Western Casualty & Surety Co. v. Weimar

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: DENMAN, MATHEWS, and HEALY, Circuit
• Citation: Western Casualty & Surety Co. v. Weimar, 96 F.2d 635 (9th Cir. 1938)
• Decision Date: 02 May 1938
• Docket Number: No. 8664.,8664.
• Parties: WESTERN CASUALTY & SURETY CO. v. WEIMAR.

96 F.2d 635 (1938)

WESTERN CASUALTY & SURETY CO. v. WEIMAR.

No. 8664.

Circuit Court of Appeals, Ninth Circuit.

May 2, 1938.

L. R. Weinmann, Samuel H. Berry, George P. Tobin, and Weinmann, Quayle & Berry, all of Oakland, Cal., and Herbert Chamberlin, of San Francisco, Cal., for appellant.

J. Hampton Hoge and John E. Gunther, both of San Francisco, Cal., for appellee.

Before DENMAN, MATHEWS, and HEALY, Circuit Judges.

DENMAN, Circuit Judge.

This is an appeal from a judgment entered upon a verdict in favor of plaintiff, Weimar, against the defendant insurance company in an action to enforce liability under a policy of liability indemnity insurance.

The complaint alleged the execution and delivery by the company to one Axton Jones of a policy insuring Jones against liability up to $5,000 incurred by him by reason of the operation of an automobile specified in the policy; that, pursuant to the statutory requirement of the state of California, the policy undertook to reimburse, to the extent of the policy limits, any person suffering damage by reason of Jones' operation of the specified automobile for the amount of any unsatisfied judgment such person might secure against Jones.

The complaint proceeds to set out that plaintiff, while riding in assured Jones' automobile some distance south of Alameda, Cal., was injured by the willful misconduct of assured in operating the automobile; that plaintiff brought action for such injuries in the superior court of the state of California and recovered judgment against assured in the amount of $8,000; that writ of execution on the judgment was returned unsatisfied, thereby obligating the company to pay to plaintiff the amount of said judgment up to the policy limit of $5,000.

Answering, the company set up as affirmative defenses the allegations that the assured Jones had voluntarily assumed liability to plaintiff and had failed to co-operate with the company in the defense of the suit brought against him by plaintiff Weimar. Either of these defenses, if sustained by proof, would exculpate the company from liability under condition (C) of the policy, which reads: "(C) The Assured shall not voluntarily assume any liability, or settle any claim, or incur any expense, other than for such immediate surgical relief as is imperative at the time of the accident, except at the Assured's own cost, unless with the written consent of the Company. Whenever requested by the Company the Assured shall aid in effecting settlement, securing evidence and the attendance of witnesses, and shall co-operate with the Company in all matters which the Company deems necessary in the defense of any suit or in the prosecution of any appeal."

The jury returned a verdict for plaintiff in the amount of $5,000, plus interest from the date of recovery of the judgment against assured in the state court. The total verdict, and the judgment thereon, amounted to $5,856.36, plus costs.

The company's first point on this appeal, seasonably preserved by repeated exceptions below, is that the complaint failed to state a cause of action in that it did not adequately allege the performance by the assured and by the plaintiff of conditions precedent to recovery on the policy. This contention is grounded on the failure of the complaint to prove the negative of the assured's voluntary assumption of liability and his lack of co-operation as specified in condition (C), supra.

There is no merit in this objection. The requirements imposed by the quoted paragraph are not conditions precedent. They outline conditions subsequent, affirmative matters of defense which the insurer must plead and prove in order to defeat recovery on the policy. Hynding v. Home Accident Ins. Co., 214 Cal. 743, 752, 7 P.2d 999, 85 A.L.R. 13; Panhans v. Associated Ind. Corporation, 8 Cal.App.2d 532, 534, 47 P.2d 791; Norton v. Central Surety Co., 9 Cal.App.2d 598, 601, 51 P.2d 113.

Next the company contends that the evidence conclusively shows that the assured breached the policy (1) by voluntarily assuming liability and (2) by failing to co-operate with the company in defense of the suit brought by plaintiff against the assured. This contention was properly presented to the District Court by motion for directed verdict.

Adequately to evaluate this argument we must review briefly the circumstances of the accident giving rise to this course of litigation.

Plaintiff, Weimar, and assured, Jones, were returning in the small hours of the morning from San Jose, Cal., to Alameda. Jones was driving, Weimar was asleep beside him in the front seat. Weimar's right arm was hanging outside the right-hand door of the car. Driving conditions were good, the headlights were burning, and the traffic was light. Jones perceived ahead of him on the broad highway, going in the same direction, a truck with trailer, and increased his speed to overtake and pass it. While passing the trailer Jones' car came too close to it and sideswiped it, with the result that the impact severed Weimar's arm at the shoulder.

The plaintiff was a nonpaying guest in Jones' automobile. Occupying such a status, he had no cause of action against Jones under the law of California, unless he could prove that the injury was "proximately resulting from the intoxication or wilful misconduct of such owner, driver or person responsible for the operation of such vehicle." Motor Vehicle Act, § 141¾, 2 Deering's Gen.Laws 1931, Act 5128, p 2520.

The complaint upon which Weimar recovered judgment against Jones in the state court charged the latter with wilful misconduct in that he deliberately and with wanton disregard of consequences approached the trailer from the side, trying to edge his car as near to it as possible without hitting it.

In this action the company contends that Jones voluntarily assumed liability by giving to the attorney for the plaintiff a statement accusing himself of wilful misconduct of the character just described.

It is undisputed that Jones did give to plaintiff's attorney, two weeks after the accident, a written statement as follows:

"Along about the first (1st) part August Harry Weimar and myself were attending a party in San Jose. We had some home brew to drink but neither of us became intoxicated.

"We left the party about 1 o'clock in the morning coming home to Alameda, were driving very fast, around 60 and 65 M. P.H. Harry was asleep beside me. I, myself, became quite drowsy and about that...