Hatridge v. Aetna Casualty & Surety Co.

415 F.2d 809, 13 Fed. R. Serv. 2d 457
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 2, 1969
DocketNos. 19348, 19349
StatusPublished
Cited by57 cases

This text of 415 F.2d 809 (Hatridge v. Aetna Casualty & Surety Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hatridge v. Aetna Casualty & Surety Co., 415 F.2d 809, 13 Fed. R. Serv. 2d 457 (8th Cir. 1969).

Opinion

BLACKMUN, Circuit Judge.

These diversity cases present interesting questions of federal jurisdiction. The appeals, although separate, are related. We treat them in one opinion. The facts are not in dispute.

1. On the morning of November 24, 1964, a bus turned over in Arkansas. It was owned by Ford, Bacon & Davis Construction Corporation and at the time was being driven by Herman Reid in the course of his employment with Ford. Gene Rodney Hatridge and James Q. Bryan were passengers on the bus at the time of the accident. Each was injured. There was outstanding a comprehensive liability policy issued by The Aetna Casualty and Surety Company to Ford. This provided Ford coverage for bodily injury liability with respect to owned motor vehicles including the bus. The policy, however, had definitional exclusions. Among these was one to the effect that the insurance did not apply “to any employee with respect to injury to * * * another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance or use of an automobile in the business of such employer.”

2. In March 1966, in the Circuit Court of Union County, Arkansas, Mr. Bryan and his wife obtained a default judgment, based on negligence, against bus driver Reid in the amount of $75,000 for Bryan and $10,000 consortium loss for Mrs. Bryan. Aetna had been given timely notice of the pendency of that state court action but did not defend it.

3. In June 1966 the Bryans sued Aetna in federal court for the Western District of Arkansas to recover the [811]*811amount of the judgment against Reid plus interest, statutory penalty and fees. This suit was based on Arkansas’ direct action statute, Ark.Stat.Ann. § 66-4001 (1966 Repl.) and on § 66-3238 which allows 12 per cent damages and attorneys’ fees for nonpayment of an insured loss. The Bryans took the position that Reid was an omnibus insured under Aetna’s policy to Ford.

4. In July 1966, in the Circuit Court of Union County, Arkansas, Mr. Hat-ridge and his wife, Barbara Ann Hat-ridge, also obtained a default judgment, based on negligence, against bus driver Reid in the amount of $50,000 for Hat-ridge and $10,000 consortium loss for Mrs. Hatridge. Aetna had been given timely notice of that suit and refused to defend it.

5. In the federal suit instituted by the Bryans, Aetna, after the submission of interrogatories, answers thereto, affidavits and offers of proof, moved for summary judgment. Chief Judge Harris granted that motion. The Bryans appealed. This court affirmed, holding that, as a matter of law, the quoted definitional exclusion served to relieve Aetna of any liability to the Bryans because the bus at the time of the accident was being used in Ford’s business and because both Reid and Bryan were then in the course of employment by Ford. Bryan v. Aetna Cas. & Sur. Co., 381 F.2d 872 (8 Cir. 1967). This court’s opinion for that appeal was filed September 6, 1967.

6. One week later, on September 13, Mrs. Hatridge instituted an action against Aetna under § 66-4001 in the Circuit Court of Union County, Arkansas, seeking $9,999.99, or one cent less than the amount of her judgment against Reid.1 Her complaint recites that she

“now irrevocably and unconditionally waives all of her right to recover on any count, including, but not limited to, the principal amount of the Judgment, costs, interests, penalty, attorneys fees, or any other possible claim whatsoever in excess of $9,999.99.”

7. On September 28 Aetna removed Mrs. Hatridge’s action to the United States District Court for the Western District of Arkansas. •

8. On the same day Aetna filed its answer in Mrs. Hatridge’s suit and, joining Mr. Hatridge and Reid as third party defendants, its “Counter Claim and Cross-Claim” for a declaratory judgment that Reid was not an insured under its policy and that Aetna was not liable for the Union County judgment. Mrs. Hat-ridge moved to remand; Mr. Hatridge and Reid moved to dismiss the “Counter Claim and Cross-Claim.”

9. On October 10, 1967, Aetna on its part instituted a federal court action in the Western District of Arkansas against Mr. and Mrs. Hatridge and Reid for a declaration of rights under the policy. The Hatridges and Reid moved to dismiss that suit on the ground that its subject matter was identical- to that of her suit against Aetna. Aetna moved for summary judgment under Rule 56, Fed.R.Civ.P., supporting its motion with affidavits, and asserting that there was no genuine issue as to any material fact. The defendants responded asserting only that Aetna’s motion was premature.

10. Chief Judge Harris, with consent, heard the cases together. Counsel for the Hatridges conceded that on the merits, and until an Arkansas state court had ruled contrarily, the federal district court was “completely controlled by the Bryan decision.” After the hearing the court filed one memorandum opinion concerning both matters. It concluded to grant Aetna’s motion for summary judgment in its case, to deny Mrs. Hatridge’s motion to remand her ease, and to dismiss her case with prejudice. Aetna Cas. & Sur. Co. v. Hatridge, 282 F.Supp. 604 (W.D.Ark.1968).

[812]*81211. Judgments were entered accordingly. In Mrs. Hatridge’s case she appeals ; this is our No. 19,348. In Aetna’s case all three defendants appeal; this is our No. 19,349. With counsel conceding that Mr. Hatridge is concluded by this court’s decision in Bryan, only Mrs. Hat-ridge, of the three appellants, has filed a brief in No. 19,349.2

The appeal in Aetna’s declaratory judgment action (No. 19,349).

The federal Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202, adopted in 1948, did not create new federal jurisdiction. It merely added a remedy. Consequently, the usual jurisdictional requirements must be met in order to have declaratory relief under the Act. Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 493, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942); Home Ins. Co. of New York v. Trotter, 130 F.2d 800, 803 (8 Cir. 1942); Hardware Mut. Cas. Co. v. Schantz, 178 F.2d 779, 780 (5 Cir. 1949).

Here diversity of citizenship is established. So, too, is the jurisdictional amount, for Aetna’s coverage to Ford, and consequent exposure, was in excess of $100,000, for each person injured in any one accident, and the Hatridge default judgment against Reid, although broken down into two amounts, was for $60,000. See Hawkeye-Security Ins. Co. v. Davis, 277 F.2d 765, 767 (8 Cir. 1960).

This would ordinarily take us to the secondary issue, namely, whether the district court properly exercised its discretion in rendering a declaratory judgment. See, for example, Public Service Comm’n of Utah v. Wycoff Co., 344 U.S. 237, 241, 73 S.Ct. 236, 97 L.Ed. 291 (1952); Zemel v. Rusk, 381 U.S. 1, 19, 85 S.Ct. 1271, 14 L.Ed.2d 179 (1965).

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