Hobbs v. Buckeye Union Casualty Company

• Citation: 212 F. Supp. 349
• Decision Date: 22 December 1962
• Docket Number: Civ. A. No. 930.
• Parties: Gaylord HOBBS, Plaintiff, v. The BUCKEYE UNION CASUALTY COMPANY, Defendant and Third-Party Plaintiff, v. CELINA MUTUAL INSURANCE COMPANY, Third-Party Defendant.
• Court: U.S. District Court — Western District of Virginia

212 F. Supp. 349

Gaylord HOBBS, Plaintiff, v. The BUCKEYE UNION CASUALTY COMPANY, Defendant and Third-Party Plaintiff, v. CELINA MUTUAL INSURANCE COMPANY, Third-Party Defendant.

Civ. A. No. 930.

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

December 22, 1962.

Dick B. Rouse and Francis W. Flannagan, Bristol, Va., for Gaylord Hobbs.

G. R. C. Stuart, of Penn, Stuart & Stuart, Abingdon, Va., for Buckeye Union Casualty Co.

Donald T. Stant, of Stant & Roberts, Bristol, Va., for Celina Mut. Ins. Co.

DALTON, Chief Judge.

This dispute originates with an automobile accident. Much of the difficulty surrounding it emanates from the legal relationships created by Virginia's relatively new Uninsured Motorist Law. (Va.Code Ann. § 38.1-381.) The facts of the case are as follows:

On April 19, 1961, the plaintiff, Gaylord Hobbs, was a paying passenger in a car owned and operated by one Carl McCroskey when it collided in Washington County, Virginia, with another car driven by an unknown motorist, hereinafter designated John Doe. Hobbs suffered extensive injuries and instituted suit in the Circuit Court of Washington County against both Carl McCroskey and the unknown and, therefore, presumably uninsured motorist, John Doe. (Va.Code Ann. § 38.1-381(c).) In that action Hobbs obtained a $12,000.00 judgment against McCroskey and John Doe as joint tort feasors.

Two insurance companies became involved as a result of the accident: The present third-party plaintiff, Buckeye Union Casualty Company, had issued a liability policy to Carl McCroskey, and the present third-party defendant, Celina Mutual Insurance Company, had issued a liability policy to Gaylord Hobbs. Buckeye, therefore, was of course responsible for any liability incurred by Carl McCroskey. And, since both policies were issued in Virginia and therefore contained the required uninsured motorist provisions, both Buckeye and Celina were responsible at the time of the accident to Hobbs for any amount which he should become legally entitled to recover from the unknown motorist, John Doe. (Va.Code Ann. § 38.1-381(b)) Buckeye offered Hobbs such coverage because he was riding in the insured automobile.¹ Celina offered Hobbs such uninsured motorist coverage because he was a named insured or a spouse of the named insured living in the same household, and thus insured 24 hours a day against injury from uninsured motorists.² Therefore it seems clear that at the time of the accident both Buckeye and Celina carried valid coverage regarding any legally determined liability on the part of John Doe to Gaylord Hobbs. As we have said, Buckeye of course carried valid liability coverage on Carl McCroskey.

Moreover, it appears from the Circuit Court record that both Buckeye and Celina were actually served with a copy of the notice of motion for judgment in the manner prescribed by law and were both therefore possessed of the right at the outset of the suit to file pleadings and take other action allowable by law in the name of John Doe. (Va. Code Ann. § 38.1-381(e) and (e) (1).) See State Farm Mutual Automobile Ins. Co. v. Duncan, 203 Va. 440, 125 S.E.2d 154 (1962). Therefore, although apparently only Celina did file pleadings and defend the claim against John Doe, and Buckeye was active in the suit only in defense of Carl McCroskey, it appears that both these companies remained responsible for John Doe's liability to Hobbs as it was legally determined in the Circuit Court action. However, as will be seen later, whether this assumption is correct or not, does not materially affect the Court's holding in the present controversy.

Following the Circuit Court judgment, execution was issued against Carl McCroskey and returned unsatisfied. And pursuant to Va.Code Ann. § 38.1-380, Hobbs instituted suit in the Circuit Court against Buckeye for full payment of the $12,000.00 judgment based on Buckeye's contract of insurance with McCroskey. Buckeye immediately removed to this Court and impleaded Celina under Rule 14 of the Federal Rules of Civil Procedure on the ground that Celina covered the joint tort feasor, John Doe, and would, therefore, be subject to contribution to Buckeye after Buckeye paid the $12,000.00 judgment to Hobbs. Buckeye then paid the plaintiff Hobbs his $12,000.00, and the issue before this Court is whether or not Buckeye is entitled to contribution from Celina for some part of the $12,000.00 payment.

Before reaching that point, however, it should be noted that Celina's contention that Buckeye's payment to Hobbs destroyed both diversity and amount jurisdiction is not well founded since the jurisdiction of this Court over the entire controversy was determined in the suit by Hobbs against Buckeye, and, having uncontroverted jurisdiction of that suit, we need no independent grounds of jurisdiction to entertain and determine the defendant's ancillary third-party claim. See Barron and Holtzoff, Federal Practice and Procedure, Vol. 1A, at 650.

Turning now to the central issue to be decided by this Court, which is whether Buckeye, having stepped into the shoes of McCroskey through its $12,000.00 payment to Hobbs, is entitled to contribution from Celina for any part of that payment. There is no doubt that contribution between wrongdoers may be enforced in Virginia so long as the wrongful act involves no moral turpitude. (Va.Code Ann. § 8-627.) Moreover, it has been held in Virginia that the insurer of one joint tort feasor which has paid the injured party may compel contribution from the insurer of another joint tort feasor. American Employers Insurance Co. v. Maryland Casualty Co., 218 F.2d 335 (4th Cir., 1954). Therefore, if Celina were the insurer of John Doe, Buckeye could undoubtedly compel contribution. But Virginia's uninsured motorist law does not create insurance for uninsured motorists! State Farm Mutual Automobile Insurance Co. v. Drewry, 191 F.Supp. 852 (W.D.Va.1961); Nationwide Mut. Ins. Co. v. Harleysville Mut. Cas. Co., 203 Va. 600, 125 S.E.2d 840 (1962). It is primarily concerned with providing adequate compensation for injured insureds when other sources are lacking. As the Virginia Supreme Court of Appeals said in the Nationwide case, supra, at 603, 125 S.E.2d, at 843:

"The intent of the General Assembly in enacting the "Uninsured Motorist Act," was to provide benefits and protection against peril of injury by an uninsured motorist to an insured motorist, his family and permissive users of his vehicle. It was not enacted to provide insurance coverage upon each and every uninsured vehicle to everyone."

Furthermore, the Virginia Supreme Court of Appeals has discussed the relationship of insurer to uninsured motorist in connection with facts pertinent to the present controversy. In Horne v. Superior Life Insurance Company, 203 Va. 282, 123 S.E.2d 401 (1962) the issue revolved around the right of a workmen's...