Kelly v. U.S. Fidelity & Guar. Co.

• Decision Date: 29 October 1954
• Docket Number: No. 8211,8211
• Citation: 76 So.2d 116
• Parties: Fancy A. KELLY, Sr. et al., Plaintiffs-Appellees, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 116

76 So.2d 116

Fancy A. KELLY, Sr. et al., Plaintiffs-Appellees, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant-Appellant.

No. 8211.

Court of Appeal of Louisiana, Second Circuit.

Oct. 29, 1954.

Rehearing Denied Dec. 10, 1954.

Morgan, Baker & Skeels, Shreveport, for appellant.

Myers, Gatti & Egan, Shreveport, for appellees.

HARDY, Judge.

This is a suit by plaintiff for the recovery of the sum of $1,080 from defendant, which amount is a suit by plaintiffs for the recovery of the sum of $1,080 from defendant, in defending certain suits with respect to which the defendant insurer refused to assume the responsibility for the defense, and the further sum of $500 as attorney's fees for prosecuting this suit. After trial there was judgment in favor of plaintiffs in a total sum of $1,525, from which defendant has appealed.

The facts involved are largely undisputed, but a somewhat detailed relation thereof is necessary in order to effect an understanding of the controversy.

Plaintiff, Frank A. Kelly, Jr., was the owner of a Chevrolet pick-up truck which was covered by a policy of liability insurance issued by defendant, which coverage included liability incurred in the course of the use of the insured vehicle by any person, so long as said use was with the consent and permission of the named insured.

On October 25, 1950, the insured vehicle while being used by plaintiff, Fancy A. Kelly, Sr., with the knowledge, consent and permission of Frank A. Kelly, Jr., for the purpose of transporting a number of farm workers, was involved in an accident which resulted in injuries to some of the said transportees.

On March 28, 1951, three of the injured employees filed suits against Fancy A. Kelly, Sr. seeking recovery of damages for injuries sustained in the automobile accident. The insurer was notified of the filing and pendency of the suits, in accordance with the requirement of the policy of insurance, and was formally called upon to defend the suits under the provisions of the policy agreement. In response to this demand defendant insurer refused to undertake the obligation of defending the suits, asserting in support of this position one of the named exclusions from liability embodied in the policy. As a direct result of this refusal to defend, these plaintiffs employed counsel who filed answer to the suits and also filed calls in warranty against this defendant. Exceptions of no cause and no right of action to the calls in warranty were filed on behalf of defendant, and trial was had thereon, subsequent to which judgment was rendered overruling the exceptions and maintaining the calls in warranty. Thereafter the suits were compromised and settled by defendant in consideration of the payment of agreed sums, and the suits dismissed by the respective plaintiffs.

Following these proceedings plaintiffs called upon defendant for payment of attorneys' fees and costs incurred by them and necessitated by defendant's refusal to defend the suits, which demand was refused. Plaintiffs thereupon instituted this suit, not only for the attorneys' fees and costs originally concerned, which claim amounted to $1,080, but also for the additional amount of $500 alleged to be due for reasonable attorney's fees in prosecuting this claim for recovery.

Before this court defendant urges its freedom from responsibility for the defense of the suits on the ground that the plaintiffs in the said suits alleged that they were employees of F. A. Kelly, Sr. and were accidentally injured while being transported to work. The exclusion set forth in the policy of insurance, which was regarded by defendant as being pertinent to the above contention, declared that the policy did not apply under designated coverages therein provided

'* * * to bodily injury to or sickness, disease or death of any employee of the insured while engaged in the employment other than domestic of the insured or in domestic employment if benefits therefor are either payable or required to be provided under any workmen's compensation law; * * *' '* * * to any obligation for which the insured or any company as his insurer may be held liable under any workmen's compensation law; * * *'

'* * * to bodily injury to or sickness, disease or death of any person if benefits therefor are payable under workmen's compensation law.'

It is at once apparent that defendant's position was completely sound if the allegations of the several plaintiffs in the suits, to the effect that said plaintiffs were employees of defendant, Kelly, Sr., were true. This was the issue and the only issue involved in the consideration by the district court of defendant's exception to the call in warranty. After trial the court determined the issue of fact adversely to the contention of defendant and found that plaintiffs were not employees of Kelly, Sr. However, defendant here contends, citing numerous authorities from other jurisdictions, after conceding that the question has not been presented to and determined by the appellate courts of this state, that it was not obliged under the terms of the policy to defend suits which alleged facts which, if proved, would fix liability upon the insured but which liability was clearly excluded by the...