Beam v. State Farm Mutual Automobile Insurance Co.
| Decision Date | 25 June 1958 |
| Docket Number | Civ. A. 3453. |
| Parties | Ida Mae BEAM, Pearl Cabble, and William Thompson, An Infant, Etc., Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Western District of Kentucky |
Julius Liebson, Wilton H. Long, for plaintiffs.
Edward J. Hogan, John L. Bennett, Louisville, Ky., for defendant.
This action was instituted in the Jefferson Circuit Court, Common Pleas Branch, on August 26, 1957, by the several plaintiffs. Plaintiffs sought to recover from the defendant insurance company the amount of three judgments recovered against William Carrier in the Jefferson Circuit Court on January 22, 1957. Ida Mae Beam had there recovered a judgment in the amount of $3,075, Pearl Cabble a judgment in the amount of $2,050, and William Thompson, an infant suing by his father, Richard Thompson, as next friend, a judgment in the amount of $535, each and all of said judgments bearing interest from January 21, 1957, and allowing recovery for costs. The actions arose out of an automobile accident which occurred on June 2, 1956, when an automobile owned and operated by William Carrier came into collision with an automobile operated by plaintiff Ida Mae Beam, in which Pearl Cabble and William Thompson were riding.
On September 13, 1957, the defendant insurance company filed its petition for removal of this action to this Court. At a pre-trial conference, the question of jurisdiction arose as to the actions of Pearl Cabble and William Thompson because said judgments did not involve amounts in excess of $3,000. The parties stipulated that the action instituted by Ida Mae Beam would be tried and would be controlling as to the judgments of Pearl Cabble and William Thompson. The individual plaintiffs are all citizens and residents of Jefferson County, Kentucky, and the defendant is an Illinois corporation.
The complaint in this action alleged that executions had issued against the defendant Carrier, all of which were returned endorsed by the Sheriff, "No property found." It was further alleged that demand for payment was made upon the defendant insurance company, which was refused. The plaintiffs averred that the insurance company had become estopped to question its liability for the judgments and had waived its right to question coverage of its policy or to deny coverage or its liability under the terms of the policy by reason of its employment of attorneys, investigation of the cases, and participation in the trial in the state court where the judgments were rendered. It was claimed that, by failure to defend under a reservation of its rights under its policy, the company had waived its right and had become estopped.
By its answer as amended, defendant insurance company denied liability under the policy by reason of the failure of the insured, Carrier, to cooperate in the defense of the actions; that clause of the policy being as follows:
This action was tried to the Court without a jury on May 28, 1958. From the stipulations filed, testimony heard, and exhibits filed, the Court makes the following findings of fact.
(1) Plaintiffs Ida Mae Beam, Pearl Cabble, and William Thompson are each and all residents and citizens of Jefferson County, Kentucky. The defendant, State Farm Mutual Automobile Insurance Company, is a corporation created under the laws of the State of Illinois and domesticated for the purpose of carrying on a casualty and insurance business in the State of Kentucky.
(2) On June 2, 1956, the defendant insurance company had issued to William Carrier and there was in full force defendant's policy No. 339-226-E1217, by which it insured Carrier against any amount, within the limits named in the policy, for which he might become liable on account of bodily injuries.
(3) On June 2, 1956, the insured, Carrier, was operating his automobile when it came into collision with an automobile driven by plaintiff Ida Mae Beam, in which Pearl Cabble and William Thompson were riding.
(4) In actions instituted against Carrier in the Jefferson Circuit Court, Ida Mae Beam recovered a judgment in the sum of $3,075, Pearl Cabble recovered a judgment in the sum of $2,050, and William Thompson recovered a judgment in the sum of $535.
(5) In due season after the accident on June 2, 1956, Carrier notified the insurance company; the insurance company investigated the accident and employed attorneys to represent it in the actions filed by the plaintiffs in the Jefferson Circuit Court. Thereafter, plaintiffs' attorneys sought to obtain the deposition of Carrier for discovery purposes and attorneys for the insurance company, by letter attempted to procure Carrier's presence to give his deposition, but without success.
When the cases were assigned for trial in the Jefferson Circuit Court, letters advising Carrier of the day of the trial and the necessity of his appearing were written to him and a telegram was sent to him by the insurance company's attorneys, all of which he now acknowledges that he received; but he did not respond in anywise to the letters or the telegram nor did he appear at the trial.
When the cases were called for trial, an effort was made by the attorneys representing Carrier at the instance of the insurance company to continue the trial; the motions for continuance were overruled, but the attorneys participated in the trial. The transcript of proceedings in the Jefferson Circuit Court on January 21, 1957, as attested by the official stenographic reporter in that proceeding and made a part of the record in this case by stipulation of counsel in this case, shows that, after defendant Carrier's motion for continuance had been denied, counsel for Carrier stated:
"* * * that on July 31st the defendant was advised of the pendency of this lawsuit; that thereafter, on September 5, 1956, defendant's counsel advised defendant, by letter directed to defendant's address, to appear for the purpose of giving his deposition, and that this letter elicited no response from the defendant; that...
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Beam v. State Farm Mutual Automobile Insurance Co.
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