ZURICH GENERAL ACC. & L. INS. CO. v. Mid-Continent P. Corp.

• Decision Date: 24 October 1930
• Docket Number: No. 173.,173.
• Citation: 43 F.2d 355
• Parties: ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Limited, v. MID-CONTINENT PETROLEUM CORPORATION.
• Court: U.S. Court of Appeals — Tenth Circuit

43 F.2d 355 (1930)

ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Limited, v. MID-CONTINENT PETROLEUM CORPORATION.

No. 173.

Circuit Court of Appeals, Tenth Circuit.

August 22, 1930.

Rehearing Denied October 24, 1930.

Ralph F. Potter, of Chicago, Ill., and R. A. Kleinschmidt, of Tulsa, Okl. (Cassels, Potter & Bentley, of Chicago, Ill., and Kleinschmidt & Johnson, of Tulsa, Okl., on the brief), for appellant.

R. H. Wills, of Tulsa, Okl. (J. C. Denton, J. H. Crocker, I. L. Lockewitz, and H. M. Gray, all of Tulsa, Okl., on the brief), for appellee.

Before LEWIS, COTTERAL, and PHILLIPS, Circuit Judges.

COTTERAL, Circuit Judge.

The appellant complains of a judgment rendered on July 3, 1929, in its favor for $7,500, with interest from that date, in a suit it brought against the appellee, and claims the judgment should have been for $10,595.75, with interest from August 9, 1926. The suit arose from a policy issued by the appellant to the appellee insuring the latter against loss by damages it might sustain in excess of $10,000 on account of death or injury to its employees.

The petition of the plaintiff (appellant here) alleged that three of such employees had been killed in an explosion on June 30, 1926, that pursuant to the policy and a letter of the defendant (appellee here), of July 28, 1926, the plaintiff in co-operation with the defendant had made settlement with the heirs in two of the cases, for $13,000, and another settlement with the heirs in the third case where suit had been brought, for $4,500; wherefore, the defendant became bound to reimburse the plaintiff to the extent of $10,000. It was further alleged that under another provision of the policy and the authorization of the defendant, it had become liable to the plaintiff for outlays made in the defense and settlement of these claims, amounting to $595.70. It was alleged that the defendant refused to pay the demands, and judgment was prayed for $10,595.75, and interest. The said letter of July 28, 1926, which is exhibited with the petition, is as follows:

"Mid-Continent Petroleum Corporation "Tulsa, Oklahoma, July 28, 1926. "Zurich General Accident and Liability Insurance Co., Ltd. "Insurance Exchange Building "Chicago, Illinois.

"Gentlemen:

"At a conference in Tulsa today with your Mr. Fuller and Mr. Kleinschmidt, concerning policy No. 5002586 and any liability that may have been incurred thereunder by reason of the death of the three persons in our plant near Drumright, Oklahoma, on June 30, 1926, we stated that it is satisfactory to us for you to undertake to effect settlements with the representatives of the deceased, and that in doing so you are free to use the services of our Mr. Graybill, leaving for future determination the amount of money in excess of $7500, if any, we will contribute to such settlements.

"It is understood that you and we are at liberty to assert any rights we may have under the policy in question, and that such settlements are to be made without prejudice to rights of either of us.

"Yours truly "Mid-Continent Petroleum Corporation "By J. C. Denton, Vice-President."

Another letter of the defendant, dated August 9, 1926, and exhibited with the petition, relates to the settlement of the two claims for $13,000, and is apparently an answer to a letter of the same date from the plaintiff requesting a check for $7,500 to apply on its liability. The answer was that: "We prefer not to issue any check till settlement has been made of all the cases involved or pertaining to the liability incurred under the policy in question. When you have effected settlements of all claims arising out of the deaths of the three persons referred to in our letter to you of July 28, 1926, we shall be glad to furnish you voucher in the sum of $7500."

The answer consisted of a general denial and other defenses. The policy was admitted and there was a concession that the employees were killed, and that the plaintiff was notified thereof and of its liability for damages in excess of $10,000. It was alleged the plaintiff investigated the deaths, informed the defendant it was fearful the damages would exceed $10,000, and urged settlement; that the defendant was not interested in the matter of settlement; that the plaintiff requested permission to negotiate for the settlements, and by reason thereof the defendant wrote the letter of July 28, 1926; that the plaintiff accepted the offer contained in the letter, and upon that authority made the settlements; that the letter, ratified by the plaintiff, fixed the limit of defendant's liability at $7,500, and any further sum the defendant might agree to pay, but it was not so agreed; that prior to suit, the defendant had tendered to plaintiff $7,500, in full settlement of plaintiff's claim, but plaintiff refused to make settlement for less than $10,000.

By a reply, the plaintiff denied the averments of the answer and alleged that the defendant, by ratifying and accepting the benefits of the settlements and payments as alleged in the petition, is estopped to deny its liability to reimburse plaintiff to the amount provided by the insurance policy.

The cause was tried to the court upon the evidence of the parties, a jury being waived in writing. The judgment entry of July 3, 1929, recites that the plaintiff moved for judgment, but the motion was denied, that the court found the plaintiff entitled to judgment against the defendant for $7,500, with interest at 6 per cent. per annum from August 5, 1926, and costs, and judgment was rendered accordingly. On application of the defendant, the judgment was modified so as to allow interest at 6 per cent. per annum from ...