Heavner v. State Auto. Mut. Ins. Co. of Columbus, Ohio

• Decision Date: 02 November 1972
• Docket Number: Civ. A. No. 70-C-82-R.
• Citation: 350 F. Supp. 859
• Court: U.S. District Court — Western District of Virginia
• Parties: James HEAVNER, Plaintiff, v. STATE AUTOMOBILE MUTUAL INSURANCE COMPANY OF COLUMBUS, OHIO, Defendant.

350 F. Supp. 859

James HEAVNER, Plaintiff, v. STATE AUTOMOBILE MUTUAL INSURANCE COMPANY OF COLUMBUS, OHIO, Defendant.

Civ. A. No. 70-C-82-R.

United States District Court, W. D. Virginia, Roanoke Division.

November 2, 1972.

COPYRIGHT MATERIAL OMITTED

F. Rodney Fitzpatrick, Roanoke, Va., for plaintiff.

Daniel S. Brown, Hazlegrove, Carr, Dickinson, Smith & Rea, Roanoke, Va., for defendant.

OPINION AND JUDGMENT

DALTON, Chief Judge.

Plaintiff filed his original complaint in this court on July 27, 1970.

This case comes before the court under 28 U.S.C.A. § 1332, as it involves citizens of different States, plaintiff being a domiciliary of Maryland at the time of this action, and defendant, State Automobile Mutual, having principal offices in Ohio. The amount in controversy exceeds $10,000, as decided by this court in an opinion and order dated March 15, 1972 (Heavner v. State Automobile Insurance Company of Columbus, Ohio, 340 F.Supp. 391 (W.D.Va.1972)), in which it was held that the liability of the insurer for the $10,000 required coverage did not include interest and costs, for which insurer was also liable, thereby causing the amount in controversy to exceed $10,000. Defendant's motion to dismiss on the grounds that the jurisdictional amount did not exceed $10,000 as required by 28 U.S.C.A. § 1332(a) was accordingly dismissed. The action now comes before this court to be decided on the merits.

The problem involves the area of uninsured motorist coverage. On March 18, 1967, the plaintiff was injured in an automobile accident in Franklin County, Virginia, while riding in a car owned by Madison M. Gray, a citizen of Delaware, and driven by Gray's son-in-law, Ralph Leo Buckle, Jr. The accident was caused by another car driven by one Larry Dean Fisher, against whom the plaintiff has obtained a judgment in this court for $27,946.65, with interest at 6% per annum and his costs in the proceeding.

Fisher was an uninsured motorist and the judgment remains unsatisfied. The present action seeks to recover on this unsatisfied judgment against State Automobile Mutual, which insured two cars owned by the plaintiff's mother.

At the time of the accident the plaintiff was 22 years old and a resident of Maryland, living in his mother's household. During most of the year, however, he was a student at the University of Georgia. State Automobile Mutual issued in Maryland, on January 13, 1967, a policy insuring two automobiles owned by the plaintiff's mother. The plaintiff used one of these cars, a 1957 Triumph, and it was noted on the face of the policy that the vehicle would be "principally garaged" in the State of Georgia. In the "Family Automobile Policy" issued by defendant, Part IV-Family Protection Coverage includes a provision ". . . to pay all sums which the insured . . . shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury . . ." The said policy further provides on the declarations page that "The insurance afforded is only with respect to such of the following coverages as are indicated by specific premium charge or charges." Maryland law does not require automobile insurance policies to include uninsured motorist coverage and no premium was paid to gain the benefits of this coverage, although on the face of the policy the coverage was clearly available.

In contrast to the law of Maryland, Georgia Code Ann. § 56-407.1 provides in part:

(a) No automobile liability policy or motor vehicle liability policy shall be issued or delivered in this State to the owner of such vehicle, or shall be issued or delivered by any insurer licensed in this State, upon any motor vehicle then principally garaged or principally used in this State, unless it contains an indorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an insured motor vehicle . . . (Emphasis supplied).

State Automobile Mutual is an insurer licensed to do business in the State of Georgia. It is contended that the Georgia statute overrides the provisions of the policy and accords uninsured motorist coverage to the plaintiff.

This court must decide several questions in reaching a decision: 1) Does the Georgia statute requiring uninsured motorist coverage for automobiles "principally garaged" in Georgia apply to the insurance contract made in Maryland? 2) If the uninsured motorist coverage is available to the plaintiff, does it extend to an accident occurring outside of Georgia, not involving the vehicle "prinicipally garaged" in Georgia?

First, does the Georgia statute requiring uninsured motorist coverage for automobiles "principally garaged" in Georgia apply to the insurance contract made in Maryland? Defendant contends that a federal court, sitting as a Virginia court, must apply Virginia law, to include Virginia conflicts law. Getlin v. Maryland Cas. Co., 196 F.2d 249 (9th Cir. 1952); Hardware Mut. Casualty Co. v. Wendlinger, 146 F.2d 984, 988-989 (4th Cir. 1944). Since Virginia follows the usual rule that the substantive law of the place where the contract is made controls, defendant contends that the law of the State of Maryland, where the insurance contract was made, controls. Maryland law does not require uninsured motorist coverage to be afforded by automobile insurance policies made in that State. Instead, Maryland provides an "unsatisfied judgment fund," managed by the State itself, in lieu of uninsured motorist coverage. Maryland Code Ann., 1957, Art. 66½, §§ 150-179, as amended.

Defendant's contention that Maryland law controls is without merit, for while the law of the place of contracting may be important, of equal importance is the law of the place of performance. Insurance contracts are subject to the laws of the State where the contract is to be performed. Numerous cases have applied the law of the forum state, if it has sufficient contacts, even though a clause in the contract or law of the contracting State was contrary to the law of the forum. Clay v. Sun Ins. Office, Ltd., 377 U.S. 179, 84 S.Ct. 1197, 12 L.Ed.2d 229 (1964); Watson v. Employers Liability Assurance Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74 (1954); Pacific Employers Ins. Co. v. Industrial Accident Comm'n., 306 U.S. 493, 59 S.Ct. 629, 83 L.Ed. 940 (1939). Cases have also held that if by the terms of the contract it is to be performed in a place other than the place of execution, the place of performance will ordinarily be deemed the place of contract, at least unless the parties otherwise intended. Poole v. Perkins, 126 Va. 331, 101 S.E. 240, 243 (1919).

In this instance, since the policy on its face shows that a part of the contract was to be performed in Georgia, it may be presumed that the intent of the parties was to include construction of the contract under Georgia law. The defendant was an insurer licensed in the State of Georgia at the date of issuance of the subject insurance policy. While the law of the place of contracting may have some weight in regard to the interpretation of a contract entered into see Lackey v. Virginia Surety Company, 209 Va. 713, 167 S.E.2d 131 (1969), nothing in this case indicates that the defendant was not prepared to apply the law of the place of performance in any claim involving the Georgia vehicle. Plaintiff's mother notified the insurance company that one car, the 1957 Triumph, would be used and garaged in Georgia, and the defendant is presumed to have known Georgia law because it did business there. Georgia also has an interest in having its laws apply to an out-of-state vehicle which will be operated for long periods of time upon its highways. While it may not have an interest in cars operated by transient guests, a car operated for nine months out of a year in Georgia could affect in a very substantial way Georgia citizens, in that they may be injured while riding in the car by an uninsured motorist, and unless § 56-407.1 of the Georgia Code Ann. was applicable they would be left without a remedy. It is not conceivable that the Georgia legislature intended for its uninsured motorist provisions to apply only to contracts made within the borders of Georgia. In the case of Stevens v. American Service Mutual Insurance Co., 234 A.2d 305 (D.C.App.1967), the Alabama based "mail order" insurance company contended that the Virginia Uninsured Motorist Act did not apply because its policy was signed and mailed in Alabama and was neither issued nor delivered in Virginia. The ...