Carr v. American Universal Insurance Company

• Decision Date: 10 February 1965
• Docket Number: No. 15692-15694.,15692-15694.
• Citation: 341 F.2d 220
• Parties: Duane M. CARR, M.D., Administrator of Estate of Lauren Duane Carr, Plaintiff-Appellee, v. AMERICAN UNIVERSAL INSURANCE COMPANY, Defendant-Appellant. Marie J. SIMS, Individually and as Natural Guardian and Next Friend of Reginald Sanderson Sims, a Minor, Plaintiff-Appellee, v. AMERICAN UNIVERSAL INSURANCE COMPANY, Defendant-Appellant. Marie J. SIMS, Individually and as Natural Guardian and Next Friend of Reginald Sanderson Sims, a Minor, Plaintiff-Appellant, v. AMERICAN UNIVERSAL INSURANCE COMPANY and Springfield-Monarch Insurance Companies, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

341 F.2d 220 (1965)

Duane M. CARR, M.D., Administrator of Estate of Lauren Duane Carr, Plaintiff-Appellee, v. AMERICAN UNIVERSAL INSURANCE COMPANY, Defendant-Appellant.

Marie J. SIMS, Individually and as Natural Guardian and Next Friend of Reginald Sanderson Sims, a Minor, Plaintiff-Appellee, v. AMERICAN UNIVERSAL INSURANCE COMPANY, Defendant-Appellant.

Marie J. SIMS, Individually and as Natural Guardian and Next Friend of Reginald Sanderson Sims, a Minor, Plaintiff-Appellant, v. AMERICAN UNIVERSAL INSURANCE COMPANY and Springfield-Monarch Insurance Companies, Defendants-Appellees.

Nos. 15692-15694.

United States Court of Appeals Sixth Circuit.

February 10, 1965.

H. Francis Stewart, Nashville, Tenn., for American Universal Ins. Co., Watkins, McGugin & Stewart, Nashville, Tenn., on the brief.

Dunlap Cannon, Jr., Memphis, Tenn., for Duane M. Carr, D. J. Smith, Jr., Memphis, Tenn., on the brief.

Richard H. Allen, Memphis, Tenn., for Marie J. Sims, Armstrong, McCadden, Allen, Braden & Goodman, Memphis, Tenn., Truett & Watkins, Tallahassee, Fla., on the brief.

Edward W. Kuhn, Memphis, Tenn., for Springfield-Monarch Ins. Companies, McDonald, Kuhn, McDonald, Crenshaw & Smith, Memphis, Tenn., of counsel.

Before WEICK, Chief Judge, and PHILLIPS and EDWARDS, Circuit Judges.

WEICK, Chief Judge.

These appeals involve questions of conflict of laws and coverage under omnibus clauses in policies of automobile liability insurance issued to different named insureds by the two insurance companies. The insurance companies will be referred to as "American Universal" and "Springfield."

The controversy grew out of an automobile accident occurring in Nashville, Tennessee, on April 30, 1961, in which Lauren Duane Carr, the daughter of the plaintiff-administrator, received injuries which resulted in her death. Her father, as administrator of her estate, recovered judgment in the United States District Court for the Western District of Tennessee against Reginald S. Sims, a minor, for $65,000, damages for her wrongful death. Sims was the driver of the automobile in which Miss Carr was riding as a guest passenger.

The administrator then instituted an action in the District Court against American Universal and Springfield to recover on the policies of liability insurance pursuant to a provision in the policies permitting any person who has obtained judgment to recover in the same manner and to the same extent as the insured.

American Universal was the insurer of the automobile driven by Sims, title to which was registered in the name of Dickson Tire Company, a family corporation of Jacksonville, Florida.

Springfield was the insurer of an automobile (not involved in the accident) owned by Sims' mother, under a policy which extended coverage to Sims while driving other automobiles, but which contained a clause that "the insurance with respect to a non-owned automobile shall be excess insurance over any other valid and collectible insurance."

Mrs. Sims, individually and as natural guardian and next friend of Reginald S. Sims, instituted an action for declaratory judgment against the two insurance companies in the Circuit Court of the Second Judicial Circuit of Florida, Leon County, to establish coverage under the policies of insurance, and to require them to pay the judgment of $65,000. and a small judgment of $360.82 entered against him.

The insurance companies removed the action to the United States District Court for the Northern District of Florida, Tallahassee Division, on the ground of diversity of citizenship. Upon motion of American Universal, the District Court transferred the action to the United States District Court for the Western District of Tennessee, where the Carr action had been pending for over two months, and the two cases were consolidated for hearing.

The District Judge heard the cases without a jury. He adopted findings of fact and conclusions of law. He entered judgment in favor of Carr, as administrator, against American Universal in the amount of $65,000., in satisfaction of the judgment against Sims in the wrongful death action. He also entered judgment in favor of Mrs. Sims, individually and as natural guardian and next friend of Reginald S. Sims, for $360.82, in satisfaction of a judgment obtained against him in the General Sessions Court of Davidson County, for property damage sustained by the owner of the other automobile involved in the accident. He entered no judgment against Springfield because American Universal's policy of insurance provided sufficient coverage for all liability, and Springfield's policy was for any excess only. He ruled that under the law of Tennessee, the allowance of attorneys' fees was in the nature of a penalty and was against the policy of the state. He therefore did not provide for the payment of any attorneys' fees claimed by Sims.

American Universal appealed from said judgment to this Court. Mrs. Sims filed a cross-appeal from such portion of the judgment as denied her the right to recover reasonable attorneys' fees for legal services rendered to her in the declaratory judgment action.

The findings of fact of the District Judge with respect to the use of the Dickson automobile are contained in the footnote.¹

The American Universal policy contained an omnibus clause which defined the "insured" as including the named insured and also any person while using the automobile, "provided the actual use of the automobile is by the named insured or with his permission."

Both policies of liability insurance were written and delivered in the state of Florida where each of the named insureds resided and the insurance companies were authorized to do business. Florida was also the place of residence of Reginald S. Sims.

It is the contention of American Universal that the law of Tennessee, which was the forum state and the place where the accident occurred, governs as to the liability of the insurance companies on the policies of insurance; that Sims, the second permittee, did not have express or implied authority to use the Dickson automobile; and that no recovery could be had under Tennessee law. It relied on Messer v. American Mut. Liab. Ins. Co., 193 Tenn. 19, 241 S.W.2d 856 (1951); American Auto Ins. Co. v. Jones, 163 Tenn. 605, 45 S.W.2d 52 (1932); Howell v. Accident & Cas. Ins. Co., 32 Tenn.App. 83, 221 S.W.2d 901 (1949); Hunter v. Western & Southern Indem. Co., 19 Tenn. App. 589, 92 S.W.2d 878 (1935).

The District Judge applied, and we think properly, the Tennessee conflict of laws rule and held that the liability of the insurance companies under the policies of insurance was to be governed by the lex loci contractus which was Florida. He relied on First American Nat'l Bank v. Automobile Ins. Co., 252 F.2d 62 (C.A.6, 1958); Sloan v. Jones, 192 Tenn. 400, 241 S.W.2d 506, 25 A.L.R.2d 1235 (1951); Globe & Rutgers Fire Ins. Co. v. House, 163 Tenn. 585, 45 S.W.2d 55 (1932). Other cases supporting this proposition, which is the general rule, are Northwestern Nat'l Cas. Co. v. McNulty, 307 F.2d 432 (C.A.5, 1962); Mutual Benefit Health & Acc. Ass'n v. Kennedy, 140 F.2d 24 (C.A.5, 1943); Shane v. Commercial Cas. Ins. Co., 48 F.Supp. 151 (E.D.Pa.), aff'd 132 F.2d 544 (C.A.3, 1942).

No pertinent Florida decisions dealing with the omnibus clause in a liability insurance policy, were cited to the District Court, nor to us. In the absence of relevant Florida decisions on the subject, we are nevertheless required to decide from all available data, how the courts of that state would approach and determine the question of liability of the insurance companies, giving consideration to the common law as declared by other state courts. Werthan Bag Corp. v. Agnew, 202 F.2d 119 (C.A.6, 1953).

In Florida an automobile has been held to be a dangerous instrumentality. Leonard v. Susco Car Rental, 103 So.2d 243, 244 (Fla.Ct.App.) aff'd 112 So.2d 832 (1959). Susco cited Lynch v. Walker, 159 Fla. 188, 31 So.2d 268, 271 (1947).

Florida has a Financial Responsibility Statute. 13 Fla.Stat.Ann. ch. 324. Section 324.151(1) of the statute required an owner's liability insurance policy to "insure the owner named therein and any other person as operator using such motor vehicle * * * with the express or implied permission of such owner, against loss from the liability imposed by law for damage arising out of the ownership, maintenance or use of such motor vehicle * * *"

It will be noted that the law specified that the omnibus clause shall insure a person driving with implied as well as express permission. In the present case express permission to Sims from the named insured, to drive the automobile, was not claimed. Whether or not Robert Dickson was clothed with implied authority to permit Sims to drive the automobile, was a factual question which could be determined only by a consideration of all of the evidence in the case.

The plain language of the Florida statutes does not adapt itself to any different construction.

The District Court relied on the following cases: National Grange Mut. Liab. Co. v. Metroka, 250 F.2d 933 (C.A. 3, 1958); Indiana Lumbermen's Mut. Ins. Co. v. Janes, 230 F.2d 500 (C.A.5, 1956); American Auto. Ins. Co. v. Fulcher, 201 F.2d 751 at 756 (C.A.4, 1953); Harrison v. Carroll, 139 F.2d 427 (C.A. 4, 1943).

We have previously construed onmibus clauses in liability insurance policies and have considered the common law of Tennessee and other states with respect thereto, in General Cas. Co. v. Woodby, 238 F.2d 452 (C.A.6, 1956); Branch v. United States Fid. & Guar. Co., 198 F.2d 1007 (C.A.6, 1952); Vezolles v. Home Indem. Co., 38 F.Supp. 455, 457 (W.D. Ky.) aff'd 128 F.2d 257 (C.A.6, 1942).

The District Court did not have the benefit of the recent decision of the Supreme Court of Tennessee in Teague v. Tate, 375 S.W.2d 840 (1964), which was decided after the cases had been appealed.

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