Perry v. U.S. Fidelity & Guaranty Co.

• Decision Date: 21 February 1962
• Citation: 49 Tenn.App. 662,359 S.W.2d 1
• Court: Tennessee Court of Appeals
• Parties: W. E. PERRY, Plaintiff-In-Error, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant-In-Error.

Page 1

359 S.W.2d 1

49 Tenn.App. 662

W. E. PERRY, Plaintiff-In-Error, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant-In-Error.

Court of Appeals of Tennessee, Western Section, at Jackson.

Feb. 21, 1962 Certiorari Denied by Supreme Court June 5, 1962.

Molloy & Leary, Memphis, for plaintiff in error.

Charles G. Morgan, Memphis, for defendant in error.

AVERY, Presiding Judge.

This case comes to this Court from the Circuit Court of Shelby County, Division III. It is a suit by W. E. Perry against the United States Fidelity & Guaranty Company, a Maryland Corporation, seeking to recover $7,550.00 and the interest thereon from July 6, 1959, representing the balance of a judgment in excess of the limits of his garage liability policy carried with the defendant. The maximum liability under the policy, damage to one defendant was $10,000 and it carried a limit of $20,000 for each overall accident for bodily injury, together with $5,000 property damage.

Benjamin Griffith, Jr. and Cleveland Mangham, Jr. sued the plaintiff, W. E. Perry, in the United States District Court at Memphis, Tennessee. The suit by Griffith was for personal injury and property damages and suit by Mangham was only for personal injury damage. There was a verdict and judgment in favor of Griffith for $19,000 and a verdict and judgment for Mangham for $5,000. Motions for new trial were seasonably filed in that Court and overruled. There was no appeal on the verdict and judgment of said Federal Court, and the United States Fidelity & Guaranty Company paid $10,000, the limit of its policy for one personal injury on the $19,000 judgment and the property damage of $1450.00, leaving a balance of that judgment of $7,550. Said insurance company also paid the $5,000 judgment in favor of Mangham. There is no controversy in the Mangham matter, and this suit is by Perry and relates alone to the Griffith judgment as stated hereinbefore.

Since this suit grows out of a former suit, when in this opinion we refer to W. E. Perry by his status in the lower court, 'plaintiff', it will mean his status in this particular case, and wherever we refer to him by name it will be in connection with the suit against him in the United States District Court. The defendant in this case will be referred to by the designation 'Insurance Company.'

The plaintiff is or was the operator of a wrecker service at Millington, Tennessee. On or about December 13, 1958, a call was received by his employee to go out to Shelby Drive and pick up a Packard automobile which had been damaged. Plaintiff's employee proceeded to the point of the call with the wrecker, hooked the rear of the Packard automobile to the rear of the wrecker with the hitch and lift hook, lifted the rear of the Packard from the ground, tied the steering wheel of the Packard with a nylon cord or rope to the panel of the door on the driver's side so as to hold the front end straight and the front wheels stable and was returning from the place where the Packard was picked up to the garage of the plaintiff where the safety chain was fastened from the wrecker to the Packard by young Perry, a son of plaintiff, and then proceeded south on Highway 51 to carry the damaged Packard to a Mr. Priest's garage, and at some place along said highway met Benjamin Griffith and Cleveland Mangham in a small Volkswagen and driving in an opposite direction from that of the plaintiff's wrecker, the Volkswagen collided with the Packard automobile and both the young men in the Volkswagen were injured, said collision was the foundation for the suit in the Federal Court.

In the instant case after the conclusion of all the proof, Honorable Andrew O. Holmes, Judge of Division III of the Circuit Court of Shelby County, Tennessee, sustained a general motion of defendant for directed verdict in its favor, holding that there was no evidence supporting the issue or allegations of bad faith on the part of the defendant and no disregard for the obligation to plaintiff on the part of counsel and agents for the insurance company, who in that case represented Perry under its contractual obligation.

The declaration alleges that soon after the accident occurred it was reported to the insurance company and that the insurance company undertook the investigation and the handling of the matter.

The declaration alleges that plaintiff carried a Garage Liability Policy with maximum liability to one person of $10,000; in one accident to all persons of $20,000, and $5,000 property damage issued by defendant, and that the driver of the wrecker, 'Luther Strevel' (perhaps meaning Wesley), also carries an automobile liability policy issued by defendant with $25,000 as to one personal injury and $50,000 for all in one accident, on his personal automobile, a 'Willy 2-door station wagon'.

The declaration sets out in Count I statements of acts which it refers to as negligence on part of insurance company but in short, in order to state them as fully as should be, the declaration alleges negligence in investigation of the facts of the case and preparing for trial. That readily available evidence in Perry's behalf they did not secure or possess. It alleges certain negligence on the part of the adjuster in directing the said Perry to answer questions in the case in the Federal Court. That in a traffic hearing against Benjamin Griffith in the General Sessions Court of Shelby County Insurance Company furnished no counsel at that hearing. That failure of company to advise the plaintiff that the policy of the driver of the wrecker would not cover any judgment that might be obtained for the injured was negligence. It alleges defendant negligently failed to keep plaintiff advised of negotiations that were carried on by the company and the investigator. It also alleges negligence on the part of attorneys in the trial of the case in the Federal Court for failure to advise plaintiff in this case that counsel for Griffith and Mangham had offered a settlement in the case, which counsel for Perry refused.

The usual recitations in the declaration to the effect that the provisions of the garage liability policy covered the injuries to body and property damage of Griffith.

The second count simply alleges that the acts of negligence set forth in the first count amounted to bad faith on the part of the insurance company.

In the third count it is alleged bad faith and negligence on the part of the investigators and adjusters in that it is averred that the handling of the matter fell below the standard of insurance adjusters in this area, and alleges that the investigation was not thorough as required by insurance companies of such matters.

There was a motion made by the defendant to require the plaintiff to make the declaration more specific, and that was done by setting out more specific averments but they amount to about what has been said above.

There is also a motion made by the plaintiff to require defendant to plead more spedifically after defendant had filed its simple not guilty plea.

In the special pleas filed insurance company admitted that it had a garage liability policy issued to the said Perry, and then specifically pleads that in the trial of the case in the Federal Court it was the contention of the plaintiff in that case that when the wrecker which was carrying the Packard automobile met the Volkswagen being driven by Griffith in which Mangham was a passenger or guest, that this automobile driven by Griffith, after it had met and gotten by the wrecker, crossed the center line of the highway on to the traffic lane occupied by the towed Packard automobile and struck the automobile in the right side. That the case was tried on that theory and that there was no negligence on the part of the operators of the wrecker.

It is admitted in the special plea that this defense was rejected by the jury, which returned its verdict as before stated. This special plea then denies that there was negligence in the investigation of the accident, denies that a workmanlike job was not done in the investigation of the accident in that the evidence accessible was not procured nor was evidence that was procured preserved. It denies that it was negligent in failing to send counsel or investigator to the traffic court when Griffith was tried there, and avers that no charges were placed against the plaintiff in this case or his employees as result of the accident in which Griffith was injured. It then states that an adjuster for the defendant was present at that General Sessions hearing and had a court reporter present in the General Sessions Court; had the testimony taken; paid for the transcription, and that this was used during the trial in the Federal Court. All specific negligence set forth in the declaration is denied item by item. It is specifically denied that it failed to keep plaintiff advised of negotiations and failed to advise plaintiff that Griffith's attorney had offered to settle the case for $6,000.

The plea admits that it owed the plaintiff the duty to conduct a reasonable and diligent investigation and to represent him in the hearing, if he so desired. It further avers that a complete and full investigation was made; that the plaintiff in this case was kept advised of the negotiations of the entire matter; that it advised the plaintiff in this case, who was defendant in the Federal Court that the suit there had been brought for considerably more than the liability that the company might have and notified him to obtain counsel to represent him personally other than the ones who were representing the insurance company, if he so desired.

It further averred that the plaintiff in this case, who was defendant in the Federal Court case did advise with a different attorney, who is shown by the record to be attorney in this case, and that the attorney thought it was unnecessary for Perry to employ some other one to represent him. It is further averred that when ...