Myers v. United States, Civ. A. No. 3-519.

• Decision Date: 22 May 1965
• Docket Number: Civ. A. No. 3-519.
• Citation: 241 F. Supp. 515
• Parties: James S. MYERS, Individually and for his Wife, Harriet Myers, and as Natural Guardian and Next Friend of James Myers, a Minor, Plaintiff, v. UNITED STATES of America, Defendant and Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant.
• Court: U.S. District Court — Northern District of Texas

241 F. Supp. 515

James S. MYERS, Individually and for his Wife, Harriet Myers, and as Natural Guardian and Next Friend of James Myers, a Minor, Plaintiff, v. UNITED STATES of America, Defendant and Third-Party Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Third-Party Defendant.

Civ. A. No. 3-519.

United States District Court N. D. Texas, Dallas Division.

May 22, 1965.

Paul K. Hyde, of Hyde, Tucker, Gano & Easterling, Dallas, Tex., for James S. Myers.

Barefoot Sanders, U. S. Atty., and Kenneth J. Mighell, Asst. U. S. Atty., Dallas, Tex., for the United States of America.

Philip L. Kelton of Strasburger, Price, Kelton, Miller & Martin, Dallas, Tex., for third-party defendant, Government Employees Insurance Company.

ESTES, Chief Judge.

Plaintiff, JAMES S. MYERS, individually and for his wife, HARRIET MYERS, and as natural guardian and next friend of his minor son, JAMES MYERS, originally brought this tort action against ELWOOD C. PUGH, alleging diversity of citizenship and jurisdictional amount. 28 U.S.C. § 1332(a) (1). Plaintiff claims damages for personal injuries to his wife and minor son and damages to his automobile resulting from a rear-end collision in Dallas, Texas, on October 14, 1962, between an automobile driven by his wife and an automobile owned and operated by Elwood C. Pugh, a civilian employee of the United States Air Force at Barksdale Air Force Base, Louisiana. Following a preliminary pretrial conference and motions by both Plaintiff and Pugh, the United States was substituted as the party defendant herein by Order of the Court on September 2, 1964. 28 U.S.C. §§ 2679(b) and 1346(b). This is now an action under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), §§ 2671 et seq.

At the time of the accident, Pugh, en route under orders to Carswell Air Force Base, Fort Worth, Texas, and acting in the scope of his employment, was insured under "Family Automobile Policy" No. 6211996 issued by Government Employees Insurance Company (sometimes called the "insurance company") on November 14, 1961, and covering the period December 10, 1961 through December 10, 1962. The "Family Automobile Policy Declarations" listed Pugh's address as P. O. Box 304, Barksdale Air Force Base, Louisiana, and itemized a total premium of $42.25 for $25,000/$50,000/$10,000 insurance coverage. The "application of renewal," on which Pugh's coverage was renewed for the period December 10, 1962, through December 10, 1963, recites:

                "3. Days per week auto    Average 4
                is driven to work
                4. One way distance to    2 miles
                work
                5. Is auto used for
                business other than
                driving to or from
                work * * *                No"
                

The policy was in full force and effect at the time of the accident and, as here pertinent, obligated Government Employees Insurance Company:

"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages * * * arising out of the ownership, maintenance or use of the * * automobile * * * and the company shall defend any suit * * * 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, but the company may make such investigation and settlement of any claim or suit as it deems expedient." (Emphasis added)

The policy also contained an "omnibus clause" providing that the term "persons insured" included the named insured and "Any other person or organization legally responsible for the use of * * * the automobile. * * *"

The United States was granted leave at the preliminary pretrial conference to file a third-party complaint against Government Employees Insurance Company under Rule 14(a) F.R.Civ.P., alleging that it is an additional "insured" under the above quoted "omnibus clause." Government Employees Insurance Company filed a Motion to Dismiss and Abate Suit, which motion was carried with the case in the interest of effective administration of justice.

After the final pretrial conference a compromise settlement was reached between all of the parties as to negligence and damages. Under the pleadings and stipulations, the only question remaining for determination by the Court is that of liability, if any, of the third-party defendant, Government Employees Insurance Company, to the United States.

The United States is not here claiming indemnity against the insurance company. See Gipson v. Shelley (E.D.Tenn., 1963), 219 F.Supp. 915; Grant v. United States (2 Cir., 1959), 271 F.2d 651. Under the policy itself, the insurer is liable only where the insured is liable. Instead, the United States seeks to hold the insurer on its policy on the theory that it, the national sovereign, is an additional "insured" under the policy. The crucial question, therefore, is one of interpretation of the private contract (policy) between the insurance company and its insured, viz: Was the United States intended to be included as an additional "insured" by the words, "any other person or organization"?¹

In Rowley v. United States (D. Utah, 1956), 140 F.Supp. 295, 297, the Court withheld approval of a tendered pro rata settlement of a tort action against the United States (under the Federal Tort Claims Act) and American Aviation and General Insurance Company. In holding that the insurance policy insured the United States, the Court's opinion stated:

"I have before me the policy. * * Mr. Colzani's occupation is noted as `Insurance and U. S. Mail'. The purposes for which the automobile is to be used are expressed as `business and pleasure'. * * *"

The Rowley case was followed in Irvin v. United States (D.S.Dak., 1957), 148 F.Supp. 25, 30, wherein the Court observed that:

"* * * the name and address of the insured are given as `Robert B. Troup, Colman, South Dakota,' and his occupation is listed as that of `Rural Mail Carrier,' and his employer as `U. S. Government.' The purposes for which the automobile is to be used are `Business and Pleasure'. * * *"

The legislative history of the 1961 amendments to the Federal Tort Claims Act (approved September 21, 1961; effective March 24, 1962) reflects that at the time the Rowley and Irvin cases were decided, Congress considered that the Federal Tort Claims Act "* * * in effect gives general consent for tort suits against the Government itself brought in Federal courts * * * it does not, in its present form, afford to the Government employee relief or protection against damages assessed against him personally when sued in a State court. While Government employees driving motor vehicles in the course of their official duties may protect themselves from liability by obtaining insurance, they must pay for it out of their own pockets." 1961 U.S. Code Congressional and Administrative News, p. 2789.

The work-connected liability hazards of government employees prompted a number of legislative proposals such as indemnification of drivers or procurement by the government, at its expense, of liability insurance covering its employees. Both of the mentioned proposals were abandoned due to anticipated difficulties in administration and excessive expense. The legislative history of the 1961 amendments further reflects that Congress considered that:

"* * * The increasing use of motor transport by the Federal Government as a part of its day-to-day operations, coupled with the augmented costs of public liability and property damage insurance coverage available to Federal employees to protect themselves in the operation of vehicles on Government business, has imposed a heavy financial burden on the large number of such employees whose work entails their driving of motor vehicles on behalf of the Government and who, as a matter of prudent self-protection, purchase insurance to protect themselves from personal liability. * * * It is not, therefore, surprising that they complain because of their assuming what they regard as an inequitable burden, and one of which they feel that the Government, as their employer, should relieve them.";

and that:

"* * * The enactment of this amendment for the protection of the Government driver would afford the relief desired by him, for there would be then no point in his spending his own funds to take out liability insurance to protect him while operating motor vehicles in the scope of his employment for the Government. * * *" (Emphasis added.)

1961 U.S. Code Congressional and Administrative News, pp. 2789-2791.

The purpose of the amendments was expressly "* * * to provide a method for the assumption by the Federal Government of responsibility for claims for damages against its employees arising from the operation by them of vehicles in the scope of their Government employment." 1961 U.S. Code Congressional and Administrative News, p. 2785. Under these amendments 28 U.S.C. § 2679(b), (c), (d), (e), the remedy against the government in a case appropriately under the Federal Tort Claims Act is the sole remedy, excluding suits against employees in their individual capacity. The government has no right of indemnity against its employee—here, Pugh, the named insured in the policy. Gilman v. United States (9 Cir., 1953), 206 F.2d 846, aff'd (1954), 347 U.S. 507, 74 S.Ct. 695, 98 L.Ed. 898. The specific purpose of protecting Government drivers against suits was implemented by the provisions of the amendments (1) for notice by the employee to the Government, (2) that the attorney general "shall defend", (3) for removal of any action instituted in state courts and (4) authorizing the attorney general to settle claims.²

Both the Rowley and Irvin cases were decided approximately four years before the aforesaid amendments to the Federal Tort Claims Act. In a suit like the instant case after the amendments, Gipson v. Shelley (E.D.Tenn., 1963), 219 F.Supp. 915, Judge Neese refused to permit joinder of Government Employees Insurance Company, the same company here involved, as a third-party defendant under Rule 14(a) F.R.Civ.P., stating:

"* * *

...