217 N.E.2d 255 | Ohio Ct. App. | 1966
On August 11, 1962, plaintiff, Celina Mutual Insurance Company, Celina, Ohio, issued at its Ft. Jennings, Ohio, agency its policy of insurance insuring the defendant Kenneth Sadler, Ft. Jennings, Ohio, doing business as Sadler Trucking Co., against liability incurred by him in certain operations of his vehicles. On October 21, 1962, one of the insured vehicles, a truck tractor, was being operated near Shartlesville, Pennsylvania, and collided with an automobile, resulting in injuries to four passengers and in injuries to, and the ensuing death of, a fifth passenger. On March 14, 1963, the plaintiff insurer filed its action in the Common Pleas Court of Putnam County, Ohio, seeking a declaratory judgment declaring that it was not obligated under its policy of insurance to defend any suits arising from such collision and that it would not be liable for the payment of any claims, demands, or judgments arising from such collision. Plaintiff claimed that there was no such obligation or liability under the policy for the reason that the tractor was not being operated in the area or in a manner within the scope of the policy coverage. The original defendants in the declaratory judgment action were Kenneth Sadler and James Sadler, the driver of the tractor; and Charles Violet, the owner of a semi-trailer operated in conjunction with the tractor at the time of the collision, was subsequently joined. *163
Suits were thereafter filed in the federal District Court of Pennsylvania by the injured and on behalf of the estate of the deceased for the recovery of their respective damages. The record is not clear as to the parties defendant, but it is implied that Kenneth Sadler is a party defendant in each of these suits. It also appears in the record that the plaintiff insurance company is licensed to do business in the state of Pennsylvania and amenable to the process of its courts.
Pursuant to hearing of the declaratory judgment action the Common Pleas Court of Putnam County made its finding "that the plaintiff has no cause of action as claimed in its amended petition," and rendered its judgment that the second amended petition be dismissed. Examination of the court's opinion reveals that the court concluded that the injured persons and the personal representative of the deceased were necessary parties to the declaratory judgment action, that without such parties the uncertainty or controversy giving rise to the proceeding would not be terminated, and that under such circumstances the court should exercise its discretion by refusing to entertain the declaratory judgment action. These conclusions were based on the case of Keystone Ins. Co. v.Warehousing Equipment Corp.,
The plaintiff insurance company, appellant herein, has assigned a multitude of errors, but they may be summarized that the trial court erroneously exercised its discretion in refusing to entertain jurisdiction of the declaratory judgment action.
Declaratory judgments are rendered in Ohio pursuant to statutory provisions based on the Uniform Declaratory Judgments Act. Section
As stated by Judge Zimmerman in his opinion in the case ofOhio Farmers Indemnity Co. v. Chames,
"The use of the declaratory judgment action to establish whether there was coverage under the provisions of a liability insurance policy has often been resorted to by insurers in recent years. In many instances this type of action will determine in advance the advisability of instituting or continuing the prosecution of negligence actions against the insured or others which may come within the protection of the policy and often accomplishes the speedier and more economical disposition of cases of this kind and the avoidance of a multiplicity of actions. Consequently, the remedy should be applied liberally whenever the result will be to settle the controversy one way or the other. A primary purpose of the declaratory judgment action is to serve the useful end of disposing of uncertain or disputed obligations quickly and conclusively."
See, also, Travelers Indemnity Co. v. Cochrane,
Would the controversy here have been terminated by the declaratory judgment action in the absence of the joinder as parties defendant of the injured persons and the personal representative of the deceased? In other words, were such parties defendant necessary parties to the declaratory judgment action? Borchard states in his work on Declaratory Judgments, Second Edition, at page 266:
"In the insurance cases, questions have frequently arisen whether, in an action by the insurer against the insured for a declaration of non-liability under the policy and immunity from the obligation to defend, the injured persons who may or may *165 not have begun suit against the insured are necessary or proper parties. There has been some difference of opinion among the courts even on the question whether the insured was a necessary party, when he was merely a conduit between the company and the injured persons. But most courts have concluded that the insured is a necessary party, whereas the injured persons or at least some of them, even when not necessary, are proper. The courts have differed on the point whether they are indispensable or merely proper. * * *"
To resolve the dispute in the instant case we must first determine whether we are governed by the law of Pennsylvania or by the law of Ohio. There is no doubt that the tort action of the injured persons is governed by the law of Pennsylvania, thelex loci delicti. Pennsylvania likewise has a statute, Section 117, Title 40, Purdon's Penna. Statutes, providing:
"No policy of insurance against loss or damage resulting from accident to or injury suffered by an employee or other person and for which the insured is liable * * * shall hereafter beissued or delivered in this State by any corporation, or other insurer, authorized to do business in this State, unless there shall be contained within such policy a provision that the insolvency or bankruptcy of the person insured shall not release the insurance carrier from the payment of damages for injury sustained or loss occasioned during the life of such policy, and stating that in case execution against the insured is returned unsatisfied in an action brought by the injured person, or his or her personal representative in case death results from the accident, because of such insolvency or bankruptcy, then an action may be maintained by the injured person, or his or her personal representative, against such corporation, under the terms of the policy, for the amount of the judgment in the said action, not exceeding the amount of the policy." (Emphasis added.)
Although the policy of insurance herein involved had provisions (Paragraph 7, Conditions) which would probably meet the requirements of the Pennsylvania statute, such statute was not applicable and the injured persons would not have a cause of action under the statute because the policy herein was not "issued or delivered" in Pennsylvania but, on the contrary, *166 was issued and delivered in Ohio. See, also, 46 Corpus Juris Secundum 116, Insurance, Section 1191, referring to a policy issued outside of state.
The applicable Ohio statute is Section
It has been held that the cited provisions of the Ohio statute are made a part of every liability policy in Ohio, that while the word "subrogation" does not appear in the statute the principle of subrogation is clearly involved, that an injured person has a potential interest and a substantial right in the policy from the very moment of his injury, and that, although it does not develop into a vested right until a judgment is secured, his rights are such, even before judgment, as to entitle him to comply with the terms and conditions of the policy and make them effective in his behalf in the event the insured fails to discharge his duty under the policy.Hartford Accident Indemnity Co. v. Randall,
Thus, the provisions of Section
Can such beneficial rights be asserted and recovery thereof had in an action brought in the Pennsylvania courts? Although the Pennsylvania courts could arrive at a contrary conclusion, we think not. The rule is expressed in 15 Corpus Juris Secundum 858, Conflicts, Section 4 g(1)(b): *167
"Special statutory remedy. Where a purely statutory right is created, and a special remedy for the enforcement of the right is also provided by the statute, the statutory remedy must be pursued, and the right will not be enforced in another jurisdiction in which such methods of procedure are unknown."
Section
It thus appears that, even should the injured persons and the personal representative of the deceased be successful in obtaining judgments in their respective tort actions brought in the state of Pennsylvania, they could not proceed either under the Pennsylvania statute or under the Ohio statute to obtain satisfaction of such judgments from the proceeds of the policy in the state courts of Pennsylvania, or in the federal District Courts of Pennsylvania. 36 Corpus Juris Secundum 332, 346, Federal Courts, Sections 165(2) and 168.
The contract of insurance, the rights of the injured persons to the proceeds thereof, and the cause of action against the insurer all being governed by the laws of Ohio, and such cause of action not being maintainable in Pennsylvania, what then is the law of Ohio as to the necessity of joining the injured persons and the personal representative of the deceased in an action by the insurer to avoid liability on the policy brought before such persons have recovered judgments for damages arising from their injuries?
It has been consistently held in Ohio that the rights of an injured plaintiff against an insurer named defendant in a supplemental petition filed under the provisions of Section
"3. When an injured party recovers a final judgment against a person insured under an indemnity insurance policy for injuries caused by such insured, but fails to recover a judgment against the insurer in a supplemental action in which the insured and insurer are parties defendant under Section 9510-4, General Code [now Section
That case is still the law of Ohio, and it may be concluded therefrom that the controlling issue as to coverage was between the insured and the insurer, that the second injured was not a necessary party to the first action, but, notwithstanding, his rights as a subrogee of the insured were concluded thereby as effectively as if he had been a party. We must further conclude that neither the injured parties nor the personal representative of a deceased injured person are necessary parties to an action, as here, between the insurer and the insured whereby the insurer seeks a declaratory judgment relieving it from liability under its policy.
In arriving at this conclusion we are well aware that it was stated in the decision of this court on May 14, 1941, in PioneerMutual Casualty Co. of Ohio v. Pennsylvania Greyhound Lines,
The injured persons and the personal representative of the deceased person not being necessary parties to the declaratory judgment action, and, under the authority of Conold v. Stern,
The Common Pleas Court having committed error prejudicial to the appellant insurer in refusing to take jurisdiction and make a declaration of the rights of the parties, its judgment dismissing the second amended petition is reversed and vacated and the cause is remanded thereto for further proceedings as provided by law.
Judgment reversed.
YOUNGER, P. J., and MIDDLETON, J., concur. *170