Clemmons v. Zurich General Acc. & Liability Ins. Co., 7840

• Decision Date: 22 December 1969
• Docket Number: No. 7840,7840
• Citation: 230 So.2d 887
• Parties: Bryan CLEMMONS, Sheriff of East Baton Rouge Parish, Plaintiff-Appellee, v. ZURICH GENERAL ACCIDENT AND LIABILITY INSURANCE COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 887

230 So.2d 887

Bryan CLEMMONS, Sheriff of East Baton Rouge Parish, Plaintiff-Appellee, v. ZURICH GENERAL ACCIDENT AND LIABILITY INSURANCE COMPANY,

Defendant-Appellant.

No. 7840.

Court of Appeal of Louisiana, First Circuit.

Dec. 22, 1969.

On Rehearing Feb. 2, 1970.

Frank S. Normann, of Normann & Normann, New Orleans, for appellant.

Robert L. Kleinpeter, Baton Rouge, for appellee.

Before LANDRY, SARTAIN and ELLIS, JJ.

SARTAIN, Judge.

Zurich General Accident and Liability Insurance Company (Zurich) takes this appeal from a judgment of the district court awarding plaintiff judgment in the amount of $24,158.40, representing reasonable attorney's fees for services rendered to the Sheriff by Robert L. Kleinpeter in defense of the Sheriff, Zurich's assured in the cases of Webb and Owen v. Zurich Ins. Co., 194 So.2d 436, 442; reversed on writs, 251 La. 558, 590, 205 So.2d 398, 410.

The sole issue presented is whether or not the actions of Zurich constituted a refusal to defend its insured thereby breaching its contractual obligation under the policy and rendering Zurich liable for the fees claimed.

Zurich presents a two-fold defense. First, it contends the insured was fully defended and therefore there was no breach of any contractual obligation. Alternatively, Zurich maintains the fees awarded are excessive and should be reduced because plaintiff did not adequately prove the value of the services rendered.

In detailed oral reasons for judgment which were dictated for the record, the trial judge held that throughout the course of the Webb and Owen cases on the merits, the firm of Normann and Normann, Attorneys at Law, represented Zurich and Mr. Robert L. Kleinpeter represented the Sheriff. The trial judge acknowledged that in the performance of these duties for Zurich by Normann and Normann, services were also rendered which inured to the benefit of Mr. Clemmons. On this point the trial judge stated, 'Certainly they (Zurich and Clemmons) occupied similar positions and had a common interest in the defense of the Owen and Webb law suits. We do not believe that this negates the role that Mr. Kleinpeter played as primary counsel for Sheriff Bryan Clemmons'. The judge a quo, therefore, found that Zurich had in effect declined to defend Mr. Clemmons and had accordingly breached its contractual obligation to him and must stand in judgment to the latter for reasonable attorney's fees. For reasons hereinafter stated we are of the opinion that the decision of the trial judge is correct and should be affirmed.

It is conceded that Zurich issued a liability policy with limits of $500,000 covering a Cessna 182 single engine aircraft belonging to the Sheriff's Office. It is also acknowledged that while the policy was in force, the insured plane crashed in the State of Michigan on or about April 28, 1956. In the crash Jesse Webb, Jr., Mayor of Baton Rouge, Dr. Kimbrough Owen, a member of the Louisiana State University faculty, and Paul O. Pittman, the named pilot of the aircraft, were killed. In 1957, the families of all decedents instituted suits seeking damages for the decedents' alleged wrongful deaths. We are here concerned only with the Webb and Owen suits. In each of these actions Sheriff Bryan Clemmons of the Parish of East Baton Rouge and Zurich as Clemmons' alleged liability insurer, were named as defendants. Clemmons' liability was based on the averred negligence of his deputy, Paul O. Pittman. The suits, consolidated for trial, collectively sought damages in excess of Zurich's policy limits. The record discloses that the Webb suit was filed on April 11, 1957 and the Owen suit on April 26, 1957. Under date of April 18, 1957 Mr. Frank S. Normann of the firm of Normann and Normann, as attorneys for Zurich, addressed a letter to Sheriff Clemmons which in part stated:

'* * * We understand that you accepted service of this petition on April 12, And under the law we must file responsive pleadings in your behalf within ten days from the date on which you accepted service. We have written Messrs. Brumfield and Weber and requested that they allow us additional time in which to file responsive pleadings, And we respectfully request that you do not take any action in your own behalf through your own counsel since the Zurich's policy provides for the furnishing of your defense in this case. During the early part of next week we will want to confer with you in connection with this matter.' (Emphasis ours)

Following this letter the Webb and Owen suits were consolidated.

On May 7, 1957 Zurich filed individual exceptions on behalf of both the Sheriff and Zurich. The exception of no cause or right of action was premised on the ground that the fatal accident occurred outside of the State of Louisiana and plaintiffs were without right to invoke the provisions of the direct action statute. The exception on behalf of the Sheriff interposed the defense that the pilot, Paul O. Pittman, was not acting as an agent for Sheriff Clemmons and further that Clemmons as the duly elected Sheriff of East Baton Rouge Parish was immune from liability.

From October 25, 1957 to September 25, 1958 Normann and Normann engaged in extensive pre-trial discovery, taking numerous depositions, propounded interrogatories, etc. On September 25, 1958 Mr. Frank S. Normann on behalf of these attorneys addressed a letter to Mr. Clemmons which stated:

'In the above captioned case you have been sued by Mrs. Webb and Mrs. Owen along with the Zurich Insurance Company. Exceptions challenging the right of these two ladies to proceed against you, as well as the Zurich Insurance Company, were timely filed, and as yet, have not been disposed of by the court. No responsive pleadings have been filed to the plaintiffs' separate actions as of this writing, nor will such responsive pleadings be filed until the court rules upon the exceptions.

We have made a thorough investigation into this matter, and the plaintiffs have taken discovery depositions, the results of which now indicate that serious questions of coverage under the Zurich's policy may be raised. If it becomes necessary to do so, then, of course, our representation of the insurer will necessitate your employing separate counsel to represent your interests.

In addition, the court's ultimate decision on the pending exceptions may be important in this respect. If the court overruled the Zurich's exceptions, thereby forcing the Zurich to remain as a party defendant in the suit along with yourself, assuming your exceptions are also overruled, The question of coverage would then, of course, necessitate separate counsel on your behalf. On the other hand, if the court dismisses the Zurich from the suit, but keeps you therein, we could offer you a defense irrespective of the questions of coverage under the policy, But we would have to do so under what is known as a non-waiver agreement, whereby our rights to urge the coverage questions would be reserved.

In the meantime, I would like to confirm what I stated to you upon my last visit in person and that is, these suits exceed the limits of the policy in question, and insofar as any excess of the policy limits, you have the right to select counsel of your own choice to defend your interest in that respect if you care to do so.' (Emphasis ours)

Notwithstanding the above letter Normann and Normann continued in their preparation of the defense in the two suits.

On July 5, 1961, in each suit, Normann and Normann filed identical answers, one on behalf of Zurich and one on behalf of Mr. Clemmons. In the Zurich answer they contended that Mr . Pittman was not acting within the course and scope of his duties as special deputy sheriff at the time of the fatal accident and any negligence of Pittman could not be imputed to the Sheriff. The answer further interposed certain policy exclusions applicable to civil air regulations. In the answer for Mr. Clemmons they interposed the defense of immunity from liability by virtue of his position as Sheriff for the Parish of East Baton Rouge. Several other defenses were affirmatively pled which are not germane to the issue now before us.

On July 4, 1961, Mr. Frank S. Normann, on behalf of Normann and Normann, addressed another letter to Mr. Clemmons which contained copies of answers filed in his behalf in the two cases, a non-waiver agreement, and a copy of their previous letter of September 17, 1958 . This letter of July 4, 1961 also contains the following language:

'(4) A photostatic copy of our letter to you dated September 25, 1968 in which we placed you upon notice that there is a serious question of coverage in connection with these cases and that while we would file responsive pleadings in behalf of yourself, if our exceptions were overruled, We would require that you execute the enclosed non-waiver agreement.

We now again specifically call to your attention that while we have filed an answer in the above captioned cases in your behalf, Because we are required to do so under the policy provisions, there is a conflict of interests in these cases and you should engage your own counsel to defend your interests therein. Of course, if you decide not to engage your own counsel, we shall proceed with the defense of these cases to the best of our ability.

It must be specifically understood that the Zurich Insurance Company reserves all of its rights under its policy contract, and should you decline to execute the non-waiver agreement enclosed herewith, we will proceed with the defenses to these cases with full reservation of the insurer's rights As though the non-waiver agreement had been executed by you.' (Emphasis ours)

On July 26, 1961 Mr. Kleinpeter answered Mr. Normann's letter of the 19th and stated:

'The writer has now had an opportunity to fully and thoroughly digest the file and while there are some questions which we still have to answer for ourselves, we are nevertheless of the firm opinion that There is positively no...