Maryland Cas. Co. v. Employers Mut. Liability Ins. Co.
| Decision Date | 17 November 1953 |
| Docket Number | Docket 22720.,No. 17,17 |
| Parties | MARYLAND CAS. CO. v. EMPLOYERS MUT. LIABILITY INS. CO. OF WIS. |
| Court | U.S. Court of Appeals — Second Circuit |
Clarence A. Hadden, William L. Hadden, New Haven, Conn., of counsel, for appellant.
DeLancey Pelgrift, Hartford, Conn., for appellee.
Before L. HAND, SWAN and AUGUSTUS N. HAND, Circuit Judges.
This is an appeal by the defendant from a judgment against it upon a policy of liability insurance issued to the "Smedley Company of Hartford, Connecticut." The action was tried to Smith, J., without a jury upon the pleadings and the following stipulated facts. The plaintiff had itself insured not only the Smedley Company in the sum of $100,000 against any liability for personal injuries caused by its motor trucks; but in the same policy had also insured "any person while using an owned automobile * * * provided the actual use of the automobile is by the named insured or with his permission." The defendant on its part had insured the Smedley Company alone in the sum of $50,000 against the same liability. Each policy contained the customary subrogation clause: i.e., "In the event of any payment under this policy, the company shall be subrogated to all the insured's rights of recovery therefor against any person"; and each also contained the customary "other insurance" clause: i. e., "if the insured has other insurance against a loss covered by this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss." The Smedley Company owned a truck driven by one of its drivers, Amendola, which struck and killed a man called Duchene, whose administrator sued both the Smedley Company and Amendola in the Connecticut Superior Court, claiming $100,000 damages. The plaintiff assumed the defence of this action; but the defendant refused a demand of the Smedley Company to assist. The plaintiff settled the action for $7,500, to recover one third of which amount — $2,500 — it brought this action under the two clauses quoted above; and it is common ground that the settlement was reasonable. In addition, the plaintiff demanded judgment for one half the cost of defending the action, relying for this upon the following clause in the defendant's policy: i. e., "the company shall (a) defend any suit against the insured," and "(c) pay all expenses incurred by the company." The judge gave judgment for the plaintiff, among other reasons because he thought that the defendant had forfeited any right of subrogation against the plaintiff by refusing to assist it in the defence of the action, brought by Duchene's administrator. 112 F.Supp. 272.
We shall try to show that to allow the plaintiff to recover any part of the payment, made in settlement of this action, would result in a circuity of action. It is indeed true that, having paid the loss, it becomes subrogated to the Smedley Company's right under the defendant's policy; but, if the defendant had paid to the plaintiff one third of the loss, it too would in turn have been subrogated to any rights of the Smedley Company by virtue of the subrogation clause in its own policy. One of the rights of the Smedley Company would have been to throw the loss on Amendola; for in Connecticut,1 as elsewhere,2 an employer, who has been forced to pay a loss because of his imputed liability for the negligence of his servant, may recover from the servant upon the servant's default in his duty to conduct the work with reasonable care. The doctrine that there is no contribution or indemnity between joint tortfeasors does not apply, when the liability of one of them is not for a personal fault, but because the personal fault of the other is imputed to him.3 Therefore, after paying the plaintiff a third of the settlement, the defendant, as surrogate of the Smedley Company, could have obtained a judgment for the same amount against Amendola, the driver; and if Amendola had paid this claim, he could have recovered it from the plaintiff under his policy of insurance. That would have been a complete circuity of action.
However, we will assume that Amendola could not have paid the loss. Even so, it is at least arguable that the plaintiff would have been directly liable to the Smedley Company, and so to the defendant, its surrogate. The policy was "to pay on...
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