Pittman v. West American Insurance Company

• Decision Date: 07 February 1962
• Docket Number: No. 16819.,16819.
• Parties: Bernadean PITTMAN, Administratrix, Joseph John Leavey, Sr., and Juanita Leavey, Appellants, v. WEST AMERICAN INSURANCE COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

299 F.2d 405 (1962)

Bernadean PITTMAN, Administratrix, Joseph John Leavey, Sr., and Juanita Leavey, Appellants, v. WEST AMERICAN INSURANCE COMPANY, a corporation, Appellee.

No. 16819.

United States Court of Appeals Eighth Circuit.

February 7, 1962.

Robert L. Boyce, Jr., Kansas City, Kan., for appellants and Robert E. Stewart, Kansas City, Mo., Howard Washburn, Kansas City, Kan., and James Farley, Farley, Mo., on the brief.

Paul C. Sprinkle, Kansas City, Mo., for appellee and Sprinkle, Carter, Sprinkle & Larson, Kansas City, Mo., on the brief.

Before SANBORN and VAN OOSTERHOUT, Circuit Judges, and GRAVEN, District Judge.

SANBORN, Circuit Judge.

This is an appeal from a final judgment in a declaratory judgment action brought June 13, 1960, by the West American Insurance Company under 28 U.S.C. § 2201 to secure the nullification of a policy of automobile liability insurance issued by it to Richard K. Pittman on April 1, 1960. The action is based upon the claim that in his signed application for the policy Pittman made material misrepresentations upon which the insurer relied in issuing the policy. The defendants are the administratrix of the estate of Richard K. Pittman, deceased, and the parents of Joseph John Leavey, Jr., who died as the result of riding with Pittman in his automobile in the early morning of May 22, 1960, on a Missouri Highway. Federal jurisdiction is based on diversity of citizenship and amount in controversy.

The plaintiff's claim is stated in its complaint as follows:

"Plaintiff states that on or about April 1, 1960, Richard K. Pittman went to one John L. Tompkins, agent for the plaintiff herein, and made application for insurance upon a 1957 4-door Ford. Plaintiff further states that by his signed application, the said Richard K. Pittman, stated that he had never had any automobile insurance declined or cancelled; that he had never had a driver\'s license revoked, suspended or restricted; that he had not been involved in any accident as an automobile driver in the past three years. Plaintiff further states that based upon said representation and as the result of the same, it issued an insurance policy to the said Richard K. Pittman, being No. A 5051577, which ran from April 1, 1960, until October 1, 1960, for which a premium was paid and in which the liability coverage for bodily injury to one person was Ten Thousand ($10,000.00) Dollars and which also covered medical payments for each person in the sum of Five Hundred ($500.00) Dollars.

"Said insurance policy which was issued to the said Richard K. Pittman, among other things, in paragraph 16 provides as follows:

"`16. Declarations. By acceptance of this policy, the insured named in Item 1 of the declarations, agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance.\'

"Plaintiff states that on or about May 22, 1960, at 2:10 A.M. in the morning, the said Richard K. Pittman was driving the automobile covered by said insurance policy on Highway 45 in the State of Missouri and that accompanying him was Joseph John Leavey, Jr. Plaintiff states that on said date, the said automobile struck a pillar on a bridge when it was being driven at an excessive rate of speed and that as a result of said collision, both Richard K. Pittman and Joseph John Leavey died. At the time of his death Joseph John Leavey, Jr., was a minor of the age of 17 years.

"Plaintiff states that the application for insurance made by Richard K. Pittman was false and untrue in that insurance had been declined to the said Richard K. Pittman, because of an accident which he had previously had on March 19, 1960, in Platte County, Missouri. The said Richard K. Pittman had also been arrested for careless driving and fined in Magistrate Court; had been arrested by police and fined for speeding and again for careless driving; that all of said facts were known to the said Richard K. Pittman at the time he signed the application for insurance; that he carefully withheld the same from the plaintiff, thereby defrauding the plaintiff, and plaintiff states that had it known of the true facts and had it known that the representations made by the said Richard K. Pittman were not true, that the policy of insurance referred to herein would never have been issued by it for the reason that the insurance so written is based upon an `experience\' rating which is less than the regular rate because of the so called `safe driving experience\' of the applicant.

"Plaintiff states that the said Bernadean Pittman, administratrix of the estate of Richard K. Pittman, is now making claim for medical benefits under the insurance policy and that the defendants Leavey, as surviving parents of the deceased minor Leavey, are making a claim and threatening suit under and by virtue of the wrongful death statute of the State of Missouri."

The defendants admitted the happening of the accident which resulted in the death of Pittman and Leavey, Jr. They asserted that before the issuance of the policy in suit to Pittman the plaintiff had knowledge of all facts material to the risk, and that if Pittman made any material false statements — which defendants deny — the statements were made innocently and without intent to defraud. Mrs. Pittman in her answer set up a counterclaim for $2,000 for funeral expenses and damage to the insured automobile.

The defendants requested a jury trial. The case was tried to a jury for two days commencing January 31, 1961.

The evidence of the plaintiff showed that the application signed by Pittman for the policy in suit contained the following questions and answers:

"Has any driver had automobile insurance declined or cancelled?" Answer: "No."

"Has any driver had his driver\'s license revoked, suspended or restricted?" Answer: "No."

"Has any user been involved in an accident (as a driver) in the past three years?" Answer: "No."

"Does any driver have a physical deficiency or impairment?" Answer: "No";

that the policy which was issued contained the paragraph "16 — Declarations," as is stated in the complaint, and is hereinbefore quoted; and that on March 19, 1960, Pittman, who then had a policy of automobile liability insurance with the State Farm Mutual Insurance Company, was involved in an accident described in a statement made by him to that Company on March 28, 1960, as follows:

"My name is Richard Pittman. I live at the White City Hotel, Parkville, Missouri. I am 35 and work for Corn Products. On March 18th Donald Pauley of Riverside, Missouri, and I were taking some friends home. I was driving Pauley\'s 1953 Chevrolet. We took Jess Clark to his home, 311 West Eighth Street, Kansas City, Missouri, at about midnight. We left there and began our trip to Riverside. The highways were slightly wet from melting and falling snow. We were going south on 71 Highway and at about four miles north of Riverside we stopped to urinate. 71 Highway is a dual lane highway at this point. We stopped over the side of a hill about 75 feet from the crest. The snow was banked high on the shoulder about three feet from the edge of the highway. I pulled the car over as far as I could against the snow. There was still about half of Pauley\'s car on the highway. The lights were on and working. We finished urinating and got back into the car when a 1960 Ford struck the car on the left rear bumper and fender. The impact was about a foot and a half from the left side on the bumper. The bumper and fender were damaged but the trunk lid was not hurt. The damage on the Ford was on the right bumper, fender and headlight. I saw the Ford coming in the rearview mirror, but could not say how fast he was going or what efforts he made to avoid the accident. Both Pauley and I received a good jolt from the impact, but haven\'t felt any ill effects as yet.

"The Missouri State Patrol was called to investigate the accident. I was given a ticket for careless driving and have to go to court in Platte City on the 30th of March. I was driving Pauley\'s car at the time because he does not have a driver\'s license. * * *"

It appears from the record that Pittman, as a result of the accident, was fined $16 for careless driving.

John Tompkins, who for almost seven years prior to February 15, 1960, had been an agent for the State Farm Mutual Insurance Company, testified that he met Pittman before March 31, 1960; that when he (Tompkins) quit State Farm and set up a general insurance business on February 15, 1960, he circularized the policyholders of that company with whom he had been in contact, including Pittman; that Pittman came alone to Tompkins' office in his home in the evening of April 1, 1960, when the application for insurance was written for the policy in suit; that Mrs. Tompkins did the typing; that Pittman answered "No" to the four questions in the application; that he paid the premium; that the application and the premium were forwarded to the home office of the plaintiff; that Tompkins was told by Pittman that he no longer had State Farm insurance; that the first time Tompkins knew of Pittman's accident of March 19, 1960, was after Pittman's death. The testimony of Mrs. Tompkins was corroborative of that of her husband. She said she knew Donald Pauley, and that he was not with Pittman the evening of April 1, when the application was signed.

The branch manager for the plaintiff in the Kansas City area testified that he appoints agents and instructs them as to acceptable risks; that the company does not write insurance for persons who have a previous accident record or a record of excessive violations; that the company "distinguishes as to `chargeable' accidents"; that: "Where a driver in no way contributes to an accident, such as his parked car being struck, he is not charged...