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MITCHELL v. SOUTHERN FARM BUREAU CASUALTY INS. CO.

April 12, 1961

J.D. MITCHELL, PLAINTIFF,
v.
SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY AND MARY IMELDA STANTON, ADMINISTRATRIX OF THE ESTATE OF WILLIAM A. STANTON, DECEASED, DEFENDANTS.



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

This case is before the court on plaintiff's motion to remand. The record reflects that the action was originally filed in the Fort Smith Division of the Sebastian Chancery Court on February 13, 1961, and was removed by the defendant, Southern Farm Bureau Casualty Insurance Company, hereinafter referred to as Southern, on March 3, 1961. The plaintiff filed a motion to remand on March 11, 1961, and Southern filed its response on April 5, 1961. Briefs have been received from the parties in support of their respective contentions and have been considered by the court.

The following facts appear from the pleadings to be undisputed. The plaintiff, J.D. Mitchell, is a citizen of Arkansas and a resident of Fort Smith. The defendant, Mary Imelda Stanton, Administratrix of the Estate of William A. Stanton, deceased, is likewise a citizen of Arkansas and a resident of Fort Smith. The defendant Southern is an insurance company, incorporated and existing under the laws of the State of Mississippi, with its principal place of business in that State.

On July 14, 1959, Southern issued to the plaintiff its policy of liability insurance for the purpose of indemnifying the plaintiff for bodily injury up to and including $10,000 and for property damage up to and including $5,000, which the plaintiff might become liable to pay by reason of the operation of his 1955 Ford station wagon. The insurance was in full force and effect at all times material herein.

On December 30, 1959, Mitchell was driving his station wagon and was involved in a collision with an automobile driven by William A. Stanton. Mr. Stanton died as a result of injuries received in the collision. The defendant, Mary Imelda Stanton, as Administratrix of her husband's estate, made a claim against the plaintiff and Southern for damages sustained as a result of the collision. Mrs. Stanton's claim was denied by Southern, and in January 1960 she brought suit against Mitchell in the Sebastian County Circuit Court, seeking damages in the amount of $150,000. Prior to the trial Mrs. Stanton offered to settle the litigation for $10,000, and the plaintiff Mitchell requested that Southern settle within the limits of the policy. Southern refused to settle, and the case proceeded to trial on June 1, 1960, and a jury returned a verdict for $37,500 in favor of Mrs. Stanton. Mitchell has demanded that Southern pay the full amount of the judgment, but Southern declined and has paid only the amount of $11,500. Therefore Mitchell is indebted now to Mrs. Stanton in the sum of $26,000 on the judgment obtained.

In effect, the plaintiff is seeking judgment against Southern for the balance of the judgment against him on the ground that Southern did not act in good faith, and did not exercise due and ordinary care to protect his interest; that throughout the litigation between Mrs. Stanton and Mitchell, Southern was negligent and acted in bad faith and solely for its own interest, and as a result of Southern's negligence and bad faith in failing to settle within the policy limits, plaintiff has suffered and continues to suffer a personal judgment against him in the amount of $26,000, plus interest.

The present action was filed in the form of a suit for declaratory judgment, and the plaintiff prays for the following relief:

"Wherefore, plaintiff prays:

    "That the Court enter its judgment declaring the
  rights of the parties;
    "That the Court declare that said judgment and
  interest should be paid by Southern Farm Bureau
  Casualty Insurance Company;
    "That the Court declare that the payment and
  satisfaction of said judgment and interest are the
  sole obligation of the defendant, Southern Farm
  Bureau Casualty Insurance Company, as between that
  defendant and this plaintiff, and that the Court
  decree that said defendant pay said judgment and
  interest to the defendant, Mary Imelda Stanton,
  Administratrix, and thereby relieve the plaintiff of
  any further obligation to the latter defendant;
    "That the said Administratrix be enjoined from any
  attempt to collect said judgment from the plaintiff
  during the pendency of this action;
    "That the plaintiff recover judgment against the
  defendant, Southern Farm Bureau Casualty Insurance
  Company, for the statutory penalty of 12% and a
  reasonable attorney's fee, together with the costs of
  this action;
    "That upon payment of said judgment by the
  defendant, Southern Farm Bureau Casualty Insurance
  Company, to the defendant, Mary Imelda Stanton,
  Administratrix, the Court decree that the latter
  defendant satisfy in full her judgment against J.D.
  Mitchell in Civil Action No. 2717 in the Sebastian
  Circuit Court;
    "And plaintiff prays for all other relief to which
  he may be entitled either ...

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