made the third inspection of the automobile, he found that it was still not fully restored. “The third time I went down,” he testified, “there was a few minor adjustments, paint scars, and the liner in the roof was wrinkled.” He told Mr. Fox that he needed an automobile, but he could not accept that car under those conditions. He further testified that he wanted to have his automobile for thirty days to road test it, but Mr. Fox would not allow him to take it out of the garage until he signed the proof of loss and release. He refused to sign this instrument because it would release and discharge the insurer from all claims that he might have against the insurer under the policy.

The trial judge instructed the jury in substance as follows: (1) that under the theft policy the insurance company had the right to indemnify by making repairs to the automobile and, if it properly made such repairs, the verdict should be in favor of defendants; (2) that if the jury found that Fox Chevrolet repaired the automobile in a good and workmanlike manner, it could claim a lien on the automobile and could retain the automobile until the charges for repairs had been paid; and (3) that plaintiff claimed damages on the ground of an unreasonable refusal of Fox Chevrolet to give him his automobile and the failure of defendants to restore it to the condition it was in before the theft, and if the jury found that defendants did refuse unreasonably to carry out their obligations and thereby did wrongfully deprive plaintiff of its possession, then the verdict should be for plaintiff. ⁵⁸⁸ The jury found in favor of Fox Chevrolet, one defendant, but in favor of plaintiff for the sum of $1,828.50 against Interstate, the other defendant. Interstate appealed from the judgment entered against it. The main contention on this appeal was that there was no legally sufficient evidence of conversion to warrant submission of the case to the jury. The insurer argued that the release it asked for was merely the usual form of release to show that the claim had been settled on completion of the repairs; that the insurer had not made any claim inconsistent with plaintiff’s