Peddy v. Pacific Employers Insurance Company
| Decision Date | 29 June 1957 |
| Docket Number | No. 16222.,16222. |
| Citation | 246 F.2d 306 |
| Parties | A. J. PEDDY, Jr. and J. J. Griffin, Appellants, v. PACIFIC EMPLOYERS INSURANCE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
William G. Carver, Lakeland, Fla., James S. Moody, Plant City, Fla., Carver
& Langston, Lakeland, Fla., for appellants.
T. Paine Kelly, Jr., MacFarlane, Ferguson, Allison & Kelly, Tampa, Fla., for appellee.
Before TUTTLE, JONES and BROWN, Circuit Judges.
A. J. Peddy, Jr., is a resident of Lakeland, Florida. During all times here pertinent he was the active head of A. J. Peddy & Sons, Inc., a Florida corporation, and of Mulberry Lumber Co., a partnership doing business in Florida and composed of Margaret C. Peddy and Mazie Peddy MacKay, wife and sister of A. J. Peddy, Jr. The corporation operated a sawmill. The partnership was in the business of retail dealer in lumber and builders' supplies. A. J. Peddy III was sixteen years of age and the son of A. J. Peddy, Jr. He was a member of his father's household. Pacific Employers Insurance Company is a California Corporation. It issues policies of automobile liability insurance in the course of its business. Oliver Joe Bailey Company is a Florida corporation conducting an insurance agency in Orlando, Florida. It represents Pacific Employers with authority to bind risks and issue policies of insurance on its behalf. Howard H. Allsopp was in the insurance business in Lakeland, Florida. He was the appointed agent of several insurance companies. He was not an appointed agent for Pacific Employers and it had never heard of him until after the happening of the events out of which this litigation arose.
Allsopp solicited the insurance business of automobile liability coverage on the cars and trucks of A. J. Peddy & Sons, Inc., and Mulberry Lumber Company. At the time of the solicitation he had no company in mind but contemplated placing the business, if he procured it, with Bailey. Allsopp asked Bailey to quote a rate which Bailey did. Allsopp submitted the rate in competition with another who was actively seeking the business. Peddy agreed to take the proposal submitted by Allsopp, a schedule of the cars and trucks was prepared and sent to Bailey. Bailey wrote up the policy for Pacific Employers, countersigned it as the agent of Pacific Employers and sent it to Allsopp. The policy named the corporation, A. J. Peddy & Sons, Inc., and the partnership, Mulberry Lumber Company, as the insureds. It was an audit policy with automatic coverage, that is, cars and trucks acquired after the issuance of the policy by those named as insureds were automatically covered by the policy without indorsement and premiums were adjusted upon periodic audits made by the insurance company. Sixteen vehicles were described in the schedule annexed to the policy as being owned by the named insureds. The policy obligated Pacific Employers "To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of" bodily injury to or death of persons, and property damage, within the policy limits, "caused by accident and arising out of the ownership, maintenance or use of any automobile." It is provided by the policy that "The insurance with respect to any person or organization other than the named insured does not apply: * * * with respect to any non-owned automobile, to any executive officer if such automobile is owned by him or a member of his household". The policy also contained this provision:
"Notice to any agent, or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this policy or estop the Company from asserting any rights under the terms of this Policy; nor shall the terms of this Policy be waived or changed, except by endorsement issued to form a part of this Policy, signed by its President and Secretary and countersigned by a duly authorized representative or agent of the Company".
On May 15, 1951, the policy was taken by Mr. Allsopp from Lakeland to Mulberry, Florida, about twelve miles distant and there Allsopp discussed the policy and its coverage with A. J. Peddy, Jr. From Peddy at the time of this discussion, or from some other source, Allsopp learned that a 1950 Dodge car was owned by Mazie Peddy MacKay in her own right rather than by one of the insureds. At this conference there was mention made of a Willys Jeep. Allsopp testified that he recalled . He couldn't remember whether Peddy said "I" or "We", but he recalled that he said to Peddy "Okay; you are covered." Allsopp went on to say that if he had been advised that the jeep was owned by A. J. Peddy, Jr. or any other individual the normal procedure would have been to include the owner as a named insured in the policy by indorsement. Peddy's testimony was "I told Mr. Allsopp I had purchased a jeep for my son". He quoted Allsopp as saying the jeep would be fully covered from then on. Allsopp then and on the same day wrote Oliver Joe Bailey Company making some corrections in the description of some of the cars listed in the policy schedule and reporting that one of the cars, Item 5, was owned by Mrs. MacKay and requesting that her name be added as an insured and an additional premium charged. The letter from Allsopp to Bailey continued:
The endorsement adding Mrs. MacKay as an insured was issued and an additional premium was paid with respect to her car.
The jeep, being driven by A. J. Peddy III was in a collision with a truck owned by J. J. Griffin. Griffin brought suit against A. J. Peddy, Jr. as the owner of the jeep. Pacific Employers denied liability and declined to defend. Griffin recovered judgment for $5,000.00 which Pacific Employers refused to pay. Pacific Employers brought suit for a declaratory decree against the named insureds, against A. J. Peddy, Jr., and against Griffin. The complaint sought a decree declaring that the jeep was not covered by the policy and that Pacific Employers had no liability for the damages incurred by Griffin as a result of of the collision. Peddy, by counterclaim, sought reformation of the policy, exoneration from the Griffin judgment and his costs and expense in defending the Griffin suit, and claimed $5,000 for damage to his reputation. Motions for summary judgment were denied and the cause was tried before the court without a jury. The district court held that Allsopp was not an agent with any real or apparent authority to bind the insurance company for insurance on the jeep or waive the policy provisions limiting or excluding coverage. Judgment was entered for Pacific Employers, and A. J. Peddy, Jr. and J. J. Griffin have appealed.
Allsopp was a broker. He did not have, at the time of the negotiations which led to the initiation of the policy by Pacific Employers any authority to represent it. He did not then know the name of the company which would issue the policy. Pacific Employers had not at that time ever heard of him. The general rule in such cases is that the broker is the agent of the insured and not of the insurer. 29 Am.Jur. 114, Insurance, § 91. Such rule would be applicable here unless the State of Florida, whose law governs, has by statute or otherwise departed from the general rule. It is here contended by the appellants that Florida has modified the general rule by the enactment of the following statutory provision:
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