Piedmont Fire Ins. Co. v. Aaron
| Decision Date | 08 November 1943 |
| Docket Number | No. 5108.,5108. |
| Citation | 138 F.2d 732 |
| Parties | PIEDMONT FIRE INS. CO. v. AARON et al. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Charles E. Ford, of Washington, D. C., and Alexander H. Sands, of Richmond, Va., for appellant.
William Davis Butts, of Newport News, Va., for appellees Mrs. D. E. Roles and Mrs. Walter Rooks.
Tazewell Taylor, of Norfolk, Va., and Allan D. Jones, of Newport News, Va. (Jones, Blechman & Jones, of Newport News, Va., on the brief), for appellee Harry J. Aaron.
This is an appeal from an order dismissing a suit for a declaratory judgment. On September 11, 1942, one Harry J. Aaron, a fur dealer, instituted an action at law in the Circuit Court of Newport News, Virginia, to recover on a contract of insurance evidenced by a binder issued by an agent of the defendant Piedmont Fire Insurance Company. A few days later, the insurance company filed a suit for declaratory judgment in the United States District Court for the Eastern District of Virginia, asking that the binder be declared null and void on the ground of fraud and misrepresentation in the procurement, and that the insurance company be declared not liable under the binder, either to Aaron or to persons who had stored with him furs which were claimed by him to be covered by the binder. A number of these persons were made parties to the suit as representatives of a numerous class, and two other insurance companies which had issued policies covering the loss were joined as defendants. The action instituted in the state court was promptly removed by the insurance company into the federal court, in which the suit for declaratory judgment had already been commenced; and an order was entered that the two causes be consolidated. Later, upon motion of Aaron that the issue as to liability on the binder be tried before a jury, an order was entered that it be so tried and that the suit for declaratory judgment be dismissed.
An affidavit filed with this court, the allegations of which are not controverted by the insurance company, shows that Aaron has made settlement with all except ten of the 976 persons who had stored furs with him; that settlement has been made with eight of these ten claimants by other insurance companies who have agreed to await the outcome of this suit for the adjustment of their claims; that the total of the ten claims does not exceed $1,500; and that Aaron is willing to deposit that sum in the registry of the court to assure the settlement of the claims. It was stated, without contradiction, that the situation at the time of the pretrial conference preceding the entry of the order of dismissal was not substantially different. There was no controversy between the insurance companies as to the liability of the companies joined as defendants in the suit for declaratory judgment. There was, consequently, but one substantial issue left in the case and, as stated by the judge below, that issue was fully determinable in the action on the binder, which was first instituted and which was retained within the court's jurisdiction when the order dismissing the suit for declaratory judgment was entered.
It is clear, we think, that the order appealed from should be affirmed. The question as to whether the insurance company was liable on the binder was one for trial by jury whether arising in the action on the binder or in the suit for declaratory judgment. "Ordinarily when the defense of fraud may be interposed to an action at law on the policy and such action is imminent or pending, there is no occasion for equitable relief and the parties will be left to their rights as determined in the suit at law". Atlas Life Ins. Co. v. W. I. Southern, Inc., 306 U.S. 563, 59 S.Ct. 657, 661, 83 L.Ed. 987; Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440; Di...
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