U.S. Fidelity & Guaranty Co. v. Millonas

Decision Date12 May 1921
Docket Number6 Div. 147
Citation206 Ala. 147,89 So. 732
CourtAlabama Supreme Court

Remittitur Filed May 26, 1921

Appeal from Circuit Court, Jefferson County; C.B. Smith, Judge.

Action by John Millonas against the United States Fidelity &amp Guaranty Company for damages for causing loss of employment. Judgment for the plaintiff, and the defendant appeals. Upon remittitur of damages filed in writing, in accordance with the opinion, by the plaintiff, the judgment is affirmed. The facts upon which the opinion is rested sufficiently appear therefrom.

Coleman Coleman & Spain, of Birmingham, and Steiner, Crum & Weil, of Montgomery (Joseph A. McCullbugh, of counsel), for appellant.

Black Altman & Harris and K.C. Charlton, all of Birmingham, for appellee.


Appellee, John Millonas, recovered a judgment for $25,000 against appellant United States Fidelity & Guaranty Company, in an action on the case for willfully, maliciously, and wrongfully procuring the discharge of appellee from his employment by the firm of A. Diniaco & Bro., and from this judgment the defendant prosecutes this appeal.

In July, 1918, the plaintiff was working as a sheeter for Diniaco & Bro. in the Birmingham district, earning $11 per day. Diniaco & Bro. did construction work in various parts of the country, and plaintiff was sent to this particular territory from the head office at Pittsburg on the 31st day of July. Plaintiff, while at work as a sheeter, suffered an injury to his eye, causing an absence from his work of about 30 days, after which time he resumed his labors and continued in the employ of Diniaco & Bro. The latter held an insurance policy with defendant company, by which they were indemnified from loss sustained by reason of an injury to any of their employés in that territory, while such employés were engaged in the performance of their duties. One Smith was the claim adjuster for the casualty company in Alabama, with headquarters at Birmingham. He handles all claims of defendant in this state, and plaintiff applied to him for compensation for his injury, but without result. Smith examined some of the witnesses to the accident, and also had several conversations with E. Diniaco, the member of the firm who had charge of the work in Alabama. Plaintiff consulted an attorney, who, it appears, advised him against a recovery. During this time he continued working for Diniaco & Bro. He then consulted another attorney, one Charlton, and employed him to recover for the injuries.

Some time during the latter part of January or the 1st of February, Smith and one Bartlett, who was another adjuster of the company, with headquarters in Atlanta, Ga., went to Charlton's office to talk over the merits of plaintiff's claim. Charlton's attention was called to the fact that the plaintiff had previously employed an attorney who had abandoned the case, and that if Charlton would go into a discussion of its merits, he thought he "could convince him [Charlton] that he would not have any case." Charlton, however, was of the opinion that the case had more merit than the other attorney seemed to think, and appeared to pay little attention to the facts disclosed by Smith. Smith's testimony shows that he in company with Bartlett went to see Charlton for the purpose of adjusting this claim, and while he himself made no offer during the conversation, Bartlett made a nominal offer of $50--not admitting any liability--which offer was declined. Charlton testified that Smith, to the best of his recollection, made the offer; but this conflict is not considered as of serious moment. In the course of this conversation Charlton mentioned the fact that plaintiff was still in the employ of Diniaco. Charlton stated that at this information Smith expressed surprise, and in substance told him that he could not work for Diniaco and sue the insurance company at the same time, and that he would be discharged.

On the day following the conversation between Smith and Charlton, the plaintiff came to Charlton's office and informed him that on the previous day he had been discharg¤ The plaintiff, testifying in his own behalf, stated: That he was discharged by Diniaco, and that at the time he was discharged Diniaco gave as his reason therefor that-- "The insurance company would not allow him to give me a job any more because I had a suit against the company."

The work in which the plaintiff was engaged required a specially trained man, and there were only a few jobs of that character in the Birmingham district; but the evidence for the plaintiff tends to show that, while this is true, yet work of this kind is difficult to secure. That after remaining in Birmingham for two weeks endeavoring to secure employment, and failing, he went to Chicago, but without result, and the first work he obtained--which was about two months after leaving Birmingham--was with Diniaco & Bro. at Steubenville, Ohio, working there for about two months, and also worked some for them in Pittsburg. Diniaco denied that he discharged the plaintiff, but insists that he quit of his own accord, testifying that he was badly in need of plaintiff's services, as it was difficult to get a man to do that character of work, and he told Smith that he needed a sheeter badly.

Diniaco denied that he had any conversation with any one to the effect that the insurance company required him to discharge the plaintiff, and he particularly denied a conversation with one Mike Gigis at his place of business to such effect. He admitted that he "told John to go up and settle his case, and he could keep him," but insisted he did not undertake to induce him to settle, merely asking him to, so that he would continue his work, as it appeared he would not do proper work until the matter was settled.

The defendant offered other evidence tending to show the work which the plaintiff was doing at the time was not satisfactory. Smith, testifying in behalf of defendant, stated that Diniaco complained to him that Millonas would not work, and if he did not work "he would have to get off the job," and that in reply to the statement that he was going to let him go, Smith said:

"I told him that we had nothing to do with that; that he could do as he thought best. I might have said, as my opinion, perhaps, it would be a good idea; but I gave him to understand that he could do as he pleased. That occurred about a month or six weeks after John got hurt."

Smith denied that he had anything to do with plaintiff's discharge, and that the subject was never discussed. That such was not the policy of his company, and had never been, and that he had never stated to an employer insured by the company that it was the policy of the company if an employé put his claim in the hands of a lawyer for suit that he (the employer) must discharge him. He admitted that in the conversation with Charlton he had made the statement that he would have "your $11 a day man discharged, or something to that effect," but insists that this was said jocularly, and with no seriousness intended.

Smith was also asked in regard to statements made at the First National Bank Building in the presence of two or three attorneys, to the effect that he would have the plaintiff discharged, and that it was the policy of the company to have the employer who had insurance with it to discharge the employé who placed his claim in the hands of an attorney. He admitted the statements in part, but not in toto.

The insurance policy contained, among other provisions, the following:

"The company reserves the right to settle any claim or suit. Whenever requested by the company the assured shall aid in securing information, evidence, and the attendance of witnesses; in effecting settlement; and in prosecuting appeal. The assured shall at all times render to the company, except in a pecuniary way, all co-operation and assistance within his power"

--and under the head Cancellation:

"Without prejudice to the rights of the assured, as respects anything that has occurred during the time the policy has been in force, the company may cancel this policy at any time by a written notice served on the assured, or sent by registered mail to the assured at the address given herein, stating when the cancellation shall be effective. The assured may cancel this policy by like notice to the company."

Appellant insists that conceding everything alleged in the complaint, and proven in the cause, the plaintiff has no cause of action by reason of the cancellation clause in the policy, above set out, upon the theory that the defendant company has an absolute right to cancel the policy, and from a threat to do what it has a legal right to do no cause of action can arise to a third person.

The case directly in point, where the question is fully treated, is that of London Guarantee, etc., Co. v. Horn, 206 Ill. 493, 69 N.E. 526, 99 Am.St.Rep. 185. In the Horn Case, Arnold, Schwinn & Co. were the employers of Horn, plaintiff, just as the relation existed in the instant case between Diniaco and Millonas; and there the employer carried a policy of liability insurance with the London Guarantee & Accident Company, occupying the same position as does the United States Fidelity & Guaranty Company here. The insurance company was there the appellant, and, speaking to this question, the Supreme Court of Illinois said:

"But certainly a desire to compel the employé to surrender a cause of action wholly disconnected with the continuance of his employment does not afford justification for interference by a third party, who desires the satisfaction of the alleged liability. *** "Arnold, Schwinn & Co. had the undoubted right to discharge Horn whenever it desired. It could discharge him for

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