Rogers v. AMERICAN EMPLOYERS'INS. CO.

• Decision Date: 23 June 1945
• Docket Number: Civ. A. No. 1490.
• Citation: 61 F. Supp. 142
• Parties: ROGERS v. AMERICAN EMPLOYERS' INS. CO.
• Court: U.S. District Court — Western District of Louisiana

61 F. Supp. 142

ROGERS v. AMERICAN EMPLOYERS' INS. CO.

Civ. A. No. 1490.

District Court, W. D. Louisiana, Shreveport Division.

June 23, 1945.

Booth & Lockard, of Shreveport, for plaintiff.

Cook, Clark & Egan, of Shreveport, for defendant.

DAWKINS, District Judge.

This suit is against the insurer alone, under an automobile liability policy, issued to Benjamin N. Frank in the District of Columbia, without making the insured a party, as permitted by Act 55 of the Louisiana Legislature of 1930. Jurisdiction rests upon diverse citizenship. Defendant has moved to dismiss the bill on the following grounds: (1) that the policy was written or the contract entered into in the District of Columbia; (2) that it contained the following provisions: "No action shall lie against the Company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company." (Emphasis by the writer.) (3) that under the law of the District of Columbia said provision in the policy is valid and prevents a third person from proceeding against the insurer until he has obtained judgment against the insured; and (4) that the issue involves a matter of substantive law, which can not be disregarded in another jurisdiction without doing violence to Section 10 of Art. 1 (prohibiting the impairment of the obligations of contracts), Section 1, art. 4, (full faith and credit) and Section 1 of the 14th Amendment of the Federal Constitution (due process and equal protection).

On argument to dismiss the facts alleged therein were admitted, including the statement that no action had been brought or judgment obtained against the insured.

There is but a single question of law involved and that is as to whether the provisions of Act 55 of 1930 of the State, permitting the suing of the insurer alone, and without first obtaining judgment against the insured, is substantive or remedial legislation.

Of course, in so far as the issue involves the Federal Constitution, it is one which this and all other Federal courts are required, when raised, to decide for themselves, and can not be controlled by decisions of state courts. Both this court and the Court of Appeals for this, the Fifth Circuit, have had occasion to construe this very act of the State upon the point in question. In Hudson v. Georgia Casualty Co., D.C., 57 F.2d 757 and Wells v. American Employers' Ins. Co., 5 Cir., 132 F.2d 316 those decisions were adverse to the contention now made by defendant. Similar conclusions have been announced by Courts of Louisiana. Rossville Commercial Alcohol Corporation v. Dennis Sheen Transfer Co., 18 La.App. 725, 138 So. 183; Gager v. Teche Transfer Co., Inc., La.App., 143 So. 62; Tuck v. Harmon, La.App., 151 So. 803; Graham v. American Employers' Ins. Co., La.App., 171 So. 471.

Defendant cites and relies upon, among other cases, Wheat v. White, D.C., 38 F. Supp. 796, wherein the identical issue was involved. In that case it was held that, since the contract was made in and with reference to the law of Mississippi, which, unlike that of Louisiana, did not give the right to sue the insurer without first obtaining a judgment against the insured, to permit such procedure here would violate the constitutional provisions relied on by defendant. In other words, Judge Caillouet held it to be substantive rather than procedural.

It is alleged in the petition in the present case, and I think must be assumed, that the defendant undertook to defend, pay and satisfy any claim against the insured arising out of the operation of his automobile. However, it required that he...