Webb v. Zurich Ins. Co.

• Decision Date: 11 December 1967
• Docket Number: No. 48550,48550
• Citation: 205 So.2d 398,251 La. 558
• Parties: Mary Estus WEBB, Administratrix of the Estate of Jesse L. Webb, Jr., v. ZURICH INSURANCE COMPANY et al.
• Court: Louisiana Supreme Court

Page 398

205 So.2d 398

251 La. 558

Mary Estus WEBB, Administratrix of the Estate of Jesse L. Webb, Jr., v. ZURICH INSURANCE COMPANY et al.

No. 48550.

Supreme Court of Louisiana.

Dec. 11, 1967.

Rehearing Denied Jan. 15, 1968.

H. Alva Brumfield, Sylvia Roberts, Emile M. Weber, H. Alva Brumfield, III, Baton Rouge, for applicant.

Normann & Normann, Frank S. Normann, New Orleans, Robert L. Kleinpeter, Watson, Blanche, Wilson, Posner & Thibaut, Charles W. Wilson, Durrett, Hardin, Hunter, Dameron & Fritchie, Wallace A. Hunter, Baton Rouge, for respondents.

FOURNET, Chief Justice.

We granted a writ in this case, which was consolidated with that of Owen, Administratrix v. Zurich Insurance Company et al., La., 205 So.2d 410,¹ in order that we might review the judgment of the Court of Appeals for the First Circuit reversing the district court judgments against the Sheriff of East Baton Rouge Parish awarding Mrs. Mary Estus Webb and Mrs. Frances Tucker Owen damages for the deaths of their respective husbands in the crash of a Cessna aircraft on April 28, 1956, allegedly caused by its negligent operation by a special deputy sheriff of that parish. La.App., 194 So.2d 436 and 441; 250 La. 258, 263, 195 So.2d 143, 145.

In order to properly dispose of the issues in this case it is necessary to give a re sume of the pertinent facts. The record reflects these to be that Sheriff Bryan Clemmons of East Baton Rouge Parish, in order to carry out more efficiently the duties of his office--such as transporting fugitives and prisoners, particularly to and from Angola State Penitentiary; investigating crimes; and creating good public relations between his office and city and state departments (of other states as well as Louisiana) whose mutual cooperation was necessary for the proper operation of his office, including the transportation of officials of these other offices-traded in a Stinson station wagon airplane then owned by the sheriff's office for a Cessna 182 single engine airplane through the Hair Flying Service, Cessna's agent in Baton Rouge, delivery thereof being accepted on April 11, 1956.

Aware of the state's immunity from suit,² and the limitations of the bonds of the sheriff and his deputies, and desirous of protecting 'any person who got in the airplane * * * against loss of life or serious injury' as the result of the ownership, maintenance, or use of the aircraft, Sheriff Clemmons secured through the Zurich Insurance Company's agent in Baton Rouge the day before the plane was accepted a policy covering property damage to and by the plane, and public liability coverage, the amount of the latter being limited to $500,000 for each accident. In this policy Paul O. Pittman, a private pilot licensed to fly a single engine plane, who was also a special deputy and unpaid head of the Sheriff's Air Squadron, was therein designated as the plane's pilot.

Under constitutional authorization,³ the governments of the City of Baton Rouge and the Parish of East Baton Rouge were fused into a unique metropolitan form of government known as a city-parish commission, of which Jesse L. Webb, Jr., was the mayor-president, although the office of the parish sheriff as a political subdivision of the state continued to function entirely separate therefrom, the limits of the city and parish not being co-extensive. Webb, together with the Sheriff and Dr. James Kimbrough Owen, a professor at Louisiana State University specializing in municipal government, planned to attend a national conference on metropolitan problems to be held at the Michigan State University in Lansing on April 28, 1956, the Sheriff, after determining Pittman's availability to pilot them, instructing him to work out the details of the flight with Webb. Because of the sudden illness of the Sheriff the night previous, the party left Baton Rouge the morning of April 28 without him and crashed later that evening, killing all occupants. Thereafter Zurich paid the sheriff's office for the loss of the plane, less a salvage estimate of $25. When Zurich denied liability for the deaths of Mayor Webb and Dr. Owen, their widows instituted these suits, joining as co-defendants, the Sheriff and Zurich as the plane's insurer.⁴

Counsel representing Zurich also represented the Sheriff, as required to do under the specific terms of the policy, filing separate but identical answers in which liability was denied. However, Zurich, on its own behalf, pleaded additionally, as a special defense, that under the exclusionary provisions of the policy the public liability arising from this accident was not covered inasmuch as 'the pilot was in * * * violation of * * * Civil Air Regulations.'

Subsequently, Zurich withdrew its representation of the Sheriff, who employed private counsel. Some nine months later, Zurich excepted to the petitions on the ground they disclosed neither causes nor rights of action. The basis for these exceptions is not set out in the pleadings, but they were predicated on the contention that the plaintiffs had no right of direct action against the company under Louisiana's direct action statute (R.S. 22:655) because the accident did not occur in Louisiana, and under the terms of the policy it could not be joined as a party defendant in any action to determine the liability of its insured. These exceptions were referred to the merits.

Following trial on the merits, the trial judge rendered judgment (1) maintaining the exceptions of no cause and no right of action filed by Zurich and dismissing the suits as to it; and (2) in favor of Mrs. Webb for $234,412.11,⁵ and favorable to Mrs. Owen for $208,698,⁶ and against the Sheriff, subject, however, 'to the limit of liability of the policy of Zurich Insurance Company issued' to him. Both the Sheriff and Zurich filed motions for a new trial, which were denied. Zurich alone appealed;⁷ hence, the judgments against the Sheriff and in favor of Mrs. Webb and Mrs. Owen are now final. See, Bertucci v. Bertucci, 224 La. 364, 69 So.2d 502; Oglesby v. Turner, 127 La. 1093, 54 So. 400.

Answering Zurich's appeal, Mrs. Webb and Mrs. Owen prayed that the judgments rendered on the merits releasing Zurich under its exceptions be reversed and the company cast in solido with the Sheriff. In addition, Mrs. Webb sought to have the award to her increased to $328,824.22.

The Court of Appeals agreed with the trial court that no direct action would lie against Zurich under R.S. 22:655, and, despite the fact that the sheriff had not appealed from the judgment against him, which was then final, it reversed this judgment and dismissed the suits. These writs were granted to review this action. 250 La. 258, 263, 195 So.2d 143, 145.

We think a careful study of the historical development of the direct action statute in Louisiana will readily disclose that the appellate court, as did the district court, erroneously concluded the plaintiffs had no right of direct action against Zurich.

As presently written, the Louisiana direct action statute represents the culmination of a long developmental process which began with the passage of Act 253 of 1918, and, despite ingenuous legal arguments seeking to restrict its application, has been gradually expanded in scope by the legislature and the courts to enlarge the remedy thus made available to a person injured through the fault of a tortfeasor. The end result has been to make a fund directly available to one injured as the result of the acts of an insured, provided there are minimum contacts in Louisiana. See, Davies v. Consolidated Underwriters, 199 La. 459, 6 So.2d 351; West v. Monroe Bakery, Inc., 217 La. 189, 46 So.2d 122; and Morrison v. New Hampshire Ins. Co., 249 La. 546, 187 So.2d 729.

In the Morrison case this court, in a well considered opinion, quoted with approval the following from the case of Travelers Fire Ins. Co. v. Ranney-Davis Mercantile Co., 10 Cir., 173 F.2d 844, cert. denied, 337 U.S. 930, 69 S.Ct. 1495, 93 L.Ed. 1737, which gives the rationale underlying this rule of law thusly: 'All legislation making foreign corporations amenable to judicial process in the state in which they seek the privilege of doing business is predicated upon the right of the state to protect its citizens in their controversies with such corporations by requiring that the same be adjudicated in the courts of the state rather than compelling its citizens to travel to remote places to litigate such controversies. Judicial decisions upholding such legislation are likewise founded upon the same logic. No sound reason appears why the state should not have power to compel foreign corporations seeking entrance to the state to agree that while engaged in business under such license, the state courts should have jurisdiction of all controversies arising between it and the citizens of the state.'

This now well established public policy recognizes the social importance of modern liability insurance in our highly industrialized society as a means whereby persons injured as the result of an accident may obtain financial relief, and that the policy against liability is not issued primarily for the protection of the insured but for the protection of the public. See, Davies v. Consolidated Underwriters, 199 La. 459, 6 So.2d 351, supra, and West v. Monroe Bakery, Inc., supra.

Originally, most accident policies afforded indemnity coverage only, containing what are commonly termed 'no action' clauses which provide the insurer is not liable until the amount of the insured's obligation has been determined by a final judgment of court. At the time of its adoption Act 253 of 1918⁸ was designed to overcome the effect of such clauses where the insured became insolvent or bankrupt before the injured party could obtain or enforce a judgment against him, by providing, in essence, that the insolvency or bankruptcy of the insured would not release the insurer from liability, and, in such case, the injured party was given a right...