Hoosier Cas. Co. of Indianapolis, Ind. v. Fox
| Decision Date | 17 January 1952 |
| Docket Number | Civ. A. No. 553. |
| Citation | 102 F. Supp. 214 |
| Parties | HOOSIER CAS. CO. OF INDIANAPOLIS, IND. v. FOX et al. |
| Court | U.S. District Court — Northern District of Iowa |
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Glenn B. Beers and R. Bruce Hughes, of Reed & Beers, of Waterloo, Iowa, and Merle L. Royce, of Marshalltown, Iowa, for the plaintiff.
Charles J. Pickett, of Waterloo, Iowa, for the defendant Wayne R. Fox.
Donald G. Allbee, of McGinnis & Allbee, of Marshalltown, Iowa, and Fred G. Clark, Jr., of Clark & Clark, of Waterloo, Iowa, for the defendant Betty Kriegel Williamson, administratrix, of estate of Gerald E. Kriegel, deceased.
Jas. W. Hall and Don C. Swanson, of Hall, Galloway & Swanson, of Des Moines, Iowa, for the defendant Joe Zieons.
Alfred M. Pabst, of Albia, Iowa, for the defendant Ralph Eakins.
Kent Emery, Asst. Atty. Gen. of Iowa, for Pearl McMurry, Commissioner of Public Safety of Iowa.
The plaintiff, Hoosier Casualty Company, is an Indiana insurance corporation which, among other insurance, writes automobile insurance. On June 19, 1950, at Marshalltown, Iowa, it issued and delivered to the defendant Wayne R. Fox a policy covering an automobile owned by him. The coverage related, in part, to bodily injury liability, property damage liability, and medical payments arising out of the operation of the automobile. The policy limits, as to bodily injury liability, were $20,000 per person and $70,000 per accident. The policy was for a term expiring June 19, 1951.
On January 28, 1951, the automobile was involved in a mishap near Beacon, Iowa. At the time it was being operated by the defendant Wayne R. Fox. Riding with him at the time were the defendant Joe Zieons, the defendant Ralph Eakins, and Gerald E. Kriegel. The last name of the defendant Ralph Eakins is incorrectly given in the complaint and in some of the other pleadings as Aikens. As a result of the mishap Gerald E. Kriegel and the defendants Joe Zieons and Ralph Eakins sustained serious injuries. Gerald E. Kriegel died as a result of his injuries. The defendant Betty Kriegel Williamson was by the District Court of Iowa appointed administratrix of his estate. The defendants Wayne R. Fox, Joe Zieons, Ralph Eakins, and Betty Kriegel Williamson, administratrix, are and were residents and citizens of the State of Iowa. Gerald E. Kriegel at the time of the mishap and at the time of his death was a resident of the State of Iowa. On September 21, 1951, the plaintiff, Hoosier Casualty Company, brought this action in this court asking for a declaratory judgment under the provisions of the Federal Declaratory Judgments Act, 28 U.S.C.A., §§ 2201, 2202. It named and joined as parties defendant Wayne R. Fox, Joe Zieons, Ralph Eakins, and Betty Kriegel Williamson, administratrix. Jurisdiction is based upon diversity of citizenship between the plaintiff and all of the defendants. It is not controverted that the situation of Joe Zieons, Ralph Eakins and Gerald E. Kriegel at the time of the mishap was such as to give them the status of guests under the so-called Iowa Guest Statute. That statute, which appears as Sec. 321.494, Code of Iowa, 1950, I.C.A., provides as follows: "The owner or operator of a motor vehicle shall not be liable for any damages to any passenger or person riding in said motor vehicle as a guest or by invitation and not for hire unless damage is caused as a result of the driver of said motor vehicle being under the influence of intoxicating liquor or because of the reckless operation by him of such motor vehicle." In its complaint the plaintiff alleges that the defendant Wayne R. Fox had procured the issuance of the automobile insurance policy by means of fraudulent statements and representations. It asks that it be declared that it is under no liability thereunder to any of the defendants. The defendant Wayne R. Fox filed an answer denying fraud on his part and asking in effect that it be held that the policy is enforceable according to its terms. The defendants Joe Zieons and Ralph Eakins filed answers setting up a number of defenses, certain of which will be referred to later. In addition, both of them filed counterclaims against the plaintiff. In their counterclaims they allege that Wayne R. Fox had been guilty of recklessness in the operation of his automobile within the purview of the Iowa Guest Statute. They ask recovery of the plaintiff for the damages sustained by them because of such recklessness on the part of Wayne R. Fox. They both also filed cross-claims against Wayne R. Fox on the same claims. The amount of damages claimed by the defendant Joe Zieons on his claim is the sum of $11,402.40. The amount of damages claimed by the defendant Ralph Eakins on his claim is the sum of $16,660. The defendant Betty Kriegel Williamson filed an answer in some respects similar to the answers of the defendants Joe Zieons and Ralph Eakins. However, she did not and has not filed any counterclaim or cross-claim herein for damages for the death of Gerald E. Kriegel. As yet she has not brought any action on her claim. It appears that her claim would be in a very substantial amount. No action is pending in any other court involving the claims of the defendants Joe Zieons and Ralph Eakins. The applicable Iowa Statute of Limitations as to the claims of the defendants Joe Zieons, Ralph Eakins and Betty Kriegel Williamson, administratrix, is two years. Sec. 614.1(3). Code of Iowa, 1950, I.C.A. Subsequently, Pearl McMurry, Commissioner of Public Safety of Iowa, made application to intervene and file answer herein. That feature will be referred to later.
The plaintiff challenges the right of the defendants Joe Zieons and Ralph Eakins to counterclaim against it on the policy for the damages sustained by them because of the claimed recklessness of the defendant Wayne R. Fox. The defendant Wayne R. Fox challenges the right of the defendants Joe Zieons and Ralph Eakins to assert their cross-claims against him in this action. The plaintiff also challenges the sufficiency of certain of the defenses asserted in the answers of the defendants Wayne R. Fox, Joe Zieons, Ralph Eakins, and Pearl McMurry, Commissioner of Public Safety of Iowa.
In the present case there is presented the situation where an insurer seeks a declaration of non-liability on an automobile policy issued by it because of fraud on the part of the insured in its procurement and in which there have been joined as parties defendant, the insured, two persons injured by the alleged recklessness of the insured, and the personal representative of another person allegedly similarly injured, and in which the two living injured persons file counterclaims against the insurer and cross-claims against the insured for the damages sustained by them because of such alleged recklessness.
The policy in question contains the following provision in regard to coverage:
It also contains a provision providing that the insurer shall defend any suit against the insured alleging bodily injury as a result of the use of the automobile and seeking damages on account thereof. The policy also contains the following provision:
Jurisdiction in this case being based upon diversity of citizenship, the doctrine of the case of Erie Railroad Company v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, is governing.
The Iowa Code contains and for a long period has contained many statutes relating to the right of insurance companies to do business in this State, the type and kind of policies they may issue and as to rights and obligations thereunder. The present statutory provisions relating thereto are found in Title XX of the Code of Iowa, 1950, I.C. A. § 516.1 et seq. Sec. 516.1 of that title provides as follows: "All policies insuring the legal liability of the insured, issued in this state by any company, association or reciprocal exchange shall, notwithstanding any other provision of the statutes, contain a provision providing that, in event an execution on a judgment against the insured be returned unsatisfied in an action by a person who is injured or whose property is damaged, the judgment creditor shall have a right of action against the insurer to the same extent that such insured could have enforced his claim against such insurer had such insured paid such judgment."
Chapter 516, and especially Sec. 516.1, has been considered by the Iowa Supreme Court in several cases. The provisions of that Section are not to be thwarted by policy provisions. Schmid v. Automobile Underwriters, 1932, 215 Iowa 170, 244 N.W. 729, 733, 85 A.L.R. 4. A...
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