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FOMBY v. WORLD INS. CO. OF OMAHA

November 16, 1950

FOMBY
v.
WORLD INS. CO. OF OMAHA, NEB. ET AL.



The opinion of the court was delivered by: John E. Miller, District Judge.

Statement

On December 13, 1949, the plaintiff filed her complaint in the Columbia Circuit Court, Second Division, and in due time the cause was removed from said court by defendant, World Insurance Company of Omaha, Nebraska.

The claim of plaintiff is based upon a policy of insurance, No. 800150, issued on or about February 28, 1949, by the defendant, World Insurance Company, insuring the employees of Columbia County, Arkansas, against loss of life, limb, sight or time from accidental injuries. The policy designates the defendant, Columbia County, Arkansas, as employer and as the beneficiary of the employees for the benefits therein provided.

The plaintiff's intestate, Robert Fomby, was killed on August 27, 1949, and the plaintiff alleges that at that time the policy was in full force and effect and that the death of the said Robert Fomby occurred through purely accidental means and that by reason of said death the plaintiff, as administratrix of the estate of the said Robert Fomby, deceased, is entitled to recover the sum of $3,000, together with a penalty of 12% and a reasonable attorney's fee and all costs.

On December 27, 1949, the defendant, World Insurance Company, filed its answer in which it admits:

That the plaintiff is a citizen and resident of Columbia County, Arkansas, and that she is the duly qualified and acting administratrix of the estate of Robert Fomby, deceased; that the defendant, World Insurance Company, is a corporation organized and existing under and by virtue of the laws of the State of Nebraska and is authorized to transact business in the State of Arkansas; that it issued on or about February 28, 1949, a policy of insurance No. 800150, under the terms and provisions of which it insured the employees of Columbia County, Arkansas, against loss of life, limb, sight or time from accidental injuries as described in the policy, a true copy of which was attached to the complaint; that the policy was in full force and effect according to the terms and conditions thereof from February 28, 1949, to the date of filing of the complaint; that the plaintiff's intestate, Robert Fomby, was an employee of Columbia County at all times subsequent to the date of the policy and on the date of his death, August, 27, 1949, and was classified in the policy as a "Class B" employee; that the said insured, Robert Fomby, was killed on August 27, 1949, by falling beneath the wheels of a truck.

The defendant insurance company denies that due proof of loss was made and likewise denies that the contract of insurance with Columbia County was made for the benefit of the employee or his legal representative.

On May 2, 1950, the defendant, Columbia County, Arkansas, filed its answer in which it admits the allegations of the complaint and adopts the same as its own, and prays that it have judgment against the defendant insurance company on the claim for the use and benefit of the plaintiff, Esther Fomby, administratrix.

On May 27 the plaintiff filed a request for admissions under Rule 36 of the Federal Rules of Civil Procedure, 28 U.S.C.A., to which request the defendant, World Insurance Company, failed to formally respond. But the attorney for the defendant insurance company, in open court, admitted that the County Judge of Columbia County, Arkansas, on August 27, 1949, the date of the death of the said insured, advised S.V. Abraham, the authorized agent of the defendant insurance company, by telephone conversation of the accidental death on that date of the said insured, with sufficient particulars to identify the said Robert Fomby; that the insurance company failed to furnish at any time thereafter to Columbia County or to Esther Fomby, or, any other person, forms as are usually furnished by the defendant insurance company for filing proof of loss; that the said authorized agent of the defendant insurance company on August 28, 1949, secured written statements from residents of Columbia County relative to the occurrence, character and extent of the loss for which claim was made, and that demand was made upon the insurance company prior to November 27, 1949, by O.W. Taylor, County Judge of Columbia County, Arkansas, for payment of death benefits under the said policy.

On June 5, 1950, the defendant insurance company filed an amendment to its answer in which it alleges that the policy sued upon contains an endorsement providing that the policy covers injuries received during the time the employee is proceeding to or returning from the place of his employment only while riding in any transportation conveyance provided by the employer for that purpose. The defendant insurance company further alleged that, at the time the deceased sustained the injuries resulting in his death, he was not proceeding to the place of his employment and was not at that time riding in any transportation conveyance provided by the employer for the purpose of transporting the deceased to his place of employment, and that he was without authority or permission from his employer to ride the truck of the employer that he was attempting to ride at the time he received said injuries.

On June 5 the plaintiff, with the permission of the defendant, World Insurance Company, withdrew her request for a jury trial and the parties, by agreement, waived a jury trial, and the cause proceeded to trial to the court on June 13, 1950.

At the beginning of the trial, an order was entered aligning the defendant, Columbia County, Arkansas, as a party plaintiff.

During the trial the plaintiff offered testimony of a witness, Dewey Hall, that the deceased, Robert Fomby, a few minutes before his death, "told me he had to go to town to work on his machine and draw his check", and of the plaintiff, Esther Fomby, widow of the deceased, "that he was going to town to work on his truck". At the time the testimony was offered the court sustained the objection of the defendant to the introduction of such testimony, and at the conclusion of the plaintiffs' case, the record showed the offer of such testimony by plaintiffs and its exclusion by the court upon the objection of the defendant. The defendant then announced that it did not desire to introduce any testimony and orally moved for a judgment in its favor. The attorney for the defendant orally set forth the reasons for said motion. Thereupon, the court stated to the attorneys for the plaintiffs and the attorney for the defendant that the testimony objected to by defendant would be admitted in accordance with the decision of the Court of Appeals for the Eighth Circuit in the case of Builders Steel Co. v. Commissioner of Internal Revenue, 179 F.2d 377, 379. Accordingly, said testimony was again offered by the plaintiff and admitted over the objection of the defendant. The defendant, through its attorney, stated that it still desired to stand on its motion for judgment and to have its objections to the admissibility noted of record, and that it did not desire to introduce any testimony.

The case was submitted to the court for its consideration and was under consideration when, on June 30, 1950, the Judge wrote the attorneys for the plaintiffs and the attorney for the defendant that while the admissibility of said testimony had not yet been determined by the court, it appeared that the attorney for the defendant might be laboring under a misapprehension as to the effect of the action of the court in first sustaining the objection to the offered testimony and then permitting the testimony to be introduced and overruling the objection of the defendant to its admission, and that in the interest of justice and in order that the case might be fully developed, the Judge suggested that if the attorney for the defendant desired, further consideration of the case would be deferred and he would be permitted to offer any testimony that he desired to offer at the next session of the court. The attorney for the defendant advised the Judge that he would like to have the privilege of offering testimony even though he was still of the opinion that the testimony offered by the plaintiff to which the defendant had objected was not admissible. Thereupon the court withdrew the case from further consideration and it was set for a further hearing October 23, 1950, at which time the defendant, over the objections of the plaintiffs, proceeded to introduce its testimony.

The respective attorneys have submitted written briefs and arguments in support of their various contentions, which briefs and arguments have been considered, and the court now makes and files herein its findings of fact and conclusions of law, separately stated.

Findings of Fact

1

The plaintiff, Esther Fomby, is a citizen and resident of Columbia County, Arkansas, and the duly qualified and acting administratrix of the estate of Robert Fomby, deceased.

The defendant, World Insurance Company of Omaha, Nebraska, is a corporation organized and existing under and by virtue of the laws of the State of Nebraska and authorized to do business in the State of Arkansas.

The amount involved herein exceeds the sum of $3,000, exclusive of interest and costs.

2

On February 28, 1949, the defendant insurance company, in consideration of the payment of the premium therein stated, executed and delivered to the plaintiff, Columbia County, Arkansas, its policy of insurance No. 800150, of which a true and perfect copy is attached to the complaint.

3

The policy provides that the defendant insurance company insures the employees of Columbia County, Arkansas, "against loss of life, limb, sight or time, sustained or commencing while this policy is in force, resulting directly and independently of all other causes from bodily injuries sustained during any term of this policy, through purely accidental means (suicide, sane or insane, is not covered) while the employee is actually engaged in the performance of some duty pertaining to his occupation for which he is compensated by a wage paid by the employer."

Endorsed upon the policy is the following provision:

    "This policy covers such injuries during the
  time the employee is proceeding to or returning
  from the place of his employment only while
  riding in any transportation conveyance provided
  by the employer for that purpose."

The policy contained the further endorsement providing:

  "This is not compensation insurance and has no
  connection with the Arkansas Workmen's
  Compensation Law."
  Columbia County, Arkansas, is named as the employer. The employees covered by the policy are divided into Class A and B. One employee was placed in Class A and 40 employees were placed in Class B. The deceased, Robert Fomby, was a Class B employee, and in the event of the accidental death of such an employee the amount of insurance was fixed at $3,000.

General provision No. 11 of the policy provides:

    "All indemnities of this policy are payable to
  the employee or beneficiary of the employee."

The policy further provides that, in the event of accidental death, immediate notice thereof must be given to the company and that such notice may be given in behalf of the employee or employer to any authorized agent of the company, with particulars sufficient to identify the employee and that, in the event such notice is given, the same shall be deemed to be notice to the company. Upon receipt of such notice the company agreed to furnish such forms as are usually furnished for the filing of proofs of loss and, in the event such forms are not furnished within fifteen days from the receipt of such notice, the claimant shall be deemed to have complied with the requirements of the policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, character and extent of the loss for which claim is made.

In Paragraph C of the "Additional Provisions", it is provided that the beneficiary of the employee for all ...


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