Suttenfield v. Travelers Indemnity Company

Decision Date25 August 1955
Docket NumberCiv. A. No. 1912.
Citation133 F. Supp. 418
CourtU.S. District Court — Eastern District of Texas
PartiesJames E. SUTTENFIELD and Columbus Fiber Mills Company, Inc., Plaintiffs, v. The TRAVELERS INDEMNITY COMPANY and Continental Casualty Company, Defendants.

W. C. Gowan, Carrington, Gowan, Johnson, Walker & Bromberg, Dallas, Tex., for plaintiffs.

Pinkney Grissom, Dallas, Tex., Thompson, Knight, Wright & Simmons, Dallas, Tex., for defendant, The Travelers Indemnity Company.

John L. Lancaster, Jr., and D. L. Case, Dallas, Tex., Robertson, Jackson, Payne, Lancaster & Walker, Dallas, Tex., for defendant, Continental Casualty Company.

SHEEHY, Chief Judge.

James E. Suttenfield, a citizen of Virginia, and Columbus Fiber Mills Company, Inc., a Georgia corporation which will be hereinafter referred to as Columbus, as Plaintiffs, are seeking to recover moneys they were compelled to pay and expend in the defense and settlement of a certain law suit brought by one Edgar E. Hoppe against the Plaintiffs, wherein Hoppe was seeking to recover damages in a substantial amount he claimed to have suffered as a result of an automobile collision between an automobile operated by Hoppe and an automobile operated by Suttenfield.

The Defendant, The Travelers Indemnity Company, which will be hereinafter referred to as Travelers, is a Connecticut corporation. The Defendant, Continental Casualty Company, which will be hereinafter referred to as Continental, is an Illinois corporation.

All of the facts were stipulated by the parties with the exception of those facts relating to the claim of Plaintiffs for reimbursement because of attorneys' fees and other expenses incurred in connection with the defense of the claims made by Hoppe against them as a result of the collision, above mentioned. The evidence offered by Plaintiffs as to those attorneys' fees and expenses so incurred was not controverted by the Defendants, or either of them.

The Travelers, by way of counterclaim against Continental, seeks to recover attorneys' fees and investigation expenses that it incurred in connection with the investigation and defense of the claim made by Hoppe against the Plaintiffs.

The pertinent facts are as follows:

At all times pertinent hereto Suttenfield was an employee of Columbus in the capacity of a salesman. On October 20, 1953, Robertson Auto-Rentals & Leases, Inc., a corporation, hereinafter referred to as Robertson, entered into a written rental agreement with Columbus under the terms of which Robertson leased to Columbus a certain Ford automobile owned by Robertson, hereinafter referred to as the Robertson automobile, for a period of one year at a rental of $80 per month. Under the terms of said lease agreement the lessee was obligated to provide public liability and property damage insurance covering said automobile with limits of not less than $100,000 for each person, $300,000 for each accident and $25,000 for damage to property. On October 20, 1953, Travelers issued its automobile policy No. MV2527774 covering the Robertson automobile with coverage for bodily injury liability of $100,000 for each person and $300,000 for each accident and with coverage of $25,000 for damage to property. The premium on this policy was paid by Columbus and Suttenfield, Columbus and Robertson were named as the insureds in said policy.

During all times pertinent hereto Suttenfield owned as his personal automobile a Studebaker sedan. On April 29, 1953, Travelers issued to Suttenfield its automobile policy No. MV1368999 covering said Studebaker automobile with bodily injury coverage of $25,000 for each person and $50,000 for each accident and property damage coverage of $5,000 for each accident.

On January 1, 1954, Continental issued its automobile policy No. CA-1055000, hereinafter referred to as the Continental policy, to Hertz Driveurself Stations, Inc., a corporation hereinafter referred to as Hertz, covering the driverless automobiles that Hertz owned and rented to persons or firms for driving with bodily injury liability coverage of $25,000 for each person and $50,000 for each accident and property damage coverage of $5,000 for each accident.

Each of the policies of insurance, above mentioned, was in full force and effect on January 18, 1954, and under the terms of each policy the insurer was not only obligated to pay the bodily injury liability and property damage liability incurred within the coverage of the policy up to the limits of such coverages extended in said policies but was required to defend any and all suits arising within the coverage of the policy and to pay the court costs in any said suit adjudged against a person falling within the coverage of said policy.

Suttenfield was authorized by Columbus to rent an automobile for use in the discharge of the duties of his employment when it was necessary, and when an automobile was rented, Columbus would pay the rental fee. The automobile rented from Robertson by Columbus was rented or hired primarily for the use of Suttenfield although other employees of Columbus used it from time to time. Suttenfield used said automobile frequently and had charge of said automobile seven days a week and not only used it in the discharge of his duties with Columbus but used it in going to and from his home and office daily when he was in Richmond, Virginia. During the year immediately preceding January 18, 1954, Suttenfield used or hired a rented automobile in the course of his employment with Columbus on the following dates at the following places: May 25, 1953, at Indianapolis, Indiana; May 28, 1953, at Dallas, Texas; August 17, 1953, at Boston, Massachusetts; August 18, 1953, at Boston, Massachusetts; August 20, 1953, at Boston, Massachusetts; November 4, 1953, at Fort Worth, Texas; and November 20, 1953, at Indianapolis, Indiana.

On January 18, 1954, Suttenfield went to the place of business of Hertz in Dallas, Texas, and rented an automobile owned and maintained by Hertz for the purpose of renting to persons for driving in order that he might drive said automobile to Waco, Texas. On that date and while Suttenfield was driving this automobile from Dallas to Waco, Texas, said automobile was involved in a collision with an automobile owned and being operated by one Edgar E. Hoppe, hereinafter referred to as Hoppe. As a result of that collision Hoppe sustained serious permanent personal injuries and his automobile was severely damaged. Suttenfield at the time of said collision was acting within the scope of his employment with Columbus.

Subsequent to the collision, above mentioned, Hoppe filed suit in the District Court of Hill County, Texas, the county in which said collision occurred, against Suttenfield and Columbus seeking to recover damages in excess of $40,000 because of the personal injuries received by him and the damages his automobile suffered in said collision. Thereafter that suit was removed to the United States District Court for the Western District of Texas, Waco Division. While the suit was pending in the last-mentioned court settlement negotiations were had between Hoppe and the Plaintiffs in this suit, the Defendants in that suit. Hoppe finally agreed to accept $40,000 and court costs in full settlement of all claims that he had against Suttenfield and Columbus, and each of them, as a result of the collision aforesaid, and the Plaintiffs and Defendants herein were in accord that such settlement offered should be accepted but could not agree on how much should be paid by each. In order to effect such settlement a written agreement was entered into by and between the Plaintiffs herein on the one hand and the Defendants herein on the other hand, wherein it was agreed that the Plaintiffs herein should pay said sum of $40,000 to Hoppe and pay the costs of court in said suit to the United States District Court for the Western District of Texas in full settlement of any and all claims that Hoppe had against the Plaintiffs herein, and each of them, because of said collision with the understanding that such payments by the Plaintiffs herein would not prejudice any rights that they and the Defendants herein had or might have under any of the policies of insurance, above mentioned. Pursuant to that agreement Columbus on November 23, 1954, paid the sum of $40,000 to Hoppe for the account of Suttenfield and also paid for Suttenfield's account the court costs in the amount of $25.50 incurred in said suit in the United States District Court for the Western District of Texas and obtained a full release from Hoppe releasing Suttenfield and Columbus, and each of them, from any and all claims that Hoppe had or might have against Suttenfield and Columbus, and each of them, because of the collision in question. The sum of $1,000 of the $40,000 paid to Hoppe was for the damages sustained by the Hoppe automobile in said collision.

Immediately upon Hoppe instituting the suit in the District Court of Hill County, Texas, against the Plaintiffs herein, the Plaintiffs herein tendered the defense of said suit to the Defendants herein, and each of them. Continental denied liability under its policy of insurance, above mentioned, and refused to defend said suit. The Travelers likewise denied liability under each of its policies, above mentioned, but undertook the defense of such suit under a reservation of rights agreement entered into with the Plaintiffs herein. Under the terms of the agreement Travelers, by undertaking the defense of said suit, did not waive any of its rights to deny liability under its policies of insurance in question.

After Hoppe instituted the suit in the District Court of Hill County, Texas, as aforesaid, and the Defendants herein, and each of them, denied...

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4 cases
  • Leteff v. Maryland Cas. Co.
    • United States
    • Court of Appeal of Louisiana (US)
    • November 26, 1956
    ...'drive other cars' clause, and, therefore, the insurance policy in question did not afford him coverage. Suttenfield v. Travelers Indemnity Co., D.C.E.D.Tex.1955, 133 F.Supp. 418, 422. Suttenfield and his employer, Columbus, Inc., both of Richmond, Virginia, brought suit against the defenda......
  • Nelson v. U.S. Fire Ins. Co.
    • United States
    • California Court of Appeals
    • February 21, 1968
    ...members of the Berkeley Y.M.C.A.'s Board of Directors, who are specifically designated as named insureds. In Suttenfield v. Travelers Indemnity Company, D.C., 133 F.Supp. 418 (reversed on another point, Continental Casualty Company v. Suttenfield, 5 Cir., 236 F.2d 433), Robertson Auto-Renta......
  • Continental Casualty Company v. Suttenfield
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 4, 1956
    ...factual situation presenting the questions posed for our decision is set forth in an opinion by the district court. Suttenfield v. Travelers Indemnity Co., 133 F.Supp. 418. Less than was there said may here suffice for presenting the issues of the James E. Suttenfield, a Virginia resident, ......
  • Sentry Sec. Systems, Inc. v. Detroit Auto. Inter-Insurance Exchange, INTER-INSURANCE
    • United States
    • Supreme Court of Michigan
    • May 5, 1975
    ...'individual' in its plain, ordinary and generally accepted meaning does not include a corporation.' Suttenfield v. Travelers Indemnity Co., 133 F.Supp. 418, at 424 (E.D.Tex., 1955). The purpose of the 'individual' limitation is to provide coverage to natural persons as to non-owned automobi......

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