Henderson v. Selective Insurance Company
| Decision Date | 23 November 1966 |
| Docket Number | 16777.,No. 16776,16776 |
| Citation | 369 F.2d 143 |
| Parties | Alice Kathryn HENDERSON and David Henderson, Plaintiffs-Appellees, v. SELECTIVE INSURANCE COMPANY, Defendant-Appellant, Firemen's Fund Insurance Company, Defendant-Appellee. Dorothy MOORE and Josephine Hayes, Plaintiffs-Appellees, v. SELECTIVE INSURANCE COMPANY, Defendant-Appellant, Firemen's Fund Insurance Company, Defendant-Appellee. Alice Kathryn HENDERSON and David Henderson, Plaintiffs-Appellees, v. FIREMEN'S FUND INSURANCE COMPANY, Defendant-Appellee, Allstate Insurance Company, Intervenor-Appellant. Dorothy MOORE and Josephine Hayes, Plaintiffs-Appellees, v. FIREMEN'S FUND INSURANCE COMPANY, Defendant-Appellee, Allstate Insurance Company, Intervenor-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Harold D. Ricketts, Bowling Green, Ky., for appellant, Selective Ins. Co., Harlin, Parker & Ricketts, Bowling Green, Ky., on the brief.
Jerry L. Moore, Bowling Green, Ky., for appellant, Allstate Ins. Co., Bell, Orr & Reynolds, Bowling Green, Ky., on the brief.
E. R. Gregory, Bowling Green, Ky., for appellees, Alice Kathryn Henderson and David Henderson.
Marshall Funk, Bowling Green, Ky., for appellees, Dorothy Moore and Josephine Hayes.
J. L. Richardson, Jr., Louisville, Ky., for appellee, Firemen's Fund Ins. Co.
Before CELEBREZZE and PECK, Circuit Judges, and TAYLOR, District Judge.
In May, 1962, Charles Hunt, Jr., a prospective purchaser of a 1962 Ford Galaxie owned by Louisville Motor Company (herein called Louisville), while driving said car, collided with another automobile operated by Plaintiff-Appellee, Alice Kathryn Henderson. Two companions of Hunt — Dorothy Moore and Josephine Hayes, were injured, as were the occupants of the other car, Alice Kathryn Henderson and David Henderson.
Damage suits were filed by the four injured parties in the Circuit Court of Warren County, Kentucky against Hunt, the driver, and against Louisville, the owner of the car. Hunt's case was defended by his insurer, Allstate Insurance Company (herein called Allstate), and Louisville's by its insurer, Selective Insurance Company, (herein called Selective). Hunt had been given permission to drive the 1962 Galaxie by one Donald Martin, a salesman of Louisville.
During the course of the trial, a directed verdict was entered as to Louisville on the express ground that there was insufficient evidence to establish an agency relationship between Louisville and Martin. The case was submitted to the jury on the liability of Hunt only and the following verdicts were returned:
Dorothy Moore $10,801.45
Josephine Hayes 25,780.85
Alice Kathryn
Henderson 30,861.94
David C. Henderson 5,000.00
Allstate paid into Court $11,300.00, the full extent of its policy coverage, plus the court costs in the amount of $532.75. These sums were proportionately applied as credits on the respective judgments, leaving balances due as follows:
To Dorothy Moore $ 9,372.95
To Josephine Hayes 22,209.35
To Alice Kathryn
Henderson 26,861.94
To David C
Henderson 2,700.00
This action was brought by the four judgment creditors against Selective and Firemen's Fund Insurance Company which did not appear in the state court action and which is the insurer of the salesman, Donald Martin. Herein, the latter insurance company is called Firemen's. Allstate intervened, asking judgments against Selective and Firemen's for $14,968.01, the amount paid out by it on the judgments, plus its reasonable attorneys fees incurred in defending the state court action. Liability for the injuries was determined against Hunt in the state court. That question is not now before us.
Recovery in this action, as District Judge Swinford pointed out at the trial in the district court, depends upon the provisions of the policies and, we might add, upon the facts with reference to whether Hunt, when the accident occurred, was using the car with the permission of the owner. The policies are not before the Court in their entirety. However, Selective in its Appendix has incorporated a memorandum which includes pertinent policy provisions from Selective's policy and from Firemen's. Those provisions from Selective's policy are as follows:
"The unqualified word `Insured\' includes the named insured and also includes * * * (2) under coverages A and C any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, * * *"
And those from Firemen's are:
With respect to Hunt's authority to operate the car at the time of the collision, parties took the depositions of Dale Wells, Sales Manager of Louisville, of Roy Phelps, Assistant Sales Manager of Louisville, of Donald Martin, the salesman who turned the car over to Hunt, and of Hunt himself. Counsel for Selective participated in the taking of these depositions and conducted cross-examination of all but Hunt.
Dale Wells deposed, in effect, as follows: That he became Sales Manager of Louisville in December, 1960 and occupied that position on May 5, 1962. That it was the general policy of the Company to permit a person who is interested in buying an automobile to drive the car without somebody being with him. That this policy was followed where it was felt that the prospective purchaser was thoroughly interested in the car. He testified that the general salesman had the right to allow a customer to drive a car if he wanted to. On cross-examination, he testified to the circumstances under which Martin took the car to Butler County. He was not on the premises when Martin talked to Phelps but Phelps reported to him that Martin had taken the car and that he, Phelps, had given him permission to do so for the purpose of selling the car to his brother or brother-in-law. On re-direct, he testified that he did not know how good the prospects for a sale were but that he did not call Martin by telephone and rescind or countermand the permission given him by Mr. Phelps to take the car.
Roy Phelps, as Assistant Sales Manager, had five salesmen operating under him, of whom Donald Martin was one. With respect to the policy of the company in requiring a salesman to accompany a prospect driving a car, he testified that if a salesman qualified the prospective customer they let the latter drive the car. He testified further that the car given to Martin was a demonstrator and that the latter had been using it three or four days while his own car was being repaired. With respect to the trip to Butler County, he said that Martin had told him he was thinking in terms of trading it and would call him back and that he, Phelps, said: "Go ahead and take it." He testified in effect that Mr. Wells knew that Martin was using the car while his car was being repaired and was using it both to go back and forth to work and to show it and that he made no objection to it. Phelps testified that in 50% or 60% of the cases he closed deals made for cars without consulting Mr. Wells or Mr. Cooper (presumably the Manager of the Company). On cross-examination, Phelps testified that he was "reasonably certain" that Martin had been using the demonstrator for three or four days before taking it to Morgantown with Mr. Wells' knowledge. That Martin could use the car for whatever purpose he wanted but that he did talk about the proposed deal and that he, Phelps, talked to Wells about it. He was aware of the type of car owned by Martin's brother-in-law, namely, a 1961 Chevrolet Impala and that in a general way they had discussed what it would be worth on a trade or how much difference Louisville would have to get to make a trade. Still on cross-examination, he testified that he, Phelps, told Martin it was O.K. to go to Morgantown and show the car to his brother-in-law.
Donald Martin testified that he knew of no set policy of Louisville with respect to people trying a car out of the presence of the salesman, but that generally "if you didn't think a guy was liable to skip out of town with the car * * * he could ride by himself, but if you thought he might be the kind of guy that would steal it, ride with him." Questioned as to the circumstances under which he delivered the car to his brother-in-law to drive, he testified: "I just told him to drive it and see if he liked the car and then we'd try to arrive at a figure and get together on a trade." He did not tell him where to go or what time to bring it back when he was trying it out. On cross-examination, he testified that his brother-in-law had his permission to drive the car and that when he took the car to Butler County he felt and believed that he was obeying the orders of Louisville Motors Company and that he had full permission of his superiors at Louisville to take it there.
Hunt testified that at the time the car later involved in the accident was turned over to him he had been "jockeying" on another car, a more expensive model. Upon being asked how he managed to get the car into his possession, he testified:
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