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M.F.A. MUTUAL INSURANCE COMPANY v. DIXON

July 20, 1965

M.F.A. MUTUAL INSURANCE COMPANY, A CORPORATION, PLAINTIFF,
v.
ROY DIXON, ADMINISTRATOR OF THE ESTATE OF WILLIAM KENNETH DIXON, DECEASED, LULA SNYDER AND ELVA L. HAMILTON, DEFENDANTS.



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

In this action commenced December 17, 1964, the plaintiff, M.F.A. Mutual Insurance Company, seeks a declaratory judgment under 28 U.S.C.A. § 2201 as to its rights and liabilities under a contract of liability insurance issued by it to William K. Dixon, now deceased. The plaintiff is a corporation organized under the laws of the State of Missouri with its principal place of business at Columbia, Missouri. The defendant Roy Dixon, the Administrator of the Estate of William Kenneth Dixon, deceased, is a citizen and resident of Washington County, Arkansas. The defendants Lula Snyder and Elva L. Hamilton are citizens and residents of Washington County, Arkansas.

In its complaint the plaintiff alleged that it issued a policy of liability insurance, No. 316728601, to William Kenneth Dixon, covering a 1960 Oldsmobile, upon the representation in the insured's application that he had never been arrested for any offense or convicted in any court; that the insured was involved in an automobile accident April 9, 1964, which resulted in his death. That the defendants Lula Snyder and Elva L. Hamilton, passengers in the car driven by the decedent, instituted suit against the defendant Roy Dixon, Administrator of the Estate of William Kenneth Dixon, deceased, in the Washington County Circuit Court on September 2, 1964. That the plaintiff would not have issued the policy to the decedent but for the representations in the application that he had not been arrested or convicted of any offense. That the answers in the application were false in that the deceased had been convicted of numerous offenses, including driving while under the influence of intoxicating liquors, and that this representation was material to the risk. The defendant prayed that it be relieved of any duty to defend the suit against the estate of the insured in the Washington County Circuit Court and that this court enter a declaratory judgment determining the rights and liabilities of the plaintiff and that the policy be declared void and unenforceable and of no effect because of the misrepresentations by the insured in his application for the policy.

Plaintiff in its reply of January 27, 1965, to the answer of Dixon and counterclaim, generally denies the allegations contained in the answer and asked the same relief as recited above in its complaint.

On February 4, 1965, the individual defendants Snyder and Hamilton filed their separate answer in which they admitted filing suit against Roy Dixon as Administrator of the Estate of William Kenneth Dixon, but otherwise allege that they are without knowledge as to any allegations of either the plaintiff or the defendant Dixon and pray that the complaint be dismissed as to them.

On June 16, 1965, the case was tried to the court without the intervention of a jury, the parties appearing by their respective attorneys. Ore tenus and documentary evidence, including stipulations of facts, were introduced. At the conclusion of the trial the case was submitted to the court and taken under advisement with leave granted to the parties to submit briefs in support of their respective contentions, which have been received and considered by the court. The case is now ready for disposition upon the pleadings, exhibits, stipulations and evidence introduced at the trial.

The following facts are established by the evidence and of which there is no substantial dispute. The deceased, William Kenneth Dixon, applied to the plaintiff's agent, Troy Hightower, of Springdale, Arkansas, May 3, 1963, for liability insurance policy covering a 1959 Chevrolet, Bel Air, four-door automobile. The application which was signed by the deceased contained several questions. The plaintiff's agent, Hightower, elicited the answers to the questions from the applicant and inserted the answers himself in the blanks. The application contains the following questions and answers which are pertinent:

"6. Has applicant or any driver EVER:

a.  Been insured under the Assigned Risk Plan?    No.
        b.  Been refused, cancelled or declined auto
            insurance or given notice of intention to
            refuse, cancel or decline insurance?          No
If yes give month and year                    ---
c.  Had any auto accidents? No
        d.  Been arrested for any offense or convicted
            in any court?                                 No
e.  Had any license suspended or revoked?         No
f.  Had high school driver training?              No

"7. Does applicant or any driver:

a.  Have any physical impairment?                 No
        b.  Use to any extent any alcoholic beverages
            or drugs?                                     No"

At the conclusion of the agent's questioning the applicant and inserting his answers in the proper blanks, the deceased signed the application and the agent also signed the application and forwarded it to the plaintiff. Subsequently, the plaintiff executed a policy upon the application.

On December 30, 1963, the deceased made application to the plaintiff through its agent, Troy Hightower, for a change and substitution of a 1960 Oldsmobile in place of the Chevrolet, at which time he reaffirmed the answers to the questions in the application for coverage of the Chevrolet as heretofore set forth.

On April 9, 1964, the deceased was involved in an automobile accident in Washington County, Arkansas, as heretofore referred to in connection with the action commenced against his Administrator by the individual defendants, Snyder and Hamilton. After demand was made upon the plaintiff to defend the suit, it declined and tendered the premiums to the deceased's estate on the grounds ...


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