Ford Motor Credit Co. v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 19 March 1975
• Docket Number: No. 4916,4916
• Citation: 309 So.2d 914
• Parties: FORD MOTOR CREDIT COMPANY, Plaintiff and Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 914

309 So.2d 914

FORD MOTOR CREDIT COMPANY, Plaintiff and Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellant.

No. 4916.

Court of Appeal of Louisiana, Third Circuit.

March 19, 1975.

Rehearing Denied April 15, 1975.

Gist, Methvin & Trimble by David Hughes, Alexandria, for defendant-third party plaintiff-appellant.

Gravel, Roy & Burnes, Alexandria.

Stephen E. Everett, Alexandria, for defendants-third party plaintiffs-appellees.

Polk, Foote, Randolph, Percy & Ledbetter by William P. Polk, Alexandria, for plaintiff-third party defendant-appellee.

Before FRUGE , DOMENGEAUX and WATSON, JJ.

DOMENGEAUX, Judge.

Plaintiff-appellee, Ford Motor Credit Company (Ford), financed a 1973 Ford Maverick automobile owned by Durwood W. Carraway, and secured a chattel mortgage thereon which was duly recorded as prescribed by law. Defendant-appellant, State Farm Mutual Automobile Insurance Company (State Farm), issued a policy of collision insurance to Carraway covering the Maverick and containing a loss payable clause in favor of Ford. A collision occurred and the Maverick was declared a total loss. At the time of the accident the gross balance due on Carraway's chattel mortgage note was $2,710 .86. Ford claimed its net balance from State Farm as loss payee under the aforementioned collision policy. State Farm refused to pay and Ford sued. Defendant answered, denying liability essentially on the basis that plaintiff by its actions destroyed the insurer's rights of subrogation. State Farm filed a third party action against Durwood Carraway and his minor son, Wayne, the driver of the Maverick at the time of the accident. The Carraways answered the third party action and additionally impleaded Ford as a third party defendant.

Judgment was rendered in the trial court in favor of Ford and against State Farm in the amount of $2,100.00. The judgment also rejected State Farm's demands against Carraway, and Carraway's demands against Ford.

State Farm has appealed.

A stipulation of facts was entered into by all parties on the morning of the trial as follows:

'1.

That effective May 21, 1973, for a policy period of May 21, 1973, to November 21, 1973, State Farm Mutual Automobile Insurance Company issued its policy number 1105 611 E21 18 to Durwood W. Carraway covering the 1972 Ford Maverick automobile involved in this matter. That among other coverages the above mentioned policy included $100 deductible collision insurance with Ford Motor Credit Corporation (sic) as the loss payee.

2.

That the premiums on the above mentioned policy were to be paid on a monthly basis. That the initial payment was the only payment made and the policy of insurance was correctly and effectively cancelled as of June 17, 1973.

3.

That Ford Motor Credit Company was notified of this cancellation on July 5, 1973, but was given an additional 13 days coverage from that date. Therefore, as to the loss payee, Ford Motor Credit Company, the policy of insurance was effective through July 18, 1973 .

4.

That on July 13, 1973, the insured vehicle was involved in a collision in Tulsa, Oklahoma, while being operated by Wayne R. Carraway, the minor son of Durwood Carraway. That a copy of the 'official police traffic collision report' prepared by representatives of the Tulsa Police Department is attached hereto and made a part hereof by reference. That as may be seen by reference to the above mentioned report, the accident occurred when Wayne R. Carraway collided with the rear of a vehicle being operated by Kenneth C. Lambrecht and occurred as a result of the negligent operation of Wayne R. Carraway.

5.

That the policy of insurance mentioned above and the rights of Ford Motor Credit Company and State Farm Mutual Automobile Insurance Company were subject to the terms and conditions of a 'Loss Payable Clause'. That a copy of that Loss Payable Clause is attached hereto and made a part hereof by reference.

6.

That on August 20, 1973, Durwood Carraway surrendered and released the insured vehicle to Ford Motor Credit Company and in so doing, executed a document entitled 'Voluntary Surrender and Release'. That a copy of that release is attached hereto and made a part hereof by reference.

7.

That the net loss sustained by Ford Motor Credit Company as a result of its financing the Carraway vehicle and the damages to the Carraway vehicle as a result of the accident mentioned above is stipulated to be $2,100.

8.

That the only witnesses who may be called at the trial of this matter are Jackie Netherlin of Ford Motor Credit Company and Huey T. Littleton of State Farm Mutual Automobile Insurance Company.'

The only witness to testify at trial was Mrs. Netherlin, who was called by plaintiff. Defendant did not call Mr. Littleton.

Mrs. Netherlin testified substantially to the effect that: at the time of the accident of July 13, 1973, and subsequently, she was employed by plaintiff Ford, and her duties consisted of the handling of delinquent accounts and insurance matters related thereto; she handled the Carraway account and, after being notified of the accident, was called by Mr. Norman Craven, a...