North Texas Producers Ass'n v. Employers Mutual Cas. Co.

• Decision Date: 28 May 1962
• Docket Number: Civ. A. No. 805.
• Citation: 205 F. Supp. 542
• Parties: NORTH TEXAS PRODUCERS ASSOCIATION, Plaintiff, v. EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Texas

205 F. Supp. 542

NORTH TEXAS PRODUCERS ASSOCIATION, Plaintiff, v. EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant.

Civ. A. No. 805.

United States District Court E. D. Texas, Marshall Division.

May 28, 1962.

R. O. Kenley, Jr., Kenley, Sharp, Ritter & Boyland, Longview, Tex., for plaintiff.

Royal H. Brin, Jr., Strasburger, Price, Kelton, Miller & Martin, Dallas, Tex., for defendant.

James A. Williams, Bailey & Williams, Dallas, Tex., for third-party defendant.

FISHER, District Judge.

This is a suit brought by North Texas Producers Association against Employers Mutual Casualty Company, seeking to recover a judgment for $24,243.57. The defendant filed a third party complaint against The Aetna Casualty and Surety Company. Plaintiff, North Texas Producers Association, will hereinafter be referred to as North Texas; the defendant, Employers Mutual Casualty Company, as Employers Mutual, and The Aetna Casualty and Surety Company, as Aetna. Employers Mutual contend that Aetna is the real party in interest, as North Texas had nothing to gain or lose by the result of this suit since its liability has been discharged by Aetna and any recovery would go to Aetna.

The facts briefly indicate that Employers Mutual issued a commercial automobile liability policy to T. W. Davis and North Texas as insureds, covering a 1955 Chevrolet truck owned by Davis and leased to North Texas. While said policy was in force and effect, Davis sold the truck to a man by the name of Dunnavant who continued doing the same type of work with said truck for North Texas as Davis had been doing for North Texas, that is, picking up milk from different farms and delivering it to North Texas. Several days after purchasing the truck on January 30, 1957, but before formal title had been effected, Dunnavant, while driving said vehicle in the discharge of his contractual duties with North Texas, had a collision with a vehicle owned and operated by one Morgan, resulting in death to the wife of Morgan and personal injuries, as well as property damage, to Morgan. A suit was filed in the District Court of Upshur County by Morgan, individually and in behalf of the heirs of his wife, against North Texas, Dunnavant and Davis.

Employers Mutual denied liability and made no appearance in said cause except for Davis who was later dismissed.

Aetna had issued a policy of insurance to North Texas, covering non-owned vehicles; and said policy being in effect at the time of the collision mentioned above. Aetna defended North Texas in said suit and notified Employers Mutual that by defending North Texas it was not waiving its right to contend that the liability, or at least the primary liability, for any negligence chargeable to North Texas in connection with said accident was covered under the Employers Mutual policy.

The Upshur County District Court cause of action was settled for $23,000.00, and costs of court. A formal demand to make settlement was made by North Texas upon Employers Mutual and Aetna, and Employers Mutual refused to participate in the settlement. Aetna made a loan and furnished the funds to North Texas with which to make said settlement.

The above fact situation presents two questions for this Court to decide; first, did the change in ownership of the truck from Davis to Dunnavant terminate, as a matter of law, the policy of insurance issued by Employers Mutual? Second, if the policy of insurance was not terminated as a matter of law, what is the extent of the liability of Employers Mutual under said policy?

In answering the first question, we hold that the sale or change of ownership of the truck from Davis to Dunnavant did not vitiate the policy of insurance issued by Employers Mutual.

North Texas was named jointly with Davis as the insured in said automobile liability policy, and the vehicle in question continued to do the same work driven by Dunnavant as it was doing when operated by Davis. It is certainly true that North...