Abbott v. Aetna Casualty & Surety Co.

• Decision Date: 16 January 1942
• Docket Number: Civ. No. 1380,1350.
• Citation: 42 F. Supp. 793
• Parties: ABBOTT v. ÆTNA CASUALTY & SURETY CO. (two cases).
• Court: U.S. District Court — District of Maryland

42 F. Supp. 793

ABBOTT v. ÆTNA CASUALTY & SURETY CO. (two cases).

Civ. Nos. 1380, 1350.

District Court, D. Maryland.

January 16, 1942.

COPYRIGHT MATERIAL OMITTED

George M. Brady, of Baltimore, Md., William C. Sullivan, of Washington, D. C., and Kenneth Lyddane, of Rockville, Md., for plaintiff.

Semmes, Bowen & Semmes and William D. Macmillan, all of Baltimore, Md., and Leonard J. Ganse, of Washington, D. C., for defendant.

WILLIAM C. COLEMAN, District Judge.

These are two suits on a safe depository liability insurance policy.

The material and undisputed facts as they appear from the pleadings, which will hereinafter be more particularly referred to, are that the plaintiff claims that on August 17, 1936, he placed fifty $1,000 Gold Certificates of the United States for safe keeping in a safe deposit box in the vaults of the Takoma Park Bank, Incorporated, Takoma Park, Maryland, this box having been rented by the plaintiff from this Bank on the same day; and that between November 30, 1937, and December 14, 1937, these Certificates disappeared without the authorization of the plaintiff and without his knowledge until their disappearance was discovered by him on the last mentioned date. Effective for three years commencing August 6, 1937, the Aetna Casualty & Surety Company, the defendant in both of the present suits, issued a safe depository liability insurance policy to the Bank, whereby the defendant agreed "to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay by reason of liability for damages, because of injury to or destruction of or loss of money, securities, jewelry and all other property in the safe deposit boxes in the vault or vaults in the Insured's premises * * *", to the limit of $50,000.

As a result of the alleged unauthorized and unexplained disappearance of these Gold Certificates and also of five $100 United States Treasury Notes, which plaintiff alleged he had also placed in the same safe deposit box in the Bank's vaults and which had likewise disappeared, plaintiff brought suit against the Bank in the Circuit Court for Montgomery County, Maryland, on September 19, 1938, for the value of these Certificates and Notes. This action was removed to the Circuit Court for Charles County, and later to the Circuit Court for Carroll County, Maryland, where jury trial was had and plaintiff recovered a judgment against the Bank in the amount of $50,500. An appeal from this judgment was taken by the Bank to the Court of Appeals of Maryland and on April 9, 1941, the judgment was affirmed. Takoma Park Bank v. Abbott, 179 Md. 249, 19 A. 2d 169. A motion for reargument was overruled. Thereupon, the Bank filed in the Supreme Court of the United States, October term, 1941, petition for a writ of certiorari to review the State Court's action. This petition was denied. 62 S.Ct. 134, 86 L.Ed. ___. Execution was levied upon the judgment so obtained against the defendant and it was returned nulla bona. Thereupon, on July 10, 1941, the plaintiff instituted, on the judgment, an attachment suit against the Aetna Casualty & Surety Company as garnishee, in the Circuit Court for Montgomery County, Maryland. The defendant has duly removed this suit to this Court. The basis of this suit is that the defendant is indebted to the Bank by reason of the liability insurance policy above referred to, for the amount of the judgment. The second of the present suits was filed in this Court on September 17, 1941. It is a direct action against the defendant, the insurance company, on this policy, the basis of this suit being that the plaintiff is the beneficiary entitled to enforce the State Court judgment against the defendant, both by virtue of the express terms of the policy and of Section 68 of Article 48A of the Annotated Code of Maryland which provides that if an execution upon any final judgment against the assured under a liability insurance policy issued in the State of Maryland is returned unsatisfied, in whole or in part, in an action brought by or on behalf of the injured, an action may be maintained by or on behalf of the injured against the insurance company, under the terms of the policy, for the amount of such judgment, not exceeding the amount of the policy.

Passing now to a consideration of the pleadings in each of the two suits and directing attention first to the direct action on the policy of insurance, the defendant has filed an answer to plaintiff's complaint in this action, embracing four defenses: (1) That the complaint fails to state a claim against defendant upon which relief can be granted; (2) a defense of admissions and denials; (3) that the plaintiff had no property right or interest, legal or equitable, in the fifty $1,000 Gold Certificates which he claims to have lost because he held them in violation of the civil and criminal prohibitions of the so-called Gold Hoarding Act of March 9, 1933, § 2, 12 U.S.C.A. § 95a, and Executive Order No. 6260, Secs. 3, 4 and 5, 12 U.S.C.A. § 95 note, whereby he could and did have no insurable interest in these Certificates, as a result of which he could and did have no insurance coverage or protection under the safe depository insurance policy issued by defendant; and (4) that plaintiff's judgment obtained in the State Court is unenforcible, because obtained by criminal conspiracy and fraud.

The plaintiff has filed a motion to strike parts of this answer under Rule 12(f) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, on the ground that they are "redundant, immaterial, impertinent and scandalous." The same motion also seeks to have the Court strike out the defenses of lack of insurable interest and non-coverage because of the alleged violation of the Gold Hoarding Act and Executive Order No. 6260, and of the alleged criminal conspiracy and fraud in procurement of this judgment.

The plaintiff has also filed another motion for judgment either on the pleadings under Rule 12(c), or for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, relying upon the provisions of the liability insurance policy.

In the second, that is, the attachment suit, the defendant has set up by way of answer, three defenses: (1) Nulla bona; (2) the same denial of property right, title or interest, legal or equitable, on the part of the plaintiff in the Gold Certificates, as alleged in defendant's answer in the direct action; and (3) denial of plaintiff's right to enforce his judgment for the same reasons that a similar denial is made in defendant's answer in the direct action. Plaintiff has filed a motion under Rule 12 (f) to strike defendant's second and third defense as redundant, immaterial, etc. The defendant also sought to take certain deposition testimony in advance of a hearing on plaintiff's motions in the other case, i. e. the direct suit against the defendant insurance company. But plaintiff opposed this, on the ground that defendant was improperly attempting, indirectly, to reopen the State Court judgment. This Court granted a hearing on this point, and sustained the plaintiff, without prejudice, however, to the defendant to petition to be allowed to proceed with the taking of the depositions, should this Court's ruling on plaintiff's motions filed in the other case be favorable to defendant, but not completely conclusive of the issues joined.

It will thus be seen that if the plaintiff has a right to file and to be heard upon its motion for judgment, either on the pleadings under Rule 12(c) or for summary judgment under Rule 56, the primary question in both cases is directly presented for decision by this motion, namely, the construction to be placed upon the liability insurance policy in relation to the judgment obtained by plaintiff against the Bank in the State Court, because, if plaintiff's contentions are sound, then it is entitled to a judgment in the direct suit on the policy, and this will conclude both cases in plaintiff's favor. Likewise, if the plaintiff had no insurable interest under the policy, then there can be no recovery by plaintiff, and this will conclude both suits in favor of defendant.

We are satisfied that plaintiff's motion for judgment is proper both as to form and substance, and in relation to the present state of the other pleadings. Neither Rule 7(b) nor Rule 8(c) is violated by relying, as plaintiff does, upon Rule 12(c) and 56 (a). A motion of the present character is to be differentiated, under the Rules, from "a pleading" requiring affirmative defenses to be set forth. To the objection that no grounds are assigned for the motion, it is sufficient for plaintiff to rely, as it does, upon the terms of the policy.

While the pleadings are extensive and varied and disclose a number of different grounds of defense, properly cognizable under plaintiff's motion for judgment, we will confine ourselves to a consideration of only one of these grounds, because our views with respect to that ground completely dispose of both suits. That ground is that defendant is not estopped by the judgment obtained by the plaintiff against the Bank in the State Court, from denying liability to the plaintiff under its liability policy issued to the Bank, for the amount of that judgment within the policy limits.

Is this a meritorious defense? We are of the opinion that it is not for the following reasons. First, the State Court judgment works an estoppel against the defendant since it is conceded that the State Court had jurisdiction, and since the liability policy by its express terms so provides, unless (1) that judgment was procured by fraud of such character as to render it impeachable in the State Court; or unless (2) the plaintiff had no insurable interest under the liability policy here in suit, in the Gold Certificates for the loss of which the judgment was obtained.

That, subject to the foregoing qualifications, the estoppel exists is too clear to warrant...