Royal Transit v. CENTRAL SURETY & INS. CORPORATION
| Decision Date | 01 June 1948 |
| Docket Number | Civil Action No. 700. |
| Citation | 76 F. Supp. 793 |
| Parties | ROYAL TRANSIT, Inc., v. CENTRAL SURETY & INS. CORPORATION. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Leo J. Landry, Wallace R. Reiss, and H. K. Curtis, all of Milwaukee, Wis., for plaintiff.
M. A. Jacobson of Waukesha, Wis., for defendant.
Plaintiff is a common carrier engaged in the transportation of property by motor vehicle. Defendant is an insurance company writing automobile public liability insurance. In August, 1936, defendant issued such a policy of insurance to plaintiff with a policy limit of $45,000 for the death or bodily injury to a single individual. Such risks were re-insured by another insurance company in all amounts in excess of $5,000.
In July, 1937, while said policy of insurance was in full force and effect, one of plaintiff's trucks was loaded in Illinois with a cargo of bar steel and six large steel plates. Each plate was 12 ft. long, 10 ft. wide, and 5/16" thick, and weighed 1750 lbs. Three plates were placed upright on each side of the truck and were set in heavy steel hooks or stirrups which were suspended below the level of the truck platform. The plates were kept upright and stable by the use of two long chains and two shorter chains and an old bedspring. The chains were tightened and kept tight by the use of a binder clamp. A detailed description of the manner in which the chains were fastened appears in Zamecnik v. Royal Transit, Inc., 239 Wis. 175, 179, 180, 300 N.W. 227.
One Schultz, a truck driver employed by the plaintiff, drove the truck to the plant of the Allis-Chalmers Manufacturing Company, where the steel plates were to be unloaded. Because of the size and weight, it was necessary in order to unload them to attach the hook of an overhead crane to each set of plates. One Shrake, an employee of Allis-Chalmers, was directed to assist in hooking the crane onto the plates. To do so he had to first fasten a heavy C-clamp to the top of each set of plates. He attempted to do so while standing on the truck platform, but was unable to install the clamp from that position. He then left the truck and obtained a ladder which he placed leaning against the outside of the plates on the left-hand side of the truck. In the meantime Schultz, the truck driver, had removed the bedspring and had started to get the plates ready for unloading by pulling the lever of the binder clamp, thus loosening the chains. When Schultz loosened and disconnected the binder clamp, he removed the only fasteners which were holding the heavy plates in position.
Suddenly the plates on the left side fell outward, killing Shrake. At that moment Zamecnik, an Allis-Chalmers employee, was walking by the truck in an aisle designated by red lines as a place to be kept clear for walking purposes. The falling plates struck Zamecnik, causing grave injuries. He sustained a badly compressed fracture of the tenth dorsal vertebra and the posterior dislocation of the tenth, eleventh and twelfth dorsal vertebrae. His spinal cord was completely severed causing complete motory and sensory paralysis below the point of the break. As a consequence he lost control of his bowels and active urination. In order to urinate thereafter it was necessary to catheterize him four times each day and once at night and his bowels were cared for by giving him castor oil each second day. His condition is permanent. He could not be treated adequately at home and required hospitalization throughout the remainder of his life. Nursing care is required to keep him in a state of health. For several months he suffered excruciating and continuing pains. Up to the time of the trial in January, 1941, his wage loss and the cash expenditures for hospital, doctor and nurses charges were approximately $21,000. There was proof that his wage loss and the necessary expenditures in the years to come to treat his injuries would be in excess of $5,600 annually. At the time he was injured he was forty-six years of age. He had an expectancy, according to the American Experience Table of Mortality, of 23.81 years and the testimony on the trial showed that he can, with good nursing, be expected to live as long as the average man.
An action was commenced by Zamecnik in the Circuit Court of Milwaukee County, in which he demanded $100,000 damages. Shortly thereafter the attorneys for the defendant wrote a letter to Royal in which they stated, "There is the likelihood that a judgment may be entered in this action for an amount in excess of the limit of your policy of insurance, in which event your company would become personally involved in respect to the payment of the same in respect to policy limit." The attorneys for the defendant made a detailed investigation of the condition of Zamecnik and as to the manner in which the injuries were sustained. Defendant's attorneys were well aware of the extent of Zamecnik's injuries, and of the fact that he would never be able to work again and would be confined in a hospital for the rest of his life.
Prior to the date of trial Attorney Wengert, representing Royal, held frequent conferences with the attorneys for the defendants in that case. He repeatedly urged that the case was one of absolute liability and insisted there should be a settlement within the policy limits. Upon behalf of Royal he offered to contribute $3,500 in order that a settlement might be effected. As a reward for his efforts his client was several times threatened by defendant's attorneys with the penalties following non-cooperation. As an illustration, on December 3, 1940, defendant's attorneys wrote that Royal was stressing settlement and that such attitude "does not constitute an attitude of cooperation and compliance with the terms of the policy."
The attorneys for the various parties involved had frequent conferences prior to the trial in the Circuit Court. Some of these were at conciliation hearings before Judge Sullivan. Zamecnik's attorneys at first offered to settle for $45,000, the limit of the policy. Thereafter offers of settlement for $40,000 were made by Attorney Quarles and Attorney McCann. In order to dispose of any liability on its part, Royal raised its offer to contribute to the sum of $5,000, so before the end of the trial a settlement could have been effected by defendant for $35,000.
Attorney Quarles, who has had wide experience in negligence cases, testified that he considered the case one of liability and anticipated that the judgment might run from $80,000 to $100,000. Attorney McCann, who likewise has had extensive practice in personal injury cases, considered that the case was one of liability, and that the judgment might range from $75,000 to $100,000. Attorney Paulsen, who represented the re-insurer, urged settlement as he considered it to be a case of liability. Mr. Dougherty, one of defendant's attorneys, testified he had in mind a settlement from $30,000.00 to $35,000. Mr. Arnold, the other attorney for defendant, agreed with Mr. Paulsen when, during the trial, the latter urged a settlement of...
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