Maryland Casualty Co. v. Elmira Coal Co.

• Decision Date: 05 March 1934
• Docket Number: No. 9723.,9723.
• Citation: 69 F.2d 616
• Parties: MARYLAND CASUALTY CO. v. ELMIRA COAL CO.
• Court: U.S. Court of Appeals — Eighth Circuit

69 F.2d 616 (1934)

MARYLAND CASUALTY CO. v. ELMIRA COAL CO.^*

No. 9723.

Circuit Court of Appeals, Eighth Circuit.

March 5, 1934.

Spencer F. Harris, of Kansas City, Mo. (Paul G. Koontz, of Kansas City, Mo., on the brief), for appellant.

Paul R. Stinson, of Kansas City, Mo. (Roy B. Thomson, Alfred M. Seddon, and Ryland, Stinson, Mag & Thomson, all of Kansas City, Mo., on the brief), for appellee.

Before GARDNER and WOODROUGH, Circuit Judges, and MARTINEAU, District Judge.

GARDNER, Circuit Judge.

This is an action at law brought by appellee, as plaintiff, to recover damages for the alleged bad faith of the appellant in failing and refusing to settle certain claims for damages suffered by one of appellee's employees. The parties will be referred to as they appeared below.

Defendant issued to plaintiff an employer's liability or indemnity policy, covering, in a limited amount, damages to plaintiff's employees during a period of one year from February 25, 1925. During the year following the execution of the policy, one Joe Thompson, employed by plaintiff in its coal mines, suffered two injuries, one in September, 1925, and the other in December, 1925.

By the terms of the policy, the defendant agreed with the plaintiff, among other things, as follows:

"I. To insure said Assured as respects bodily injuries by accident, including death resulting therefrom, in accordance with the provisions of the Specific Agreement as aforesaid applicable to such injury or death.

"II. To serve the Assured (1), by the inspection of work places set forth in the respective schedules of such Specific Agreements whenever deemed necessary by the Company and thereupon to suggest to the Assured such changes and improvements as may operate to reduce the number and severity of such injuries, (without liability however upon the Company for failure so to do); and (2) upon notice of such injuries, by investigation thereof or by such negotiation or settlement of resulting claims as may be deemed expedient by the Company.

"III. To defend in the name and on behalf of the Assured any suits or other proceedings which may at any time be instituted against the Assured on account of such injuries, including death resulting therefrom, including suits or other proceedings alleging such injuries or death and demanding damages therefor, although such suits, proceedings, allegations and demands are wholly groundless, false or fraudulent; but the Company reserves the right to settle any such suit.

"IV. To pay all costs taxed against the Assured in any legal proceedings defended by the Company, all premiums on attachments and/or appeal bonds required in any such proceedings, all interest accruing after entry of judgment up to the date of payment by the Company of its share of such judgment, and all expenses incurred by the Company for investigation, negotiations for settlements, and/or defense of claims or suits; further, to pay the cost of such immediate surgical relief as is imperative at the time of accident."

There was provision limiting the company's liability as follows: "The Company's liability for loss on account of one person so injured or killed is limited to Five Thousand and no/100 Dollars ($5,000.00), and, subject to the same limit for each person, the Company's total liability on account of any one accident so injuring or killing more than one person is limited to Ten Thousand and no/100 Dollars, ($10,000.00)."

The policy provided that, upon the occurrence of an accident, the insured should give the insurer immediate written notice, and, in the event of suit, should forward to the insurance company summons, notice, or other process served. It was also provided in the policy that: "The Company is not responsible for any settlements made, or any expenses incurred by the Assured, unless such settlements or expenditures are first specifically authorized in writing by the Company; except that the Assured may provide at the time of the accident, at the expense of the Company, such immediate surgical relief as is imperative."

By a rider attached to the policy it was provided that: "In consideration of the rate at which this Policy is written, it is hereby understood and agreed that the Company will furnish at its own cost and expense such medical, surgical, hospital and ambulance services as shall be necessary for any injury sustained by employees of the Assured and covered by the terms of the policy."

Each accident in which Thompson received injury was promptly reported to the insurance company, in accordance with the provisions of the policy. The details of the facts connected with the accidents which resulted in Thompson's injuries are not of the utmost importance, as it must be conceded under this record that they were such as gave rise to very serious claims against the assured.

At the time of receiving his first injury, Thompson was working on a conveyor in plaintiff's coal mine, cleaning off the cuttings from the previous day. The conveyor was controlled by means of a lever which, however, had been broken several days before so that it required more time to stop the conveyor than if had been in proper repair. The operator of this lever, with knowledge of Thompson's position on the conveyor, had left his post. The conveyor, in its course, traversed a section near a crossbeam or strip, which left insufficient space for the passing of a man's body. Thompson, approaching this obstruction, signaled to the operator to stop the conveyor, but, because of the operator's absence from his post and the difficulty of stopping the conveyor in its broken condition, Thompson struck the crossbeam and was injured before the operator stopped the conveyor. He was taken from the mine in an unconscious condition. The doctors reported a large bruise near the sacroiliac region, and he was later taken to Kansas City, where an examination under X-ray showed a bad strain of his sacroiliac joint on the left side, "which is going to cause him quite a little disability." The doctor placed a brace upon his spine.

His second injury was caused by the falling of a large rock from the roof of the mine while he was at work under the direction of a foreman, after complaint had been made to the foreman of the dangerous condition of the roof and he had given Thompson assurance that it was safe. The falling rock struck Thompson on the back, shoulders, and neck, cutting two gashes in his head, breaking his breastbone and two ribs, and inflicting serious bruises.

It is the claim of plaintiff that defendant, in violation of its duty to it, neglected, failed, and refused to make investigation of the facts connected with these accidents, and that it had been guilty of bad faith in failing to avail itself of the opportunity it had to settle with Thompson for his injuries.

At the close of all the testimony, defendant moved for a directed verdict, which the court overruled, sending the case to the jury under instructions limiting the issues as hereinafter noted, and the jury returned a verdict in the sum of $7,029.50.

In submitting the issues to the jury, the court limited its consideration to one issue by the following instruction: "The issue of fact in this case is this: Was the casualty company guilty of bad faith, guilty of reckless disregard of the interests of the coal company in that having been given an opportunity to effect a reasonable settlement with Thompson, the injured employee, that it arbitrarily refused to make or enter into such a settlement? That is the issue of fact upon which you Gentlemen must pass upon the evidence in this case. The burden of proof, Gentlemen, is upon the plaintiff to prove that the defendant, the casualty company, did, in the respects I have indicated, act in bad faith towards the coal company in reckless disregard of its interests."

Counsel for appellant, in their brief, say: "The only question involved in this case was whether or not in view of conditions which were known to the representatives of the Maryland Casualty Company it was guilty of bad faith in not settling the case before trial and involved only the condition of the injured man, Thompson, as he was or appeared to be at the time of the alleged offered settlement."

This question is presented by assignments which challenge the action of the court in denying defendant's motion for a directed verdict, in the giving of certain instructions, and in denying other instructions requested by defendant. There are other assignments which challenge certain rulings of the court in admitting evidence, but all these assignments must be eliminated because they are wholly insufficient. Such assignments must state the questions, the objections made thereto, the rulings of the court thereon, and the substance of the evidence admitted, with the pages of the printed record where the rulings occur. These assignments fail to show what objections were interposed by plaintiff, and, to entitle defendant to a review of such rulings, the assignments must affirmatively show that a good objection was interposed and overruled.

Certain instructions were requested by defendant and refused by the court, and counsel for defendant took exception to certain portions of the instructions as given by the...