General Acc. Fire & Life Assur. Corp. v. Rinnert

• Decision Date: 06 November 1948
• Docket Number: No. 12234.,12234.
• Citation: 170 F.2d 440
• Parties: GENERAL ACC. FIRE & LIFE ASSUR. CORPORATION v. RINNERT et al.
• Court: U.S. Court of Appeals — Fifth Circuit

170 F.2d 440 (1948)

GENERAL ACC. FIRE & LIFE ASSUR. CORPORATION v. RINNERT et al.

No. 12234.

United States Court of Appeals Fifth Circuit.

November 6, 1948.

E. M. Friend, Jr., and J. P. Mudd, both of Birmingham, Ala., for appellant.

J. T. Stokely and M. L. Taliaferro, both of Birmingham, Ala., for appellees.

Before McCORD and LEE, Circuit Judges, and MIZE, District Judge.

LEE, Circuit Judge.

This suit in equity was brought by the judgment creditors of Virginia Woodson against the insurance company to reach proceeds of an insurance policy which covered liability of Miss Woodson as omnibus insured in the operation of a Chrysler car owned by her mother. The proceeding is statutory in nature and is provided for under § 12, Title 23, Code of Alabama 1940, The insurance company denies liability, predicating its denial on the theory that Miss Woodson breached the cooperation clause of the policy, relieving the company of liability.

Virginia Woodson, a minor, received her mother's permission to use the latter's automobile on the 21st of August, 1940. While the car was in Virginia's custody and traveling along a highway near Birmingham, Alabama, it was involved in a serious accident, from which negligence actions arose and were determined adversely to Miss Woodson. The judgments in these actions were unsatisfied after levy against Miss Woodson, and the plaintiffs now seek, under the above-mentioned statute, to recover from the insurance company carrying coverage on the automobile. The statute allows suit in equity against the insurance company and the insured to reach the proceeds of the policy after judgment against the insured is returned unsatisfied.

Carroll Watt, driving a Buick car, Lucius Colmant, Jr., driving a Dodge automobile, and one Robert Gunn, driving the Woodson Chrysler, were proceeding west on the highway in the order listed at high speed. A Ford automobile, driven by Mrs. J. C. Combs and having as passengers the plaintiffs and plaintiff's intestate, was proceeding east on the same highway, in its proper lane. The Dodge driven by Lucius Colmant, veered onto the right shoulder of the highway, went out of control and, swinging back into the road, struck the rear bumper of the Buick a glancing blow, and, continuing to its left, passed onto the other side, striking the Combs car. The Chrysler, immediately behind Colmant, struck the Dodge. The net result was that the Combs car left the highway, and the death and the injuries for which judgments were awarded occurred. At the time of the collision, Virginia Woodson falsely stated that she was driving the Chrysler. Two considerations dictated this course: (1) the car had been placed in her hands by her mother with the admonition that she must not allow others to drive; and (2) Robert Gunn, a friend, was operating the car without benefit of an automobile operator's license. Virginia's friends who were riding in the Chrysler joined in this deceit. Statements to this effect were given the State Highway Department representatives, the appellant's attorney, and an insurance adjuster from the company insuring the Colmant automobile. On August 26, five days later, after the issuance of a manslaughter warrant against her, Virginia Woodson stated the true facts to her personal attorney, to plaintiffs' attorney, to the adjuster, and to appellant's attorney. Some ten months intervened before trial. In the interval, settlement negotiations were entered into, but no settlement was reached. Within a month after the accident, Virginia Woodson signed a non-waiver agreement with the insurance company. This agreement was made for the purpose of enabling the insurance company to defend the damage suits without disturbing the status quo or waiving any of its rights.

The present action was heard by the district court with an advisory jury. In answer to interrogatories made by the judge, the jury found Virginia Woodson did not breach Conditions 5 and 6 of the policy, Condition 5 having to do with sufficient notice of accident and its particulars and Condition 6 being the cooperation clause. The judge accepted the findings of the jury as his own and made independent findings, and finally ruled that there was no substantial breach of cooperation by Virginia Woodson such as would render the policy void.

The insurance company prosecuted this appeal, alleging there was error in the judgment for plaintiffs because, as a matter of law, Virginia Woodson breached the cooperation clause of the insurance contract to the company's prejudice.

As a matter of law, non-cooperation of a material and substantial nature precludes recovery on an automobile liability policy. Buffalo v. U. S. F. & G. Co., 10 Cir., 84 F.2d 883, U. S. F. & G. Co. v. Wyer, 10 Cir., 60 F.2d 856. It is to be emphasized, however, that Alabama law requires non-cooperation to be material and substantial. George v. Employers Liability Assurance Corp., 219 Ala. 307, 122 So. 175, 72 A.L.R. 1438. All cases examined which have denied recovery as a matter of law because of false statements constituting non-cooperation by the...