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PREFERRED RISK INS. CO. v. CENTRAL SUR. & INS. CORP.

March 7, 1961

PREFERRED RISK INSURANCE COMPANY AND VIVIAN S. ANDRES, EXECUTRIX OF THE ESTATE OF SUZANNE SAGE, DECEASED, PLAINTIFFS,
v.
CENTRAL SURETY & INSURANCE CORPORATION, DEFENDANT.



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

This is an action by Preferred Risk Insurance Company, hereinafter referred to as Preferred, and Vivian S. Andres, Executrix of the Estate of Suzanne Sage, deceased, against Central Surety & Insurance Corporation, hereinafter referred to as Central, or defendant, arising out of an automobile liability insurance policy allegedly issued by Central to the deceased, Suzanne Sage. The case was originally filed in the Circuit Court of Clark County, Arkansas, and duly removed to this court.

Preferred is an Arkansas insurance corporation, having its principal place of business at Fayetteville, Arkansas. Vivian S. Andres, Executrix of the Estate of Suzanne Sage, deceased, is a citizen of the State of Arkansas. Central is an insurance corporation organized under the laws of the State of Missouri, with its principal place of business in Kansas City, Missouri. The matter in controversy exceeds the jurisdictional amount, exclusive of interest and costs.

In the complaint it is alleged that defendant issued an automobile liability insurance policy insuring Suzanne Sage against liability arising out of bodily injury sustained by third persons in the operation of her 1958 Rambler automobile, the limits of liability being $10,000 for one person, $20,000 for one accident, and $5,000 property damage; that the policy also insured the occupants of the automobile for medical, including funeral, expenses, arising out of injuries sustained by the occupants of the car, and that said policy was in effect from May 20, 1959, until November 20, 1959.

It is further alleged that the plaintiff Preferred likewise issued an automobile liability insurance policy on May 20, 1959, insuring for a one-year period the deceased against the same risks and in the same amounts as the defendant's policy.

Plaintiffs further contend that on June 7, 1959, while both policies were in force and effect, Miss Sage was driving the insured automobile and was involved in an automobile accident which caused her death, along with the death of one of the passengers in the other automobile involved in the collision. Several occupants of the Sage car and of the other car were injured. After the accident the plaintiff, Vivian S. Andres, Executrix, notified both Central and Preferred of the accident and of claims arising out of it. Central declined to defend said action and denied liability under its policy. Preferred appeared and defended the litigation, and paid a total judgment of $17,750, plus costs. Preferred now seeks to recover one-half of this sum from Central under the applicable co-insurance provision contained in each policy. The plaintiff Andres seeks to recover the sum of $456 as funeral expenses paid in connection with the death of Suzanne Sage. Preferred also seeks to recover one-half of the attorneys' fees and litigation expense, and both plaintiffs pray for the statutory 12 percent penalty, along with reasonable attorneys' fees in this action.

In its answer to the complaint, the defendant Central denies that the collision between the automobile driven by Suzanne Sage and the Sowell automobile, driven by Thomas R. Sowell, "occurred at a time when any policy of insurance issued by this defendant was in force." The defendant further alleges "that if any insurance policy ever became effective between defendant and Suzanne Sage, that the same was canceled by mutual agreement prior to the collision which occurred on June 7, 1959."

Prior to the trial of the case the parties entered into the following stipulation:

"Stipulation

    "The parties hereto, by their attorneys, stipulate
  as follows:
    "1. On May 20, 1958, Greening Insurance Agency of
  Hope, Arkansas, an authorized local agent of Central
  Surety & Insurance Corporation, prepared and mailed
  to Miss Suzanne Sage of Hope, Arkansas, a document
  entitled Family Automobile Policy and bearing Serial
  No. AC136771. Described therein as the owned
  automobile was a 1958 Rambler. The policy period
  stated therein was from May 20, 1958 to November 20,
  1958. The Limits of Liability described therein were
  $5,000.00 for bodily injury liability to each person,
  $10,000.00 for bodily injury liability on each
  occurrence, $5,000.00 for property damage liability
  on each occurrence and $500.00 medical payments for
  each person. The premiums set out therein were
  seasonably paid by Miss Sage.
    "2. Thereafter and prior to expiration of the
  policy period described in the document referred to
  in Paragraph 1 hereof, Greening Insurance Agency, as
  agent for Central Surety and Insurance Corporation,
  prepared and mailed to Miss Sage a document entitled
  Family Automobile Policy and bearing Serial No.
  AC163646. The owned automobile and Limits of
  Liability were described in the same manner as in the
  document described in Paragraph 1 hereof. The policy
  period described in the document bearing Serial No.
  AC163646 was from November 20, 1958, to May 20, 1959.
  The premiums set out therein were seasonably paid by
  Miss Sage. A photostatic copy of this document is
  attached as Exhibit A to this Stipulation.
    "4. The premiums referred to in Paragraph 3 were
  never paid and the document referred to therein was
  never returned to Greening Insurance Agency. Greening
  Insurance Agency never mailed a Notice of
  Cancellation and no Cancellation Agreement was ever
  executed by Miss Sage.
    "5. On June 7, 1959, Miss Suzanne Sage, while
  driving said Rambler automobile, was involved in a
  collision on U.S. Highway No. 67 in Clark County,
  Arkansas, which caused her death and the death of
  Lauran Sowell and injuries to Richard Sowell, Marrgie
  Sowell, and Thomas R. ...

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