Home Indemnity Co. of New York v. Standard Acc. Ins. Co.

• Decision Date: 14 June 1948
• Docket Number: No. 11661.,11661.
• Citation: 167 F.2d 919
• Parties: HOME INDEMNITY CO. OF NEW YORK v. STANDARD ACC. INS. CO. OF DETROIT et al.
• Court: U.S. Court of Appeals — Ninth Circuit

167 F.2d 919 (1948)

HOME INDEMNITY CO. OF NEW YORK v. STANDARD ACC. INS. CO. OF DETROIT et al.

No. 11661.

Circuit Court of Appeals, Ninth Circuit.

May 11, 1948.

Rehearing Denied June 14, 1948.

Thomas P. Menzies and Harold L. Watt, both of Los Angeles, Cal., for appellant.

Jones, Thompson & Kelly, of Los Angeles, Cal., for appellee Standard Acc. Ins. Co.

Lasher B. Gallagher, of Los Angeles, Cal., amicus curiae.

Before GARRECHT, DENMAN, and BONE, Circuit Judges.

GARRECHT, Circuit Judge.

The appellee insurance company, hereinafter referred to as "Standard", filed in the court below a complaint praying for a judgment declaring that it was not obligated to defend certain actions brought in the Superior Court of San Diego County, California, and that it had no liability to to pay any judgment that might be rendered therein until the appellant had fully paid and discharged its liability under a certain policy of automobile liability insurance issued by it.

1. The Insurance Policies

The appellant's policy was issued on November 30, 1945, and insured Walter Haggerty and the Northumberland Mining Company, jointly and severally, as their respective interests may appear, against bodily injury liability in the amount of $100,000 for each person and $300,000 for each accident, and property damage liability in the amount of $5,000, resulting from the operation of the company's 1942 Lincoln Zephyr sedan. It was that automobile which was involved in the accident that forms the basis of the present suit.

One paragraph of the policy contains the following definition:

"The unqualified word `insured' * * * includes the named insured and, except where specifically stated to the contrary, also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured."

Another paragraph of the policy reads as follows:

"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. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate and surgical relief to others as shall be imperative at the time of the accident."

The policy also contains the following provision:

"Action Against company

"No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy. * * *"

Standard's interest in any legal liability arising from the accident referred to, stems from the following facts:

Under an automobile liability policy effective from September 29, 1945, to September 29, 1946, Standard insured George White against bodily injury liability in the amount of $25,000 for one person or $50,000 for more than one person injured or killed in one accident, from the operation of a certain 1942 Packard automobile. That policy contains a provision that when the automobile covered by the policy is undergoing repairs, the insurance afforded by the policy applies to another automobile "used as the substitute" for the car that is being repaired.

Another paragraph in Standard's policy provides in part that, as to a "substitute automobile," the coverage "shall be excess insurance over any other valid and collectible insurance available to the insured."

The court found that when the accident occurred the Packard automobile, covered by Standard's policy, was under repair; that White was at that time driving the Lincoln Zephyr, covered by the appellant's policy, with the permission of the named insured under that policy; and that therefore White himself became "an assured under said policy."

Accordingly, Standard is endeavoring to fix the appellant's liability as the primary insurer, so that Standard itself may become only the excess insurer, under the provision in Standard's policy relative to "excess insurance over any other valid and collectible insurance available to the insured."

2. The Accident and Its Aftermath

The court found that on July 20, 1946, White, driving the Lincoln automobile mentioned above, ran into and collided with Claude McLester Lee and Leana Mae Osborne Lee, injuring them fatally. The evidence showed that the accident occurred at about 10:35 P.M., in Solano Beach, California, on Highway 101. One witness said that he heard the crash, and that when he first saw the bodies, immediately after the accident, they were about 60 or 80 feet from the point of impact, which he described as "awful". Another witness testified that she saw "the bodies flying through the air".

After the accident, White seemed to slow down his car but he did not stop. He was halted by a motorcycle policeman within the city limits of San Diego about 10 or 15 minutes later. After inspecting the front end of White's car with a flashlight, the officer asked White to accompany him to the police station. There White was informed that he was under arrest for violation of Section 480 of the California Vehicle Code, relating to the failure of the driver of a motor vehicle involved in an accident to stop immediately, render assistance, etc. On the following day White was released on bail.

White told the police that the damage to the front end of his car had been done at the Santa Anita race track as the result of insufficient parking space, and that he knew nothing of any accident, or "if there was anybody got killed."

At this juncture, we adopt, with certain amplifications in the interest of clarity, a part of a "chronological table of events" contained in Standard's brief:

July 22, 1946 — Fitzgerald et al. v. White et al., is filed in the San Diego County Superior Court, being a damage suit arising out of the death of the two pedestrians killed in the accident.

Oral statement by White, given to the appellant's claim manager and the appellant's attorney, to the effect that White had not been in an accident, had not struck any one, and had not known anything about the accident; and that his automobile had been damaged at the Inglewood race track. The court itself specifically found that White first reported to the appellant "that he had not been involved in any accident."

July 23, 1946 — The insured automobile is examined by the appellant's attorney and the appellant's claim manager, and the inquest is attended by them.

White's sworn statement is taken by the appellant's representatives. In that statement, White repeatedly denies having been in any automobile accident during his trip from Los Angeles to San Diego, on July 20, 1946. Seven of these denials are unqualified: three are modified by the phrase, "Not that I know of". This sworn statement, according to the claim manager, "was in substance and effect the same statement" as that given by White the day before.

Later the same day, White informs the appellant's attorney that he had fallen asleep and the accident may have happened then.

July 24, 1946 — The claim manager interviews witnesses near the scene of the accident and is informed by the appellant's attorney that the automobile had human blood and flesh on it.

July 26, 1946 — William W. Harper, consulting physicist, is employed by the appellant "to determine the extent of the physical damage, and then at that time to determine whether or not the car had collided with some fixed object or with another vehicle, or with human beings."

White informs the appellant's representative that he thinks he is going to plead guilty to violating § 480, supra, adding "I can't tell you why," according to the testimony of the claim agent.

July 29, 1946 — White's attorney in the criminal case informs the appellant's attorney as to the reasons for White's plea of guilty. The appellant's attorney expresses the wish that the plea of guilty be not entered for White, but White's lawyer is obdurate.

July 31, 1946 — White pleads guilty.

August 6, 1946 — Lee v. White is filed in the San Diego court. See the first paragraph of this chronology.

August 15, 1946 — Answers to Superior Court actions against White, denying that White was involved in an accident, are prepared by the appellant's attorney and sent to White for verification.

August 23, 1946 — Answers admitting that White was involved in the accident are sent to the appellant's attorney and thereafter filed by him. Shortly afterward, the appellant's attorney withdraws as attorney for White.

August 26, 1946 — The appellant denies liability in both civil cases against White.

3. The Weight to Be Given to the Judge's Findings

The appellant's attack upon the judgment below is based upon the contention that the lower court erred in finding that White "has at all times co-operated" with the appellant in the investigation of the accident and in the defense of the actions against him in the state court. White's lack of co-operation, the appellant argues, consists of "false, misleading or inconsistent" statements of facts in reporting the accident. The claim is also made that the court erred in finding that the appellant "has not been in anywise prejudiced by any action or statement or omission of George White."

Now, there is no serious dispute as to the nature of the five separate and distinct statements made by White regarding the accident.

The first was made to the police, and White's own version of what he told the arresting officer regarding his lack of knowledge of any accident agrees with that given by the police.

The second statement was given orally to the appellant's representatives, and the testimony as to what that statement was is not disputed. Indeed, Standard cites the claim manager's testimony alone as the basis for the section of the "chronological...