Eastman v. United States

• Decision Date: 30 June 1966
• Docket Number: IP 65-C-181.,No. IP 64-C-90,IP 64-C-90
• Citation: 257 F. Supp. 315
• Parties: Paul T. EASTMAN, Plaintiff, v. UNITED STATES of America, Defendant, Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant. Mildred EASTMAN, Plaintiff, v. UNITED STATES of America, Defendant, Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant.
• Court: U.S. District Court — Southern District of Indiana

257 F. Supp. 315

Paul T. EASTMAN, Plaintiff, v. UNITED STATES of America, Defendant, Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant.

Mildred EASTMAN, Plaintiff, v. UNITED STATES of America, Defendant, Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant.

Nos. IP 64-C-90, IP 65-C-181.

United States District Court S. D. Indiana, Indianapolis Division.

June 30, 1966.

Feeney, Treacy & Ward, Indianapolis, Ind., for plaintiff.

Richard P. Stein, U. S. Atty., Indianapolis, Ind., for the Government.

Armstrong, Gause, Hudson & Kightlinger, Indianapolis, Ind., for third-party defendant.

OPINION

DILLIN, District Judge.

The above related causes of action, heretofore consolidated for trial, were tried by the Court without the intervention of a jury. The Court having considered all of the evidence, and the post trial briefs of the respective parties, and being duly advised, expresses its findings of fact and conclusions of law in this written opinion, pursuant to Rule 52(a), F.R.Civ.P.

On May 28, 1963, one Harold William Brown was an employee of the United States Government. On such date, he was operating an automobile owned by him on government business arising out of and in the scope of his employment, and was involved in a collision with another vehicle operated by the plaintiff Paul T. Eastman. The accident resulted fatally to Mr. Brown and caused Mr. Eastman to suffer severe personal injuries, which are the subject of his suit. Eastman was driving a vehicle owned by his wife, the plaintiff Mildred Eastman, and damage to such vehicle is the subject of her action.

Originally, the claimant Paul T. Eastman filed a claim against the estate of the said Harold William Brown, as is provided by Indiana law. The Government determined that the decedent was acting within the scope of his employment with the United States at the time of said collision, and properly removed the suit to this court and caused itself to be substituted as the sole party defendant pursuant to Title 28 U.S.C. §§ 1346(b) and 2679(b). The Mildred Eastman case was filed directly in this court, with the Government named as sole defendant.

Thereafter, the Government interpled Government Employees Insurance Co. (hereinafter "GEICO") as third party defendant in each case, alleging that the Government was an insured under an automobile insurance policy issued by the third party defendant to the decedent, covering the vehicle which he was operating at the time of the collision. GEICO moved to dismiss the third party complaint in Cause No. IP 64-C-90, which motion was overruled by this Court on August 4, 1965 in a written opinion entered on such date. The Court adheres to its view of the law as stated in such opinion, and incorporates the same herein by reference. GEICO likewise made a motion to dismiss the third party complaint in Cause No. IP 65-C-181, which the Court overruled without further comment on the basis of its ruling in the first-mentioned case.

On the day assigned for trial of the consolidated cases, a stipulation for compromise settlement of the two principal cases of the Eastmans was entered into by and between such plaintiffs, the Government, and GEICO, wherein it was stipulated that the Government would pay to the plaintiff Paul T. Eastman the sum of $35,875.00 in settlement of his claim, and to Mildred Eastman the sum of $1,625.00 in settlement of her claim. In the stipulations, GEICO agreed that the amounts to be paid in settlement were reasonable, and that it would pay to the United States the sum of $10,000 (its policy limit) in the Paul T. Eastman case, and the full agreed settlement of $1,625.00 in the Mildred Eastman case if it be finally determined that it is liable to the Government as a result of the respective third party complaints, with interest as provided by law.

The United States and GEICO agreed that neither party, by entering into such stipulations, would waive any right to appeal from the decision of the Court as to the issues formed on the third party complaints. The stipulations for compromise settlement were each approved by the Court and the agreed amounts were paid by the Government to the respective plaintiffs on May 11, 1966.

The decedent Brown was first issued a policy of automobile insurance by GEICO on or about December 18, 1959. Numerous changes were made in the policy from time to time, primarily to reflect changes in the motor vehicles owned by Brown through the years. The policy was in effect on the date of the accident in question. The policy includes in its definition of persons insured, as to bodily injury and property damage liability, the following:

"* * * (c) any other person or organization legally responsible for the use of (1) an owned automobile * * * provided the actual use thereof is by a person who is an insured * * * with respect to such owned automobile. * * *"

It is not contested by GEICO that Brown was actually using an insured automobile at the time of the collision in question.

Since the 1961 amendment to the Federal Tort Claims Act, which amendment is commonly referred to as the Government Drivers Law, Title 28 U.S.C. §§ 2679(b) (c) (d) (e), there have been numerous cases decided by the federal courts construing clauses contained in insurance policies identical or substantially similar to the clause contained in this policy.¹ All but one of such decisions has held that the United States is an additional insured by virtue of the above-quoted clause including as an insured "any other person or organization legally responsible * * *."

The case in which the insurance carrier has prevailed in the trial court is Myers v. United States (N.D.Texas, 1965), 241 F.Supp. 515, (on appeal to the Court of Appeals for the Fifth Circuit, 363 F.2d 615). By coincidence GEICO is the insurance carrier involved as third-party defendant in such case. In Myers the policy provision involved is identical to that in this case. The named insured government employee had stated in his current 1962 application for insurance that he did not use his vehicle for business purposes. The Court holds that GEICO did not intend to insure the Government, and should therefore not be held. It bases its inference of fact on a stipulation to the effect that subsequent to the 1961 amendments, GEICO issued a "Family Automobile Policy" to Government employees, which policy excluded a job description or the word "business" in the coverage section. It was further stipulated that had the policy been written to include "business" use, the named insured would have paid a 40% higher premium and that prior to the 1961 amendments GEICO would have required the employee to be rated in the "business" class, had he indicated that his car would be driven on business for the United States.

In the cases at hand, GEICO attempted a similar approach. It proved that Brown's original 1959 application stated no business use. (However, it offered no proof that the application was false when made, nor that Brown ever at any time used one of his insured vehicles on Government business save on the occasion of the accident in question). Moreover, its evidence regarding the "Family Automobile Policy" is substantially different from the stipulation in the Myers case. Here its evidence was that after the 1961 amend...