123 F.2d 692 (2nd Cir. 1941), 54, Farm Bureau Mut. Auto. Ins. Co. v. Violano

Docket Nº:54.
Citation:123 F.2d 692
Case Date:December 01, 1941
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 692

123 F.2d 692 (2nd Cir. 1941)




VIOLANO et al.



No. 54.

United States Court of Appeals, Second Circuit.

December 1, 1941

Where the legal issue of automobile liability insurer's liability was in real doubt, insurer could not be held liable to insured for the amount of judgment recovered against insured in excess of policy limit because of insurer's refusal after judgment to accept judgment creditor's offer to settle for an amount substantially less than policy coverage.

Page 693

William H. Edmunds and Guy M. Page, both of Burlington, Vt., for defendant-appellant and appellee Farm Bureau Mut. Automobile Ins. Co.

Peter Giuliani, of Montpelier, Vt., and Finn & Monio, of Barre, Vt., for plaintiff-appellant and appellee Rose Violano, adm'x.

C. O. Granai, of Barre, Vt., for defendants-appellants and appellees J. Alan Partridge and J. Arthur Partridge.

Before L. HAND, CLARK, and FRANK, Circuit Judges.

FRANK, Circuit Judge.

This is an appeal from a judgment holding Farm Bureau liable to the extent of $10, 155 because of a judgment in the amount of $12, 155 obtained by Rose Violano, as administratrix, against J. Alan Partridge for negligently causing the death of Geuseppe Violano while driving a Ford coach owned by his father, J. Arthur Partridge. Farm Bureau is admittedly liable to J. Alan in this amount under the 'omnibus clause' of a policy issued to J. Arthur on the death car, unless J. Alan, at the time of the accident was covered by other valid and collectible insurance. Such other insurance, according to Farm Bureau, was provided by a policy issued by the Shelby Mutual Plate Glass and Casualty Company. The court below held that the Shelby insurance did not apply to the accident in question, and Farm Bureau here challenges the validity of that holding. The judgment also held Farm Bureau liable to J. Alan for the expense of his defense in the suit brought against him by Mrs. Violano for $200 damages, for his confinement in jail under a body execution issued after Farm Bureau's refusal to pay the Violano judgment, and for the costs of the present action. There is a cross-appeal by Mrs. Violano, J. Alan and J. Arthur based on the court's failure to hold Farm Bureau liable for the full amount of the $12, 155 judgment.

Page 694

J. Arthur was the owner of four motor vehicles. Three of them, including the Ford coach which killed Violano, were insured by Farm Bureau. The policy on the coach was issued by it on February 22, 1934, and contained an omnibus clause providing that 'the terms and conditions of this policy are so extended as to be available, in the same manner and under the same conditions as they are available to the Named Assured, to any person or persons while riding in or legally operating the within described automobile, and to any person, firm or corporation legally responsible for the operation thereof, provided such use or operation is with the permission of the Named Assured * * * . If any person, form or corporation other than the Named Assured included in this insurance is covered by valid and collectible insurance against a claim also covered by this policy, such other person, firm or corporation shall not be entitled to indemnity or protection under this policy. ' The fourth vehicle, a Ford truck, was insured by a policy subsequently issued to J. Arthur by Shelby, dated April 30, 1934. That policy also contained an omnibus clause. The situation on June 26, 1934, then, was that J. Arthur was covered for any liability as owner or operator of his Ford coach and Ford truck, and that J. Alan, his son, was protected when using either vehicle with his father's permission. On that day, J. Alan, while driving the truck on the wrong side of the road, struck another vehicle and caused damages amounting to $175. He and his father were thereupon required by the Commissioner of Motor Vehicles, pursuant to the provisions of the Vermont Financial Responsibility Law, Public Laws of Vermont 1933, Secs. 5190-5199, to file 'proof of financial responsibility to satisfy any claim for damages' in specified amounts.

The law is by no means unambiguous as to the necessary extent to such proof. Sec. 5190 says financial responsibility must extend to 'any claim for damages, ' but in Sec. 5191, on...

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