Glesenkamp v. Nationwide Mutual Insurance Company, C-70-1727.

• Decision Date: 05 May 1972
• Docket Number: No. C-70-1727.,C-70-1727.
• Court: U.S. District Court — Northern District of California
• Parties: Hazel L. GLESENKAMP, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, a corporation, Defendant.

344 F. Supp. 517

Hazel L. GLESENKAMP, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, a corporation, Defendant.

No. C-70-1727.

United States District Court, N. D. California.

May 5, 1972.

Ernest M. Thayer, San Francisco, Cal., for plaintiff.

Miller, Groezinger, Pettit & Evers, San Francisco, Cal., for defendant.

MEMORANDUM AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

RENFREW, District Judge.

This action arises out of a dispute as to the extent of coverage afforded under a travel accident insurance policy issued to plaintiff by defendant. Plaintiff sustained injuries which are the subject of this claim while boarding a boat. Defendant refused to honor plaintiff's claim for these injuries on the ground that the policy afforded coverage only while she was riding as a passenger aboard a boat, not while she was in the act of boarding. Upon defendant's refusal to honor her claim, plaintiff instituted this lawsuit, alleging causes of action based on fraud, breach of contract, and constructive trust. The breach of contract claim, which was based on defendant's failure to perform under the terms of the insurance policy, was disposed of on March 19, 1971, when this Court granted plaintiff's motion for summary judgment as to that cause of action. In satisfaction of this partial summary judgment, plaintiff received the sum of $2,018.43, which represented actual damages in the amount of $1,530 plus interest. Defendant contends that on the basis of the doctrine of election of remedies and res judicata, satisfaction of plaintiff's claim under the contract bars further action on her fraud claim. The matter is now before the Court on defendant's motion to dismiss.

Plaintiff's fraud claim is founded on an allegation that defendant never intended to insure plaintiff at the time the policy was issued. Under this cause of action, plaintiff alleges actual damages in the amount of $1,530 plus interest, damages for mental suffering in the amount of $15,000, and punitive damages in the amount of $50,000. Defendant frames the issue in terms of whether the different theories of recovery arise out of one state of facts and give rise to but one wrong to be redressed, or whether they arise out of separate and distinct facts and are for redress of different violations of plaintiff's rights, thereby allowing them to be consecutively prosecuted. This is essentially a proper statement of the question which confronts the Court. Defendant argues that plaintiff's remedies for breach of contract and fraud are inconsistent, and that to allow plaintiff to recover under the fraud claim would be to allow her to recover twice for the same wrong.

In oral argument defendant urged this Court to apply the rationale of the Seventh Circuit's holding in United States v. Temple, 299 F.2d 30 (7 Cir. 1962), to this matter and find that further prosecution of the fraud claim by plaintiff is barred by the principle of res judicata. However, while the rationale of that opinion is persuasive, this Court must reach its decision in this matter on the basis of the applicable California law.^*

Defendant relies on authority which stands for the proposition that plaintiff may not recover twice for the same wrong. Although different theories of recovery may be pleaded and pursued, once plaintiff recovers under one theory, he is thereby precluded from pursuing to conclusion other claims based on the same right or rights. This is undoubtedly a proper statement of the law. In many situations a tort and a contract claim arise out of the same act. Defendant relies on Acadia v. Herbert, 54 Cal.2d 328, 336-337, 5 Cal.Rptr. 686, 353 P.2d 294, 299 (1960) which states that "An act that constitutes a breach of contract may also be tortious" (5 Cal.Rptr. 691, 353 P.2d 299). The action in Acadia was based on defendant's failure to comply with obligations under two agreements to supply water to plaintiff. The same act, failure to...