Yenowine v. State Farm Mutual Automobile Ins. Co.

• Decision Date: 02 April 1965
• Docket Number: No. 15947.,15947.
• Citation: 342 F.2d 957
• Parties: Edythe YENOWINE, Plaintiff-Appellee, and Elsie Densmore, Donald D. Densmore, and Daniel W. Rowe, Administrator of the Estate of Lila Crawford, Deceased, Intervenors-Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

342 F.2d 957 (1965)

Edythe YENOWINE, Plaintiff-Appellee, and Elsie Densmore, Donald D. Densmore, and Daniel W. Rowe, Administrator of the Estate of Lila Crawford, Deceased, Intervenors-Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.

No. 15947.

United States Court of Appeals Sixth Circuit.

April 2, 1965.

Henry V. B. Denzer, Louisville, Ky. (Hogan, Taylor, Denzer & Bennett and Henry A. Triplett, Louisville, Ky., on the brief), for appellant.

William L. Gibson, Louisville, Ky. (Gibson & Gibson, Louisville, Ky., on the brief), for intervenors-appellees.

Richard H. Nash, Louisville, Ky., for plaintiff-appellee.

Before WEICK, Chief Judge, and MILLER and PHILLIPS, Circuit Judges.

SHACKELFORD MILLER, Jr., Circuit Judge.

The appellant, State Farm Mutual Automobile Insurance Company, issued its automobile liability insurance policy No. 332085 — F-15-17 to the plaintiff, Edythe Yenowine, covering a 1953 Plymouth automobile owned by her, effective April 7, 1956. On August 11, 1960, while the policy was in force and effect by reason of annual renewals, she purchased and acquired title to a 1955 Plymouth automobile without any trade-in being involved, which she drove regularly until November 30, 1960. Shortly after purchasing and driving the 1955 Plymouth she discovered that it "burned oil" and was not a good car, and notified the seller to that effect. He examined the car, was of the opinion that the motor was bad, and told her that as soon as he could get a car that he thought would suit her, he would replace the car. In November 1960 he got a 1956 Plymouth, which he considered suitable, and called Mrs. Yenowine. On November 30, 1960, she returned the 1955 Plymouth to him and he transferred the 1956 Plymouth to her in exchange.

On June 9, 1961, Mrs. Yenowine, while driving the 1956 Plymouth, was involved in an automobile accident in Louisville, Kentucky, which resulted in personal injuries to two of the occupants of the other car, and in death to a third occupant of the other car. The injured occupants of the other car and the Administrator of the deceased party instituted action in the state court against Mrs. Yenowine, who called upon the appellant insurance company to defend the action under its policy No. 332085 — F-15-17 issued to her and covering the 1953 Plymouth. It was her contention that the coverage under that policy included the 1956 Plymouth under a provision therein which included in its coverage a newly acquired automobile which replaced the automobile covered by the policy, which will be discussed more in detail hereinafter. The insurance company was of the opinion that the policy did not cover the 1956 Plymouth and declined to defend the action. Mrs. Yenowine employed her own attorney to do so, whose fee was $1,000.00. The trial resulted in judgments against Mrs. Yenowine, totaling $18,260.39. The insurance company refused to pay both the judgments and the attorney's fee.

Mrs. Yenowine filed this action in the state court against the insurance company for the amount of the judgments, the attorney's fee, and for various additional amounts on account of personal injuries and medical expenses suffered by herself and her two children, who were in the car with her, and for property damage to her automobile, which she claimed were also covered by the policy. The action was removed to the United States District Court, where the injured occupants of the other car and the Administrator of the deceased party filed an Intervening Complaint seeking enforcement of their judgments against the insurance company in accordance with the terms of the policy. The insurance company denied coverage of the 1956 Plymouth under its policy No. 332085 — F-15-17, which was originally issued to cover the 1953 Plymouth.

The provision in policy No. 332085 — F-15-17, under which Mrs. Yenowine claimed coverage, reads as follows:

"III. Automobile Defined.

"(a) AUTOMOBILE. Except where stated to the contrary, the word `automobile\' means:

"(1) DESCRIBED AUTOMOBILE — the motor vehicle or trailer described in the declarations;

* * * * * *

"(4) NEWLY ACQUIRED AUTOMOBILE. — an automobile, ownership of which is acquired by the named insured, * * * if (a) it replaces an automobile owned * * and covered by this policy, or the company insures all automobiles owned by the named insured * * on the date of its delivery, and (b) the named insured * * * notifies the company within thirty days following such delivery date. * *"

The courts which have interpreted this clause in insurance policies are generally in accord, as are we, with the following ruling as to what constitutes a replacement vehicle.

"* * * the replacement vehicle is one the ownership of which has been acquired after the issuance of the policy and during the policy period, and it must replace the car described in the policy, which must be disposed of or be incapable of further service at the time of the replacement."

State Farm Mutual Automobile Insurance Co. v. Shaffer, 250 N.C. 45, 108 S.E.2d 49; Mitcham v. Travelers Indemnity Co., 127 F.2d 27, C.A. 4th; Lynam v. Employers Liability Assurance Corp., 218 F.Supp. 383, D.C.Del. The parties herein apparently accepted this construction, the substance of which the District Judge gave in his instructions to the jury.

Upon the conclusion of the evidence, the District Judge overruled defendant's motion for a directed verdict and submitted the case to the jury on four interrogatories, the following three of which are applicable to the question now under consideration. In answer to whether the 1955 Plymouth purchased on August 11, 1960, replaced the 1953 Plymouth, the jury said "no." In answer to whether the 1956 Plymouth purchased on November 30, 1960, replaced the 1953 Plymouth, the jury said "yes." In answer to whether the 1956 Plymouth replaced the 1955 Plymouth as "replacement" was defined in the instructions, the jury said "no." After overruling defendant's motion for judgment notwithstanding the verdict, or in the alternate for a new trial, judgment was entered in favor of the plaintiff and intervening plaintiffs, from which this appeal was taken by the insurance company.

The question argued by Mrs. Yenowine in the District Court and in this Court is whether the 1953 Plymouth was replaced by the 1956 Plymouth within the provisions of the policy originally issued to cover the 1953 Plymouth. We are of the opinion that this is not the correct analysis of the question involved. The undisputed facts clearly show that the 1956 Plymouth replaced the 1955 Plymouth, which was purchased by Mrs. Yenowine and later replaced by the seller with the 1956 Plymouth when complaint was made by Mrs. Yenowine that the car which he sold to her was defective. With respect to her ownership and use of the 1955 Plymouth, Mrs. Yenowine testified that she complained to the seller about the car and "I kept it until I got a replacement." The seller testified that Mrs. Yenowine complained about the 1955 Plymouth and brought the car to his lot for him to look at, and that after listening to the motor he told her that "the motor was bad and as soon as I could I would replace that car." He also testified about what he did about "replacing that automobile," and in answer to the direct question, "Did you replace that automobile with some other car?" he answere...