Worden v. Tri-State Insurance Company, 7516.

• Decision Date: 27 May 1965
• Docket Number: No. 7516.,7516.
• Parties: Jim WORDEN, Appellant, v. TRI-STATE INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

347 F.2d 336 (1965)

Jim WORDEN, Appellant, v. TRI-STATE INSURANCE COMPANY, Appellee.

No. 7516.

United States Court of Appeals Tenth Circuit.

April 29, 1965.

Rheearing Denied May 27, 1965.

COPYRIGHT MATERIAL OMITTED

R. A. Munroe and Fred R. Vieux, Augusta, Kan. (Franklin D. Gaines, Augusta, Kan., on brief), for appellant.

Malcom Miller, Wichita, Kan. (Robert C. Foulston and Benjamin C. Langel, Wichita, Kan., on brief), for appellee.

Before MURRAH, Chief Judge, BREITENSTEIN, Circuit Judge, and DAUGHERTY, District Judge.

DAUGHERTY, District Judge.

This matter involves an action brought in the United States District Court for the District of Kansas by Jim Worden, the Appellant, against the Tri-State Insurance Company, the Appellee, in which the Appellant seeks to hold the Appellee responsible in damages for its negligence in failing to settle a claim or suit against Appellant by one Shufelberger, arising out of an accident which involved the Appellant and Shufelberger. The Appellant will hereinafter be called Worden, and the Appellee will be called Tri-State.

Worden was the permissive user of a truck covered by a policy of insurance issued by Tri-State. Worden was moving a piano in the back of said truck with Shufelberger riding in the back with the piano. In the process of moving the piano it toppled from the back of the truck with Shufelberger and fell on Shufelberger causing him serious injury. Shufelberger brought suit against Worden in the District Court of Butler County, Kansas, and recovered a judgment for $88,800.00. The limits of the insurance policy were $25,000.00. It appears that Shufelberger offered to settle his claim prior to the jury verdict for $22,500.00. The case was appealed to the Kansas Supreme Court and affirmed. See Shufelberger v. Worden, 189 Kan. 379, 369 P.2d 382. Tri-State paid the policy limits, plus interest. Worden then instituted this diversity action in Federal Court against Tri-State, seeking to recover the excess over the policy limits represented by the above mentioned jury verdict and other items of damages. In brief, Worden's complaint herein alleges negligence on the part of Tri-State in the handling of the claim and suit of Shufelberger against him by failing to interview the police officers who investigated the accident, failing to go to the scene of the accident and interview neighbors who witnessed the accident, failing to take the depositions of known witnesses, failing to provide a diagram for the trial, failing to interview the doctors of Shufelberger, failing to have a physical examination of Shufelberger by their own doctors, and failing to follow the recommendations of its agents and attorneys to settle the case. Worden further alleges that he told the agents of Tri-State that his memory of the accident was bad and that he could not recall any of the details of how the accident occurred. By way of answer to Worden's complaint, Tri-State claims that it employed a claims service to investigate the accident; that the claims service made a full, complete and careful investigation of the accident which exonerated Worden from any fault or liability; that the police officers were interviewed; that all the witnesses to the accident were interviewed; that the preparation of a diagram would in no wise show how the accident happened; that a physical examination of Shufelberger was not necessary or desirable as they had a complete medical report from Shufelberger's doctors; and that Worden, when interviewed, could recall the details of the accident and gave a written statement about the accident to the agents of Tri-State in which Worden denied that he was in any wise liable for the accident. Tri-State also alleges contributory negligence on the part of Worden in the matter by and through the manner in which he testified in the Shufelberger trial. This case was tried to a jury, and after both sides presented their evidence in support of their respective contentions as above outlined, the verdict of the jury, based on interrogatories submitted, was in favor of Tri-State and against Worden. Worden has appealed to this Court from said verdict and judgment entered thereon in the lower Court and cites eleven points of error which he claims entitle him to a reversal of the lower Court's result in this case.

The eleven points of error raised by Worden are as follows:

1. Was Tri-State negligent in failing to settle the Shufelberger action under the evidence presented herein?

2. Error of the Court in submitting the issue of contributory negligence of Worden to the jury under the facts of this case.

3. May Tri-State absolve itself of liability herein by showing it acted upon the advice of attorneys?

4. Error of the Court in admitting expert testimony herein regarding the matter of settling or trying the Shufelberger case.

5. Error of the Court in requiring entire documents to be put in evidence when only a part of each was offered by Worden.

6. Error of the Court in letting in evidence all of the records and files of the Shufelberger case.

7. Error of the Court in stating in the presence of the jury that the testimony of the trial judge in the Shufelberger case about overhearing an offer of settlement was pure hearsay, and error of the Court in allowing said trial judge on cross examination to testify relative to statements of record made by him during the trial of the Shufelberger case.

8. Error of the Court in failing to grant summary judgment.

9. Error of the Court in instructing the jury that an insurer can rely on statements given it by its insured and that everyone has the duty to tell the truth.

10. Error of the Court in refusing to submit the "Determined Facts" agreed upon by the parties during preparation herein to the jury with the Court's instructions, and error of the Court in treating said "Determined Facts" the same as other evidence in this case.

11. Error of the Court in not submitting to the jury the issue of punitive damages.

The Court will now treat with each of the eleven alleged errors asserted by Worden.

The first point is difficult to comprehend in the form in which the same has been presented as error, but it is believed that the answer to the point would be whether or not the trial court properly instructed the jury on the applicable law of this case, and if the verdict of the jury is fairly supported by competent evidence. The jury has answered this point adversely to Worden. The jury found Tri-State to be not guilty of negligence in its failure to settle or compromise the Shufelberger claim. An examination of the Court's instructions reveals that the Court properly stated the applicable law with reference to an action of this type following the case of Bennett v. Conrady, 180 Kan. 485, 305 P.2d 823. It does not appear that Worden has voiced any objection to the applicable law of Kansas regarding an action of this type as instructed on herein by the Court. An examination of the entire record discloses that the evidence presented by both sides required the Court to submit the case under proper instructions to the jury and the verdict of the jury appears to be fairly supported by competent evidence. Thus the jury has ruled on this point adversely to Worden under proper instructions, the jury verdict being supported by competent evidence. No error can therefore be found in connection with this point.

The second point has to do with alleged error of the Court in submitting to the jury the issue of contributory negligence on the part of Worden. Since the type of action here involved appears to be based principally on negligence under Kansas law, it would follow that contributory negligence on the part of the insured could be a proper defense. See Bennett v. Conrady, supra. If a defense of contributory negligence is supported by the evidence, such a defense should then be submitted to the jury under proper instructions. Carpenter v. Strimple, 190 Kan. 33, 372 P.2d 571. Of course, if there is no evidence to support a claim of contributory negligence, it would be error to submit same to the jury, or if any evidence bearing on the claim of contributory negligence is such that men of reasonable minds would only reach the conclusion that contributory negligence was not present, then it would be error to submit to the jury the issue of contributory negligence. Carpenter v. Strimple, supra. Tri-State in its answer claims that Worden testified in the Shufelberger case in a manner constituting a complete reversal of his previous position as set out in his signed statement to it, which testimony came as a complete surprise and shock to Tri-State, and that Worden in this manner failed to cooperate with his insurer, which constituted negligence on his part in violation of the mutual and reciprocal duty he owed under the circumstances to Tri-State as his insurer. It would appear from the record that there is merit in this position and that the evidence supports the claim and issue of contributory negligence. The trial court felt so, and it is believed correctly acted in this respect. Moreover, it is to be noted that this case was submitted to the jury on four interrogatories, the first of which inquired of the jury as follows: "Was the defendant guilty of negligence which was the proximate cause of the damage to plaintiff? Answer: No." Upon a negative answer to this first interrogatory, the jury was instructed that it was not necessary to answer the remaining three interrogatories. The third interrogatory inquired of the jury as to whether the plaintiff was free from contributory negligence which was the proximate cause of the damage to plaintiff. By the negative answer to the first interrogatory, the jury did not treat with the third interrogatory. Thus, if there was any error in the Court instructing the jury on the issue of contributory negligence, it is harmless and not prejudicial to Worden in view of the jury finding Tri-State not guilty of...