Greer v. Associated Indemnity Corporation

• Decision Date: 06 January 1967
• Docket Number: No. 22844.,22844.
• Citation: 371 F.2d 29
• Parties: Wilma Irene GREER, Appellant, v. ASSOCIATED INDEMNITY CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

371 F.2d 29 (1967)

Wilma Irene GREER, Appellant, v. ASSOCIATED INDEMNITY CORPORATION, Appellee.

No. 22844.

United States Court of Appeals Fifth Circuit.

January 6, 1967.

Wm. H. Roundtree, Cocoa, Fla., for appellant.

Eugene L. Roberts, Rockledge, Fla., William M. Howell, Jacksonville, Fla., Howell, Kirby, Montgomery, Sands & D'Aiuto, Rockledge, Fla., for appellee.

Before BROWN, GEWIN and GOLDBERG, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

As with another recent case, Hamilton v. Maryland Cas. Co., 1966, 5 Cir., 368 F.2d 768, this adds to the list of insurance controversies in which the parties, most frequently the insurers, Travelers Ins. Co. v. Employers' Liability Assur. Corp., Ltd., 1966, 4 Cir., 367 F.2d 205, flee from the state forum to litigate their local, non-federal claims in the Federal Courts.

What — and all — that is involved is the construction of the terms of an insurance policy as to which we are Erie-Florida bound. Indeed, we can think of no more local an Erie-problem than construction of the provisions of an insurance contract, a judicial process in which public policy factors frequently assume extraordinary importance, so much so as to produce diametrically opposite judicial "constructions" of uniform identical policy clauses. Hamilton v. Maryland Cas. Co., 1966, 5 Cir., 368 F.2d 768, 769 at n. 4; American Agricultural Chem. Co. v. Tampa Armature Works, Inc., 1963, 5 Cir., 315 F.2d 856, 861-862 (concurring opinion). Pointing as such considerations do toward utilizing — as we have done often in the past¹ — the salutary provisions for certification to the Florida Supreme Court,² we think such circuity unnecessary and, hence, inadvisable here. There is simply no room for doubt as to the required result. We read the Erie signal loud and clear with no need for amplification.

The issue here presented is whether the Insurer under a Family Automobile Policy insuring two specified automobiles at specified different premium rates is liable for sums exceeding the stated limits of liability ($10,000) per automobile where only one of the insured automobiles is involved in the accident giving rise to the claim. For reasons hereinafter discussed, we hold that it is not and affirm the District Court's judgment.

The facts are simple and may be quickly stated. In June 1963, the Insurer issued a Family Automobile Liability Policy to the Assured, John R. Workman (and wife) specifically covering their two Ford automobiles, a convertible and a Falcon. Shortly thereafter, the Assured's son (John), who resided in the same household with his father, lost control of the convertible and collided with the automobile driven by Miss Greer, the Damage Claimant. The other insured automobile (Falcon) was in no way involved in the accident. As a result of the accident, the Damage Claimant sustained personal injuries and damage to her automobile. She brought a suit against the son in the Florida State Court and recovered judgment in the sums of $35,100 for her personal injuries, $1,300 for property damage, and $605.18 costs. She then instituted this action in the Florida State Court against the Insurer asserting that although the policy purported to limit liability for bodily injuries to a maximum of $10,000 per person, since it insured two automobiles, the Insurer was liable up to $20,000 for bodily injuries. The Insurer acknowledged liability for the property damages and costs, and for personal injuries in the sum of $10,000, and paid the Damage Claimant these sums in partial satisfaction of her judgment. The action then proceeded on the claim for $10,000 additional coverage.³ Thereafter, the Insurer removed the case to the United States District Court on grounds of diversity. Subsequently both parties moved for summary judgment. On February 22, 1965, the Insurer's motion was granted. This appeal followed.

The policy appears to be the standard⁴ 1958 form Family Automobile Policy except for an amendatory endorsement. It extended broad coverage for personal injuries arising out of the operation of "the owned automobile."⁵ to a wide group of omnibus assureds⁶ under suitable policy definitions.⁷ The limits of liability⁸ were expressly defined with a Separability Clause⁹ where the policy specifically covered more than one automobile. Although most of the amendatory endorsement incorporating changes made in the 1963 standard form are of no moment here,¹⁰ there is an important, if not decisive, change in the definition of "owned automobile" which ties it to the automobile 1 described in the policy¹¹ and 2 for which a premium is specified.

The parties are in agreement in urging that the single insurance policy insuring two automobiles but charging a separate premium for each and containing a "separability clause"¹² provides the coverage and should be interpreted as though separate policies had been issued for each automobile. We must therefore determine the status of the Assured, John, under the terms of the policy which relate to the automobile that was not involved in the accident.

In order to derive any benefit from the policy, the Damage Claimant must rely on the coverage afforded the Assured while driving an "owned automobile," since both of the automobiles involved in the present dispute were "owned by the named insured."

So far as we can divine it, and in the most favorable structure possible, the Damage Claimant's argument presumably proceeds along these lines. Son John is clearly an Assured with respect to an "owned automobile" because he is a "resident of the same household" as the named insured (par. (a) (1), note 6, supra). Further, the definition of "owned automobile" is broad enough to include any and all automobiles owned by the named Assured (note 11, supra). Since the Damage Claimant secured a judgment for bodily injuries "arising out of the ownership * * * or use of" an owned automobile (note 5, supra), there is nothing limiting coverage to the involved automobile so the Insurer is also liable under the policy terms covering the non-involved automobile. Alternatively, the insuring clause referring to "owned automobile" is ambiguous and could be construed to cover not only the involved automobile but also the non-involved automobile. Therefore, under the cases holding that ambiguous terms must be construed in favor of the Assured,¹³ the Damage Claimant is entitled to prevail.

This argument — if otherwise sound, and the if is a big one — ignores the changes made in the policy terms by the 1963 amendments in the definition of "owned automobile" (note 11, supra). As pointed out by the Insurer, the insuring agreement (note 5, supra) specifies that the injury must be caused by "the owned automobile," (emphasis added). Under the amendatory endorsement forming a part of this policy, this means "a private passenger * * * automobile 1 described in this policy 2 for which a specific premium charge indicates that coverage is afforded * * *." Far from aiding her, the Damage Claimant's separability argument now compels a holding adverse to her claim. Applying the separability concept, the provisions of the theoretical "separate policy" insuring the noninvolved automobile could not possibly be interpreted to extend coverage to the Damage Claimant, because her injuries did not arise as the result of the "ownership, maintenance, or use of the owned automobile * * * 1 described in this policy * * *" and "2 for which a specific premium charge" is made. (Emphasis added.)¹⁴

The Court in Thompson, note 14, supra, on facts almost identical to ours, reached the same result without relying on the 1963 amendments. The Court held that the separability clause "merely assures the applicability of the policy to whichever car is involved in an accident, or to all cars, and does no more." 56 Wash.2d 715, 355 P.2d at 12. Whatever doubt there might have been — and we intimate none — all has been removed by the 1963 changes.

As far as we are concerned, no help comes from Loerzel v. American Fidelity Fire Ins. Co., Sup.Ct. Ulster Co., 1952, 204 Misc. 115, 120 N.Y.S.2d 159 (R&A 864). In an unrevealing opinion there is some indication that both trucks were physically involved in the accident¹⁵ and, in any event, apparently both trucks were present at the scene of the accident. If both were causally involved from an operational standpoint, coverage existed for both. If not, the decision is, in our judgment, unsound and for Florida, we decline to follow it.

Nor can the Damage Claimant find any comfort in the medical payments cases where, under a policy insuring two or more automobiles, recovery in excess of the maximum limit of liability where a single amount is specified, or in excess of the maximum for the "involved automobile" where there are different limits of liability for the insured automobiles, is almost uniformly allowed.¹⁶ This result, while roundly criticized by at least one discerning writer in the field of automobile liability insurance,¹⁷ does not seem unreasonable in view of the different terminology incorporated in the insuring agreement of the medical payments provisions which broadly extends coverage to automobile-produced injuries regardless of its ownership or status as insured or uninsured.¹⁸ We may assume, without deciding, and as the recent cases seem to bear out that the 1963 amendments,¹⁹ while altering the terminology of the medical payments section, do not appear to have significantly affected the broad coverage afforded. In these cases coverage is not narrowly circumscribed but rather the Courts consider that when analyzed in conjunction with the separability clause in a policy insuring two or more automobiles, broad coverage is afforded so the assured is entitled to recover up to the policy limits for both automobiles.

But for us we need not concern ourselves with the correctness of this approach to medical payment cases. For from Government Employees, Inc. Co. v. Sweet, 1966, Fla.App., 186...