Hartford Acc. & Indem. Co. v. Cosby

• Decision Date: 11 March 1965
• Docket Number: 2 Div. 456
• Citation: 173 So.2d 585,277 Ala. 596
• Parties: HARTFORD ACCIDENT & INDEMNITY COMPANY v. C. Pierson COSBY.
• Court: Alabama Supreme Court

Page 585

173 So.2d 585

277 Ala. 596

HARTFORD ACCIDENT & INDEMNITY COMPANY v. C. Pierson COSBY.

2 Div. 456.

Supreme Court of Alabama.

March 11, 1965.

Rehearing Denied April 15, 1965.

Harry W. Gamble, J. E. Wilkinson, Jr., and Harry W. Gamble, Jr., Selma, for appellant.

W. McLean Pitts, Edgar A. Stewart and Philip Henry Pitts, Selma, for appellee.

HARWOOD, Justice.

This is an appeal from a judgment for the plaintiff rendered in what is commonly called an 'excess judgment suit.' The plaintiff below, who is the appellee here, was insured by the appellant, Hartford Accident and Indemnity Company, for liability resulting from accidents. The amount of the policy was $25,000. The policy provided that the insurer would defend any suit against the insured seeking damages caused by accident, but that 'the company may make such investigation, and settlement of any claim or suit as it deems expedient.'

The complaint in the present suit contains five counts. Each count sets forth in substance the policy contract and avers that on 15 July 1957, a suit was brought in the Circuit Court of Wilcox County, Alabama, by Carrie S. Smith et al., as plaintiffs against the Alabama Power Company, a Corporation, John J. Smedley, and C. Pierson Cosby (the latter being the insured under the policy and also the plaintiff in the present action). The Carrie Smith suit claimed damages in the sum of $100,000 for the death of one Earl Smith; that the present appellant, as insurer of the defendant Cosby, assumed control of the defense of said suit, the investigation thereof, and the negotiations for a settlement; that said Carrie Smith suit in Wilcox County resulted in a judgment against all of the defendants in the amount of $75,000, and costs of court; that the defendant Cosby filed a motion for a new trial which was overruled, and thereafter he perfected his appeal to the Supreme Court of Alabama. That court affirmed the judgment on 22 March 1962, and denied the application for rehearing on 21 June 1962. See Alabama Power Company v. Smith et al., 273 Ala. 509, 142 So.2d 228.

Count 1 avers that the appellant 'knowing that credible sworn testimony would be offered on the trial of said case against the plaintiff et al., failed to perform the duty it owed this plaintiff and the exercise of good faith in the negotiations of said settlement of said claims and suit, but on the contrary, wrongfully and in bad faith, and acting for its own interest wrongfully failed, declined, or refused to settle said claim * * * although the said defendants had the opportunity of settling said claim within the limits of said policy of insurance.'

Count 2 of the complaint is virtually the same as Count 1, except it alleges that the appellant negligently failed or refused to settle the claim, etc.

The complaint further alleges that this appellee, in order to prevent an execution being issued against his personal property, was forced to execute a supersedeas bond and that this appellant refused to execute the supersedeas bond for the appellee until he deposited with the appellant U. S. Treasury notes in the sum of $50,000. It was also averred that he was caused to employ attorneys and incur fees therefor.

In February 1960, demurrers were filed to the complaint and on 2 November 1962, the demurrers were overruled. The appellant filed four pleas, the first two pleas being the general issue and pleas three and four being the statute of limitations of one year. Thereafter on 1 April 1963, the appellee amended his complaint by adding Counts 1A (alleging bad faith), 2A (negligence), and 3A (negligence). These counts contained substantially the same averments as the original count but with additional allegations setting forth more details than were averred in Counts 1 and 2.

There were other pleadings, but we do not consider it essential to this review, other than to note that the court sustained the appellee's demurrers to pleas 3A and 4, which were pleas of statute of limitations.

Upon the trial of the present cause the jury returned a verdict in favor of the plaintiff-appellee in the sum of $20,863.78, and the court entered a judgment thereon. The defendant's motion for a new trial being overruled, an appeal was perfected to this court.

The admitted or uncontradicted facts show that the appellant, as the insurer, assumed control of the defense of the appellee in the Carrie Smith case; that prior to the trial of the Smith case, and during said trial, the plaintiffs in the Carrie Smith case offered to settle their claim for $25,000; the appellant refused to pay this amount, but offered to pay $12,500 if the Alabama Power Company, one of the co-defendants, would pay the other $12,500. The Power Company declined to contribute more than $500.00 towards the settlement; the appellee's personal attorney, McLean Pitts, demanded before and during the trial of the Carrie Smith case that the appellant accept the $25,000 offer of settlement.

There was also evidence introduced which tended to show that the appellant notified the appellee that the Carrie Smith case claimed damages of $100,000 and was in excess of the policy limits; that the appellant was advised by its attorney by letter that the Carrie Smith case was a serious case, and that the appellant's (Hartford's) attorney was employed to represent the appellee in the Carrie Smith case and thereafter assumed charge and control of the defense of the Smith case; that after being notified by the appellant that the Smith case claimed damages in excess of the policy limits, the appellee employed McLean Pitts as his personal attorney to represent him in the Carrie Smith case; that Mr. Pitts, the appellee's attorney, before the trial of the Carrie Smith case, demanded that the appellant settle the case for $25,000, and advised the appellant that if the case was not settled for said amount the appellant would be guilty of bad faith and negligence; that the appellant appealed the Carrie Smith case but refused to execute a supersedeas bond to protect its assured, the appellee, unless the appellee deposited with the appellant sufficient collateral. The appellee did deposit with the appellant $50,000 in U. S. Treasury four percent notes and the appellee then executed a supersedeas bond; that $12,500 was retained by the appellant out of the U. S. Treasury notes which retained sum was used by the appellant in part payment of the judgment in the Carrie Smith case.

Under assignment of error No. 1, appellant has argued that the lower court erred in overruling appellant's demurrer to Counts 1 and 2 of the complaint.

Pretermitting the validity of the sufficiency of the assignment because of its generality, we see no need to inquire into the sufficiency of Counts 1 and 2 in that it is clear that under Counts 1A, 2A, and 3A, the same issues are presented, and the evidence offered was admissible under either Counts 1 and 2, or under the remaining three counts. There was no affirmative charge requested as to Counts 1 and 2. The verdict rendered by the jury was a general verdict, and referable as well to Counts 1A, 2A, and 3A, as to Counts 1 and 2. Therefore, if it should be conceded arguendo that Counts 1 and 2 were insufficient, the action of the court in overruling the demurrer to the complaint would be error without injury. Hamilton v. Browning, 257 Ala. 72, 57 So.2d 530; Brush v. Rountree, 249 Ala. 567, 32 So.2d 246; Central Aviation Company v. Perkinson, 269 Ala. 197, 112 So.2d 326. Assignment of error No. 1 is unavailing.

Assignments of error Nos. 2, 3, and 4, assert as error the court's action in sustaining the appellee's demurrers to pleas 3 and 4. These pleas seek to impose as a defense the statute of limitations of one year.

Assignment of error 13, relates to the refusal of the trial court to give the appellant's written charge, affirmative in nature, that the cause of action was barred by the statute of limitations.

The admitted and undisputed facts show that the $75,000 verdict and judgment in the Carrie Smith case was rendered and entered on 6 November 1958; that a motion for a new trial was timely filed and overruled and thereafter an appeal was perfected to this court wherein the judgment was affirmed on 22 March 1962, and the rehearing was denied on 21 June 1962.

The appeal was taken on 24 March 1959, and Hartford refused to made a supersedeas bond unless Cosby deposited with Hartford security in the amount of $50,000, which demand Cosby complied with on 18 April 1959. On 14 January 1961, some nine months after Cosby had deposited the security for the supersedeas bond, the present suit was filed.

In support of these assignments of error, it is the appellant's contention that the one year statute of limitations governing this action began to run on the day the judgment in the Carrie Smith case was entered, that is, 6 November 1958, and this suit not being filed until 14 January 1961, the bar of the statute of limitations had fallen.

Counsel for appellant argue that unless the date of the rendition of the judgment in the Carrie Smith case be considered the day on which the statute of limitations began to run, rather than the day of the affirmance of the judgment in this court, the result would be to permit the appeal to create an exception to the statute of limitations, and would therefore violate the doctrine that there are no exceptions to a statute of limitations except those made in and by the statute itself. Vines v. Crescent Transit Co., 274 Ala. 173, 146 So.2d 318.

We consider, however, that we are not dealing with an exception to a statute of limitations, but rather with when the appellee's cause of action ripened, that is, the day on which the statute of limitations began to run.

American Mutual Liability Ins. Co. of Boston, Mass. v. Cooper, 5 Cir., 61 F.2d 446, involves the same point which we are now considering. The case involved an appeal from a judgment of the U. S. District Court for the ...