State Farm Mutual Automobile Ins. Co. v. Hamilton

• Decision Date: 03 May 1971
• Docket Number: Civ. A. No. 69-21.
• Citation: 326 F. Supp. 931
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. Nellie P. HAMILTON et al., Defendants.
• Court: U.S. District Court — District of South Carolina

326 F. Supp. 931

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. Nellie P. HAMILTON et al., Defendants.

Civ. A. No. 69-21.

United States District Court, D. South Carolina, Greenville Division.

May 3, 1971.

David L. Freeman, William W. Kehl, Wyche, Burgess, Freeman & Parham, Greenville, S. C., for plaintiff.

Charles W. Spence, Austin C. Latimer, and James D. Jefferies, Greenwood, S. C., for defendants.

ORDER

SIMONS, District Judge.

This interpleader action was commenced by plaintiff against the defendants pursuant to Rule 22 of the Federal Rules of Civil Procedure as a result of a three-car automobile collision that occurred on June 15, 1968 on U. S. Highway # 25 near Ware Shoals, South Carolina.

At the time of the collision plaintiff had in full force and effect its automobile liability insurance policy # A0006 600 A23 40 insuring Defendant George M. Coleman with liability limits as follows: For bodily injury $10,000 for each person and $20,000 for each accident, and $5,000 for property damage. Under the insuring agreement of its policy plaintiff agreed "(1) To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of (A) bodily injury sustained by other persons, and (B) property damage, caused by accident arising out of the ownership, maintenance or use * * * of the owned automobile * *" subject to the limits of liability set forth above.

At the commencement of this action plaintiff asked for a preliminary injunction restraining the prosecution in the state court of separate civil actions by the several defendants. After a hearing Judge Russell, citing that plaintiff had settled with the defendant, Sue S. Shirley, and two other passengers in the Shirley automobile for their personal injuries in the total amount of One Thousand, Seven Hundred Eighty-four and 63/100 ($1,784.63) Dollars, ordered on February 24, 1969 that Defendants Lloyd S. Turner, James C. Turner as Administrator of the Estate of Effie Mae Dorn Turner, and Nellie P. Hamilton as Administratrix of the Estate of Earl R. Hamilton, Sr., deceased, be permitted to proceed to judgment in their state court actions which had already been, at that time, commenced against Defendant George M. Coleman in the Courts of Common Pleas of Greenwood and Greenville Counties; provided, however, that no judgment obtained by them should be enforced by suit or execution against plaintiff as to the Defendant Coleman's policy except through petition in this court in this proceeding. Judge Russell's Order further required that plaintiff deposit in the Registry of this Court funds, or a bond, in the amount of $20,000 conditioned upon payment as the Court shall direct of any judgments obtained against Defendant Coleman arising out of the foregoing accident, and allowing to plaintiff such credit for its compromise settlements already made with the Shirleys as the Court shall deem proper. Pursuant to such Order plaintiff filed its bond for $20,000.

After plaintiff's settlement with the Defendant Shirley and the two passengers in her automobile for their personal injuries for a total of One Thousand, Seven Hundred Eighty-four and 63/100 ($1,784.63) Dollars, there is still remaining from the total of $20,000 personal bodily injury coverage in plaintiff's policy issued to Defendant Coleman the sum of Eighteen Thousand, Two Hundred Fifteen and 37/100 ($18,215.37) Dollars. From its $5,000 maximum property damage coverage plaintiff paid Four Hundred Seventy-five ($475.00) Dollars for the total loss of the Shirley vehicle, leaving a balance of unexpended property damage coverage of Four Thousand, Five Hundred Twenty-five ($4,525.00) Dollars.

The following judgments have heretofore been obtained against the defendant, George M. Coleman, in the courts and on the dates as follows, to wit:

1. Nellie P. Hamilton, as Administratrix of the Estate of Earl R. Hamilton, Sr., deceased, $20,000 actual damages, and $5,000 punitive damages, on February 3, 1969 in the Court of Common Pleas for Greenville County, S. C.

2. James C. Turner, as Administrator of the Estate of Effie Mae Dorn Turner (wrongful death action), $35,000 actual damages and $15,000 punitive damages on November 9, 1969 in the Court of Common Pleas for Greenwood County, S. C.

3. Lloyd S. Turner, for $33,000 actual damages (including property damage to his automobile and to other personal belongings damaged or destroyed in the collision), and $27,000 punitive damages obtained January 13, 1970 in the Court of Common Pleas for Greenwood County, S. C.

In each of the foregoing suits plaintiff provided a defense to its insured, Defendant George M. Coleman, and each suit was a bona fide adversary proceeding. No suit has been filed under the South Carolina Survival Statute on behalf of the Estate of Effie Mae Dorn Turner; and the survival action commenced on behalf of the Estate of Earl R. Hamilton, Sr., has not been tried. Apparently claimants are making no claim for any recovery under the Survivalship Statute as to either deceased and that issue is not now before the Court. The total amount of the judgments obtained against Defendant George M. Coleman as a result of the collision in question greatly exceed the bodily injury limits of coverage of $20,000 under plaintiff's policy issued to Mr. Coleman.

In addition to the policy in question, plaintiff at the time of the accident had in full force and effect identical automobile liability policies with minimum limits covering the automobiles of Defendant Lloyd S. Turner and Ronald L. Shirley. All three policies were introduced in evidence and are now before the Court. According to the record before the Court no action has been commenced and no judgment has been obtained against any persons qualifying as an insured under any of the foregoing policies with the exception of the judgments and actions hereinabove set forth involving Defendant George M. Coleman.

Subsequent to the obtaining of the foregoing judgments against Defendant Coleman and their proper entry in the offices of the Clerk of Courts in the respective counties, the judgment creditors asserted in the hearing before Judge Hemphill that plaintiff should be held liable for the total amount of their judgments, notwithstanding the policy limits contending that plaintiff was guilty of "bad faith" and "negligent failure to settle" in its settlement negotiations with the defendants.

In a well documented and well reasoned Order Judge Hemphill, on November 23, 1970, found "no breach of duty as shown to the plaintiff's insured, the usual circumstance for the operation of the Tyger River (Tyger River Pine Co. v. Maryland Casualty Company, 170 S.C. 286, 170 S.E. 346 (1933)) doctrine. Nor is there any evidence of a breach of duty to the defendants herein under any recognized theory." Defendant Lloyd S. Turner also contended before Judge Hemphill that plaintiff should be required to deposit into the Registry of this Court additional funds or a bond in the amount of $5,000 to cover any property damages suffered by him. Judge Hemphill, in his Order, also ruled that the plaintiff should deposit such bond "without prejudice to its position that only a portion or no amount of that sum is due any of the defendants herein, conditioned upon payment as the court shall direct of any claims of the Defendant Coleman."

Thereafter, on December 14, 1970, the plaintiff filed the additional $5,000 bond.

This matter is presently before the Court for determination as to how and in what amounts the bodily injury and property damage coverages of plaintiff's Coleman policy should be disbursed to the defendant judgment creditors.

Defendant Nellie P. Hamilton, as Administratrix, contends that the defendants' judgments should have priority as to their dates of entry, citing Section 10-1561 of the 1962 South Carolina Code of Laws; that her judgment was obtained and entered first and that therefore she should be paid $10,000 of the balance of the bodily injury coverage. Failing in that position Mrs. Hamilton contends that each judgment should be prorated on a basis of a $10,000 value since the liability limits of the policy for one person is $10,000.

Defendants Lloyd S. Turner and James C. Turner as Administrator, contend that the bodily injury coverage of the policy should be prorated among the judgment creditors in proportion to the total amounts of their judgments.

Defendant Lloyd S. Turner further contends that since under South Carolina law he only had one cause of action for personal injury and property damage, citing Holcombe v. Garland and Denwiddie, Inc., 162 S.C. 379, 160 S.E. 881 (1931), he is entitled to recover from plaintiff the balance of the unexpended property damage coverage remaining, to wit, the sum of Four Thousand, Five Hundred Twenty-five ($4,525.00) Dollars, covering the actual property damages established by him at the trial of his state court case, which was not contradicted at that trial by any testimony on behalf of the plaintiff, and to also cover the punitive damages obtained by him against Coleman in the state court action.

The plaintiff contends that it is entitled to a credit of One Thousand, Seven Hundred Eighty-four and 63/100 ($1,784.63) Dollars against its maximum coverage of $20,000 bodily injury liability which it in good faith paid out to settle other personal injury claims prior to the obtaining of judgments by the defendants, Turners and Hamilton. The plaintiff further informs that it takes no position as to how the balance of Eighteen Thousand, Two Hundred Fifteen and 37/100 ($18,215.37) Dollars should be divided, or apportioned among the three judgment creditors, but alleges that such distribution as the Court may determine should be without prejudice to any subrogation right it may have with respect to the $1,000 payment by it to the Turners under the medical payments coverage of its policy issued to Defendant Lloyd S. Turner....