McCullough Transfer Co. v. Virginia Surety Co.

• Decision Date: 27 May 1954
• Docket Number: No. 11929.,11929.
• Parties: McCULLOUGH TRANSFER CO. v. VIRGINIA SURETY CO., Inc.
• Court: U.S. Court of Appeals — Sixth Circuit

213 F.2d 440 (1954)

McCULLOUGH TRANSFER CO. v. VIRGINIA SURETY CO., Inc.

No. 11929.

United States Court of Appeals Sixth Circuit.

May 27, 1954.

Charles J. Cole, Toledo, Ohio, for appellant.

Roger H. Smith, Toledo, Ohio, for appellee.

Before SIMONS, Chief Judge, MILLER, Circuit Judge, and FORD, District Judge.

MILLER, Circuit Judge.

Appellee, Virginia Surety Company, brought this action to recover from the appellant, McCullough Transfer Company, insurance premiums totalling $31,254.99, which it claimed were due and owing by the appellant under a Retrospective Premium Endorsement, forming part of a policy of motor vehicle liability insurance issued to the appellant.

Upon issuance of the policy by appellee on September 19, 1949, appellant paid $22,000 as a premium deposit and by the terms of the Retrospective Premium Endorsement, retrospective adjustments were to be made at the end of successive 6-month periods as long as the policy should remain in effect. The policy was cancelled on February 4, 1951. The complaint alleged that while the policy was in effect the premiums due by reason of the retrospective premium endorsement totalled $53,254.99, which, credited with the payment of $22,000, left an unpaid balance of $31,254.99, which the appellant refused to pay.

The appellant claimed that the retrospective endorsement was not filed with or approved by the Superintendent of State Insurance of Ohio, as required by the Ohio statute, and was therefore illegal, against public policy, and void. In a pre-trial conference, appellee admitted that it had not complied with the Ohio statute, whereupon appellant moved for summary judgment. The District Judge overruled appellant's motion for summary judgment and entered judgment for the appellee in the amount prayed for. The printed appendix does not contain any motion by the appellee for summary judgment in its favor, or admissions by the appellant with respect to certain factual issues raised by its answer, or the agreements reached in the pre-trial conference, but the judgment refers to certain admissions, and appellee's brief states that as a result of the pretrial conference it was agreed that the sole issue in the case was the legality of the Retrospective Premium Endorsement, and that the case would be disposed of on appellant's motion for summary judgment. Such an agreement should properly be reduced to writing, made a part of the record, and be included in the printed appendix to counsel's brief, but since the case has been practiced upon the basis of such an agreement, it will be likewise considered on this review. Rule 61, Rules of Civil Procedure, 28 U.S.C.A.

Sections 9592-21(a) and (h) of the Ohio General Code provide as follows:

"(a) Every insurer shall file with the superintendent every manual of classifications, rules and rates, every rating plan and every modification of any of the foregoing which it proposes to use.

* * * * * *

"(h) On and after January 1, 1948, no insurer shall make or issue a contract or policy except in accordance with filings which are in effect for said insurer as provided in this act * * *."

Section 9592-33 provides:

"Any person or organization, who wilfully violates any provision of this act, shall be deemed guilty of a misdemeanor and shall upon conviction thereof, be punished by a fine not to exceed $500.00 for each such violation. The superintendent may suspend the license of any rating organization or insurer which fails to comply with an order of the superintendent within the time limited by such order, or any extension thereof which the superintendent may grant. * * *

"No penalty shall be imposed and no license shall be suspended or revoked except upon a written order of the superintendent, stating his findings, made after a hearing held upon not less than ten days\' written notice to such person or organization specifying the alleged violation."

Section 9592-35 provides:

"This act shall be liberally interpreted to the end that insurance rates shall not be excessive, inadequate or unfairly discriminatory, and cooperative action among insurers in rate making and in other matters within the scope of this act shall be authorized and regulated. * * *"

Appellant relies upon the...