Case Name: Employers Mutual Casualty Company, et al. v. Ainsworth
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1964-05-25
Citations: 249 Miss. 808
Docket Number: No. 42998
Parties: Employers Mutual Casualty Company, et al. v. Ainsworth
Judges: All Justices concur, except Rodgers, J. and Lee, G. J., who dissent.
Reporter: Mississippi Reports
Volume: 249
Pages: 808–835

Head Matter:
Employers Mutual Casualty Company, et al. v. Ainsworth
No. 42998
May 25, 1964
164 So. 2d 412
Davidson & Beach, Jackson, for appellant.
Melvin, Melvin & Melvin, Laurel, for appellee.

Opinion:
Gillespie, J.
This is an appeal from a judgment in a garnishment proceeding wherein the judgment creditor in an automobile accident case filed garnishment proceedings against the liability insurer of the judgment debtor. Issue was joined between the judgment creditor, H. K. Ainsworth, appellee herein, and Employers Mutual Casualty Company, appellant herein, on whether the cooperation clause in an automobile liability policy was violated. This issue was presented to the jury and the verdict was for the judgment creditor and the insurance company appealed to this Court.
Appellee obtained judgment for $6,000 against Mrs. J. W. (Agnes A.) McCraw, his daughter, in his suit in circuit court charging that his daughter negligently operated an automobile in which he was riding- resulting-in an accident and serious injuries to him. Appellee had a writ of garnishment served upon Employers Mutual Casualty Company, who had theretofore issued its automobile liability policy to J. W. McCraw, under which Mrs. J. W. (Agnes A.) McCraw was protected. Appellee contested the answer in which appellant charged that Mrs. J. W. McCraw failed to cooperate with the insurer.
The insurance company contends that the verdict was contrary to the overwhelming weight of the credible evidence; and that the trial court erred in rendering judgment against the insurance company in the sum of $6,000, or $1,000 in excess of the policy limits.
The policy obligated insurance company "to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death resulting therefrom, hereafter called bodily injury, sustained by any person." The policy also obligated the insurance company to ". . . defend any suit alleging such bodily injury or property damage, and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the company may make such investigation or settlement of any claim it deems expedient."
Under the terms of this policy Mrs. J. W. (Agnes A.) McCraw was insured and entitled to all the protection afforded the named insured.
The policy contained a cooperation clause as follows: "The insured shall cooperate with the company and, upon the company's request, attend hearings and trials and assist in making settlements, securing and giving-evidence, obtaining- the attendance of witnesses, and in the conduct of any legal proceedings in connection with the subject matter of this insurance. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of the accident. ' '
On November 15, 1960, while the policy was in effect, Mrs. M. W. McOraw left her home in Laurel to go to Oak G-rove, Louisiana, driving her husband's 1959 Vauxhall automobile described in the policy. Her father, appellee, accompanied her. When they reached a point on Highway No. 585, near Oak G-rove, Louisiana, and as they approached a sharp right-hand curve in the two-lane blacktop road, a truck came around the curve from the opposite direction. Mrs. McCraw turned the automobile to the left, ran off the road and turned over. Appellee sustained serious injuries.
Thereafter H. K. Ainsworth filed suit in the Circuit Court of Jones County against Mrs. J. W. McCraw, seeking damages for the injuries sustained by him in the aforesaid accident.
Mr. T. E. Davidson of Jackson, Mississippi, an attorney and state representative of the insurance company, employed Mr. David C. Welch, an attorney of Laurel, Mississippi, to assist in defending the suit. On April 29, 1961, Mr. Davidson met Mr. and Mrs. McCraw in the law offices of Mr. Welch for the purpose of discussing the case filed against Mrs. McCraw by appellee. On the same day the answer of Mrs. McCraw was filed by the said attorneys. The case went to trial in March 1962.
The attorney for appellee, the plaintiff, called Mrs. McCraw as an adverse witness and she testified that she was driving 45 miles an hour, and volunteered the statement that she was going too fast to approach the curve; that she was driving in the center of the road, which would put her partly in the path of the oncoming truck; that she lost control of the car; stepped on the accelerator instead of the brake; and went down the dump and turned over two or three times. As will be hereafter shown, this testimony was in direct conflict with her purported written statement. When this occured, Attorneys Davidson and Welch requested the court's permission to examine Mrs. McCraw in the absence of the jury. This request was granted and Mr. Welch questioned her about the purported written statement given on November 23, 1960, and she denied that she had signed any of the pages except the first two. She admitted signing her father's statement as a witness but denied knowing its contents. Mrs. McCraw was questioned about the meeting in the office of Mr. Welch on April 29, 1961, and she testified that she told Mr. Welch the statement attributed to her was incorrect.
Mr. Welch advised the court that "we are taken by surprise, if your honor, please." The court then suggested there was a conflict of interest between Mrs. McCraw and Messers. Davidson and Welch. He stated that he assumed said attorneys would withdraw at this point, and Mr. Welch said, "That is exactly correct, we wish to withdraw for failure on the part of the witness to cooperate with us and giving us inconsistent statements." The trial judge then said to the witness: "Mrs. McCraw, it is apparent to the court that as between you and your attorneys, there is a definite conflict of interest, and they cannot represent you in the cause because their attitude shows they can't do it. Under these circumstances, it would be unethical for them to proceed any further in the case, and it would be my duty not to let them because it is obvious that this conflict of interests exists. You are entitled to have counsel in the matter and the case is started, I don't know whether you want to get counsel or not, or whether you want to proceed without counsel."
Mrs. McCraw said she knew nothing about court and did not know what he was talking about when he said "counsel," or "to proceed without counsel." Whereupon the judge said: "The court would be required to give a directed verdict against you because of the fact that your testimony shows negligence in driving the automobile. All I can advise you is that it is the duty of the court to release these attorneys, or say that they do not represent you, because of the obvious conflict of interest. I don't know how else to tell you than I have told you. If you want time to get an attorney you may do so."
Mrs. McCraw did not request a continuance for the purpose of obtaining an attorney and the case proceeded to trial, resulting in a judgment for $6,000.
Thereafter the garnishment proceedings involved on this appeal were instituted. The insurance company answered that it was not indebted. The answer was contested by appellee and in response thereto the insurance company charged that Mrs. McCraw failed to comply with the terms of the cooperation clause of the policy.
The insurance company introduced Corporal Virgil Johns, a trouper with the Louisiana State Police, who testified he investigated the accident involved, and that Mrs. McCraw told him she was traveling north on the highway when she came to a sharp curve where she met a truck traveling south on the inside of a curve, which was on her side of the road; to prevent a head-on collision she pulled to the left to miss the truck,, lost control of the vehicle and ran into the lefthand ditch. The court refused to allow this testimony to be presented to the jury although it was tendered by the insurance company and developed in the absence of the jury. It will be noted that this version of the accident is in accord with the purported statement of Mrs. McCraw.
James H. Gruyse, employee of Crawford Adjustment Agency, testified that he contacted Mrs. McCraw for the purpose of determining the facts of the accident in the course of an investigation for the insurance company, and she told him how the accident occurred and he reduced her oral statement to writing which was signed by her on each page. It consisted of five pages, the last being a diagram. The statement was also witnessed by Mrs. McCraw's son, J. D. McCraw. The diagram attached to the statement, which is in ink, purports to show the highway where the accident occurred, and shows Mrs. McCraw's vehicle at a point before it reached the curve, opposite which is an arrow with words, "about 30 m.p.h." It shows Mrs. McCraw's vehicle near the curve on her right-hand side of the road two car lengths from the other vehicle meeting her on its left-hand side of the road directly in front of the car driven by Mrs. McCraw. It also shows a line indicating- that Mrs. McCraw turned her vehicle to the left out of the path of the oncoming truck so that her vehicle left the highway. Mr. G-uyse also testified that Mrs. McCraw put her initials, "A.A.Mc" on one page of the statement to indicate an interlineation, and this was placed in the written statement at the suggestion of Mrs. McCraw so that it would be complete.
The first four pages of Mrs. McCraw's purported statement is in ink and contains considerable details about her trip to Louisiana leading- up to the accident and what happened thereafter. The first page (which she and her son admitted signing) contains the following:
"I was travelling north on Highway 585 about four and four tenths miles South of Goodwill, La., and travel-ling about twenty five to thirty miles per hour when I met an unknown truck and trailer on my side of the road in a steep curve. I had to leave the highway and my car turned over side way two or three times it seemed to me. . I told Daddy to hold on, he was going to hit us and cut to my left to miss the truck. ' '
And on page two (which she and her son admitted signing) the statement said: "I knew I was to make the sharp right turn and had reduced my speed. I could have made the curve without any trouble at all." In short, the statement exonerated Mrs. McCraw from negligence in connection with the accident and placed the fault on the driver of the truck.
Guyse also testified that on December 6, 1960, after appellee returned to Mrs. McCraw's home from the hospital, he took a statement from appellee consisting of two pages signed by appellee and Agnes McCraw. This statement was substantially in accord with the purported statement of Mrs. McCraw as to the speed Mrs. McCraw was driving, her position on the highway, and the position of the truck.
Guyse stated that on another occasion he went to Mrs. McCraw's residence and discussed the accident in a very limited way with her and she had changed her story as to what happened and referred him to appellee's attorney.
Mr. Ludlow Baynard, an examiner of questioned documents of Baton Rouge, Louisiana, testified to his qualifications, and after identifying enlarged specimens of the known handwriting of Agnes A. McCraw and of the signatures to the last three pages of her purported statement, said that in his opinion all of the signatures on said statement were made by the same person. This witness testified that he could not say absolutely that Mrs. McCraw signed all pages of the statement, hut it was his opinion that she did. These enlargements have been sent up to this Court along with the original of the purported statement, and it appears to us that all of the pages of this statement were signed by the same person, although we do not undertake to make any finding based on our examination of these signatures.
Mr. T. E. Davidson, attorney for the insurance company, testified that he associated Mr. David Welch to defend the suit of H. K. Ainsworth against Mrs. J. W. McCraw, and went to Laurel on April 29, 1961, after suit had been filed, and met with Mr. Welch, Mrs. McCraw and her husband, J. W. McCraw, in the law offices of Welch, Gihbes and Graves; that he explained to Mr. and Mrs. McCraw that they were the attorneys who would defend her in the suit and the purpose of the meeting was to discuss the declaration and the allegations contained therein. He stated the first thing they did was to go over the declaration (the declaration charged that Mrs. McCraw was driving the automobile at a high and dangerous rate of speed on the wrong side of the road, etc.), and she commented that the charges were ridiculous and were not true. He stated that he then read to her the statement purportedly given by her to Mr. Guyse on November 23, 1960, and she stated that it was a true and correct statement with the exception of the distance between her car and the truck when she first noticed the truck. The witness stated that he was testifying from handwritten notes made during the discussion with Mrs. McCraw in Mr. Welch's office on April 29, 1961. He stated that Mrs. McCraw told him she felt she was not to blame for the accident or for the injuries to her father. Davidson stated that based upon the information contained in the statement of Mrs. McCraw, and the information gained in the conference on April 29, 1961, he prepared the answer to the suit of H. K. Ainsworth and that the first time he had any knowledge or information that Mrs. McCraw would testify differently from her written statement was when she was called by appellee's attorney as an adverse witness.
Mr. David C. Welch gave substantially the same testimony as Mr. Davidson concerning the meeting with Mr. and Mrs. McCraw in his office on April 29, 1961. Mr. Welch testified that the first time he had heard the version of the accident given by Mrs. McCraw at the trial of the suit against her by her father was when she was called as an adverse witness, and Mr. Welch stated that he was taken completely by surprise.
At this point the insurance company rested its case.
Mr. J. D. McCraw, the son of Mrs. J. W. McCraw, was introduced on behalf of appellee. He stated that he was present at the hospital on November 23, 1960, when Mr. Guyse came to the hospital to see his mother with reference to the accident; that when he got there Mr. Guyse was writing up a statement and after about ten minutes, Mr. Guyse said that he needed the statement "to help get the thing straightened out." Witness testified that he signed only two pages and that he saw his mother sign only two; that sometime thereafter he saw Mr. Guyse at Ms mother's home taking a statement from appellee. He said appellee did not read the statement and could not read it because his eyesight was gone.
Mr. J. W. McCraw testified that he remembered Mr. Guyse coming to his home to see his wife on two occasions ; that Guyse asked about Mr. Ainsworth — how he was getting along, and told Mrs. McCraw that the matter had gone to court and Mr. Welch and Mr. Davidson would be her lawyers. He stated that he was at the meeting in the law office of Mr. Welch on April 29, 1961, and when the papers were read to his wife, she told them they were not correct. He had reference to the statement they claimed she had signed. He said that his wife said, "Mr. Welch, I want to cooperate with you but that is not correct." Then the lawyer said, "Well, that's all then," and he and his wife left and she did not attempt to point out what was incorrect about the statement and neither Mr. Welch nor Mr. Davidson asked her what part of the statement was incorrect.
Mrs. J. W. (Agnes A.) McCraw testified that Mr. Guyse came to the hospital at a time when she was busy working with her father; that he stated he came there as an adjuster for the insurance company; that she was not in a condition to talk to him but she tried, and he wrote two pages which she signed. She did not have anything to. do with the writing or the words placed on the paper; she did not read the two pages; it was a statement about the wreck, and Mr. Guyse asked her only two questions. Thereafter her father went home but was still confined to the bed. Mr. Guyse came to her home and she was fixing dinner, but came out of the kitchen and at Mr. Guyse's request signed a paper (referring to the statement purported to have been given by appellee). She said she did not read that statement. She said thereafter Mr. Guyse and Mr. Black came to her home to ask how her father was getting along, and denied she told them to see Mr. Melvin if they wanted any information about the lawsuit. She said at a meeting in Mr. Welch's office on April 29, 1961, Mr. Davidson read the papers and she said, "Mr. Welch, that is not correct." She said she told them the statement said it was her car and she told them it was her husband's car (the transcript of the testimony in the damage suit shows that Mrs. McCraw there testified that the Vauxhall car was hers). She said there was only part of two pages of the statement that she signed, and she told Mr. Welch it was not correct, and Mr. Davidson said, "That is all." Mrs. McCraw said that she and her husband then went home. She denied she told Mr. Welch the allegations of the declaration were ridiculous. Nowhere in her testimony does she claim to have told Mr. Welch or Mr. Davidson, or anyone else connected with the insurance company, the version of the facts she testified to as an adverse witness in the damage suit trial.
When an insurance company seeks to avoid the coverage of an insurance policy on the ground of breach of the cooperation clause, it is an affirmative defense. The insurance company carries the burden of proof and must establish the fact of failure of cooperation by a preponderance of the evidence. And the determination of the question of lack of cooperation is one of fact to be determined by the jury. Appleman, Automobile Liability Insurance, pp. 263-264.
Cooperation of the insured with the insurer, required by an automobile liability insurance policy, implies, not an abstract conformity to ideal conduct, but a pragmatic question to be determined in each case in the light of the particular facts and circumstances. 7 Am. Jur. 2d, Automobile Liability Insurance, See. 177, p. 510.
"Under the co-operation clause of an automobile liability insurance policy, it is the duty of the insured to give a full, frank, and complete statement of the cause, conditions, and circumstances of the accident and the conduct of the parties at the time, in order that the insurer may properly present its defense, or determine whether there is a genuine defense. Also, although a technical or inconsequential misstatement to the insurer is immaterial, and although an unintentional and accidental mistake in the statement of facts, made by the insured under an automobile liability policy, especially if afterward seasonably corrected, does not establish such a lack of co-operation as will create a defense for the insurer, the intentional furnishing of false information of a material nature either before or at the trial is a breach of the co-operation clause. To a like effect, there is a breach of the clause where the insured untruthfully or collusively assumes liability for the accident, or misrepresents the facts to the prejudice of the insurer." 7 Am. Jur. 2d, Automobile Liability Insurance, Sec. 178, p. 512.
A withdrawal of a misstatement promptly, prior to trial, and in time not to prejudice the insurer does not necessarily constitute failure to cooperate. Ibid., Sec. 179, p. 513.
The relationship of insured to the injured party will not, of itself, raise an inference of bad faith or of collusion between the parties;-but the authorities agree that in evaluating credibility the fact that close family relationship tends to cause the insured to sympathize with those to whom the insured may be liable, should be taken into account. Such tendency is a matter of common knowledge. Appleman, Automobile Liability Insurance, p. 267; 7 Am. Jur. 2d, Automobile Insurance, Sec. 177, p. 511.
The right of the parties to a jury trial of the issues involved in this case is vouchsafed by law, as already stated. In exercising the constitutionally ordained duty to set aside a verdict when it is contrary to the overwhelming weight of the evidence, this Court has a responsibility and a power that must he exercised with conscious self restraint and great caution. But its duty to act when it should is just as compelling as the duty not to overturn a jury verdict when it should not. In Moak v. Black, 230 Miss. 337, 92 So. 2d 845, this Court said that the power of the Court to review the evidence and set aside the verdict of the jury when it is against the overwhelming weight of the evidence is a necessary incident to the right of trial by jury. Every Mississippi Constitution since the first one was adopted in 1817 has guaranteed the right of trial by jury. The rule that it is the duty of the Court to set aside a verdict when it is against the overwhelming weight of the evidence has prevailed since the establishment of the constitutional judicial system in this State, and existed at common law. Universal Truck Loading Co. v. Taylor, 178 Miss. 143, 172 So. 756.
In Williams Yellow Pine Co. v. Henley, 155 Miss. 893, 125 So. 552, the Court reviewed the fundamental principles which govern in determining whether a verdict of a jury should be set aside and in doing so made it clear that a verdict will be set aside on the grounds that it is not supported by reasonably believable proof, or is against the overwhelming weight of the evidence, only when it so appears "in such a convincing way as to be fairly inescapable upon the record as presented." The Court has the duty to assure litigants the right to trial by jury without abridgment and at the same time protect litigants against a jury that is partial, biased or prejudiced.
The Court has never attempted to prescribe any elaborate formula, adequate to meet all cases, as to when a verdict will be considered contrary to the overwhelming weight of the evidence. Faulkner v. Middleton, 186 Miss. 355, 188 So. 565. In that case the Court said that the Constitution itself imposes on the court the duty to set aside a verdict when it is against the overwhelming weight of the evidence, and this Court must apply to all the evidence, considered together, a calm, deliberate and impersonal judgment founded in the lessons of long experience and observation in the lives of men in all their various ranks, and measure thence according to sound human standards of reasonable probabilities. The opinion then continued as follows:
"But in measuring the probabilities, the character and cogency of the evidence, its reasonableness, its harmony or inharmony with the undisputed facts, or with the facts of common knowledge, or with the laws of nature, the character and intelligence of the witnesses, their several attitudes, and the like — not the number of witnesses for the respective sides — must be among the tests. The problem is not to be reduced to any such a simple process as counting the witnesses, although this in some cases, as for instance in Mobile & O. Railroad Co. v. Bennett, 127 Miss. 413, 90 So. 113, may have some bearing. At last, the question is: Can the Court say with confidence that the verdict is manifestly against all reasonable probability; that manifestly it has not responded to reason upon the evidence produced? Unless the Court can so say, the verdict must stand, for otherwise there would be only a matter of conflict in the evidence, in which case, if the issues have been fairly submitted to the jury on proper instructions, the verdict is irreversible. Goodyear, etc. Co. v. Anderson, 171 Miss. 530, 536, 157 So. 700; Cox v. Tucker, 133 Miss. 378, 385, 97 So. 721; and see the long list of cases from this Court gathered under Note 16 in 5 C.J.S., Appeal and Error, p. 616, Sec. 1648."
Throughout our history the Court has found it necessary from time to time to set aside verdicts of the jury in order to preserve the integrity of the right to trial by jury and to see to it that litigants have the kind of jury trial contemplated by the Constitution, for every Constitutional Convention has adopted the same language used in the Constitution of 1817 with full knowledge that in the cases under the Constitution of 1817 the Court construed the guarantee of the right to jury trial as subject to the rule that a verdict would be set aside when "found palpably against the preponderance of evidence." Sims v. McIntyre, 8 S. & M. 324. In civil cases the Court has applied this rule in almost every kind of case. In Moak v. Black, 230 Miss. 337, 92 So. 2d 845, the jury exonerated a defendant charged with the negligent killing' of a child in a traffic accident and the Court held it should be set aside as being against the overwhelming weight of the evidence. In Gordon v. Lee, 208 Miss. 21, 43 So. 2d 665, and in Green v. Hatcher, 236 Miss. 830, 105 So. 2d 624, the Court set aside verdicts because they were so grossly inadequate as to evince bias, passion or prejudice. In Miss. State Highway Commission v. Valentine, 239 Miss. 890, 124 So. 2d 690, the Court set aside the verdict in an eminent domain case as being so grossly excessive as to evince bias, passion and prejudice. And in Pellerin Laundry Machine Sales, Inc. v. Jeffcoats (Miss.), 161 So. 2d 190, the Court set aside a verdict in a personal injury case as being so excessive as to evince bias and prejudice on the part of the jury. Many cases could be added to each of these eatagories. The rule has been applied to protect all classes of litigants from injustices that sometimes result from abuses and excesses. Thus it is that courts insure the preservation, integrity, and vitality of the constitutionally guaranteed right to trial by jury.
Viewed in the frame of the constitutional duty placed upon the Court, we hold that the verdict is against the overwhelming weig'ht of the evidence.
The case of Employers Liability Assurance Corp. v. Bodron, 65 F. 539, is not in point. In that case there was no finding that the verdict was against the overwhelming weight of the evidence. The opinion stated that there was not much difference between the insured's written statement and his statement at the trial. In the case at bar, Mrs. McCraw's written statement (also her alleged statement to the State Trouper immediately after the accident, and the statements Attorneys Welch and Davidson said she made on April 29, 1961, affirming her written statement) was completely different from her testimony given when appellee's attorney called her as an adverse witness.
The remaining question is whether the trial court erred in rendering judgment against the insurance company for $1,000 in excess of the policy coverage.
If Mrs. McCraw cooperated with the insurance company as required by the policy, the attorneys should not have raised the question of non-cooperation, resulting- in the judge advising them they could no longer represent Mrs. McCraw, and such unjustifiable refusal to defend and the untimely withdrawal from the defense would entitle appellee to recover all damages resulting therefrom, including the amount of the judgment above policy limits. So. Farm Bureau Casualty Insurance Co. v. Logan, 238 Miss. 580, 119 So. 2d 268. On the other hand, if Mrs. McCraw failed to cooperate as required by the policy, then the attorneys were justified in raising the question of non-cooperation and in withdrawing from the defense under the circumstances. The question then is one for the jury, the same as the main issue involving the cooperation clause.
Reversed and remanded.
All Justices concur, except Rodgers, J. and Lee, G. J., who dissent.