State Farm Mut. Auto. Ins. Co. v. Hanna

• Decision Date: 26 March 1964
• Docket Number: 5 Div. 772
• Citation: 277 Ala. 32,166 So.2d 872
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Phillip HANNA et al.
• Court: Alabama Supreme Court

Page 872

166 So.2d 872

277 Ala. 32

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Phillip HANNA et al.

5 Div. 772.

Supreme Court of Alabama.

March 26, 1964.

Rehearing Denied Aug. 27, 1964.

Sam W. Oliver, Dadeville, Rives, Peterson, Pettus & Conway, Birmingham, for appellant.

Chas. R. Adair, Jr., and Ruth S. Sullivan, Dadeville, Wm. I. Byrd, Alexander City, for appellees.

HARWOOD, Justice.

This is an appeal from a decree entered in a declaratory judgment action. The bill prayed for a determination of the rights of the parties under an automobile insurance policy.

It alleged that a damage suit for personal injuries had been filed by Jimmie Hanna against his son Phillip, who was the insured. It further alleged that the injury to Jimmie Hanna, on 4 November 1961, resulted from the negligence of Phillip in the operation of an automobile.

The insurer, State Farm, had been called upon to defend the suit under a liability insurance policy issued by it to Phillip. State Farm thereupon filed the bill below and asserted that it was not obligated to defend the suit nor to pay any judgment rendered thereon on grounds that, (1) the alleged accident was not covered by the policy because of a family exclusion provision and, (2) the respondent, Phillip Hanna, had breached the cooperation clause of the policy, a condition precedent to liability by State Farm under the policy.

The family exclusion provision in the policy excludes coverage to:

'Bodily injury to the insured or any member of the family of the insured residing in the same household as the insured.'

The assistance and cooperation of the insured provision in the policy reads:

'The insured shall cooperate with the company.'

In their separate answers the respondents denied that Jimmie Hanna was a member of the family of the insured, Phillip Hanna, residing in the same household, and further denied that the insured had failed to cooperate with State Farm as required by the policy.

After a hearing, the court rendered a decree adverse to State Farm, and in favor of the respondents, holding that State Farm was obligated to defend the action at law instituted by Jimmie Hanna against his son Phillip Hanna, the insured, and was obligated to pay any judgment that might be rendered therein. The court further found that non-cooperation on the part of the insured that would prejudice the complainant was not sufficiently established.

From this decree State Farm has perfected its appeal.

The appellant has argued three points: (1) that the court erred in decreeing that State Farm was obligated to defend the insured, Phillip Hanna, in the suit brought by his father, and to pay any judgment rendered thereon against Phillip Hanna, (2) that the court erred in finding that the coverage, if any, was not voided by the insured's breach of the cooperation clause, and (3) in considering evidence which was illegal, immaterial, and irrelevant in reaching its conclusions and its decree.

The evidence presented by the complainant shows that at the time of the accident on 4 November 1961, the insured, Phillip Hanna, was 20 years of age, and was in his third year as a student in Howard College in Birmingham, Alabama. At the college he lived in a dormitory room with a roommate, with the usual furnishings of a dormitory room.

It cost Phillip approximately $800.00 per college year to attend college, his tuition being reduced by half because he was a ministerial student. These expenses were paid in part by Phillip and in part by his parents who were domiciled in East Tallassee, Alabama. Prior to entering college Phillip had accumulated $1,000 to $1,500 which was deposited in a savings account in a bank in Tallassee. During the summer vacations he had earned $300 to $500 in summer jobs, and while in college he had preached six or eight times a year and had been paid about $15 each time. He drew upon his monies from time to time while in college, and part of his expenses were paid by his parents. Upon registering for the draft in Tallapoosa County, he gave his address as that of his parents in East Tallassee. Subsequent notices of classification by the draft board have been sent to that address, the last such notice being dated 12 January 1961. He never changed his address with the draft board.

During the summer vacation each year, Phillip returned to the home of his parents in East Tallassee, and also returned there for the Thanksgiving, Christmas, and Spring holidays. He also would return for weekend visits from time to time.

Phillip had a room in the family home in East Tallassee which was known as his room, and which had been his room while in high school. He was an only child and he and his parents were the only people who had lived in the home. While away at college some of his possessions remained in this room.

Just before Christmas of 1960, he applied for the policy of insurance involved in this case. At that time he was a student at Howard College. The license tags for the automobile purchased in late 1961 were bought in Tallapoosa County and Phillip gave his address as East Tallassee, Alabama.

Phillip did not pay room rent or borad when he went to the family home on weekends, but from time to time during the summer vacations he would buy and contribute groceries. He maintains a charge account in a drug store in East Tallassee where his address is listed as the family home. His drivers' license shows his address as being at the family home. The present insurance policy and other papers belonging to Phillip remain in the family home. On the other hand, his college library card listed his address as Room 213, Howard College. When he purchased the insurance policy here involved, he told Mr. Thompson, the State Farm agent, he had been living in Birmingham at school.

Mr. Thompson testified that he had told Mr. Jimmie Hanna that the two conditions to issuing the policy to Phillip were that a State Farm policy must be in force in his immediate household insuring a car owned by a member of the household and secondly, that the minor owner of a car had to be a resident or member of the household. When the policy was actually applied for on 26 December 1960, he again discussed these conditions in the presence of both Mr. Hanna and Phillip. He told Phillip he was qualified under both conditions, though Mr. Thompson at that time knew that Phillip was a student in Birmingham and would take the car to Birmingham when he returned to school. Notwithstanding, Mr. Thompson considered Phillip a member of the household in Tallassee.

The accident in which Mr. Hanna was injured occurred on 4 November 1961, while Phillip had his automobile in the yard of his parent's home, he being on a weekend visit to them.

On 10 February 1962, Mrs. Hanna, at the request of Mr. Hanna's attorney, got in touch with Phillip at Howard College and requested him to pick up papers pertaining to a suit filed by his father against him, and to take such papers to Dadeville for filing. Phillip did as he was requested, picking up the papers at the office of his father's attorney, and called his mother from Dadeville telling her that he had been served, and that she should notify Mr. Thompson. This, of course, was after he had taken the suit papers from the attorney's office in Alexander City to Dadeville, Alabama, where he handed them to the clerk of the Circuit Court. He also filed a paper for the appointment of a guardian ad litem to represent him in the suit. In Dadeville a copy of the suit papers was handed to the deputy sheriff by an employee in the circuit clerk's office, who in turn served the copy on Phillip. He then returned to school and did nothing with respect to the papers until his mother called him about two and a half weeks later and told him that Mr. Thompson, the State Farm agent, needed the papers. Phillip mailed them to his mother.

Phillip testified that he in no wise discussed the suit with Mr. Hanna's attorney, but merely picked up the papers and took them to Dadeville as instructed.

Mr. Thompson testified he received these papers on 6 March. He further testified that he visited Jimmie Hanna with a claims adjuster some time after 5 November 1961, and prior to 10 February 1962, but he could not recall what was said or done on that occasion regarding the injury to Mr. Hanna.

Mr. Charles Funderbuck testified that Phillip had worked in his drug store in the afternoons while in school, and full time during the summers. Phillip terminated this employment after telling Mr. Funderbuck that he was going to college in Birmingham.

Miss Jenny Ruth Gann, clerk of the East Tallassee Baptist Church, testified in substance that Phillip Hanna moved his church membership back and forth between East Tallassee and Birmingham depending on whether he was in school or at home for the summer. A copy of the 'Church Covenant' was received in evidence and it showed that...