Wells v. Hartford Acc. & Indem. Co.

• Decision Date: 12 October 1970
• Docket Number: No. 55091,55091
• Citation: 459 S.W.2d 253
• Parties: James WELLS, individually and as next friend for Jewel Wells, Edith Wells, Tony Wells and Elaine Wells, minors, Plaintiffs-Respondents, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a corporation, Defendant-Respondent, Preferred Risk Mutual Insurance Company, a corporation, Defendant-Appellant, Lester Riley, Defendant-Respondent.
• Court: Missouri Supreme Court

Page 253

459 S.W.2d 253

James WELLS, individually and as next friend for Jewel Wells, Edith Wells, Tony Wells and Elaine Wells minors, Plaintiffs-Respondents, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a corporation Defendant-Respondent Preferred Risk Mutual Insurance Company, a corporation Defendant-Appellant, Lester Riley, Defendant-Respondent.

No. 55091.

Supreme Court of Missouri, En Banc.

Oct. 12, 1970. As Modified on Court's Own Motion Nov. 9, 1970.

Jack H. Ross, Coleman, Ross & Cekovsky, Clayton, for plaintiffs-respondents.

Donald L. James, Moser, Marsalek, Carpenter, Cleary & Jaeckel, St. Louis, for defendant-appellant.

ROBERT E. HOGAN, Special Judge.

Plaintiff James Wells and his four minor children were injured in a collision between Wells' automobile and a truck being driven by defendant Lester Riley. Plaintiffs brought suit for personal injuries against defendant Riley and obtained a judgment in the sum of $2,000 in favor of plaintiff James Wells, and judgments in favor of each of the minor plaintiffs in the sum of $750. Subsequently, plaintiffs brought this action for a declaratory judgment, seeking to establish either: (1) that defendant Hartford was liable under the omnibus clause of its automobile liability policy covering the vehicle being driven by defendant Riley, or (2) that defendant Preferred Risk was liable under the uninsured motorist provisions of its automobile liability policy issued to plaintiff James Wells. A trial to the court resulted in a finding that defendant Preferred Risk was liable on its policy. Preferred Risk appealed to the St. Louis Court of Appeals, which affirmed the judgment. On application of defendant Preferred Risk, the appeal was ordered transferred here after opinion pursuant to the provisions of Mo. Const. Art. V, Section 10, V.A.M.S., and Rule 84.05, V.A.M.R. We are therefore required to decide the case as an original appeal, whatever the underlying reason for transfer, Fizette v. Phillips, 357 Mo. 947, 951--952, 211 S.W.2d 728, 730--731(1) (2), and even though we may agree with the Court of Appeals, Beetschen v. Shell Pipe Line Corporation, 363 Mo. 751, 755, 253 S.W.2d 785--786(1), as we do in this case.

As material here, the facts are that the plaintiffs were involved, and presumably injured, in an automobile accident which took place in the City of St. Louis on September 13, 1964. Plaintiff James Wells was driving his own car, and his children were riding with him. Defendant Riley was driving a truck which belonged to his employer, a concern known as Arthur Enterprises, Inc. Mr. Wells filed suit to recover damages for his injuries and those of his children, originally against Arthur Enterprises; later, an amended petition was filed joining Mr. Riley as an additional defendant.

The original action was filed, apparently, on October 6, 1964. On November 30, 1965, plaintiff James Wells and his wife executed a document styled 'Contract to Limit Recovery on Judgment to Specified Insurance Contract.' Obviously intended to bring plaintiffs and defendant Riley within the operation of Section 537.065, RSMo (1969), V.A.M.S., the contract recites that plaintiff Wells and his wife, 'on behalf of themselves and their minor children * * * and in consideration of the sum of $1.00 and other valuable consideration paid to them by the defendant Lester Riley * * * do * * * agree that in the event of a judgment against Lester Riley in this cause of action neither they nor any person, firm or corporation claiming by or thrpough them will levy execution by garnishment or as otherwise provided by law, except against any insurer providing liability coverage or uninsured motorist coverage on either of the vehicles involved or the operators or persons therein * * *.' It further recites that Wells and his wife agree to indemnify Riley in case of 'action or cause of action' against him on behalf of the children. This contract is signed and sworn to by Wells and his wife.

On May 10, 1965, defendant Riley was made a party to the suit. On June 22, 1965, counsel for the plaintiffs sent a long letter to defendant Hartford's office in St. Louis, summarizing the plaintiffs' position with respect to the pending litigation. The letter recites the court in which the litigation is pending, the names of the parties, and the number assigned to the case. In general, the letter goes on to state counsel's understanding that Hartford's position was that its policy did not cover Riley at the time of the accident, and that Hartford had indicated it did not intend to appear. Counsel gave it as his view that Riley's employer was not liable, but asserted that he did believe Mr. Wells '* * * (has) a cause of action against Lester Riley individually and we * * * advise you and all other parties to whom this letter is directed, that it is our intention to pursue that cause of action * * * to judgment.' Mr. Ross went on to state his further view that if Hartford's policy was not applicable, then it would appear that Preferred Risk's was, and gave notice that a claim would be made on Preferred Risk if Hartford's policy did not cover Mr. Riley at the time of the accident. Counsel stated in his letter that he was enclosing copies of both parties' pleadings, and further offered '* * * to furnish (Preferred Risk) copies of any other documents arising out of or in connection with this litigation which they may request.' Preferred Risk was asked to acknowledge receipt of the letter. It was stipulated at the trial of this case that Preferred Risk had received a copy of the letter.

On February 3, 1966, plaintiffs' counsel gave notice to both Hartford and Preferred Risk that he intended to 'request judgment' against defendant Riley only on February 23. Again it was stipulated that Preferred Risk received a copy of this letter. On February 23, 1966, plaintiffs reduced their claim against Mr. Riley to judgment. The trial court found--in this case--that the judgment was not a default judgment but that plaintiffs' action against Mr. Riley was 'handled as a jury waived case.' The trial court found further that both parties appeared (at the earlier trial) and both were represented by counsel. Parts of the record and files from the earlier case were offered and received in evidence. The trial court was at liberty to consult its own files to determine what happened in the first case, Arata v. Monsanto Chemical Company, Mo., 351 S.W.2d 717, 721(5), and we think we must accept the finding that plaintiffs' judgment against Mr. Riley was not taken by default, but was entered after a contest. The record is wholly devoid of any indication that Preferred Risk sought to participate in this trial in any capacity, though it had had about six months' notice that counsel intended to proceed to judgment and that its interest might well be involved. We cannot say what investigation, if any, Preferred Risk undertook to make, but again the record is devoid of any indication that it communicated with plaintiffs or their counsel, or indicated its position in any way prior to the trial of the declaratory judgment action.

The declaratory judgment action--the case now under review--was filed some time after the judgment had been taken in the tort case. We need not set out the content of the pleadings in this second suit at length; in substance, the plaintiffs pleaded the occurrence of the accident, the existence and, very briefly, the pertinent substance of the two insurance policies, the recovery of a judgment against Riley, and, in somewhat conclusory fashion, that one of the two insurers was liable over on the judgment. Hartford responded by admitting issuance of an insurance policy to the owner of Mr. Riley's truck, and by denying that Riley was an omnibus insured. Preferred Risk admitted the existence of its policy but denied that Riley was an uninsured motorist, and further pleaded that plaintiffs had forfeited their uninsured motorist coverage by entering into a settlement with Riley in violation of the policy terms. In summary, the issues tendered, and the issues actually tried in the declaratory judgment action, were: (a) whether or not Riley was using the truck 'with permission' of his employer, thus making him an omnibus insured under Hartford's policy; and (b) whether or not Preferred Risk was liable on its uninsured motorist coverage if Hartford's policy did not apply, in view of the document the plaintiffs had executed before their tort claim was litigated.

On the first of these issues, plaintiffs called defendant Riley as a witness. He testified that at the time of the accident he worked for a concern known as Arthur Enterprises, which operated motion picture theaters in the St. Louis area. Mr. Riley's duties were to '* * * work in the parking lots, and deliver stuff.' Sometimes, but not always, Mr. Riley used a company truck in the performance of his job. At the time the accident occurred, Mr. Riley was driving a dump truck which he and '* * * about four or five others' used in their work. Riley occasionally used the truck for personal business, but it was kept at a parking lot near the Fox Theater, and ordinarily when Mr. Riley finished his work he left the truck there. The keys to the truck, and presumably to other vehicles, were left at a commercial filling station near or on the parking lot, and when the station was open Riley took the key to the truck when he needed it. However, if the station was locked Mr. Riley could not have got it, because 'at that time I didn't have no key to the station.' It was shown that on occasion, when the weather was inclement, Mr. Riley was allowed to take the truck home, 'so I could get back to work and get the the lots cleaned.' Mr. Riley did not regularly keep the key to the truck with him; he stated positively that '(t)he only time I would have the key (was) when I asked for the truck and he (his superior) would let me have it.' Riley '* * * didn't just regular keep...