Lumbermen's Mutual Casualty Co. v. Norris Grain Co., No. 17654.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtVAN OOSTERHOUT and MEHAFFY, Circuit , and DELEHANT, Senior
Citation343 F.2d 670
PartiesLUMBERMEN'S MUTUAL CASUALTY COMPANY, a corporation, Appellant, v. NORRIS GRAIN COMPANY, a Tennessee Corporation, and Norris Grain Company, an Illinois corporation, Appellees.
Docket NumberNo. 17654.
Decision Date15 March 1965


Donald F. Flint, of Flint & Newman, St. Louis, Mo., Morton R. Newman, of Flint & Newman, St. Louis, Mo., for appellant.

Edward Weakley, of Boyle, Priest, Elliott & Weakley, St. Louis, Mo., Aubrey B. Hamilton, of Hamilton and Armstrong, St. Louis, Mo., for appellees.

Before VAN OOSTERHOUT and MEHAFFY, Circuit Judges, and DELEHANT, Senior District Judge.

DELEHANT, Senior District Judge.

The appellant (sole defendant in the district court and herein so designated) appeals from the judgment of the United States District Court for the Eastern District of Missouri, Eastern Division, against it and in favor of the appellees (plaintiffs in the district court and herein so designated) for the sum of $115,460.49, made and given September 24, 1963, upon the verdict of the jury found and returned on that date, in this action, which was then pending in the District Court between the parties. The amount of the judgment, supra, was arrived at by adding to the aggregate sum of the jury's award, namely, $102,552.80, interest thereon in the stipulated and agreed sum of $12,907.69. The stipulation or agreement is operative only on the amount of the interest, if the jury's award itself be allowed to stand.

The action was instituted,1 and has been prosecuted to recover from the defendant, (a) sums of money alleged to be due and owing from it to the plaintiff (later, plaintiffs) under a policy of insurance executed and issued by the defendant to and in favor of both of the plaintiffs, and of sundry other named beneficiaries, as well as to and in favor of, still other described, but unnamed beneficiaries or "assureds," vide infra, and (b) sums of money alleged to be due and owing from the defendant to the plaintiff (plaintiffs) in enforcement of Section 375.420 RSMo 1959, V.A.M.S., on the ground that the defendants' denial and resistance of the claim was and is vexatious, within the meaning of that statute, infra.

By the pleadings, it is agreed that the defendant is, and at all material times was, a corporation incorporated under the laws of Illinois, and qualified to do business in Missouri, by and through its agents located in Missouri, and engaged in the insurance business for hire in the City of St. Louis, Missouri, and registered in the Division of Insurance of the State of Missouri under the laws of Missouri applying to insurance companies.

The case was commenced in the Circuit Court of the City of St. Louis, Missouri, by the plaintiff, Norris Grain Company, a corporation organized and existing under the laws of Tennessee, authorized to transact business within Missouri, whose general offices are located at Number 112 North 4th Street, St. Louis, Missouri, against the defendant. The defendant, timely thereafter, and on January 11, 1962, filed in the United States District Court for the Eastern District of Missouri, Eastern Division, its Petition and Bond for Removal to the latter court of the action so instituted, and timely thereafter gave due notice of the filing of such Petition and Bond for Removal. On March 5, 1962 the case was assigned to Court No. 1, Chief Judge Roy W. Harper presiding, under whose judicial supervision it has generally proceeded thereafter in the District Court. On May 18, 1962, with no change of, or addition to, parties, the original plaintiff, with leave therefor, filed an Amended Petition2 in the District Court. On June 4, 1962, the defendant filed in that court a motion to dismiss both of the then two counts of the Amended Petition for failure to state a claim on which relief can be granted, in that the then plaintiff was not the "first named assured" in the contract of insurance, which "first named assured," the motion asserted, alone "may act for itself and for each and all of the assureds for all purposes of the policy;" and to dismiss Count II of the Amended Petition for failure to state a claim on which relief can be granted, upon the separately assigned bases, first, that such Count II was for recovery under the policy's Insuring Agreement V for loss resulting from forgery, despite the exclusion from coverage under such Agreement V, of losses resulting from employee dishonesty, and secondly, that the then sole plaintiff was the assignee, only, of a claim for loss resulting from dishonesty of certain employees. On January 15, 1963, the trial court made and entered an Order overruling that Motion to Dismiss in all respects.3 On January 25, 1963, the defendant filed its answer to the Amended Petition and Demand for Trial by Jury. It also then filed request for admissions, to which, shortly thereafter, plaintiff filed objection, which objection was overruled on March 1, 1963. On February 7, 1963 (after the filing of its request for admissions), the defendant filed a Motion for Summary Judgment.

Thereafter, and on February 20, 1963, the plaintiff moved for leave to file a Second Amended Petition, and therein and thereafter to add as another party plaintiff, Norris Grain Company, an Illinois corporation; and concurrently therewith "lodged" in the files, the proposed Second Amended Petition. On March 1, 1963, the trial court (in addition to its action overruling the objections to the defendant's Request for Admissions, supra), took submission of, and denied and overruled, the defendant's Motion for Summary Judgment, and also took submission of, and sustained and granted, plaintiff's Motion for Leave to file Second Amended Petition, and to make Norris Grain Company, an Illinois corporation, an additional party plaintiff. And the Second Amended Petition (theretofore marked as "lodged," supra) was filed. On March 11, 1963, the defendant's Answer to Plaintiff's Second Amended Petition was filed. It is that Second Amended Petition and the Answer thereto which, ultimately, reflect the issues in the action, but with this reservation, namely, that on September 16, 1963, upon the opening of the trial of the action, the plaintiffs, by leave of court then granted, dismissed Count II of the Second Amended Petition. Therefore, the action proceeded to trial upon Count I of the Second Amended Petition, and the defendant's Answer to such Count I.

The foregoing admittedly extended recollection of the history of the pleading in the action is probably not strictly necessary for the present purposes of this court. It is, nevertheless, offered, among other reasons, out of regard for its conceivable bearing upon the issues arising from the defendant's contention that the judgment, supra, must be reversed, and the action — now Count I of the Second Amended Petition — must be dismissed for the asserted want of the timely participation in the prosecution of the claim in suit by the only party competent under the Policy to proceed as plaintiff herein, et supra, et infra.

By Count I of that Second Amended Petition, the plaintiffs, first, allege the facts, and the States, of their respective incorporations, the authority for, and acuality of, their engagement, in the State of Missouri, and in the City of St. Louis therein, and elsewhere, "in the business of purchasing, selling and storing grains, soy beans and other related products;" and the defendant's incorporation in Illinois, authorization to do, and actual doing of, business as an insurer for hire in the State of Missouri, and the City of St. Louis therein (all as already recited herein). By paragraph 3 of such Second Amended Petition, they allege:

"3. On or about the 15th day of December, 1956, in consideration of the payment to the defendant of the premium of Six Thousand Seven Hundred Seventy Two and 62/100 ($6,772.62), defendant issued and delivered to Norris Grain Company; Norris Grain Company, Ltd.; Bruce A. Norris; Arthur R. Kneibler, Jr.; Eleanor Norris Kneibler; Marguerite L. Norris; Marguerite Ann Norris and all subsidiary, related or affiliated companies now owned or controlled or which may hereafter be acquired or controlled by the named assureds, its Policy No. F-54,200, and for a further premium to it paid in the sum of Two Thousand Seven Hundred Twenty-two and 26/100 ($2,722.26), defendant extended the term of said policy of Fidelity and Indemnity Insurance, a continuing insuring agreement nominated by the defendant generally as `Employee Dishonesty Coverage — Form A, Safe Deposit Box Coverage and Depositors Forgery Coverage,\' whereby defendant promised and agreed to indemnify and save harmless those designated in the policy as `the assured\' for all losses sustained by them during the period beginning the 15th day of December, 1956, and continuing as long thereafter as said policy should remain in force and effect according to the provisions of said policy and in the amounts therein limited as follows:
"Insuring Agreement I, Employee Dishonesty Coverage — Form A, $500,000.00 caused by any fraudulent or dishonest act or acts committed anywhere by any of the employees of the assured acting alone or in collusion with others and including losses caused by the fraud or dishonesty of any one or more employees whom (sic) are unidentifiable."4
A copy of said Policy No. F-54,200, marked Exhibit A, is attached hereto and made a part hereof. Said policy was not cancelled or otherwise terminated and was in force and effect at the time of the losses herein complained of."

The exact language of the policy identifying the "Assureds" within its protection is contained in "Schedule A" attached to and incorporated into the policy in the following language:

"SCHEDULE `A' Norris Grain Company Norris Grain Company, Ltd. Bruce A. Norris Arthur R. Kneibler, Jr. Eleanor Norris Kneibler Marguerite L. Norris Marguerite Ann Norris, and all subsidiary, related or...

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