Fidelity & Casualty Co. of New York v. Gault
| Decision Date | 29 April 1952 |
| Docket Number | No. 13853.,13853. |
| Citation | 196 F.2d 329 |
| Parties | FIDELITY & CASUALTY CO. OF NEW YORK v. GAULT. |
| Court | U.S. Court of Appeals — Fifth Circuit |
P. H. Eager, Jr., Jackson, Miss., L. A. Smith, Jr., Holly Springs, Miss., for appellant.
Chester L. Sumners, R. L. Smallwood, Jr., Oxford, Miss., for appellee.
Before HOLMES, STRUM, and RIVES, Circuit Judges.
The appellee carried a liability policy with the appellant on her automobile. At the time she first obtained this insurance she lived in Oxford, Mississippi, and was connected with the University. Later, she moved to Grand Forks, North Dakota, but continued to carry her insurance with appellant through its Oxford agency.
The insured returned on a visit to her parents in Oxford, and took them for a trip into Alabama. As she was returning with them on August 17, 1950, she collided with another automobile on a narrow bridge a short distance from Tupelo, Mississippi. As a result of this accident, her mother, Mrs. J. W. Gault, was seriously injured.
Appellee promptly notified the appellant of the accident. The latter denied liability, refused to investigate the matter, or to defend any suit with reference thereto, on the ground that the policy had been cancelled on July 14, 1950, for non-payment of the premium by the insured. The notice of cancellation was mailed to the insured at Oxford, when she was in North Dakota, and she never received it.
When the mother filed suit on September 2, 1950, against the insured, alleging negligence on the part of the driver, and process was served on the daughter, the latter left the following day for her work with the medical school at Grand Forks, but advised the appellant of the suit. The company refused to defend it, and returned the summons to the insured with notice of its contention that the policy had been cancelled before the accident for non-payment of premium. On September 12, 1950, a judgment was rendered against the insured for $16,200. Mrs. Gault then filed her suit in the federal court against appellant. In the trial of this cause the company, as defendant therein, raised the defense of the policy's cancellation, which was the sole issue before the court. The court rendered judgment against the company for the full sum of $5000, with interest, plus $500 for medical expenses, with interest; and the judgment for the total of these amounts was paid in full.
Thereafter, in February, 1951, the appellee filed the present suit against the appellant for damages in the sum of $11,200, alleging negligence, fraud, and bad faith, on the part of the company in failing to investigate and defend in accordance...
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...failing to settle is a tort action, not a suit on the insurance contract. This is not contested by plaintiff. See: Fidelity & Casualty Co. v. Gault, 5 Cir., 1952, 196 F.2d 329; American Fidelity & Casualty Co. v. All American Bus Lines, Inc., 10 Cir., 1951, 190 F.2d 234; Kleinschmidt v. Far......
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...bad faith of an insurer in managing the defense of claims. Porter's situation is thus similar to that considered in Fidelity & Cas. Co. v. Gault, 196 F.2d 329 (5th Cir.). Both Nationwide and the attorneys who had been retained by it to appear for Porter advised him by letters, November 19, ......
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CHAPTER 6
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