Court Opinion

ID: 9643330
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:26:07.450418+00
Date Added: 2024-06-11T18:10:59.019865
License: Public Domain

*802PARKER, Circuit Judge
(dissenting).
I think that the judgment appealed from should be affirmed for reasons adequately stated in the opinion of the learned judge below, which is in accord with all decided cases dealing with the question involved. Miller v. U. S. Fidelity & Guaranty Co., 291 Mass. 445, 197 N.E. 75; Stefus v. London & Lancashire Indemnity Co., 111 N.J.L. 6, 166 A. 339; Jusiak v. Commercial Casualty Co., 169 A. 551, 11 N.J.Misc. 869; Jackson v. Maryland Casualty Co. 212 N.C. 546, 193 S.E. 703. See also United Services Automobile Ass’n v. Zeller, Tex.Civ. App., 135 S.W.2d 161; State Farm Mut. Automobile Ins. Co. v. Wright, 173 Va. 261, 3 S.E.2d 187.
The insurance company undertook “to pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages * * * sustained ■by any person or persons, caused by accident and arising out of the ownership, maintenance or use of the automobile”. There was a judgment against the insured for damages because of negligence in the operation of the automobile. This was a liability which the company had expressly agreed to pay and the judgment establishing it was binding upon the company as well as upon the insured. See 30 Am.Jur. pp. 970-971, 973-974; Robbins v. Chicago, 4 Wall. 657, 672, 18 L.Ed. 427; Inhabitants of Milford v. Holbrook, 9 Allen, Mass., 17, 85 Am. Dec. 735; E. I. Du Pont de Nemours & Co. v. Richmond Guano Co., 4 Cir., 297 F. 580, 582. As said by this Court in the case last cited: “It is well settled that when a person is responsible over to another, either by operation of law or by contract, and has notice of a suit against the other, and an opportunity to appear and defend, he is not afterwards to be regarded as a stranger to the action, but is bound by the judgment therein, whether he appeared or not.”
It is true, of course, that where a question affecting coverage is not adjudicated in the suit against the insured, the judgment is not binding on the company as to that question, see State Farm Mut. Automobile Ins. Co. v. Coughran, 303 U.S. 485, 58 S.Ct. 670, 82 L.Ed. 970; but here the question affecting coverage was directly adjudicated 'in the suit against the insured when he was held liable therein on the ground of negligence. To permit the company to deny liability now, on the ground that the injury was not negligent but intentional is to permit it to litigate again a matter covered by the judgment against the insured, without averring or even suggesting fraud or collusion in its procurement. This seems to me to be clearly contrary to well settled law. As was well said by the Supreme Judicial Court of Massachusetts in the case of Miller v. U. S. Fidelity & Guaranty Co., supra [291 Mass. 445, 197 N.E. 77]: “Where an action against the insured is ostensibly within the terms of the policy, .the insurer, whether it assumes the defense or refuses to assume it, is bound by the result of that action as to all matters therein decided which are material to- recovery by the insured in an action on the policy. (Citing cases.) This case is but one instance under a rule of broad application that an indemnitor, after notice and an opportunity to defend, is bound by material facts established in an action against the indemnitee.”
The fact that the company could’ not assert in the original case that the injury was not negligent but intentional without prejudicing the defense of that case means merely that the defense which it had undertaken was difficult. It furnishes no ground for absolving the company from application of the well settled rule that the judgment rendered is binding upon it as to issues actually adjudicated; and there can be no question but that the judgment adjudicated that the injury in question resulted from insured’s negligence. “The very ground of liability against the indemnitor was found to exist and was necessarily adjudicated in the original suit.” B. Roth Tool Co. v. New Amsterdam Casualty Co., 8 Cir., 161 F. 709, 712.