E. Payson Gibbs v. Lumbermen's Mutual

If the plaintiff may charge the defendant with conducting the defence of the action, the issue of coverage may not now be litigated. The defendant as insurer had no interest to defend unless there was coverage, and this was a preliminary question to be determined. American Motorists Ins. Co. v. Garage, 86 N.H. 362, and cases cited. If held to have been represented by the defending attorneys in the trial, its ""binding acknowledgment"" of coverage would appear to follow. When the action went to trial, it knew the facts upon which its position against coverage stood. If it defended, it did so ""without reservation, with a full knowledge of the facts, and without excusing circumstances,"" and thus was estopped from denying that the policy gave insurance for the claim defended against. Sauriolle v. O'Gorman, 86 N.H. 39, 49. Its defence of the action, without seeking prior determination of the issue of coverage, would therefore dispose of the issue in the plaintiff's favor. The issue of notice of the action affects the defendant's liability in two respects. Primarily, if there was notice, the issue of coverage would now be presented provided the defendant did not conduct the defence of the action. If held to have defended, then it became estopped from asserting non-compliance with the requirement of notice in the manner the policy prescribed. Wilson v. Insurance Co., 77 N.H. 344. Notice as an issue is to be given the same procedural treatment as coverage and other matters on which the insurer's right or duty to defend depends. In a secondary way, upon the issue of the defendant's chargeability for conducting the defence the issue of notice has relevant bearing. Notice given in a manner authorized would be a material if not controling circumstance of the situation in its support of the claim that the defendant held the defending attorneys out to the plaintiff as authorized to carry on the defence in its behalf.