407 F.

2d 576

Marcia M. BRYANT, Appellant,

v.
LIBERTY MUTUAL INSURANCE COMPANY, a
Massachusetts Corporation, Appellee.
Marcia M. BRYANT, Appellant,
v.
CONNECTICUT FIRE INSURANCE COMPANY, a
corporation organized under the laws of the State of
Connecticut, Appellee.
No. 12731.
No. 12732.

United States Court of Appeals Fourth Circuit.

Argued December 2, 1968.
Decided February 20, 1969.

Walkley E. Johnson, Jr., Norfolk, Va. (Crenshaw, Ware & Johnson,

Norfolk, Va., on brief), for appellant.
E. Pryor Wormington, Norfolk, Va. (Rixey & Rixey, Norfolk, Va., on
brief), for appellee in No. 12,731, and Harvey E. White, Jr., Norfolk, Va.,
for appellee in No. 12,732.
Before SOBELOFF, WINTER and BUTZNER, Circuit Judges.
WINTER, Circuit Judge:

These two appeals arise out of an automobile accident in which plaintiff

incurred personal injuries allegedly caused by the negligence of one Daniel W.
Evans, who at the time was operating a motor vehicle which had been procured
from the Budget Rent-A-Car of Norfolk, Virginia ("Budget"). Plaintiff obtained
a judgment against Evans in the sum of $32,000. When the execution issued
pursuant to this judgment was returned unsatisfied, plaintiff brought suit against
Budget's insurer, Liberty Mutual Insurance Company ("Liberty"). Plaintiff

simultaneously commenced an action against Connecticut Fire Insurance

Company ("Connecticut") under the uninsured motorist provision of the policy
of her mother, whose car plaintiff was driving at the time of the accident. The
two suits were consolidated below for trial before a jury. Upon a determination
by the jury that Liberty had properly invoked the defense of non-cooperation on
the part of Evans, judgment was entered in favor of Liberty. Judgment was also
entered in favor of plaintiff against Connecticut in the sum of $15,000, the limit
of the uninsured motorist coverage. Interest, however, was allowed by the
district court under the terms of the policy only on the amount of $15,000 from
the date of the judgment, rather than upon the sum of $32,000, the amount of
plaintiff's judgment against Evans, claimed by plaintiff. Bryant v. Liberty Mut.
Ins. Co., 282 F.Supp. 229 (E.D.Va. 1968). We affirm.
2-I3

Appellant's principal contention in the action against Liberty is that the district
court erred in refusing to direct a verdict for plaintiff because (a) there was no
showing of a material failure of cooperation on the part of Evans; (b) the
insurance company did not establish due diligence in seeking the insured's
cooperation; and (c) a compulsory insurance ordinance of the city of Norfolk
renders the defense of non-cooperation ineffective to prevent recovery by
plaintiff as a matter of public policy. We shall consider the initial two alleged
errors together.

At the outset, we note our agreement with the district court that under Virginia
law, Liberty was required to establish by a preponderance of the evidence that
Evans failed in a material manner to comply with the cooperation clause1 of the
insurance policy. See, e.g., Connell v. Indiana Ins. Co., 334 F.2d 993 (4 Cir.
1964); Grady v. State Farm Mut. Auto. Ins. Co., 264 F.2d 519 (4 Cir. 1959);
Shipp v. Connecticut Indemnity Co., 194 Va. 249, 72 S.E.2d 343, 348 (1952).
The issues thus raised are questions of fact to be determined by the jury. North
River Ins. Co. v. Gourdine, 205 Va. 57, 135 S.E.2d 120, 124 (1964); Shipp v.
Connecticut Indemnity Co., supra. We only state the obvious when we assert
that we are without power to redetermine facts found by the jury, e. g., Atlantic
& Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 358-359, 82
S.Ct. 780, 7 L.Ed.2d 798 (1962), and that our function is strictly limited to
determining the legal question of whether there is any substantial evidence to
allow the case to go to the jury. See, generally, Moore's Federal Practice
38.05, 38.08 [5] and cases cited therein.

Applying these principles, our review of the evidence in the instant case
convinces us that there is more than sufficient evidence to support the verdict of

the jury.
6

We need not detail the many facts contained in the record which have been
adequately stated by the district court. 282 F.Supp., at 232-233. We only
emphasize some of the more salient ones from which the jury properly could
have concluded that Evans violated his duty of cooperation with Liberty.

Following the accident involving plaintiff and Evans on January 13, 1966,
Evans was arrested but escaped from custody, finally surrendering to police a
few days later. Evans did not inform Liberty of the occurrence of the accident,
nor did he at any time forward to them any papers connected with the suit
which had been served upon him. One J. M. Polasko, an adjuster for Liberty,
during the course of his investigation of the accident made a futile attempt to
locate Evans by contacting Budget, the police, Evans's wife, and his attorney.
Finally, on January 28, Evans telephoned Polasko and discussed the details of
the accident freely for approximately thirty minutes. This is the only occasion
upon which Evans did discuss the occurrence with Liberty. Evans refused to
give a local address, however, and stated that he could be reached only through
his attorney.

Liberty, through its attorney, Robert Doumar, sent letters to Evans on February
9, 15, and 22, requesting him to contact the attorney and to forward any papers
pertinent to the pending suit instituted by plaintiff. Copies of these letters were
sent to various addresses, including those supplied by Evans's attorney, but
there was no response, although these letters were later admitted by Evans to
have been received by him. About the middle of March, Mr. Doumar
discovered that Evans was then incarcerated in the Norfolk city jail. Doumar
interviewed Evans twice in the jail, explaining each time to Evans the necessity
for his cooperation. Evans, however, initially refused to discuss the
circumstances surrounding the accident until such time as Doumar investigated
a pending criminal proceeding involving Evans in the State of Georgia. When
informed that a total payment of $415.00 was necessary to extricate Evans from
his entanglement with the Georgia authorities, Evans insisted that Liberty
and/or Doumar pay this amount. Doumar refused, whereupon Evans adopted
the attitude of no payment, no cooperation. Evans reiterated this position in
letters to Doumar of March 21 and 22, written from the Norfolk city jail, and
also in correspondence of May 13 and June 14 after Evans had been returned to
Georgia. Plaintiff aptly describes these letters as "contain[ing] reprehensible
implications."

During this period two attempts were made to take Evans's deposition before he
was transferred from Norfolk to Georgia. The first time around Evans

absolutely refused to discuss the details of the accident, even though he was
urged to do so by counsel for Liberty and for Connecticut. On the subsequent
attempt, Evans initially refused to discuss the accident, but finally relented
when counsel for Connecticut offered to speak with the traffic court judge
concerning the criminal aspects of the case. Since Evans had refused to discuss
the accident in private with Doumar, the latter did not ask any questions during
the taking of the deposition, later explaining that he wanted to avoid surprise
answers from an obviously hostile witness.
10

Even from this brief recital, manifestly, the jury could reasonably have reached
the conclusion that Evans flagrantly breached his duty of cooperation with
Liberty, in spite of the consistent and diligent efforts of Liberty to secure that
cooperation. Its verdict, therefore, will not be disturbed.

-II11
12

Plaintiff nevertheless urges that the defense of non-cooperation be stricken in

the instant case because of the existence of an ordinance of the city of Norfolk
which prescribes compulsory insurance for certain vehicles. Plaintiff assumes
that rented automobiles fall within the class of vehicles delineated by the
ordinance and that, therefore, the public policy to compensate victims who are
negligently injured by a vehicle of this class requires that such technical
defenses as that of non-cooperation be abrogated.

13

This issue was not presented to the district court, and Liberty raises the question
of the appropriateness of our considering the issue for the first time on review,
and devotes a considerable portion of its brief to a discussion of the ancient rule
of the common law that courts may not take judicial notice of municipal
ordinances.2 During oral argument, Liberty supplied us with copies of the entire
chapter from which the compulsory insurance provisions had been extracted by
plaintiff. Our examination of the city ordinances convinces us that the
compulsory insurance provisions were not intended to apply to rented
automobiles. On this basis, we conclude that there is no legal reason for
striking the defense of non-cooperation.3

14

Plaintiff relies upon 47-6 of the Norfolk City Code which provides in part
that "public vehicles shall not be operated or any license issued therefor unless
and until the owner has filed with the state corporation commission of Virginia,
for each vehicle operated, a liability insurance policy of some liability
insurance company authorized to do business in this state * * *." "Public
vehicles" are defined in 47-1(c) as "mean[ing] and includ[ing] taxicabs and
for-hire automobiles." Section 47-1(a) defines "for-hire automobiles" as "any

seven-passenger or five-passenger motor-driven vehicle or any station wagon

used for the transportation for hire of passengers * * *." (Emphasis added.)
15

It is unlikely that a vehicle used "for the transportation for hire of passengers"
includes a vehicle simply rented by a private person. The phrase is more
customarily employed to denote the business of transporting passengers for
hire, such as, by the operation of jitneys or a limousine service, over regular or
irregular routes. Examination of the entire chapter (Chapter 47, Taxicabs and
Other Vehicles for Hire) satisfies us that it is inapplicable to rented vehicles.
For example, before "public vehicles" may be operated in the City of Norfolk a
certificate of public convenience and necessity must be procured. Norfolk City
Code 47-2 (1958). Furthermore, once a certificate is issued, the for-hire
automobile may not be "loaned, rented, assigned or transferred to any person to
operate as such * * *." Norfolk City Code 47-3(c). Not only would it be
highly unusual to require a rent-a-car dealer to obtain certificates of need and
convenience; in addition, application of the prohibition against loaning or
renting automobiles would be at least obscure if applied to those in the business
of renting cars. See, in addition, Norfolk City Code 47-7: "It shall be unlawful
for any person to operate in the city any public vehicle, unless such person
shall be the owner of such public vehicle or the employee of such owner for the
operation of such vehicle." (Emphasis added.)4 This review of the various
provisions of the Norfolk City Code amply demonstrates that a "for-hire
automobile" is a vehicle which is used in the regular business of transporting
passengers, is analogous to a taxicab, and includes such devices as jitneys and
limousines. More importantly, the various regulatory provisions are quite
inconsistent with the normal operation of a rent-a-car agency, even if it could be
assumed that a rented car is in some sense a "public vehicle." Thus, we
conclude that a rented car is not a "public vehicle" within the meaning of the
Norfolk city ordinance, and the scheme requiring that compulsory insurance be
maintained for such public vehicles is not applicable thereto.

16

Aside from the question of the applicability of compulsory insurance scheme,

which we have decided adversely to plaintiff, there is no basis for abrogating
the defense of non-cooperation in the instant case. "Public policy," which we
are urged to invoke to achieve a contrary result, is more than a mere incantation
which mysteriously dissolves the "technical" defenses of insurance companies.
The State of Virginia, whose law we apply, has in no way intimated that all
automobile accidents are to be compensable and that technical defenses are to
be stricken with a view toward advancing the universality of insurance
coverage. Even if this is a desirable goal, Virginia's explicit and consistent
recognition of the defense of non-cooperation, e. g., North River Ins. Co. v.
Gourdine, 205 Va. 57, 135 S.E.2d 120 (1964); Nationwide Mut. Ins. Co. v.

Gentry, 202 Va. 338, 117 S.E.2d 76 (1960), makes it plain that we should not
achieve it by judicial fiat.
17

We have considered plaintiff's other assignments of error, relating primarily to

instructions to the jury and the admissibility of certain evidence. These issues
were fully explored in the court below, and we perceive no reversible error in
that court's resolution of these issues.

-III18
19

In No. 12,732, plaintiff seeks to recover interest on her judgment against her
own insurer, Connecticut. Connecticut concedes that it is liable for interest on
the $15,000 jugment which plaintiff obtained under the uninsured motorist
provisions of her policy. The district court allowed interest on $15,000,
computed from the date of the entry of the final judgment of the Court of Law
and Chancery of the City of Norfolk, Virginia, in favor of plaintiff against
Daniel W. Evans, and Connecticuit did not appeal. Thus, we construe the
judgment as entitling her to interest from that date until actual payment into her
hands. Plaintiff asserts, however, that she is entitled to interest on the entire
$32,000 judgment which she originally obtained against Evans. For her position
plaintiff relies upon the provision of her policy with Connecticut styled
"SUPPLEMENTARY PAYMENTS" which obligates the insurer

20

"To pay, in addition to the applicable limits of liability:

21

(a) all expenses incurred by the company, all costs taxed against the insured in
any such suit and all interest on the entire amount of any judgment therein
which accrues after entry of the judgment and before the company has paid or
tendered or deposited in court that part of the judgment which does not exceed
the limit of the company's liability thereon." (Emphasis added.)

22

Connecticut, on the other hand, notes that the foregoing provision is a part of
the main body of the liability policy but that plaintiff in the instant case secured
her judgment on the basis of a special uninsured motorist endorsement
appended to the policy. This endorsement states in part that:

23

"none of the insuring Agreements, Exclusions, Conditions or Other Provisions

of the policy shall apply to the insurance afforded by this endorsement except
the Conditions `Notice' or `Notice of Accident,' `Subrogation,' `Changes,'
`Assignment,' `Cancellation' and `Declarations.'"

24

Since the endorsement does not specifically incorporate the section concerning
"supplementary payments," Connecticut, so the argument goes, is not obligated
for interest "on the entire amount of * * * [the] judgment" obtained against the
uninsured motorist, Evans, but only for such interest as has accrued on the
judgment obtained directly against Connecticut under the terms of the
uninsured motorist endorsement.

25

We agree with Connecticut and with the district court that the "supplementary
payments" proviso does not apply to suits under the uninsured motorist
endorsement. In the first instance, we note that under Virginia law an uninsured
motorist provision was required to be appended to the policy, but there is no
statutory requirement that "supplementary payments" be included therein. Thus,
it is entirely consistent with the state statutes for an insurer to provide
supplementary payments under the main body of the liability policy but to
exclude such payments in the uninsured motorist endorsement. We think this is
precisely what Connecticut has done, for the endorsement states quite clearly
which provisions of the remainder of the policy are to be incorporated thereinto
and which are not. The supplementary payments constitute one of the "Other
Provisions of the policy [which] shall [not] apply to the insurance afforded by
this [uninsured motorist] endorsement."

26

Furthermore, we agree with Connecticut that the rationale of the supplementary

payment provision relating to interest on the entire judgment is the protection of
the insured when the insurer decides to contest liability and a judgment in
excess of the policy limits is returned against the insured. See, Wilkerson v.
Maryland Cas. Co., 119 F. Supp. 383, 388 (E.D.Va.1953), aff'd, 210 F.2d 245
(4 Cir. 1954). This purpose is not served and no other suggests itself when the
position of the parties is reversed, as in the instant case, and the insured is not
being compelled to pay a judgment.

27

The judgments in Nos. 12,731 and 12,732 are

28

Affirmed.

Notes:
1

The following conditions are contained within the policy issued by Liberty to
Budget: "10. NOTICE OF CLAIM OR SUIT * * * If claim is made or suit is
brought against the insured, the insured [the definition of which includes `any
person while using * * * a hired automobile'] shall immediately forward to the

company every demand, notice, summons or other process received by him or

his representative." "12. ASSISTANCE AND COOPERATION OF THE
INSURED. The insured shall cooperate with the company and, upon the
company's request, shall attend hearings and trials and shall assist in effecting
settlements, securing and giving evidence, obtaining the attendance of
witnesses and in the conduct of suits. * * *"
Furthermore, it may be noted that the rental contract signed by Evans when he
procured the vehicle involved in the accident from Budget contains the
following provision: "8. Renter or driver shall immediately report to Budget in
writing if said vehicle shall be involved in any accident, is damaged in any way
whatsoever, or is seized or stolen, and must immediately forward to Budget
every process, pleading or paper relating to any and all claims, suits and
proceedings received by Renter or driver. Renter agrees to co-operate with
Budget and its insurer in all matters connected with the investigation, defense
or prosecution of any claim arising out of the operation of the vehicle under this
contract." By paragraph 5 of the rental contract, Budget agreed to insure the
Renter under a standard public liability policy, the terms and conditions of
which were thereby incorporated into the rental contract. Pertinent provisions
of this policy have hereinbefore been set forth in this note.
2

The rule proscribing judicial notice of municipal ordinances has been

vigorously criticized by the commentators. McCormick, Evidence, 326, pp.
695-96; Wigmore, Evidence, 2572, pp. 552-54. See Uniform Rules of
Evidence, Rule 9 (2) (3) (judge may, and if furnished by the party with
sufficient information must, notice private acts and ordinances and regulations
of governmental divisions). Wigmore makes the following observations:
"Of course, these technical quiddities, in the reviewing Court's rulings, refusing
to take judicial notice, mean little more than that counsel should have taken
care to adduce formal proof of the law or ordinance at the trial below, or at
least to have set it forth in the appellate brief. But the curious layman will ask,
in most of these cases, why did not the appellate Court send to the law library
for the book and be done with the bother of looking up precedents to authorize
and excuse not doing so? Or why not, in oral argument, take a recess, until
counsel fetched the book and marked the page? Or even (!!!) why not call up
both counsel by telephone and peremptorily order `habeas corpus istius libri'?"
Wigmore, id.
Nevertheless, many cases support the notion that judicial notice of municipal
ordinances may not be taken. E. g., Howard v. United States, 306 F.2d 392 (10
Cir. 1962); Gardner v. Capital Transit Co., 80 U.S.App.D.C. 297, 152 F.2d 288

(1945); Tipp v. District of Columbia, 69 App.D.C. 400, 102 F.2d 264 (1939).
But see, United States v. Clement, 231 F.Supp. 913 (W.D.La.1964), rev'd on
other grounds, 358 F.2d 89 (5 Cir. 1966); City of Ketchikan, Alaska v. Lot 5,
130 F.Supp. 263, 15 Alaska 518 (1955); Monk v. City of Birmingham, 87
F.Supp. 538 (N.D.Ala.1949), aff'd, 185 F.2d 859 (5 Cir. 1950), cert. den., 341
U.S. 940, 71 S.Ct. 1001, 95 L. Ed. 1367 (1951). See also, United States v. A. L.
R. Schechter Poultry Corp., 76 F.2d 617, 623 (2 Cir.), aff'd, 295 U.S. 495, 55
S.Ct. 837, 79 L.Ed. 1570 (1935).
3

Appellant cites Royal Indemnity Co. v. Olmstead, 193 F.2d 451, 31 A.L.R.2d
635 (9 Cir. 1951), for the proposition that when there is in existence an
applicable scheme of compulsory insurance technical defenses such as noncooperation will not be available to the insurer. In the view we take of the
instant case, namely, that the scheme of compulsory insurance existent in the
City of Norfolk does not comprehend rented automobiles, we need not reach,
nor express any views upon, the issues adjudicated inOlmstead.

See also, Norfolk City Code 47-8(a) ("Every person operating one or more
public vehicles * * * shall keep and maintain * * * a manifest or written record
* * *."); 47-9 (posting of certificate of public convenience and necessity,
rates, etc.; display of rates on outside of vehicle); 47-18 (for-hire automobile
rates; designated rates between specified points); 47-19 (division of fares
among passengers of public vehicles); 47-22 (prepayment of fares and
obligation to transport passengers); 47-23 (shortest practicable route); 47-24
(passengers on front seat); 47-25 (limitation on number of passengers
transported); 47-31 (disposition of property left in vehicles); 47-36
(requirement of "public vehicle driver's license" before driving vehicle); 4738 (posting of driver's license in vehicle, etc.); 47-42 (license granted only to
owners of vehicles or employees thereof)