State ex rel. State Farm Mut. Auto. Ins. Co. v. Craig, 8172

• Decision Date: 24 January 1963
• Docket Number: No. 8172,8172
• Citation: 364 S.W.2d 343,95 A.L.R.2d 1321
• Parties: STATE of Missouri ex rel. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Relator, v. Hon. Marshall CRAIG, Judge of the Circuit Court of Scott County, Missouri, Respondent.
• Court: Missouri Court of Appeals

Page 343

364 S.W.2d 343

95 A.L.R.2d 1321

STATE of Missouri ex rel. STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY, Relator, v. Hon. Marshall CRAIG, Judge of the Circuit Court of Scott

County, Missouri, Respondent.

No. 8172.

Springfield Court of Appeals, Missouri.

Jan. 24, 1963.

Motion for Rehearing or for Transfer to Supreme Court

Overruled Feb. 12, 1963.

Jackson & Thomasson, Freeland L. Jackson, Cape Girardeau, for relator.

Dempster & Edwards, Robert A. Dempster, Sikeston, for respondent.

RUARK, Presiding Judge.

This is mandamus to require the trial judge to permit intervention.

Relator, State Farm Mutual Automobile Insurance Company (hereinafter referred to as 'State Farm'), issued its policy of insurance to Arthur Allen (hereinafter referred to as 'insured'), whereby (under Coverage III) State Farm agreed to pay all sums which insured '* * * shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained by the insured * * *'; subject to the provision that 'for the purposes of this coverage, determination as to whether the insured * * * is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured * * * and the company or, if they fail to agree by arbitration.' Under 'Exclusions' it was provided that such insurance should not apply to any injury with respect to which the insured should, without written consent of the company, make settlement with or prosecute to judgment any action against the person legally liable therefor. Under 'Conditions' it was provided that, if before payment by insurer the insured should institute any action against the person legally responsible for the injury, a copy of summons and complaint would be forwarded immediately to the company.

On March 31, 1962, the insured, Allen, commenced suit in the circuit court against Hobert Crader, Aleen Crader and State Farm. The suit was in two counts. Count I alleged that on March 29, 1961, plaintiff while driving his car in the exercise of the highest degree of care was struck by a car driven by defendant Hobert Crader and that plaintiff suffered injury and damage in the sum of $5,000 for which he prayed judgment against 'the defendant.' In Count II plaintiff realleged all the allegations of paragraphs one and two of Count I. He then stated: that plaintiff was insured by State Farm under a provision in the policy which covenanted that insurer would pay all sums which plaintiff should be legally entitled to recover as damages under the uninsured motorist coverage; that the automobile which Hobert Crader was driving was uninsured and that neither Hobert Crader nor Aleen Crader had insurance to cover bodily injuries of plaintiff; that plaintiff has made demand upon State Farm to pay for the bodily injuries which 'he' has sustained and payment has been refused. 'Wherefore, the plaintiff prays for judgment against the defendant in the amount of $5,000 * * *.'

The defendants Crader, although served, did not answer or contest but have remained in default. Within proper time, defendant State Farm filed, to Count II, motion to dismiss for failure to state a claim because the action was premature; and, to Count I, motion to intervene. This motion admits the execution of the policy. It alleges that the defendants have failed to file responsive pleadings; that petitioner has reason to believe that the defendants are uninsured motorists within its coverage; that it has a direct interest in the outcome of Count I and its interest is not being adequately represented; and that petitioner may be bound by a judgment entered on Count I, on both the issue of liability and the issue of amount of damages. Both motion to dismiss and motion to intervene were overruled. This action is to require the trial court to permit intervention in Count I. If State Farm is entitled to intervene as a matter of right, mandamus is a proper remedy. State ex rel. Duggan v. Kirkwood, 357 Mo. 325, 208 S.W.2d 257(5), 2 A.L.R.2d 216.

We have then a suit composed of one count in tort against one party and another (Count II) based on contract against another party. The questions to be determined on the issues in Count I would, in the ordinary course, be: (a) whether the uninsured motorist was negligent; (b) whether plaintiff was in the exercise of the highest degree of care; (c) whether plaintiff was injured; and (d) the amount of damages which plaintiff is legally entitled to recover. The issues arising under the contract count (Count II), could involve: (a) whether plaintiff was insured; and (b) whether defendant was an uninsured motorist. Neither of these seems to be disputed; therefore, the only real issues in the lawsuit appear to be those involved in Count I.

We must first dispose of some preliminary questions. The arbitration provision did not prevent the bringing of the suit, RSMo., Sec. 435.010, V.A.M.S. Regardless of statute, the general rule is that the contract cannot oust jurisdiction of the courts as to a determination in respect to liability, although it may provide a reasonable method of estimating or appraising the amount of damage. 29A Am.Jur., Insurance, Sec. 1161; see Security Printing Co. v Connecticut Fire Ins. Co. of Hartford, Conn., 209 Mo.App. 422, 240 S.W. 263. ¹ We think further that the 'consent' exclusion as a bar to suit must fall along with the arbitration clause. The exclusion would reasonably be applicable in situations where arbitration is required; but, where this is not the case, it would be against public policy to permit a prohibition against resort to the courts for remedy without the consent of the person ultimately liable.

Supreme Court Rule 52.11, V.A.M.R. provides for intervention as a matter of right 'when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action.' Such provision is patterned after that in Federal Rule of Civil Procedure 24(a)(2).

We think the argument that relator's interest will be 'adequately represented' in respect to Count I because the court will require proof of plaintiff's cause is specious. It is not the duty of the trial court to subpoena and interrogate witnesses who might contradict the testimony of plaintiffs or those who might testify to compelling facts which show that plaintiff is not 'legally entitled to recover' the damages he claims. The court cannot, and should not, act as attorney for the defaulting defendants. Every practicing lawyer knows that, in so far as the issues of fact are concerned, the defaulting defendants are not 'adequately represented.'

The petitioner for intervention must have an 'interest' in the subject matter of the action. Such interest does not include a mere, consequential, remote or conjectural possibility of being in some manner affected by the result of the original action. It must be such a direct claim upon the subject matter of the action that the intervenor will either gain or lose by direct operation of the judgment to be rendered. State ex rel. Farmers Mutuals Auto Ins. Co. v. Weber, 364 Mo. 1159, 273 S.W.2d 318(4); Laclede Gas Co. v. Abrahamson, Mo., 296 S.W.2d 100, 61 A.L.R.2d 1286; see City of Hannibal v. Winchester, Mo.App., 360 S.W.2d 371, 375. Respondent leans heavily upon the Weber case, supra, but we think the factual situation there involved distinguishes it from the case at hand. The question is: Does the petitioner have an 'interest' contemplated by Rule 52.11? Will it gain or lose by the direct operation of the judgment? Is the situation such that it 'may be bound' by a judgment against the uninsured motorist in Count I?

In considering this question, we must endeavor to determine what kind of insurance is involved. The terms of the insurance contract bind State Farm to pay all sums which the insured 'shall be legally entitled to recover' from the uninsured motorist. The character of this coverage must be separated from the regular and customary liability insurance. The petitioner is not the insurer of the uninsured motorist. Neither, on the facts in this case, is it called upon to defend the insured against the claim made by the opposing party. The defendants Crader are in default. They assert nothing upon which the insurer is called upon to discharge its 'liability' contract with insured. We see no conflict of interest or position. The only insurance here involved is that which has been likened to limited accident insurance.

'The undertaking of the insurer more closely resembles the undertaking contained in other provisions of the standard policy to pay to the insured medical expenses suffered by him as a result of injury by automobile, although the undertaking now in question is limited to payment of damages for bodily injuries occasioned by a limited category of tort feasors, namely uninsured operators against whom the insured is 'legally entitled to recover.' See 24 Insurance Counsel Journal 134, 136-137. Thus uninsured motorist insurance more closely resembles accident insurance restricted to a limited class of accident, than it does the type of insurance commonly regarded as indemnity insurance. See 44 C.J.S. supra Insurance Sec. 2, p. 474.' Kirouac v. Healey, supra (1962), N.H., 181 A.2d 634, 1. c. 636.

The 'interest' of intervenor is inextricably tied to the question of whether it 'may be bound' by the direct operation of the determination of the issues raised in Count I. Let it be assumed that it will not be 'bound' in the ordinary sense of res adjudicata so that a judgment against the uninsured motorist can be enforced against an insurer who is not made a party by means of execution or other process. But the question is: Will the insurer, or may it, be 'bound' in the sense that the insurer will not be permitted to dispute or deny that the insured is 'legally entitled to recover' a certain sum since...