Bourget v. Government Employees Insurance Company

• Decision Date: 19 July 1968
• Docket Number: Civ. No. 12532.
• Citation: 287 F. Supp. 108
• Court: U.S. District Court — District of Connecticut
• Parties: Gerald E. BOURGET, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY and Patricia Thompson, Defendants.

287 F. Supp. 108

Gerald E. BOURGET, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY and Patricia Thompson, Defendants.

Civ. No. 12532.

United States District Court D. Connecticut.

July 19, 1968.

Stephen I. Traub, of Lynch & Traub, New Haven, Conn., for plaintiff.

Morris Tyler and Louis M. Winer, of Tyler, Cooper, Grant, Bowerman & Keefe, New Haven, Conn., for defendant Government Employees Insurance Co.

Gordon R. Raynor, Hamden, Conn., for defendant Patricia Thompson.

TIMBERS, Chief Judge.

Plaintiff brought a diversity action in this Court against Patricia Thompson, as administratrix of the estate of Oren B. Thompson, to recover for personal injuries sustained in a car-truck collision. After a trial before Judge Zampano and a jury, a judgment in amount of $94,900 was entered in plaintiff's favor. Insurance coverage amounted to only $20,000.

Plaintiff, allegedly having thus far been unsuccessful in collecting the amount of the judgment in excess of the $20,000 insurance limit, now brings this action against Government Employees Insurance Company and Patricia Thompson. Plaintiff alleges that Government Employees as the issuer of the $20,000 insurance policy to Oren Thompson and agent for the administratrix of his estate in the defense of the earlier suit was obligated to use reasonable care in settling that action within the policy limits. It is further alleged that Government Employees had such an opportunity to settle the action but unreasonably rejected it and therefore is liable to the estate of Oren Thompson for the excess amount of the judgment. Plaintiff maintains that on the basis of this liability and the lapse of thirty days since its accrual plaintiff is entitled to recover this amount directly from Government Employees.

Plaintiff contends that Patricia Thompson as administratrix of Oren Thompson's estate is obligated to collect all debts owing to the estate, which, despite demands by plaintiff that she do so, she has refused to do with respect to the alleged liability of Government Employees to the estate. Plaintiff alleges that therefore Patricia Thompson has breached her duty to him as a creditor of the estate and is personally liable for the amount in controversy.

Government Employees and Patricia Thompson move to dismiss the complaint for failure to state a claim upon which relief can be granted.

Government Employees contends that no common law cause of action lies directly against it by plaintiff and Conn. Gen.Stat. § 38-175, which permits direct actions against an insurer by a person recovering a judgment against the insured, is not applicable in the instant matter.

Patricia Thompson claims that since the time has not yet expired in which she may pursue the alleged claim against Government Employees she has breached no duty, and, at any rate, plaintiff's remedies against her must be sought in the probate court and not in the federal court.

I

Despite Government Employees' lengthy brief, involved textual analysis of Conn.Gen.Stat. § 38-175, and attempt to argue on the basis of policy considerations, the plain fact remains that the language of Conn.Gen.Stat. § 38-175 clearly subrogates the injured person to all the insured's rights against the insurer. Furthermore, this Court has specifically held that a judgment creditor may bring a direct action against the debtor's insurer to recover the excess over the policy limits on the ground that the insurer negligently failed to settle within the policy limits. Turgeon v. Shelby Mutual Plate Glass & Casualty Co., 112 F.Supp. 355 (D.Conn. 1953) (Smith, D. J.). In Turgeon Judge Smith stated:

"It may be conceded, as defendant contends, that plaintiffs, even if treated as creditor third-party beneficiaries, could recover on the policy itself only the policy limits. The plaintiffs, however, base their claims on the statute which by its terms subrogates them to all the insured's rights against the defendant. Insured's right of action in negligence ordinarily would not be assignable to plaintiffs, but there is no reason to doubt the power of the Legislature to transfer this right if it chose to do so.

Its primary purpose in the act in question was to provide protection for those injured by judgment-proof insureds. We cannot say whether it had specifically in mind the insured's right of action for negligence

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