Adkins v. Allstate Ins. Co., 83-1578

• Citation: 729 F.2d 974
• Decision Date: 15 March 1984
• Docket Number: No. 83-1578,83-1578
• Parties: Dorothy K. ADKINS, Appellant, v. ALLSTATE INSURANCE COMPANY and Allen Simmons, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 974

729 F.2d 974

Dorothy K. ADKINS, Appellant, v. ALLSTATE INSURANCE COMPANY and Allen Simmons, Appellees.

No. 83-1578.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 9, 1984.

Decided March 15, 1984.

George B. Rushing, Augusta, Ga. (Mary J. Wiesen-Kosinski, Aiken, S.C., on brief), for appellant.

Richard R. Mehrhof, Jr., Augusta, Ga. (Allgood & Childs, Augusta, Ga., on brief), for appellees.

Before RUSSELL and HALL, Circuit Judges, and MAX ROSENN, Senior Circuit Judge for the United States Court of Appeals for the Third Circuit, sitting by designation.

ROSENN, Senior Circuit Judge:

In this diversity action, plaintiff Dorothy K. Adkins seeks reformation of an insurance contract with defendant Allstate Insurance Company and an award of monies allegedly due under the reformed contract. The United States District Court for the District of South Carolina entered summary judgment for defendants, concluding that in light of a prior action instituted by plaintiff in the federal courts in Georgia the doctrine of res judicata barred the suit. We affirm.

I.

On July 25, 1976, Douglas Adkins applied for automobile insurance at an Allstate Insurance Company office in Augusta, Georgia. At the time, Adkins and his wife Dorothy resided in Belvedere, South Carolina. Allstate agent Stan Kent processed the application and issued a binder. Allstate then mailed the contract to the Adkins home in South Carolina.

In August 1979, the Adkins separated, and Dorothy moved to Martinez, Georgia. She obtained a Georgia driver's license and registered her car there. Allstate agent Allen Simmons received prompt notification of plaintiff's change of residence.

On February 2, 1980, plaintiff suffered serious injuries from an accident that occurred while she was driving her sister's automobile in Richmond County, Georgia. That automobile was not insured by Allstate. On December 2, 1980, Allstate paid Dorothy $15,000 pursuant to the uninsured motorist benefits provision of the policy. By letter dated January 9, 1981, plaintiff wrote to Allstate demanding payment of $46,000 "due her under the optional personal injury protection coverage" of her policy under Georgia law. She informed the Company that she had never been offered "the statutorily required option of purchasing higher limits of personal injury protection." She requested personal injury protection limits of $50,000 retroactive to the inception date of the policy. By letter dated January 23, 1981, Allstate rejected the demand.

On July 10, 1981, plaintiff instituted an action against Allstate in the United States District Court for the Southern District of Georgia seeking reformation of the insurance contract and monies allegedly due thereunder. Her theory of relief rested upon the contention that the insurance contract should be governed by Georgia law and that, accordingly, Allstate's failure to offer the Adkins the option to purchase up to $50,000 worth of personal insurance protection--required of insurers by Georgia law--constituted grounds for reformation. The district court was unpersuaded. Applying Georgia's conflict of laws rule, the court concluded that South Carolina law governed the insurance contract. It therefore entered summary judgment for Allstate. The plaintiff did not appeal.

In October 1982, however, plaintiff instituted another action against Allstate, this time in a South Carolina court of common pleas. The complaint also named Allen Simmons as a defendant. ¹ Following removal of the action to federal court, Judge Anderson entered summary judgment for the defendants, holding that the doctrines of res judicata and collateral estoppel compelled that conclusion. Plaintiff thereupon appealed.

II.

Over the years, the doctrine of res judicata has generated a substantial amount of confusion. Such confusion need not detain us here. For to properly decide this appeal we need only remind ourselves of the most basic principles embodied by the doctrine.

The Restatement (Second) of Judgments Sec. 19 (1982) provides:

A valid and final personal judgment rendered in favor of the defendant bars another action by the plaintiff on the same claim.

In the comment that follows the rule the draftsmen concisely explain its well-settled purpose:

The rule that a defendant's judgment acts as a bar to a second action on the same claim is based largely on the ground that fairness to the defendant, and sound judicial administration, require that at some point litigation over the particular controversy come to an end. These considerations may impose such a requirement even though the substantive issues have not been tried, especially if the plaintiff has failed to avail himself of opportunities to pursue his remedies in the first proceeding, or has deliberately flouted orders of the court.

Id., comment a. Both the Supreme Court and this circuit have consistently recognized the importance of these principles. In Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 94 S.Ct. 806, 39 L.Ed.2d 9 (1974), the Court reiterated:

[W]hen a court of competent jurisdiction has...