Western Casualty and Surety Company v. Herman

• Decision Date: 31 August 1962
• Docket Number: No. 57 C 574(M).,57 C 574(M).
• Parties: The WESTERN CASUALTY AND SURETY COMPANY, a corporation, Plaintiff, v. Margy HERMAN, Mark Lowell Herman and Leo Newman, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

209 F. Supp. 94

The WESTERN CASUALTY AND SURETY COMPANY, a corporation, Plaintiff, v. Margy HERMAN, Mark Lowell Herman and Leo Newman, Defendants.

No. 57 C 574(M).

United States District Court E. D. Missouri, E. D.

August 31, 1962.

Barnhart & Sommers, St. Louis, Mo., for plaintiff.

Douglas H. Jones, St. Louis, Mo., for defendants, Margy & Mark L. Herman.

Jean P. Bradshaw, Springfield, Mo., and Hugo M. Walther, St. Louis, Mo. for defendant Leo Newman.

MOORE, District Judge.

This is a declaratory judgment action brought by The Western Casualty and Surety Company, hereinafter referred to as Western, against Margy Herman, the insured, Mark Lowell Herman, her son, and Leo Newman, who was injured while an occupant of a car driven by Mark Herman. Western seeks a declaration of non-liability under the contract of insurance with Margy Herman. Defendants counterclaimed requesting a declaration that the policy was in full force and effect. By way of affirmative defense, defendants pleaded estoppel. Furthermore, they requested reformation of the contract of insurance.

The case was tried before this court, without a jury, on November 4th and 5th, 1959. Judgment was entered for the plaintiff, but was vacated on the motion of the defendants. After this, both parties requested summary judgment, but since there had already been a trial on the merits, these motions were overruled because there existed genuine issues as to material facts. In overruling the motions for summary judgment the court suggested that the parties stipulate that the court be authorized to make new Findings of Fact and Conclusions of Law, as authorized by Rule 52 of the Federal Rules of Civil Procedure, 28 U.S.C.A. The parties have so stipulated, and accordingly the Court decides the case on the record of November 4th and 5th, 1959.

Western is a corporation organized under the laws of the State of Kansas. Defendants are residents of Missouri. The amount in controversy exceeds $3000.00. (Since this case was brought before the 1958 amendment to Section 1332, 28 U.S.C.A., the jurisdictional amount is only $3000.00, and the corporation is a citizen of its state of incorporation.)

Defendant Mark Lowell Herman, the twenty-two year old son of defendant Margy Herman, purchased a 1951 4-door Dodge automobile on or about April 1, 1957. Mark Herman, who is a professional wrestler, lived with his mother, Margy Herman, at 1331 Midland in University City, Missouri. The Hermans claimed that the car was jointly owned by them, but this is disputed, and will be discussed later. On April 2, 1957, either Margy Herman or Mark Herman called Mr. Sam Glassman, an independent insurance broker, who wrote most of the family's insurance. (The Hermans lived with the family of Mr. Sidney Shapiro, Mrs. Herman's son-in-law.) Mr. Glassman knew the family well, including Mark Herman, and knew him to be a professional wrestler. The conversation between Glassman and the Hermans is in dispute, and will be discussed later. However, they arrived at coverage of $25,000.00 for each person, $50,000.00 for each occurrence, for personal liability and $5000.00 property damage. Mr. Glassman called into the Western Casualty office, who took down the data supplied by Glassman. Included in this data was the motor vehicle number. Mr. Glassman is unaware how he obtained the number. Mark Herman testified that he showed Mr. Glassman the title certificate.

The premium on the insurance was paid, and the policy mailed to the Hermans.

In May of 1957, defendant Mark Herman, accompanied by defendant Leo Newman, drove to Albuquerque, New Mexico, in the car. Both defendants had engaged in wrestling bouts in the Albuquerque area. On May 25, 1957, while returning from the southwest, Mark Herman was driving. An accident occurred near Marshfield, Missouri, and defendant Leo Newman was injured. The car was completely demolished and was subsequently sold for $10.00.

On June 5, 1957, the Hermans were contacted by a representative of The Western Casualty and Surety Company. The Hermans then disclosed that they owned the car jointly, and that Margy Herman was not the sole and unconditional owner of the car.

Criminal proceedings were brought against Mark Herman in Marshfield, Missouri. Mr. James P. Gray, an attorney who represents Western, appeared for Mark Herman in the Magistrate court, and entered a plea of guilty. On June 13 Gray wrote the Hermans and told them a fine of $36.00, including court costs, had been assessed, and suggested that they pay it. On June 28, 1957, more than a month after the accident, Western took a reservation of rights agreement from Margy Herman. No such agreement was taken from Mark Herman.

This suit was commenced November 15, 1957. Western paid into court the entire premium paid. This was the first attempt by Western to rescind the policy.

Subsequently, Western indicated on its records, April 2, 1958, that the policy had lapsed, and would not be renewed.

The principal fact disputed arises out of the ownership of the car. The insurance policy, which was introduced into evidence, listed Margy Herman as the sole owner of the 1951 4-door Dodge in question. The policy further provides that the policy was issued in reliance upon this declaration. The title certificate to the car was introduced into evidence, and disclosed that Mark Herman was the owner of the car. The testimony of Mark Herman and Margy Herman was that they owned the car jointly, each paying for half. However, Mrs. Herman was unable to produce any cancelled checks to evidence payment, although she claimed to have paid by check. She also testified that she sent the check to Mark while he was in Albuquerque, and that the check was her paycheck from her work as a masseuse at Meadowbrook Country Club. However, she was in the hospital at the time, and not working. There are many other contradictions in the testimony of the Hermans in regard to payment. Accordingly, the Court finds that Mrs. Herman paid nothing towards the purchase price of the car. Furthermore, Mrs. Herman did not have a driver's license, nor had she driven a car for many years. And, she never drove the 1951 Dodge, while her son, Mark Herman, was the sole user. Accordingly, the Court finds that Mark Herman was the sole owner of the car.

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