Russom v. United Services Automobile Association

• Decision Date: 20 July 1956
• Docket Number: Civ. A. No. 2055.
• Citation: 143 F. Supp. 790
• Parties: James B. RUSSOM et al. v. UNITED SERVICES AUTOMOBILE ASSOCIATION et al.
• Court: U.S. District Court — Western District of Texas

143 F. Supp. 790

James B. RUSSOM et al. v. UNITED SERVICES AUTOMOBILE ASSOCIATION et al.

Civ. A. No. 2055.

United States District Court W. D. Texas, San Antonio Division.

July 20, 1956.

Josh H. Groce, San Antonio, Tex., Eskridge, Groce & Hebdon, San Antonio, Tex., of counsel, for plaintiffs.

Charles W. Trueheart, San Antonio, Tex., Trueheart, McMillan, Russell & Westbrook, San Antonio, Tex., of counsel, for defendants.

RICE, Chief Judge.

The jury in this case has found, in response to special interrogatories, that at the time of the accident in question Norbert Enslen was using the Critchfield family automobile with the implied permission of Col. Critchfield. It is undisputed that on the occasion of the accident Enslen was using the Critchfield family car with the express permission of Mrs. Critchfield, and the jury has likewise found that Mrs. Critchfield was both impliedly and apparently authorized by her husband to grant permission to Enslen to use the car on the occasion of the accident. No other issues were requested to be submitted and the evidence supports the findings of the jury.

There have been so many motions and counter-motions, and rulings by the court, both on the law and on the facts of this case, that it is deemed advisable for the court to file a memorandum of decision, setting forth the actions of this court and the reasons therefor. As a factual background for the holdings of this court, the following will suffice:

Around January 9, 1950, Richard E. Critchfield, a Lieutenant Colonel in the Air Force, then stationed in Dayton, Ohio, owned, as a family car, a 1948 Oldsmobile automobile which he was desirous of selling, and for that purpose inserted an advertisement in the paper. Shortly thereafter, Norbert Enslen, a college graduate and the owner of his own business, being interested in the purchase of an automobile to replace his older Oldsmobile, in response to the Critchfield advertisement, called upon Critchfield at his home in the evening, introduced himself and evinced an interest in the car. With Critchfield's express consent, he tested out the car briefly by driving it alone around the block a time or two. A couple of nights later, Enslen returned with his wife and family to demonstrate the car to them, and Critchfield not being at home, he obtained the keys from Mrs. Critchfield, and used the car with her permission for an hour or so, and then returned it with the keys to Mrs. Critchfield. A day or so later, the terms of the sale were agreed upon, and by appointment Critchfield picked Enslen up on Saturday morning at his place of business and Enslen, with Critchfield's express permission, drove the car in question to the Winters National Bank to consummate the purchase and sale of the car. The bank, however, was unable to finance the deal on such short notice, so Critchfield took the car on to his home, after advising Enslen that he was leaving at noon for Florida, but would be back about Tuesday and the deal would be closed on Wednesday of the following week. A down payment of $250 was made by Enslen to Critchfield in the form of a check dated Friday, January 13th. Critchfield left on a flight for Florida around noon, after advising his wife that he had about sold the car and after cautioning her that if she went down town in it to be careful. Critchfield had never placed any restrictions on his wife's use of this family automobile nor upon her right to permit others to use it, and on occasions in the past she had permitted others, such as relatives and close friends, to use it with Critchfield's knowledge.

Upon Enslen's return to his home, he found a message to the effect that if he would drive down near Cincinnati, a distance of 54 miles, he could obtain a set of new tires at a reduced price. He contemplated putting the new tires on the Critchfield automobile and putting the Critchfield tires on his older Oldsmobile, the tires on which were bad, as well as the battery. Enslen then phoned Mrs. Critchfield and asked if he could use the Critchfield car to get the tires and Mrs. Critchfield gave her express permission for the use of the car for that purpose. In driving down toward Cincinnati, in the town of Mason, Enslen was involved in an accident, resulting in severe personal injuries to Margaret Russom and injuries in a lesser degree to Jean Lee and Thomas Combs. James Russom's automobile was likewise damaged.

Critchfield returned from Florida the following Tuesday, January 17th, and on Wednesday he and Enslen reported the accident to Critchfield's insurer, United Services Automobile Association, the defendant in this case, and the defendant was advised promptly that there were personal injuries involved as well as property damage loss and a collision loss, and Critchfield explained that the accident had not been reported sooner because he was out of the state at the time of the accident. Enslen paid the $50 deductible collision damage to the Critchfield car and United Services paid the remainder, and the sale of the car to Enslen was consummated a few days later.

United Services, through its attorneys and adjusters, communicated with the injured parties, who, shortly thereafter, employed attorneys. Arrangements were made for a medical examination, an under-cover investigation, and negotiations for settlement were carried on between the claimants and United Services representatives over a period of nearly a year, and no question of coverage for Enslen was raised by United Services during that time.

In December of 1950, suits were brought against Enslen by the various plaintiffs for damages in excess of $50,000. Service of process was had, and on the 27th day of December, 1950, the United Services demanded of and obtained from Enslen a non-waiver agreement and for the first time raised the question of want of coverage for Enslen. The attorneys for United Services thereupon filed answers in the cases but only a few weeks later, in February of 1951, United Services denied any obligation to Enslen and had their attorneys withdraw from the case. Thereafter, around April first, Enslen reported the accident for the first time to Standard Accident Insurance Company, which had the policy covering Enslen's older car. Standard immediately raised the question of delayed notice, and Enslen executed to Standard another non-waiver agreement, whereupon Standard substituted its attorneys in the cases and thereafter continued handling the cases to conclusion under the non-waiver agreement.

At no time prior to February, 1953, did United Services have a permit to do business in Ohio, and had no agents for service in that state. In October of 1951, Standard employed Josh H. Groce, an attorney of the San Antonio, Texas, Bar, the city in which the Home Office of United Services is located, and Mr. Groce communicated the fact of his employment in the matter in October, 1951, to Mr. Max Wier, head of the claim department of said association. United Services' policy provided liability coverage for "any person while using the automobile * * provided the actual use of the automobile is by the named insured or with his permission." Standard's policy provided coverage for Enslen while driving the Critchfield car, but provided that such insurance "shall be excess insurance over any other valid and collectible insurance available" to Enslen. Standard's attorneys continued to handle the suits, which were filed by the plaintiffs in Dayton, and on March 18, 1953, Groce wrote Wier advising him of a settlement demand of $15,000, $10,000 for Margaret Russom and $5,000 for all other claims, and advising further that Standard was defending under reservation of rights and was contending that their coverage, if any, was excess over and above primary coverage on the part of United Services. Wier did not answer this letter. In February of 1953, United Services for the first time designated the Registrar of Motor Vehicles in Ohio as an agent for service upon United Services, which fact was unknown to the plaintiffs and their attorneys and Standard and its attorneys, until long after the present suit was filed in San Antonio.

On October 18, 1954, a hearing on the suits was held in the Court of Common Pleas of Dayton, Ohio. The plaintiffs all appeared in person and by their attorneys and Enslen appeared by his attorneys, who had been furnished by Standard. A jury was waived by all parties, and the causes were submitted to the court. The attorneys for the plaintiff made rather a full opening statement. Each of the plaintiffs testified at length both as to the happening of the accident and the damages suffered by them. A doctor, an orthopedic specialist, testified at length to the serious and permanent injuries to Margaret Russom. The attorneys for the plaintiffs argued the case to the court and stated that although the plaintiff Margaret Russom would accept whatever the judge awarded, plaintiffs' attorney felt that a judgment for her in the sum of $20,000 should be rendered.

No cross-examination was made by the defendant's attorneys; no defense was offered, and the defendant's attorney stated that if the judgment did not exceed $20,000 he, the defendant's attorney, had agreed with the plaintiffs' attorney that there would be no appeal. The court thereupon pronounced judgment in favor of the plaintiff Margaret Russom in the sum of $20,000.

Judgment was likewise pronounced under similar circumstances in favor of James Russom in the sum of $5,000 for his loss of services and medical expenses for his wife, as well as for $150 for damages to his car, and for Jean Lee judgment was pronounced for $500, and for Thomas Combs judgment was pronounced for $300. No contention has been raised that these judgments were not reasonable, either as to liability or amount.

On October 22, 1954, this suit was filed by James Russom, Margaret Russom, Jean Lee and Thomas Combs. The plaintiffs were represented by Mr. Groce, who, in...