Builders & Manufacturers Mut. Cas. Co. v. Paquette

• Decision Date: 12 January 1938
• Docket Number: No. 1022.,1022.
• Citation: 21 F. Supp. 858
• Parties: BUILDERS & MANUFACTURERS MUT. CASUALTY CO. v. PAQUETTE et al.
• Court: U.S. District Court — District of Maine

21 F. Supp. 858

BUILDERS & MANUFACTURERS MUT. CASUALTY CO. v. PAQUETTE et al.

No. 1022.

District Court, D. Maine, S. D.

January 12, 1938.

COPYRIGHT MATERIAL OMITTED

Robinson & Richardson, of Portland, Me. (Forrest E. Richardson, of Portland, Me., of counsel), for petitioner.

Willard & Willard, of Sanford, Me., and Louis B. Lausier and William P. Donahue, both of Biddeford, Me., for respondents.

PETERS, District Judge.

This is a petition by an insurance company, alleged to have been organized and to be existing under the laws of Illinois and to be a citizen of that state, against certain individuals alleged to be citizens of the state of Maine, asking that a judgment be rendered declaring void a certain liability insurance policy issued by the petitioner to one of the respondents. Answers were filed and the matter has been heard and considered on the equity side of the court. Certain issues were submitted to a jury in the form of interrogatories as provided by the Declaratory Judgments Act, U.S.C.A. tit. 28 § 400, under which this proceeding was brought.

Various motions have been filed, determination of which was reserved and which now require rulings; and the case has to be decided on the basis of the pleadings, evidence, and answers of the jury to the questions submitted.

I find the following facts: The petitioner, hereinafter referred to as the insurance company or the company, on February 12, 1936, issued its liability insurance policy in the usual form to the respondent, Josephine Grenier, insuring her, up to a limit of $5,000 for any one person, or $10,000 for any one accident, against loss from liability for damages consequent upon the operation of a certain Chevrolet automobile described therein, the same insurance being, later, transferred from the Chevrolet to a Plymouth sedan. The policy by its terms expired in one year from February 15, 1936.

The policy contained the following provision: "This entire policy shall be void * * * (a) if the interest of the assured in the subject of this insurance be other than unconditional and sole ownership."

Also the following: "This entire policy shall be void if the assured or his agent has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof; or, in case of any fraud, attempted fraud or false swearing by the assured or his agent touching any matter relating to this insurance or the subject thereof, whether before or after a loss."

The policy also contained a clause to the effect that its provisions covered the operation of the automobile while used by another person with the consent of the assured.

In addition to the indemnity against loss from liability for damages, the policy contained a provision obliging the company to defend any suit brought against the assured to enforce any claim covered by the policy, whether groundless or not.

On November 7, 1936, the Plymouth automobile described in the policy was being driven by the respondent Raymond L. Grenier, son of Josephine, when it collided with a tree outside the highway, causing the death of Roland Paquette and Louis Turcotte, who were passengers or guests of Grenier and whose administrators are the other respondents named in this petition. Paquette died after conscious suffering. Turcotte was killed instantly.

Grenier had been previously convicted of reckless driving, fined, and had his driver's license suspended, and by provisions of law in Maine he was prohibited from registering any automobile in his name until he had made arrangements with the secretary of state, by insurance policy or bond, to protect users of the highways against his recklessness.

Grenier, knowing that he was not allowed to drive, purchased the automobiles covered by the insurance policy and, with the connivance of his mother, had them registered in her name, having placed thereon chattel mortgages or conditional sales contracts at the time of purchase. These facts were unknown to the insurance company, which was led to believe that Josephine Grenier was the actual and the sole owner and only person interested in the cars.

The issue at the trial was the validity of the insurance policy. Two questions were submitted to the jury: One was whether Josephine Grenier at the time of the placing of the insurance on the Chevrolet was its unconditional and the sole owner; and the other, whether at the time of the placing of the insurance on the Plymouth she was the unconditional and sole owner of that car; and the answer to each question was in the negative.

It being an express condition of the policy that it should be void in case the assured named was not the sole and unconditional owner, it necessarily follows, as a matter of law, from the verdict of the jury, that the policy was void, and judgment should be rendered accordingly unless there appears some reason to the contrary.

After the death of Turcotte and Paquette in the accident of November 7th, a suit was brought in the superior court of the state by the administratrix of Turcotte against Josephine and Raymond L. Grenier to recover damages for the negligent driving of the car, causing the death of Turcotte. The plaintiff discontinued as to Josephine Grenier and was awarded a verdict of $1,500 against Raymond L. Grenier. No judgment has been rendered on that verdict, and a motion by the plaintiff for a new trial is pending. The motion was made on the ground that the amount awarded for damages was inadequate.

On September 28, 1937, before the trial of that suit, the respondent Raymond L. Grenier, in behalf of his mother and himself, notified the insurance company, in writing, by a letter directed to it at 120 S. LaSalle street, Chicago, Ill., that it was the duty of the petitioner to defend the Turcotte suit, and saying "We demand that you comply with this duty. Your lawyers, Robinson and Richardson of Portland, should be notified to defend this suit that they know about." The company had informed Grenier by letter of November 23, 1936, that it disclaimed all liability under the policy and should take legal measures to have it declared void. The company took no part in the defense of the suit in the superior court.

It does not appear that the administrator of Paquette has brought any suit, but the limitation fixed by the statute for so doing has not expired.

The Matter of Jurisdiction.

The respondents, in various ways and on several grounds, challenge the jurisdiction of this court.

This petition for a declaratory judgment was filed September 29, 1937. On October 6th a motion to dismiss was filed by each of the respondents, the language and the grounds for dismissal in each case being substantially the same, to wit:

First: "That said petition admits on its face prior jurisdiction of the Superior Court of the State of Maine of actions brought and now pending of Theodore Paquette, Administrator of the Estate of Roland Paquette against Raymond L. Grenier and Josephine Grenier, and the prosecution of said suit cannot be enjoined by any federal court, said action not arising from any proceeding in bankruptcy."

Second: "That said petitioner having discontinued its business is not authorized to do business in the State of Maine and is not a citizen of the State of Illinois, and had no legal capacity to appear and prosecute said petition in these proceedings."

It is evident that the motions refer to the suit of Turcotte against Grenier hereinabove mentioned, as only one action was pending in the state court and that was by Turcotte.

Assuming these motions to be amended to apply to the only suit pending, it should be said that there is no question of the right of Turcotte to have brought the suit he did in the state court, and no injunction has issued from this court.

As for the second ground mentioned, there is no evidence that the petitioner is not authorized to do business in Maine; but, even if a previous permission to do business here had been withdrawn, and it had ceased doing business in Maine, the petitioner would not thereby be deprived of access to the federal courts. The allegation that the petitioner was not a citizen of Illinois is, of course, without effect, because it might be a citizen of any state, other than Maine, and have the same right to sue.

The motions to dismiss filed October 6th will be denied.

But the jurisdiction of the court, as based on diversity of citizenship, is further questioned in the answers, as follows:

The answers of Paquette and Turcotte simply deny "the allegations relative to jurisdiction in the stating part of said petition."

The joint answer of the Greniers states that "the defendants deny that the petitioner * * * is an insurance company organized or existing under the laws of Illinois or any other state except Maine, or that it has any legal place of business in Chicago, in the State of Illinois, or that it is authorized to transact business within the State of Maine, or that it is a citizen of the State of Illinois or any other State except the State of Maine, and demand proof of the same."

The answer also denied that the respondents are citizens of Maine, but at the trial this point was not pressed and the respondents are admittedly citizens of Maine.

These answers, in respect to citizenship, amount to nothing more than denials of the allegations in the petition. The Grenier answer is more comprehensive than the others in that it denies that the petitioner is a citizen of any state excepting Maine. While Maine is excepted from the denial, it is alleged that the petitioner cannot do business in Maine. There is no allegation by either party that the petitioner is a citizen of Maine, and the answers in that particular amount simply to a general denial and demand for proof. This is not a plea to the jurisdiction; and, under our practice, it was not incumbent upon the plaintiff to offer proof of its allegations supporting jurisdiction.

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