McDonald v. Great American Insurance Company

• Court: U.S. District Court — District of Rhode Island
• Citation: McDonald v. Great American Insurance Company, 224 F.Supp. 369 (D. R.I. 1963)
• Decision Date: 15 November 1963
• Docket Number: Civ. A. No. 3035.
• Parties: Forrest McDONALD, Plaintiff, v. GREAT AMERICAN INSURANCE COMPANY and The Aetna Casualty and Surety Company, Defendants.

224 F. Supp. 369

Forrest McDONALD, Plaintiff, v. GREAT AMERICAN INSURANCE COMPANY and The Aetna Casualty and Surety Company, Defendants.

Civ. A. No. 3035.

United States District Court D. Rhode Island.

November 15, 1963.

Gunning & LaFazia, Zietz, Sonkin & Radin, Providence, R. I., Bruce M. Selya, Albert B. West, James Radin, Providence, R. I., of counsel, for plaintiff.

Hinckley, Allen, Salisbury & Parsons, Providence, R. I., Guy J. Wells, Jacques V. Hopkins, Peter Alegi, Providence, R. I., of counsel, for Ætna Casualty & Surety Co.

Higgins & Slattery, Providence, R. I., Eugene V. Higgins, William C. Dorgan, Providence, R. I., of counsel, for Great American Ins. Co.

DAY, District Judge.

In this action the plaintiff seeks a declaratory judgment against each of the defendants under the provisions of Title 28 U.S.C.A. § 2201 et seq. Jurisdiction is based upon diversity of citizenship and the existence of a controversy in the requisite amount.

Plaintiff seeks a declaratory judgment that each of the defendants is obligated under a certain policy of insurance issued by it, as will hereinafter be set forth, to defend the plaintiff, McDonald, in two suits which have been instituted against him by Joseph A. Karouz and Henry T. Whitaker III in the Superior Court of Rhode Island to recover damages for alleged injuries sustained by them and to pay the amount of any recovery that may be secured against him in said suits. In addition he seeks the recovery of the amount of counsel fees incurred by him in the investigation of the claims asserted against him in said suits and in the defense thereof up to the present time.

The defendants contend that McDonald is not entitled to the relief he seeks on the ground, in addition to other grounds, that said suits are not within the coverage of the policy issued by each of them.

The evidence shows that the incident giving rise to this action occurred on May 30, 1962 on Angell Street, a public highway, in the City of Providence, in the State of Rhode Island. It appears that at said time and place McDonald was a passenger in a motor vehicle owned by Elizabeth K. Forbes, of Wellesly Hills, Massachusetts and operated by her son with her consent. It further appears that as said motor vehicle was proceeding along said highway, McDonald threw a lighted explosive, known as a "Cherry Bomb", out of the Forbes car and that it landed in the motor vehicle in which the plaintiffs in said state court suits were then and there riding, with resultant injuries to both of them, they claim. After the institution of said suits, McDonald requested each of the defendants to defend him therein and upon their refusal to do so the instant action was commenced against them for the relief herein sought.

On January 23, 1962, the defendant Great American Insurance Company, at Providence, Rhode Island, issued its homeowners policy, so-called, to McDonald and his wife as the named insured. Said policy by its terms was effective for the period from January 23, 1962 to January 23, 1965.

Under "Insuring Agreements" applicable to section II of said policy, the company agrees with the name assured as follows:

"COVERAGE E—COMPREHENSIVE PERSONAL LIABILITY.

"(a) Liability. To pay on behalf of the named Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, and the company shall defend any suit against the Insured alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy even if any of the allegations of the suit are groundless, false or fraudulent; * * *."

Under "Special Exclusions", said policy provided that section II thereof does not apply:

"(b) under Coverages E and F to the ownership, maintenance, operation, use, loading or unloading of (1) automobiles * * * while away from the premises or the ways immediately adjoining. * * *

"(c) under Coverages E and F to bodily injury or property damage caused intentionally by or at the direction of the Insured;"

The policy of the defendant, The Ætna Casualty and Surety Company, which is involved herein, is an automobile liability insurance policy issued to the said Elizabeth K. Forbes for statutory coverage under the Massachusetts compulsory liability statute, but it also contains coverage for extraterritorial liability and property damage. By its terms said policy was effective from January 1, 1962 to January 1, 1963.

The insuring agreements of said policy provided in pertinent part as follows:

"COVERAGE B—BODILY INJURY LIABILITY — OTHER THAN STATUTORY—(This Coverage is optional)

"To pay on behalf of the insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness, or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the motor vehicle.

"COVERAGE C — PROPERTY DAMAGE LIABILITY. (This coverage is optional)

"To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the motor vehicle.

"II DEFENSE, SETTLEMENT, SUPPLEMENTARY PAYMENTS

"With respect to such insurance as is afforded by this policy under Coverages A, B and C the Company shall:

"(a) defend any suit against the Insured alleging such injury * * * and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent. * * *"

The rule is well settled that whether it is the duty of an insurer to defend a suit against the insured is to be determined by the allegations in the complaint or declaration filed in the suit against the insured. If such complaint or declaration does not allege a liability within the coverage of the policy, the insured is not required to defend. Stout v. Grain Dealers Mutual Insurance Company, 4 Cir., 1962, 307 F.2d 521; Employers' Liability Assur. Corp. v. Youghiogheny & Ohio Coal Co., 8 Cir., 1954, 214 F.2d 418; Hardware Mut. Cas. Co. v. Mason-Moore-Tracy, Inc., 2 Cir., 1952, 194 F.2d 173; Lee v. Ætna Casualty & Surety Co., 2 Cir., 1949, 178 F.2d 750; Boutwell v. Employers' Liability Assurance Corporation, 5 Cir., 1949, 175 F.2d 597; Thomas v. American Universal Insurance Company, 1952, 80 R.I. 129, 93 A.2d 309; Fessenden School, Inc. v. American Mut. Liability Insurance Co., 1935, 289 Mass. 124, 193 N.E. 558; 8 Appleman, Ins. § 4683.

Copies of the declarations filed by the plaintiffs in said suits against McDonald are a part of the record in this case. The declarations, as filed, were identical and originally contained five counts. It appears that Counts 1, 2 and 4 have been dismissed. Accordingly, I am concerned only with the allegations contained in Counts 3 and 5 of said declarations.

In Count 3 of his declaration, each plaintiff alleges that "on, to-wit, the 30th day of May A.D.1962 the plaintiff was riding as a passenger in an open convertible which was being operated along and upon Angell Street, so-called, a public highway, in the City of Providence, State of Rhode Island; * * * that the defendant intentionally threw an explosive device * * * to which a lighted fuse was attached, said device being known as a `Cherry Bomb', so-called; that said defendant threw the said `Cherry Bomb', so-called at the motor vehicle in which the plaintiff was riding as a passenger"; that said "Cherry Bomb" exploded and that as a result thereof the plaintiff sustained personal injuries, etc.

In said Count 3, each plaintiff alleges that the throwing of said explosive device "was wilfully and wrongfully done and against the peace of the people of the State of Rhode Island" and seeks punitive as well as compensatory damages.

In Count 5 of his declaration, after alleging that he was a passenger in said open convertible, each plaintiff alleges that the defendant was then and there riding as a passenger in another automobile and that he "carelessly and negligently threw said `Cherry Bomb' in the vicinity of the said p...