Hager v. Hanover Fire Ins. Co. of New York

• Decision Date: 21 November 1945
• Docket Number: No. 3238.,3238.
• Citation: 64 F. Supp. 949
• Parties: HAGER v. HANOVER FIRE INS. CO. OF NEW YORK et al.
• Court: U.S. District Court — Western District of Missouri

64 F. Supp. 949

HAGER v. HANOVER FIRE INS. CO. OF NEW YORK et al.

No. 3238.

District Court, W. D. Missouri, W. D.

November 21, 1945.

Clif Langsdale, of Kansas City, Mo., for plaintiff.

Hogsett, Trippe, Depping & Houts, of Kansas City, Mo., for defendants.

RIDGE, District Judge.

In the case of Home Insurance Company et al. v. Trotter et al., previously tried in this Court, four insurance companies joined as plaintiffs in a declaratory judgment action. By the prayer of the petition said companies prayed for a declaration of rights under separate insurance contracts issued by them to the Trotters. "The petition in that action exhibits the distinctive characteristics of a suit for declaratory judgment." Home Insurance Company et al. v. Trotter et al., 8 Cir., 130 F.2d 800, 803. Two of the policies involved in said action were for face value of twenty-five hundred dollars ($2500) each. On motion of the Trotters, who were defendants in that action, the Trial Court dismissed said action as to the two companies whose policies were for a face amount less than three thousand dollars ($3,000), the Court holding that it did not have jurisdiction to declare the rights of the parties under said contracts. The Court did, however, declare and determine, in said action, the rights of the parties under the contracts whose face value exceeded the requisite jurisdictional amount. The four insurance companies joined in a motion to set aside the order of dismissal, and for a new trial as to the two companies against whom judgment was entered in said cause. An affidavit in support of said motion was filed in said action by said companies. The substance of said affidavit, if not true, nor privileged, was libelous per se of plaintiff in this action, who was a witness at the trial of said case. The motion to set aside the order of dismissal and for a new trial was overruled. The four insurance companies appealed. Thereafter, in the 8th Circuit Court of Appeals, on motion of the two companies whose policies were for less than the requisite jurisdictional amount the appeal as to them was dismissed, without prejudice to the other two companies. After the decision of the 8th Circuit Court of Appeals, in Home Insurance Company v. Trotter, 130 F.2d 800, plaintiff, a resident of the State of Missouri, filed in a Court of the State of Missouri, an action for libel against all four insurance companies, and the person who executed the above-referred-to affidavit, also a resident of the State of Missouri. In Hager v. Major et al., 353 Mo. 1166, 186 S.W.2d 564, 158 A.L.R. 584, the highest Court of the State of Missouri affirmed a ruling sustaining a demurrer to the petition filed in the State Court action, as to the two companies whose policies of insurance were of a face value in excess of three thousand dollars ($3,000), and as to the person who made and executed the affidavit that was the subject of said libel. Said Court held that no action was stated in the petition filed against said three parties, because the libel there claimed was shown to be absolutely privileged, having occurred in a legal proceeding in a Court of competent jurisdiction, and the subject of the alleged libel being relevant to the proceedings in which it occurred. Said Court reversed a ruling sustaining the demurrer in the State Court action as to the two companies whose policies were of a face value of twenty-five hundred dollars ($2,500) each, holding as to said last-mentioned companies that the libel charged was not shown to be privileged as to them, because the Court, in which they caused said affidavit to be filed, had no jurisdiction over the subject matter of the proceeding, insofar as said two companies' policies were concerned. After remand in the State Courts (the resident defendant having been discharged from said action), the two insurance companies remaining as defendants therein caused removal of the action to this Court.

Defendants in the instant action allege in their answer, inter-alia, that the libel charged against them herein is absolutely privileged because it was made in an action pending in a Court of competent jurisdiction, and, if not absolutely privileged, it is qualifiedly so for the reason it was made in a judicial proceeding in which it was necessary for them to preserve their right of review of the action of a Court dismissing a cause of action instituted by them in good faith.

Plaintiff has moved to strike certain portions of defendants' answer on the ground that the decision of the highest Court of Missouri, in Hager v. Major, supra, is res judicata of such defenses; and that the matters alleged in the answer are not privileged and constitute no defense to plaintiff's cause of action herein.

The decision of the Supreme Court of Missouri, in Hager v. Major et al., 353 Mo. 1166, 186 S.W.2d 564, 158 A. L.R. 584, is not res judicata of the defense asserted in the answer filed herein. A decision reversing a judgment sustaining a demurrer generally only determines the "law of the case." South Florida Securities, Inc., v. Seward, 5 Cir., 103 F.2d 872, 873; State ex rel. Melbourne Hotel v. Hostetter, 344 Mo. 472, 126 S.W.2d 1189; United States v. Northwestern Telegraph Co., D.C., 52 F.Supp. 973. The doctrine of the "law of the case" is not the same as the doctrine of res judicata. Connett v. City, etc., 7 Cir., 110 F.2d 1015; 30 American Jurisprudence, Page 913, Sec. 170. The opinion of the Supreme Court of Missouri in the Hager Case, supra, did not adjudicate all the issues herein involved. Creason v. Harding, 344 Mo. 452, 126 S.W.2d 1179. After the decision of the Missouri Supreme Court the cause remained pending against these two defendants. Their answer to that cause of action was filed in this Court after removal. 28 U.S.C.A. § 725, and Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, only require a Federal Court to apply the "general law" of a State, as declared by the highest Court of such State. "General laws" are those which apply to and operate uniformly upon all members of any class of persons, places or things. 36 C.J. 958. The "law of a case" is not "general law"; it is a rule of practice. Western Fire Insurance Company v. University City, 8 Cir., 124 F.2d 698. The decision of the Supreme Court of Missouri, entered in this cause before removal to this Court, is binding on this Court under Sec. 79, T. 28 U.S. C.A., insofar as said decision rules plaintiff's petition states a cause of action. Lookout Mountain R. Company v. Houston, C.C., 44 F. 449. This Court has the duty to determine the sufficiency of the allegations contained in the answer to assert a defense.

The proceeding instituted by the four insurance companies against the Trotters was a typical declaratory judgment action. "The petition did not ask the cancellation of the policies of insurance, nor injunctive relief, nor execution nor performance from the defendants, nor coercive relief of any character. The prayer of the petition was for a declaration of the rights of the (parties) under (separate) contracts of insurance." Home Insurance Company v. Trotter, 8 Cir., 130 F.2d 800, 802. No Federal equity power was sought by the four companies in said declaratory judgment action. Viewed from that aspect, said cause is materially different from the cause of action sustained in the case of Firemen's Fund Insurance Company et al. v. Crandall Horse Company of Buffalo, New York, D.C., 47 F.Supp. 78, 79, relied on by defendants herein. In the Crandall case, supra, the plaintiffs sought, "among other things, a judgment declaring the policies of the plaintiffs void and restraining the institution of any action against the plaintiffs for the recovery of the amount of the respective policies" there involved. No such relief was sought by the plaintiffs in the Trotter case.

In the Crandall case the Court held that the "pro-rata liability" provisions contained in the policies there involved created a "common interest" so that the requisite jurisdictional amount of liability under each policy could be aggregated to create the requisite Federal jurisdictional amount. In support thereof the Court cites Jamerson v. Alliance Insurance Company of Philadelphia, 7 Cir., 87 F.2d 253, certiorari denied 300 U.S. 683, 57 S.Ct. 753, 81 L.Ed. 886; American Optometric Ass'n v. Ritholz, 7 Cir., 101 F.2d 883; Phillips Petroleum Company v. Taylor, 5 Cir., 115 F.2d 726; Pacific Fire Insurance Company v. C. C. Anderson Company of Nampa, D.C., 42 F.Supp. 917; Sovereign Camp, Woodmen of the World, v. O'Neill, 266 U.S. 292, 45 S.Ct. 49, 69 L.Ed. 293. Whether such ruling, determining that the jurisdiction of Federal Courts in declaratory judgment actions, in which equity relief is sought against a multiplicity of suits, arising out of a single transaction, is sound, need not be determined. The Crandall case involved such...