Jefferson Insurance Co. of Pine Bluff, Ark. v. Hirchert
| Decision Date | 17 August 1960 |
| Docket Number | No. 16356.,16356. |
| Citation | 281 F.2d 396 |
| Parties | JEFFERSON INSURANCE COMPANY OF PINE BLUFF, ARKANSAS, Appellant, v. Lester H. HIRCHERT and Norman Hirchert, Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Herschel H. Friday, Jr., Little Rock, Ark., and Louis L. Ramsay, Jr., Pine Bluff, Ark., for appellant.
Alston Jennings, Little Rock, Ark., for appellees.
Before SANBORN, MATTHES and BLACKMUN, Circuit Judges.
This is an appeal from a judgment for the plaintiffs (appellees), Lester H. Hirchert and Norman Hirchert, citizens of North Dakota, in a declaratory judgment action brought by them in June of 1957 against the Jefferson Insurance Company of Pine Bluff, Arkansas (appellant). The judgment determined that an automobile liability policy issued February 1, 1956, by the Company for the term of six months to Lester H. Hirchert while in the military service at Fort Bragg, North Carolina, covered whatever liability the plaintiffs may have had for bodily injuries and property damage resulting from an accident in which they and the insured automobile were involved on May 10, 1956, near Steele, North Dakota, and that the Company was obligated to investigate the accident and to defend against any claims or suits for injuries or damages arising therefrom.
At the time of the accident, Lester H. Hirchert was no longer in the military service, having been discharged on April 12, 1956. He was riding in the front seat of the insured automobile, which he still owned but which, with his permission, his brother Norman was driving. There were three persons in the car beside Norman and Lester Hirchert. Apparently the automobile collided with a train. Bodily injuries and property damage resulted. Claims in excess of $3,000 were made against Norman Hirchert. The Company was duly notified, and demand was made upon it to investigate the accident and to defend against the claims. The Company refused to take any action, and denied that the policy in suit was applicable or furnished any coverage in respect to the accident.
The Company's denial of liability and coverage was based upon a "Military Personnel Endorsement," reading as follows:
The form of the endorsement was drawn by the Judge Advocate's Department at Fort Bragg and was on file at that post. It was a special requirement of the military at Fort Bragg, and it was necessary for Lester Hirchert, while in service, to have the policy with the endorsement in order to drive his automobile in or onto the military post. Both policy and endorsement became effective the same day. The policy, without the endorsement, was the standard form for Arkansas on file with the Insurance Department of that State. It contained the usual "omnibus clause" providing, in substance, that the word "insured" includes the named insured and any person while using the automobile with his permission.
The policy was procured by Lester H. Hirchert through Colonel Edwin D. Bonner, a retired army officer, who lived adjacent to the army post. The Company was not licensed in the State of North Carolina. Colonel Bonner had authority to accept, on behalf of the Company, applications for automobile liability insurance from military personnel, to be forwarded to it for acceptance or rejection, together with the premium paid to him. He also had authority to bind the risk for a ten-day period pending the issuance of the policy applied for or rejection of the application.
The application signed by Lester H. Hirchert on February 1, 1956, was in the form of answers to questions. After the printed words "Permanent Home Address" appeared, also in print: "Policy to name the following additional drivers:". Spaces were provided for the insertion of such names. No names were inserted. Below the signature of the applicant appears: "Note: Coverage to be afforded is limited to applicant and other persons named as additional drivers." We find nothing in the policy which made the application any part of the contract of insurance.
The limits of liability under the policy, without the Military Personnel Endorsement, were, for bodily injury, $5,000 each person, $10,000 each accident, and, for property damage, $5,000 each accident.
Were it not for the Military Personnel Endorsement, there could be no question as to the obligation of the Company, under its policy, to investigate the North Dakota accident, to defend against claims resulting from it against either or both of the plaintiffs, and, within the limits of the policy, to pay whatever damages the plaintiffs were adjudged legally obligated to pay.
This case, then, turns upon the meaning and effect of the endorsement.
The Company contended that the endorsement restricted coverage to liability for injury and damage from the use of the automobile only while it was being operated by Lester H. Hirchert, the "Named Insured"; that the omnibus clause of the policy "was limited by the endorsement so that when the insured automobile was being driven upon a military reservation or public highway contiguous thereto there was no limitation upon coverage afforded as to persons insured, but when the automobile was being operated elsewhere coverage was limited to operation by the named insured only."
The District Court determined that the policy was a North Carolina contract; that the substantive law of...
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