Hendry v. Grange Mutual Casualty Co.
| Decision Date | 20 March 1967 |
| Docket Number | No. 22331.,22331. |
| Citation | 372 F.2d 222 |
| Parties | Robert M. HENDRY, Jr., Appellant, v. GRANGE MUTUAL CASUALTY CO., Appellee. GRANGE MUTUAL CASUALTY CO., Appellant, v. Robert M. HENDRY, Jr., Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Joseph D. Farish, Jr., Farish & Farish, West Palm Beach, Fla., for appellant.
William H. Pruitt, Fisher, Prior, Pruitt & Schulle, West Palm Beach, Fla., for appellee.
Before TUTTLE, Chief Judge, WISDOM, Circuit Judge, and FISHER, District Judge.
This is an insurance policy case involving insurer's failure to defend under an automobile liability insurance contract a suit instituted against its insured, and also the possibility of liability in excess of policy limits thereof where the insurer wrongfully refused to so defend. Federal jurisdiction is based upon diversity of citizenship, plus the requisite amount in issue. Both parties appeal from a final judgment of the district court holding against the insurer, but limiting recovery by the insured to the policy limits plus attorney's fees and costs. We affirm.
The Grange Mutual Casualty Company, defendant below, through its agent, the R. F. Stanford Insurance Company, West Palm Beach, Florida, sold Robert M. Hendry, Jr., plaintiff below, an automobile liability insurance policy which the parties stipulated to have been in full force and effect at all times and for all purposes in issue in this action. The policy contained the following provisions:
Thereafter, on August 22, 1962, Hendry's automobile (insured under the policy) was involved in an accident, in which a minor guest occupant, Katherine Louise Wilson, was injured. The son, Robert Hendry, III, was the driver of the vehicle at the time of the accident and was also injured.
At the trial, Hendry testified that on Monday following the accident which occurred the previous Wednesday, he personally visited the Stanford Agency and advised some woman office worker about the accident (where it occurred, that there were no witnesses) and that she told him she would notify a Mr. Bennett, the man from whom Hendry purchased the policy, and have him call. Hendry further testified that Mr. Bennett did not get in touch with him but did talk to his sister after plaintiff had permanently left Palm Beach County. Hendry testified that he telephoned the agency on two other occasions but could not recall the exact dates. Testifying further, Hendry disclosed that he moved permanently to Eau Gallie very soon after the accident (at which time he lived in West Palm Beach with his sister) and later, to Daytona.
Marcus Brewer, the step-father of the minor guest occupant who was injured in the accident, testified that he also telephoned the Stanford Agency, within two or three days after the accident, talked to a man in the office and advised him where the accident happened and that there had been injuries to the occupants and damages to the vehicle. This testimony was corroborated by Brewer's wife, his ex-wife and his daughter.
Around October 3, 1962, Grange received a form SR-21 from the Financial Responsibility Division of the Florida State Insurance Commission, regarding the accident. On October 5th Grange sent Hendry a letter informing him of the SR-21 form and enclosing an accident form for Hendry to complete and return. Subsequently, on December 12, 1962, when no reply to the letter of October 5th had been received, Grange advised Hendry that unless the matter was given immediate attention there would be no alternative but to return the SR-21 form to the state insurance commission and advise the automobile underwriting department accordingly. Shortly thereafter, on December 17, 1962, a summons and complaint were served upon Hendry in an action for personal injuries sustained in the accident by Katherine Louise Wilson. After being so served, Hendry on December 29th forwarded to Grange a partially completed accident report together with suit papers and Grange's letter of October 5th. A notation made by Hendry at the bottom of the letter explained that the accident report had not been returned sooner because Hendry felt no litigation would occur as a result of the accident.
However, Hendry testified that he did not receive Grange's letters of October 5th and December 12th until after he had been served with suit papers because he had permanently moved from his sister's home in West Palm Beach, to which address the letters had been sent. Hendry also testified that he did not see Mr. Bennett until after the suit papers had been served on him, and that he understood Mr. Bennett had been ill during most of the period in question. Grange's claim supervisor testified by deposition that the company does not require a completed accident report before it opens a claim file and that information from which the report is made may come from informal sources such as a telephone call from the insured.
On January 2, 1963, Grange advised Hendry that through failure to promptly report the accident, he had violated the terms of the policy and would consequently have to provide his own defense to the action instituted on behalf of Katherine Louise Wilson. Hendry discussed this matter with Mr. Bennett of the Stanford Agency, who told plaintiff he would write the company.1 When the company refused to change its position, Hendry procured independent counsel. The suit instituted on behalf of Katherine Louise Wilson proceded to trial and resulted in a verdict of $20,934.30 against Hendry. The present litigation was then instituted by Hendry seeking damages resulting from Grange's failure to defend.
At the conclusion of all the evidence, Hendry sought a ruling from the trial court that his recovery was not limited to the policy limits, $10,000.00, but rather, that the proper measure of damages was $20,934.30, together with costs and attorney's fees. Hendry also attempted, at this point to inject the issue of "bad faith" into the case, regarding Grange's conduct in failing to defend the third party action. Hendry requested that the issue be submitted to the jury and that leave to amend the pleadings to include a "bad faith" allegation be granted.
The trial court ruled that a recovery was limited to the policy limits of $10,000.00 plus appropriate costs and attorney's fees and also refused to permit amendment of the pleadings to include a "bad faith" allegation. Subsequently, the jury returned a verdict in Hendry's favor, upon which final judgment was entered by the court assessing...
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