Adriaenssens v. Allstate Insurance Company

• Decision Date: 11 August 1958
• Docket Number: 5791.,No. 5790,5790
• Parties: E. A. ADRIAENSSENS, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee. Marie EPPERSON, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

258 F.2d 888 (1958)

E. A. ADRIAENSSENS, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee.

Marie EPPERSON, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee.

Nos. 5790, 5791.

United States Court of Appeals Tenth Circuit.

August 11, 1958.

H. G. Bill Dickey, Tulsa, Okl. (S. Joe Richard, Tulsa, Okl., was with him on the brief), for appellants.

Thomas R. Brett, Tulsa, Okl. (Robert D. Hudson, Tulsa, Okl., was on the brief), for appellee.

Before BRATTON, Chief Judge, and MURRAH and BREITENSTEIN, Circuit Judges.

BRATTON, Chief Judge.

E. A. Adriaenssens and Marie Epperson, father and daughter, each instituted in the state court in Oklahoma an action against L. R. Phillips for the recovery of damages for personal injury sustained in a traffic accident. Phillips died during the pendency of the actions and they were revived in the name of the administrator of his estate. Judgment for plaintiff was entered in each case. About five years later, Adriaenssens and his daughter instituted in the state court these actions against Allstate Insurance Company, a corporation organized under the laws of Illinois, to recover upon a policy of liability insurance issued to Phillips in which the insurer obligated itself to pay on behalf of the insured all sums within specified limits which the insured should become obligated to pay as damages because of bodily injury sustained by any person caused by accident arising out of the ownership, maintenance, or use of his automobile. The actions were removed to the United States Court upon the ground of diversity of citizenship with the requisite amount in controversy. One defense interposed in each case was fraud in the procurement of the policy. Specifically, it was pleaded that in the application for the policy, Phillips falsely represented that his driver's license had never been revoked. The causes were consolidated for trial and were tried to the court without a jury. The court found among other things that the representation was made in the application for the policy; that it was untrue; that the driver's license of the insured had been twice revoked because of drunken driving; that the representation was material; that it was relied upon by the insurer; and that the policy would not have been issued if the revocations of the license had been disclosed. Judgment was entered in each case denying recovery upon the policy; separate appeals were perfected; and the causes were submitted in this court upon a single record.

The jurisdiction of the court to entertain the actions on removal from the state court is challenged. Treating the actions as being merely supplemental proceedings in the nature of garnishment for the collection of the judgments rendered in the state court, it is argued that they were not subject to removal. A like contention was advanced in London & Lancashire Indemnity Co. of America, v. Courtney, 10 Cir., 106 F.2d 277. There the holder of an unpaid judgment rendered in a state court in Oklahoma caused to be issued and served a writ of garnishment against a foreign corporation for the purpose of subjecting to the payment of the judgment the obligation of the garnishee under its policy of indemnity protection. The garnishee caused the proceeding to be removed upon the ground of diversity of citizenship with the requisite amount in controversy. The removability of the proceeding was challenged by motion to remand. It was held in terms too clear for misunderstanding that the proceeding was in effect an original and independent action; and that diversity of citizenship with the requisite sum in controversy being present, the proceeding was removable. In like manner, these actions were original and independent actions between the holders of the judgments and the insurer. The issue between the parties was whether the insurer was liable under its policy issued to one who made a false representation of a material nature in order to obtain the coverage. And, being original and independent actions of that kind with diversity of citizenship and the requisite sum in controversy, they were open to removal. London & Lancashire Indemnity Co. of America v. Courtney, supra.

The further contention advanced is that under an applicable statute of Oklahoma, 47 O.S.1951 § 521(f), upon the occurrence of the traffic accident with resulting injury to appellants, the liability of the appellee upon its outstanding policy of insurance became absolute and could not thereafter be defeated upon the ground of fraud in the application. But the provision in the statute fixing absolute liability under a motor vehicle liability policy is limited to insurance coverage furnished pursuant to a requirement to furnish proof of financial responsibility in compliance with 47 O.S. 1951 §§ 519, 520. United States Fidelity & Guaranty Co. v. Walker, Okl., 329 P.2d 852. There is no suggestion that the insured had ever been required to furnish proof of financial responsibility or that the policy issued to him had ever been certified under section 519 or 520; and...