Davis v. Associated Indemnity Corporation, Civil Action No. 1320.

• Decision Date: 01 August 1944
• Docket Number: Civil Action No. 1320.
• Citation: 56 F. Supp. 541
• Parties: DAVIS v. ASSOCIATED INDEMNITY CORPORATION (DANIELS, Third-Party Defendant).
• Court: U.S. District Court — Western District of Pennsylvania

56 F. Supp. 541

DAVIS v. ASSOCIATED INDEMNITY CORPORATION (DANIELS, Third-Party Defendant).

Civil Action No. 1320.

District Court, M. D. Pennsylvania.

August 1, 1944.

Carl B. Shelley, of Harrisburg, Pa., for plaintiff.

Douglas D. Storey, of Harrisburg, Pa., for defendant.

Elmer E. Harter Jr., of Harrisburg, Pa., for third-party defendant.

JOHNSON, District Judge.

This is a motion by a third party defendant for judgment on the pleadings.

It is necessary to state briefly the facts involved before the validity of the motion may be determined.

The facts are as follows:

A. Lester Anstine, Nellie B. Anstine, and John B. Anstine, brought suit against the Pennsylvania Railroad Company and Harry R. Davis, Jr., in the Court of Common Pleas of Dauphin County, Pennsylvania, to recover damages resulting from injuries sustained by John B. Anstine while he was riding in an automobile operated by Harry R. Davis, Jr., when it collided with a train owned and operated by the Pennsylvania Railroad Company.

As a result of that litigation, verdicts were rendered against Harry R. Davis, Jr., and the Pennsylvania Railroad Company and in favor of A. Lester Anstine in the amount of $3,938.65, and in favor of John B. Anstine in the amount of $20,000.

It should be noted here, to avoid confusion, that in the contents of the pleadings filed in this case, the name of the plaintiff is given as Harry R. Davis, Jr., and not Robert R. Davis, Jr., as appears in the caption of the case.

The Associated Indemnity Corporation had issued a policy of insurance covering damages resulting from the operation of the automobile by Harry R. Davis, Jr., but refused to defend the suit brought by Anstine against Davis nor did it pay the amount of the judgment against Davis.

The Associated Indemnity Corporation based the refusal to defend its insured upon an alleged failure to cooperate in the preparation and conduct of the defense. The insurer subsequently instituted declaratory judgment proceedings in this Court to determine liability under the policy. The Circuit Court of Appeals for the Third Circuit, upon appeal, decided that the refusal of the insurer to defend was not justified.

The Pennsylvania Railroad Company filed a Motion for a new trial and the Court of Common Pleas granted the motion unless a remittitur in the amount of $10,000 was filed. Upon the filing of the remittitur reducing the judgment against the railroad company to $10,000, the Pennsylvania Railroad Company made payment thereof.

Judgment was entered upon the verdict against Harry R. Davis, Jr., in the full amount thereof, and he has brought an action in this court, seeking to recover from the Associated Indemnity Corporation an amount equal to the judgment standing against him in favor of the Anstines by reason of the policy of insurance above mentioned.

Plaintiff bases his action in this Court upon a breach of contract on the part of the Associated Indemnity Corporation for its failure and refusal to defend the action against him and to pay the amount of the judgment. By reason of the refusal of the Associated Indemnity Corporation to comply with the terms of its contract to defend, the plaintiff retained Willis F. Daniels, as his attorney, at the trial of the issue in the Court of Common Pleas.

In the action in this Court, the insurance company has brought in Willis F. Daniels, as a third-party defendant, alleging that if Davis suffered any damages, it was the result of the failure of the said Willis F. Daniels, in the trial of the case, in the Common Pleas Court, to take proper legal steps following the rendition of the verdict, and alleging:

Firstly, that if the said Willis F. Daniels had filed a motion for a new trial, judgment could not have been entered upon the verdict, and

Secondly, "If said Willis F. Daniels had filed said motion for new trial said John B. Anstine would never (have) had any basis to claim he had a judgment of $20,000.00 against plaintiff after said John B. Anstine had remitted $10,000.00 of said $20,000.00 verdict against plaintiff and the Pennsylvania Railroad Company, and could never have alleged he had been injured after the Pennsylvania Railroad Company paid said verdict with interest and costs on 1 February, 1943."

The motion for judgment sets forth five reasons therefor as follows:

"1. Because the Complaint of Complainant fails to state a claim against Willis F. Daniels, Third-Party Defendant, upon which relief can be granted.

"2. Because the Complaint of the Associated Indemnity Corporation, Third-Party Plaintiff, fails to state a claim against Willis F. Daniels, Third-Party Defendant, upon which relief can be granted.

"3. Because the Complaints of Plaintiff and Third-Party Plaintiff rest soley upon the allegations that Willis F. Daniels failed or refused to move for a new trial on behalf of Harry R. Davis, Jr., after the jury in Anstine vs. Pennsylvania Railroad, and Harry R. Davis Jr., at No. 638, September Term, 1938, in the Court of Common Pleas of Dauphin County, Pennsylvania, had rendered verdicts against the Pennsylvania Railroad Company and Harry R. Davis, Jr.

"4. That Willis F. Daniels is an Attorney at Law, admitted to practice in this Court and all Courts of the Commonwealth of Pennsylvania, and is not liable for the honest, careful exercise or mistake of judgment in advising his clients professionally, but can be liable only for gross negligence and wilful and wanton disregard of the rights of his client.

"5. That neither the Complaint of Plaintiff or of the Third-Party Plaintiff alleges an error arising from an ordinary want of skill and knowledge, or want of due caution.

Two days later, the third-party defendant filed an amendment to his original motion for judgment as follows:

"1. The Third-Party Plaintiff has not alleged any privity by contract or otherwise between it and the Third-Party Defendant. In fact, in paragraph #3 of the Complaint of the Third-Party Plaintiff, it is definitely stated that the Third-Party Defendant was not employed by the Third-Party Plaintiff.

"2. The Third-Party Plaintiff, by bringing in the Third-Party Defendant, is joining an action sounding in contract with one sounding in negligence, which is contrary to law".

The reasons advanced by the third-party defendant in support of the motion for judgment will be considered in the order in which they are stated above.

In support of the first and second reasons the third-party defendant contends that the complaint of the original and of the third-party plaintiff does not contain an allegation "of the lack of ordinary care or failure to perform a professional duty with ordinary and reasonable skill and care." But paragraph 16 of plaintiff's complaint avers negligence in the...