Taylor v. Black
| Decision Date | 09 August 1966 |
| Docket Number | No. 65C 226(3).,65C 226(3). |
| Citation | 258 F. Supp. 82 |
| Parties | Carrie Ellen TAYLOR, Plaintiff, v. Joseph T. BLACK, Defendant, and Allstate Insurance Company, a corporation, Garnishee. |
| Court | U.S. District Court — Eastern District of Missouri |
Milton Suffian, St. Louis, Mo., for plaintiff.
F. X. Cleary, St. Louis Mo., for defendant.
This is a garnishment proceeding in aid of an execution, removed from the Circuit Court of the City of St. Louis. Plaintiff theretofore recovered judgment against Joseph T. Black for $13,000 actual damages and $2,000 punitive damages, for injuries sustained as a result of an automobile collision on April 6, 1963. This garnishment proceeding was tried to the court.
Plaintiff is a citizen and resident of Missouri. Garnishee, a corporation, incorporated under the laws of Illinois, having its principal office and place of business in Illinois, is a citizen of Illinois. We have jurisdiction because of diversity of citizenship and the amount in controversy.
The essential issue for our determination is whether garnishee should be required to pay the judgment rendered against Mr. Black under the terms of a liability insurance policy covering Black which was admittedly issued by garnishee, or whether the insurance policy was void ab initio.
On March 25, 1963, Joseph T. Black signed two applications for insurance with garnishee, on different automobiles, one of which was involved in the collision in which plaintiff was injured. Each application contained a number of questions which were to be answered by checking the appropriate "Yes" or "No" box. One of these questions read:
"Have you or anyone in your household ever been sent notice of cancellation or refusal, or given notice of intention to cancel or refuse, any insurance similar to that applied for?"
The "No" box opposite this question was checked. The evidence is uncontradicted, and we so find, that the information contained in the application, including the answer to the foregoing question, was supplied by Black himself.
In reliance on the truth of the statements in the application, garnishee issued its policy of liability insurance, effective March 26, 1963, insuring Black for a period of one year. The limits of liability were $25,000 for any one person, and $50,000 for any one accident. Thereafter, on July 15, 1963, garnishee wrote Black a letter declaring "void from the date of its inception" the policy issued on March 26, 1963, and denying all liability or obligation thereunder upon the ground, "We have declared such policy to be void because our investigation has revealed that, during the past two years, an insuror has cancelled automobile insurance issued to a member of your household, specifically your wife, Mrs. Nell Ruth Black." In conjunction with the cancellation, garnishee refunded the premium in full.
Under Missouri practice applicable in this Court, under Rule 69 of the Federal Rules of Civil Procedure, see United States v. Yazell, 382 U.S. 341, 355, 86 S.Ct. 500, 15 L.Ed.2d 404 (note 31), the sole issues in contested garnishment actions in aid of execution are made up of plaintiff's denial of the garnishee's answer and the garnishee's reply. Civil Rule 90.18 V.A.M.R. The so-called denial is the equivalent of the petition or complaint in an ordinary lawsuit, and, therefore, must specifically allege the ground upon which recovery is sought against the garnishee. So, too, the reply is the equivalent of the answer to the petition or complaint. Rainwater v. Wallace, 351 Mo. 1044, 174 S.W.2d 835, 839; Jenkins v. Jenkins, Mo.App., 243 S.W.2d 804, 807. In the instant proceeding, the plaintiff filed what she designated as a "return" to the garnishee's answer, but which in legal effect was a denial, and the garnishee filed what it designated as a "denial" of plaintiff's "return", the "denial" being in legal effect a return.
Plaintiff's "return", although containing some unnecessary allegations, sufficiently pleaded the facts upon which recovery is sought. The garnishee's "denial" admitted the issuance of a policy of insurance to Joseph T. Black, "but states that such policy was void and of no effect because said Joseph T. Black made material, intentional and fraudulent misrepresentations in the application for said policy of insurance, and as a result thereof, said policy was cancelled and declared void ab initio."
Did Joseph Black make material, intentional and fraudulent misrepresentations in the application he signed, upon which the policy here involved was issued? Bearing upon this issue are the following facts. Joseph T. Black and Nell Ruth Jones were married July 1, 1961. Prior to her marriage, Mrs. Black had obtained a policy of liability insurance from the State Farm Mutual Automobile Insurance Company. The policy, effective December 17, 1957, was for a period of six months, apparently with a provision therein for renewal at the end of each six month period upon payment of the applicable premium and consent of the insuror. This policy has been renewed periodically, the last such renewal being for the 6-month period ending December 17, 1961.
In November, 1961, State Farm again mailed a premium notice offering to renew the Jones policy for the further period of six months. In October, 1961, Mr. Black while driving the automobile insured by State Farm struck a parked car, causing some property damage which was paid by his wife's insuror. As a result of this accident, Black was subsequently convicted of the offense of driving while intoxicated.
On December 15, 1961, after ascertaining some of the facts, State Farm wrote a letter addressed to Miss Nell Ruth Jones, the letter admittedly being received by her, advising that in accordance with the terms of her policy, it elected to cancel the policy, effective December 27, 1961, and stating further that the letter superseded the previous notice "and withdraws the offer to renew your policy which appears therein." Actually, the policy expired by its terms on December 17, 1961, no premium having been paid, and was not in effect thereafter.
At the time Mr. Black applied to Allstate for insurance coverage he was living with his wife, so that in law she was then "a member of his household." Giokaris v. Kincaid, Mo., 331 S.W.2d 633, 640, 86 A.L.R.2d 925; Kelso v. Kelso, Mo., 306 S.W.2d 534, 536, 71 A.L. R.2d 258.
Plaintiff argues that the State Farm letter to Nell Ruth Jones was not as a matter of law a cancellation notice. Her theory appears to be that since the Jones policy expired by its terms on December 17, 1961, the notice of December 15, 1961 was no more than a statement of intention to cancel the policy on December 27, 1961, and hence, actually operated to renew the policy after its December 17, 1961 expiration, in spite of the "withdrawal" of its previous renewal offer. On this premise, plaintiff contends the policy could be cancelled, pursuant to its terms, only by a 10-day notice given after December 17, 1961.
We are not impressed with plaintiff's extremely technical and unrealistic argument. Aside from the fact that the December 15th notice was considered by both parties involved, State Farm and Mrs. Black, as an effective termination and cancellation of Mrs. Black's insurance coverage, the real question is whether the notice is the kind intended to be included in the question which Black answered in the application. We are of the opinion that it was.
It may well be that State Farm was under no legal or contractual obligation to continue Mrs. Black's insurance in force for 10 days after the end of the period for which the premium paid. The fact that it mistakenly did so does not affect the true character of the notice of cancellation. Technically, as we have stated, no "cancellation" was necessary, the policy expiring by its own terms on December 17th, but neither party was a lawyer. Bearing in mind that the policy had been periodically renewed for 6month periods, and that new policies were not issued, it is understandable that a layman would believe that the word "cancelled" should be used and that the policy provision about a 10-day notice must be followed.
In any event, the letter unequivocally withdrew the previous offer to renew the policy. Hence, without regard to the effectiveness of the notice to terminate the insurance as a matter of law, had an accident occurred after December 17th or even after December 27th, we find that the letter constituted a notice that State Farm "intended to cancel or refuse" the insurance provided for in the policy. The question which Black answered pertained not only to a notice of cancellation, but also a notice of intention to cancel or refuse similar insurance.
There can be no doubt that Black's representation that no similar policy issued to anyone in his household had been cancelled or refused was material to the risk. "Whenever the misrepresentation `would have, or might have, a real influence upon the underwriter, either not to underwrite at all, or not to underwrite except at a higher premium, it must be deemed material to the risk.'" Smith v. American Automobile Ins. Co., 188 Mo.App. 297, 175 S.W. 113, 114. In Minich v. M.F.A. Mutual Insurance Co., Mo.App., 325 S.W.2d 56, 58, it was held that a representation that the insured had previously had a policy cancelled was material to the risk. See also, Gooch v. Motors Insurance Co., Mo. App., 312 S.W.2d 605, 608; Berry v. Equitable Fire & Marine Ins. Co., Mo. App., 263 S.W. 884, 886; and ...
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