Case Name: Dorothy Milam JERNIGAN, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1959-11-24
Citations: 272 F.2d 857
Docket Number: No. 17582
Parties: Dorothy Milam JERNIGAN, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 272
Pages: 857–863

Head Matter:
Dorothy Milam JERNIGAN, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee.
No. 17582.
United States Court of Appeals Fifth Circuit.
Nov. 24, 1959.
Rives, Chief Judge, dissented.
Louis B. Graham, New Orleans, La., for appellant.
F. Carter Johnson, Jr., New Orleans, La., for appellee.
Before RIVES, Chief Judge, and CAMERON and JONES, Circuit Judges.

Opinion:
CAMERON, Circuit Judge.
The forceful petition for rehearing makes it desirable that the principles upon which the decision is based be brought into sharper focus. Basically this liability policy covered accidents, indemnifying each and all of those insured (whether named or "omnibus") against payment of any damages caused by any and all accidents arising from use of the insured automobile. Specifically, therefore, the court below and we were called upon to decide whether that term embraced a deliberate assault not provoked by the assaultee.
The answer to that question was yes. The law had written into the policy a provision of this import:
The word "accident" as herein used shall be construed from the standpoint of the person injured and shall include unprovoked assaults. That provision of the policy "is as effectually one of its terms — as if it had been plainly expressed." We recently stated: "Of course, the existing law, including judicial precedents, must be read into all contracts "
Assuming, without deciding, that the parties could agree to excise that clause from an insurance contract, it is clear that such an amendment would have to-be accomplished by explicit and direct words. It cannot be accomplished by the indirect and equivocal language of the clause upon which the insurance company relies. The portion of it which essays to include assault and battery within the term accident is surplusage, because the policy already contained a legally implied provision which defined accident as including assault and battery. The unclear and ambiguous language with which Condition 7 closes ("unless committed by or at the direction of the insured") is, as the insurer would have us construe it, in the nature of a "negative pregnant" — i. e., negative in form but carrying affirmative implications. To have the effect with which the insurer seeks to invest it this provision would have been required to be in some such language as this: "An assault shall not be considered an accident if it is committed by or at the instance of any of the persons named or included within the word insured as used in this policy."
We think that this Court attributed to the clause "unless committed by or at the direction of the insured" the only logical meaning of which it is susceptible when we said: "The reasonable construction of that clause, it seems to us, is that it was inserted out of deference to the question of public policy involved in insurance indemnifying against an insured's willful act." The Court of Appeals of Louisiana thought that this limitation referred "only to the named insured" and that ony other holding would be "to render this clause completely ineffective " It is not unreasonable to conclude that Reites, the person who purchased the insurance protection, should, by the terms of the policy, be barred from claiming indemnity against any deliberate assault he might commit. Otherwise, a person planning mischief against another could purchase advance protection against being forced to pay for his deliberate act.
But it is irrational to deny the protection given by the explicit terms of the policy to Reites' spouse and to others using the car with their permission, provided, of course, they did not commit the assault "at the direction of the insured." Under the construction advocated by the insurer and espoused in the dissenting opinion the policy would cover no assaults except those committed by the employees of Reites. Such a limitation would, in our opinion, have no reasonable foundation and some courts have ruled even employees out of coverage where such a clause appears in the policy.
The question of employee coverage is not involved in the case before us, and we mention this feature merely to illustrate that the law-implied definition of accident as including unprovoked assault would be stripped of practically all of its efficacy under the theory of the dissenting opinion. The location of the assault clause in the policy before us tends to negative the implications with which ap-pellee seeks to invest it. A policy provision having enough potency to set aside a paragraph inserted in it by legal implication would logically occupy a prominent place among the Exclusions of the policy. This policy has three grand divisions, each appearing as a heading set in large heavy type in the middle of the page — Insuring Agreements, Exclusions, and Conditions. Under the line, Exclusions, appears, in heavy type, "THIS POLICY DOES NOT APPLY:" followed by seventeen separate paragraphs defining areas of possible liability specifically excluded from the coverage of the policy. It would be assumed that all exclusions would be embraced in the policy division bearing that heading.
The clause in question appears as a "Condition," of which there are twenty-three covering in general the details of the relationship between insurer and insured and embracing such items as notice of accident, claim or suit, actions against the insurer, cooperation of the insured, assignment, cancellation, and the like.
While it is clear that this holding is in line with what the court did in Western Casualty & Surety Co. v. Aponaug, supra, it is not dependent upon it. In view of the extended discussion of that case in the dissenting opinion, we think it worth while to point out the facts with which we were there dealing upon which the words we used were dependent. Sinclair Oil & Gas Co. v. Masterson, 5 Cir., 1959, 271 F.2d 310. The policy involved there was a "Manufacturers and Contractors Liability Policy" covering the textile operations of five corporations named insured. Most of the important provisions are substantially identical with those of the policy before us, the assault "condition" being in the same words. The "omnibus" clause extended the coverage so as to cover "not only the named Insured, but also any partner, executive officer, director or stockholder thereof, while acting within the scope of his duties as such." One Morrison sued said corporations and Sanders, president and treasurer of each of them, for an assault alleged to have been committed by him "while he was acting in direct line with his duties as agent and officer of said corporations" in discussing the Workmen's Compensation Act, "a subject matter concerning which said corporate defendants were vitally interested." Western Casualty declined, after due notice, to defend the action, and it was settled and suit was brought by Aponaug to recover the amount paid in settlement, together with expenses and attorneys' fees. Aponaug moved for summary judgment based upon certain affidavits and upon the deposition of Sanders. These revealed that Sanders owned a majority of stock of all of the corporations and the affidavit of Morrison stated that Sanders was president, secretary and a director of each of the corporations, and that "as an executive officer of the Aponaug Manufacturing Company, Inc., as a stockholder of said corporation, as a director of said corporation, and as president and secretary and treasurer of said corporation, the said R. D. Sanders met affiant and in connection with his efforts as such officer, director, president and secretary and treasurer of the corporations above named, willfully, viciously, and without cause, assaulted and battered affiant "
This Court affirmed the action of the court below in granting summary judgment in favor of Aponaug and against Western notwithstanding this evidence that Sanders was an insured under the "omnibus" clause.
We adhere to the opinion and judgment heretofore entered and the petition for rehearing is
Denied.
. Judge (soon thereafter Mr. Justice) Van Devanter in Brewster v. Lanyon Zinc Co., 8 Cir., 1905, 140 F. 801, 812, citing six decisions of the Supreme Court of the United States.
. St. Paul-Mercury Indemnity Co. v. Rutland, 5 Cir., 1955, 225 F.2d 689, 692. And see also 20 Am.Jur., p. 236.
. The policy involved in the landmark case of Georgia Casualty Co. v. Alden Mills, 1930, 156 Miss. 853, 127 So. 555, 73 A.L.R. 408, — it being the standard form of policy then in use — contained no such clause.
. In Western Casualty & Surety Co. v. Aponaug Mfg. Co., 5 Cir., 1952, 197 F.2d 673, 674.
. Barringer v. Employer's Mutual Liability Insurance Co., La.App.1952, 62 So.2d 173, 177.
. Even assuming that this statement was not necessary to a decision of the case, it is not robbed of the logic and reason which inheres in it.
. Under § 4 of the annotation in 33 A.L.R. 2d at pages 1036-1037, the courts aligned on both sides of the question of coverage of the employees of the assured are discussed. Our decision in Western Casualty & Surety Co. v. Aponaug Mfg. Co., supra, is classified as among the decisions protecting the named insured from the assaults of its agents. Other cases are listed which reject such coverage.