Lumbermen's Mut. Casualty Co. v. McIver

• Decision Date: 07 June 1939
• Docket Number: No. 297-RJ.,297-RJ.
• Citation: 27 F. Supp. 702
• Court: U.S. District Court — Southern District of California
• Parties: LUMBERMEN'S MUT. CASUALTY CO. v. McIVER et al.

27 F. Supp. 702

LUMBERMEN'S MUT. CASUALTY CO. v. McIVER et al.

No. 297-RJ.

District Court, S. D. California, Central Division.

June 7, 1939.

C. F. Jorz, of Los Angeles, Cal., for plaintiff.

James J. McCarthy, of Santa Monica, Cal., for defendant Loraine Johnson.

Carl B. Sturzenacker, of Los Angeles, Cal., for defendants Jeff Clark and Leotia E. McIver.

JENNEY, District Judge.

This is an action for declaratory relief. Requisite jurisdictional requirements of diversity of citizenship and amount in controversy are present. The insurance company seeks a judicial declaration determining its non-liability upon one of its policies; and asks to be exonerated from the duty of defending a personal injury suit brought against its assured, and also from liability to satisfy any possible judgment in that suit.

The stipulated facts are these: The Lumbermen's Mutual Casualty Company issued a policy of automobile liability insurance to Leotia McIver and Jeff Clark upon an automobile owned by the former. On January 26, 1939, and during the effective period of the policy, this automobile was involved in an accident at Fourteenth and Montana Streets in Santa Monica, California. At that time the automobile was driven through a stop sign into the intersection, and while traveling on the wrong side of the street knocked down and severely injured Loraine Johnson, a pedestrian who was crossing the street in the cross-walk.

A suit, predicated upon negligence, was instituted in the Superior Court of Los Angeles county by Loraine Johnson against the defendants McIver and Clark. Demand was made by said defendants upon the insurance company to defend the suit in the Superior Court on their behalf and to assume liability for any judgment which might be rendered against them therein. This the insurance company refused to do and instituted the present action for declaratory relief, seeking judicial sanction for its claim of non-liability.

The complaint in the case at bar sets out the policy in question as an exhibit and refers particularly to a certain exclusionary clause contained therein. This clause provides that the policy does not apply while the automobile is being operated "by any person in violation of any state, federal or provincial law as to age applicable to such person." The complaint further alleges that the automobile in question at the time of the accident was being operated by defendant Gracie Vaughn, a minor of the age of fourteen years, four months, who was not licensed to operate or drive a motor vehicle in the State of California.

Answers were filed by the various defendants controverting these allegations of the complaint as to who was driving the car at the time of the accident. The other facts, as above stated, were agreed upon by written stipulation.

Counsel for the minor contends that even if Gracie Vaughn were driving the vehicle and without a license, these facts would not be a violation of that clause in the policy forbidding operation "in violation of any state * * * law as to age". He argues that since in California a minor fourteen years of age may be licensed to drive under certain circumstances, the operation by Gracie Vaughn, even though possibly unlawful, and violative of the state law as to driver's licenses, was not violative of the particular state law governing age of drivers referred to in the policy.

Section 257 of the Vehicle Code of California provides:

"No operator's license shall be issued to any person under the age of sixteen years except that an operator's license may be issued to a person fourteen years of age but less than sixteen years of age upon application as required of other minors under section 350 hereof accompanied by a statement of reasons satisfactory to the department given and signed by the persons or person other than the minor required under said section to sign and verify such application.

"The department may impose such restrictions applicable to the licensee as the department may determine to be appropriate to assure the safe operation of a motor vehicle by the licensee." St.Cal. 1935, p. 129.

This section has been construed in connection with exactly the same exclusionary clause in an insurance policy by the District Court of Appeal for the State of California in Brown v. Travelers Ins. Co., 87 P.2d 377; hearing in Supreme Court denied. The argument of counsel here was considered there and rejected. The reasoning of the state court and the decision finally reached is most persuasive, and this court will follow it. Erie Ry. Co. v. Tompkins, 302 U.S. 671, 58 S.Ct. 50, 82 L.Ed. 518.

It is admitted by the insurer that the policy was duly issued, that the premium was paid, that the accident occurred during the effective period of the policy, and that it is claimed by the insured that the accident occurred at a time when insured was operating the automobile covered by the policy in a manner substantially complying with the provisions thereof. It is apparent therefore that insurer's contention that an unlicensed minor was operating the vehicle in violation of the state law and within the meaning of the exclusionary clause constitutes a special defense. Had this been a suit by the injured party directly against the insurer, such a contention would have been pleaded as a special defense. The fact that this is a suit for a declaration of non-liability, brought by the insurer as plaintiff, does not alter the essential nature of the contention. It still amounts to a special defense.

It is well established both on principle and authority that when the existence of the policy at the time of the loss has been admitted and compliance therewith has been alleged, the burden of proving affirmative matter constituting a special defense rests upon the insurance carrier. Aetna Ins. Co. v. Kennedy, 301 U.S. 389, at page 395, 57 S.Ct. 809, 81 L.Ed. 1177; Hartford Fire Ins. Co. v. Morris, 6 Cir., 27 F.2d 508; Murdie v. Maryland Casualty Co., D.C.Nev., 52 F.2d 888, appeal dismissed, 9 Cir., 57 F.2d 1081; Kimball Ice Co. v. Hartford Fire Ins. Co., 4 Cir., 18 F.2d 563, 52 A.L.R. 799. The burden of proving the special defense in the case at bar accordingly rests on the Lumbermen's Mutual Casualty Company.

This conclusion is re-enforced by an examination of the pleadings. It is to be noted that the insurer's allegation consists, not of a statement that Jeff Clark was not operating the automobile, but of an affirmative assertion that Gracie Vaughn was driving it. The burden of proving that fact rests on the one asserting it.

The Vehicle Code of California provides as follows:

"`Driver' is a person who drives or is in actual physical control of a vehicle." Section 69, p. 98, St.Cal.1935.

"`Operator' is a person, other than a chauffeur, who drives or is in actual physical control of a motor vehicle upon a highway." Section 70, p. 98, St.Cal.1935.

The one question of fact before the court therefore is: Was Gracie Vaughn driving or in actual physical control of the motor vehicle at the time of the impact?

At the trial Jeff Clark testified to the following facts: There were three persons in the front seat of the automobile, with Gracie Vaughn on the left, behind the wheel. He was in the middle and Gracie's sister, Maxine, was on his right. He sat close to Gracie, with his back toward Maxine and was teaching Gracie to drive the car. The lesson had been carried on for about twenty minutes prior to the accident and the same seating arrangement had prevailed during the entire period. Prior to that time Clark himself had been at the wheel driving the party about town. About eighty feet from the intersection at which the accident occurred and while the car was going about twenty-five miles an hour, he said to the girl, "Put your brakes on, Gracie". The brakes, when applied, caught just for a moment and then released. Gracie hollered "They won't hold". He glanced at the floor-board and saw that Gracie's foot was on the brake pedal which was depressed to the floorboard. The car was proceeding westward down an incline toward the intersection and the speed of the car was being gradually accelerated. At...