Court Opinion

ID: 9448196
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:25:18.283563+00
Date Added: 2024-06-11T17:31:19.290230
License: Public Domain

RIVES, Circuit Judge
(dissenting).
Richardson’s liability to respond in damages for the injuries which he had inflicted on Mr. and Mrs. Hallatt was fully covered by insurance on the date of the collision, April 11,1956, and remained so protected for more than three years. Richardson declined to come from Massachusetts to Florida to attend the trial, stating that he had been out of work all of the preceding winter, and had then secured a job painting bridges which paid him $200 per week. There was no proof that Richardson could give any testimony beneficial to the defense of the negligence action. There had been no effort to take his deposition. The evidence of Richardson’s liability was such that the trial court directed a verdict for the Hallatts on that issue. The Hallatts got a judgment against Richardson for $8,797. Maryland Casualty Company refuses to pay that amount to the Hallatts because it says that Richardson breached the condition of the policy providing for “Assistance and Cooperation of the Insured”: “The insured shall cooperate with the company and, upon the company’s request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits.” The district court admitted evidence, over Maryland’s objection, from which the jury might, and probably did, determine that Richardson’s mere presence at the trial was not material, and that his failure to attend was not prejudicial to the defense of the action. The majority holds that the failure of the insured to attend the trial in Florida is prejudicial to the insurer as a matter of law, and hence that the question of prejudice was not a proper issue for the jury. I agree with the district court.
Automobile liability insurance supplies a highly important social need. Without it few of the drivers on our highways could respond in damages to the victims of their negligence. Some of the States have recognized the social need by enacting compulsory automobile liability in*73surance laws. Many more encourage the taking of liability insurance by financial responsibility laws, or by other means. That social need should be kept in mind by the courts, especially in a case like this, where the liability insurer admits coverage on the date of the injury but claims a defense arising more than three years thereafter because of conduct of its insured, in which the injured persons had no part. In such cases, the courts will, of course, accord to the liability insurer all legally sufficient defenses, but they should, I submit, be slow to recognize technical defenses or those which are not really substantial.
In differing with the learned district judge, my brothers find that there is no case in point from the Florida appellate courts: “Whatever may have been said in any of the opinions of the Florida courts was not essential to the decision. It was, therefore, mere obiter dictum.” I disagree.
In the first place, I do not agree with my brothers that every statement in an opinion not essential to the decision is mere obiter dictum. For example, in Parsons v. Federal Realty Corporation, 1932, 105 Fla. 105, 143 So. 912, 920, 88 A.L.R. 275, the Florida Supreme Court said: “Two or more questions properly arising in a case under the pleadings and proof may be determined, even though either one would dispose of the entire case upon its merits, and neither holding is a dictum, so long as it is properly raised, considered, and determined.”
The rule of the Supreme Court of the United States is to like effect:
“Of course, where there are two grounds, upon either of which the judgment of the trial court can be rested, and the appellate court sustains both, the ruling on neither is obiter, but each is the judgment of the court, and of equal validity with the other. Whenever a question fairly arises in the course of a trial, and there is a distinct decision of that question, the ruling of the court in respect thereto can, in no just sense, be called mere dictum.”
Union Pacific R. Co. v. Mason City & Ft. D. R. Co., 1905, 199 U.S. 160, 166, 26 S. Ct. 19, 20, 50 L.Ed. 134.
In State Roads Commission v. Johnson, 222 Md. 493, 161 A.2d 444, it was held that where the court’s statement was germane and may have been intended to guide the trial court upon retrial of the case, the statement was not dictum.
Let me re-examine the cases from the Florida appellate courts to show why I disagree with my brothers’ holding that the pertinent statements in those cases are mere obiter dicta.
In United States F. & G. Co. v. Snite, 1932, 106 Fla. 702, 143 So. 615, 616, the liability insurer defended on the ground that its insured had violated the condition of the policy requiring his cooperation in defending the suit. The insured had been absent from the trial of the damage suit. In the course of its opinion, the Supreme Court of Florida said: “Neither is it shown that, if Scocos had been present at the trial, he could have rendered any assistance to the surety company in connection therewith which would probably have changed the result of that trial.” My brothers dismiss that statement as mere dictum, sayihg: “In view of the court’s holding that the cooperation clause was not breached because the insured’s absence from the trial was not intentional, we do not regard as a ground for decision the comment regarding the failure to show that the insured could have rendered assistance if he had been present.” With deference, I submit that my brothers have misapprehended the holding of the Florida Court. While it made the statement which my brothers paraphrase, that Court did not itself hold that the cooperation clause had not been breached, but merely held that the jury was warranted in reaching that conclusion. To make that clear, at the risk of repetition, I quote somewhat fully:
“The record fails to show any bad faith on the part of Scocos in connection with his absence from the trial. Neither is it shown that, if Scocos had been present at the trial, he could have rendered any assistance to the *74surety company in connection therewith which would probably have changed the result of that trial. The record affirmatively shows by the allegations of the motion for continuance above referred to, and by which allegations the surety company . was bound, that Scocos had not intentionally absented himself from that trial.
“The question of whether or not Nicholas Scocos violated the condition of the liability policy above referred to in such manner as to relieve the surety company of liability on its policy became a question of fact for the jury to determine, the burden of proof being on the surety company to show that such condition of the policy had been so violated. See Taxicab Motor Co. v. Pacific Coast Casualty Co., etc., 73 Wash. 631, 132 P. 393; U. S. Fidelity & Guaranty Co. v. Williams, 148 Md. 289, 129 A. 660; U. S. Casualty Co. v. Drew (C.C.A.) 5 F.(2d) 498.
“The jury resolved this question against the surety company. The evidence warranted that conclusion.” 143 So. at page 616.,
The failure to prove that the insured’s absence from the trial prejudiced the defense of the case was one of the reasons which led the Florida Supreme Court to hold that the jury was warranted in resolving the question against the insurance company. True, it was one of several such reasons. It seems clear to me that the pertinent statement in the Snite case is not dictum, but is a part of the ratio decidendi. See Parsons v. Federal Realty Corporation, supra; Union Pacific Co. v. Mason City Co., supra.
My brothers next undertake to differentiate the Snite case because the cooperation clause in the present case is more specific in requiring the insured to attend hearings and trials, saying: “The policy did not contain a provision such as is in the policy here which expressly requires the insured to attend hearings and trials. Even if it could be said that prejudice must be shown for an insurer to be relieved of liability for a breach by the insured of a covenant to render cooperation and assistance, it does not follow that the rule would be applicable where the insured breached an undertaking to attend hearings and trials.”
With deference, I submit that the attempted distinction is not warranted. Under the present policy, the insured’s duty to attend hearings and trials is simply a part of his broader duty to cooperate. (See the condition for “Assistance and Cooperation of the Insured,” heretofore quoted.) Assuming that there could otherwise have been some doubt about the proposition, the policy made definite that the required assistance and cooperation include the insured’s attending the trial upon the insurer’s request. There is, however, no indication that the effect of nonattendance is any different from the effect of any other failure to assist and cooperate. The Florida Supreme Court held in the Snite case, supra, that the jury, in determining the question of whether the insured had violated the condition of a liability policy requiring him to “aid * * * in defending suits” and to “render to the Company all reasonable cooperation and assistance,” could consider the lack of proof that the insurer was prejudiced by his absence from the trial. The rule should not be different because the policy spells out the already obvious fact that cooperation includes the insured’s compliance with the insurer’s request to attend the trial. Under either provision, the failure to cooperate is not material unless it is prejudicial to the insurer.
In the case of American Fire & Casualty Co. v. Vliet, 1941, 148 Fla. 568, 4 So.2d 862, 863, the Court did hold as a matter of law that the insured did not violate the cooperation clause when she failed to come to court from a distant city at her own expense, and I would concede that its statement about the necessity of proving prejudice was dictum. It was nonetheless a clear and well-considered statement of the law of Florida, viz.: “The rule is that to constitute the breach of such a policy the lack of cooperation *75must be material and the insurance company must show that it was substantially prejudiced in the particular case by the failure to cooperate.”
That statement was quoted approvingly by the Third District Court of Appeals of Florida in American Universal Insurance Co. v. Stotsberry, 1959, 116 So.2d 482, 484. That Court reversed a summary judgment against the liability insurer, and remanded the cause for further proceedings. The quotation was obviously intended to guide the trial court in determining “whether the circumstances of Lorenzo’s absence or non-cooperation were such as to amount to a breach of the co-operation clause of the policy under the facts of this case.” As such, the statement should not be reduced to the level of a “mere dictum” on the part of the appellate court. See State Roads Commission v. Johnson, supra. Nor can any attempted distinction be drawn as to the wording of the cooperation clause, for it was the same in that case as in this. See 116 So.2d 483, note 2.
Let me go further, and assume arguendo that my brothers are correct in holding that all three statements of the Florida appellate courts are dicta, what then ? Are the statements to be wholly disregarded, as the majority opinion would seem to indicate ? The Florida cases cited in that opinion go no further than to hold that dictum “is not controlling” in a subsequent ease. State v. Florida State Improvement Commission, 1952, 60 So.2d 747, 750. The rule in Florida appears no different than that in other common-law jurisdictions, that dictum by the highest court of the jurisdiction or by an appellate court, while not controlling, is entitled to respectful consideration. 21 C. J.S. Courts § 190, pp. 313, 314. My brothers themselves made a clear statement of the true rule in an extremely recent case: “If as dicta the statements are to be treated, they must nevertheless be regarded as considered and repeated dicta, and therefore highly persuasive of the correctness of the Commission’s decision.” Mississippi Valley Gas Co. v. Federal Power Commission, 5 Cir., 1961, 294 F.2d 588, 591 (per Jones, Circuit Judge; Tuttle, Chief Judge, and Cameron, Circuit Judge, concurring). An immediate example is supplied by the Florida appellate court in the Stotsberry case following the dictum of the Supreme Court of that State in the Vliet case. This Court, as “in effect, only another court of the State,” [326 U.S. 99, 65 S.Ct. 1469] should, I think, do likewise.
As was said in West v. American T. & T. Co., 1940, 311 U.S. 223, 236, 237, 61 S.Ct. 179, 183, 85 L.Ed. 139:
“A state is not without law save as its highest court has declared it. There are many rules of decision commonly accepted and acted upon by the bar and inferior courts which are nevertheless laws of the state although the highest court of the state has never passed upon them. In those circumstances a federal court is not free to reject the state rule merely because it has not received the sanction of the highest state court, even though it thinks the rule is unsound in principle or that another is preferable. State law is to be applied in the federal as well as the state courts and it is the duty of the former in every case to ascertain from all the available data what the state law is and apply it rather than to prescribe a different rule, however superior it may appear from the viewpoint of ‘general law’ and however much the state rule may have departed from prior decisions of the federal courts. See Erie Railroad Co. v. Tompkins, supra, 78 [304 U.S. 64, 78, 58 S.Ct. 822, 82 L.Ed. 1188]; Russell v. Todd, supra, 203 (sic) (309 U.S. 280, 293, 60 S.Ct. 527, 84 L.Ed. 754].”
Professor Moore collects the pertinent authorities in 1 Moore’s Federal Practice, 2nd ed., p. 3312, in support of his text that:
“The obligation to accept local law extends not merely to definitive decisions, but to considered dicta as *76well, and if explicit pronouncements are wanting, the federal court should endeavor to discover the law of the state on the point at issue by considering related decisions, analogies, and any reliable data tending convincingly to show what the state rule is.”
Surely expressions to like effect in the opinions of two State Supreme Court Justices concurred in by their colleagues, and still further in an opinion of a State Appellate Court Judge concurred in by his colleagues, must rank at least as “considered dicta” to be used along with any other relevant data to ascertain state law.
By what seems to me to be a kind of bootstrap operation, my brothers consider themselves bound by two cases from this same federal Court of Appeals: “Pertinent to and, we think, decisive of the question under consideration are the two Rexford cases, Royal Indemnity Co. v. Rexford, 5 Cir., 1952, 197 F.2d 83, and Rexford v. Royal Indemnity Co., 5 Cir., 1954, 215 F.2d 693.”
The careful annotator in 60 A.L.R.2d 1151 observed that this Court in Royal Indemnity Co. v. Rexford, 1952, 197 F.2d 83, “approved, arguendo, the statement that the very fact that an insured is absent from the trial without explanation is prejudicial to the rights of the insurer and has a material effect upon the verdict.” I agree with the annotator that that part of the opinion was dictum. The decision was expressly stated to be “because of the error in permitting the plaintiff to retry the damage suit, the case was not fairly tried on the issue of non cooperation.” This Court stated unequivocally that “there is no doubt that, under all the authorities, the non cooperation must have been material.” 197 F.2d at page 86. Further, the Court expressly denied any intention to direct the rendition of a verdict.
“The case is a very close one as to whether there should not have been an instructed verdict in favor of the insurer on the ground that the insured failed as matter of law to cooperate, but we have concluded that the judgment should not be reversed and rendered on that issue.”
197 F.2d at page 86. Upon remand, nevertheless, the district court did just that, and upon second appeal this Court again reversed, stating that “the decision in the former appeal, reported in 197 F.2d 83, became the law of the case and, as this court found at that time that it was not proper for a directed verdict to be granted * * Rexford v. Royal Indemnity Company, 5 Cir., 1954, 215 F.2d 693, 694.
The Rexford cases appear to me to support the rulings of the district court in the present case, if effect be given to their actual holdings rather than to dictum. Certainly, to my way of thinking, the cases of U. S. F. & G. Co. v. Snite, supra, and American Universal Insurance Co. v. Stotsberry, supra, are decisions binding upon this Court under the Erie doctrine. Under all of the Florida cases which have either passed upon or discussed an insured’s breach of the cooperation clause or condition, I submit, the injured person may show lack of prejudice to the insurer and that the failure of the insured was immaterial and unsubstantial and, hence, not a breach of the cooperation clause within the fair intendment and purpose of that clause. I think that the judgment should be affirmed, and therefore respectfully dissent.