Mid-Century Insurance v. Hutsel

Opinion

AULT, J.

John F. Hutsel appeals from a declaratory judgment entered against him and in favor of William H. Cousins, Joseph L. Leakes and Mid-Century Insurance Company (Mid-Century).

There is no dispute as to the facts. Hutsel was Cousins’ insurance agent. The previous year he had placed Cousins’ automobile liability insurance ($10,000/$20,000 bodily injury and $5,000 property damage) with Transnational Insurance Company. The policy expired on May 24, 1966. Having undertaken to do so, and having collected a premium therefor, Hutsel negligently failed to procure a new and similar liability policy for Cousins with some other insurance company (Hutsel does not dispute this finding on appeal). On May 28, 1966, just four days after Cousins’ insurance with Transnational lapsed, his automobile was involved in a multiple injury accident in Connecticut. At the time of the accident, the automobile was being driven by his stepson, Leakes, with Cousins’ consent and permission. Leakes carried liability insurance ($10,000/$20,000 bodily injury and $5,000 property damage) with Mid-Century. As a result of the accident several tort actions have been filed against Leakes and Cousins for personal injuries and property damage. None has yet resulted in judgment, but the total claims in the actions exceed the limits of Mid-Century’s policy. Mid-Century has undertaken the defense of these actions on behalf of Leakes and Cousins. It also joined with them as a plaintiff in this action to seek a declaration of the respective rights and duties of the parties.

After finding Hutsel negligent in failing to procure liability insurance

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for Cousins and finding such negligence proximately damaged Cousins and Leakes by depriving them of insurance protection which would otherwise have been available to them, the trial court concluded all three plaintiffs, Mid-Century, Leakes and Cousins, were entitled to a declaratory judgment against Hutsel. The judgment declared, as to the accident of May 28, 1966, and all claims arising therefrom, Hutsel was to indemnify reimburse or pay Mid-Century, Leakes and Cousins for all reasonable settlements made by them or judgments suffered by them not to exceed $10,000 per claimant, or $20,000 per multiple claimants for personal injury damage, or $5,000 for property damage, plus any costs assessed in favor of any claimant. The judgment further provided Hutsel was to indemnify and reimburse Mid-Century, Leakes and Cousins for all out-of-pocket costs for investigators, adjustors and attorneys, including litigation costs and expenses and, if the principal amounts of settlements or judgments exceeded the $10,000/$20,000 and $5,000 to be paid by Hutsel, such costs would be prorated between Hutsel and Mid-Century in the same proportion each would become ultimately responsible for the payment of the judgments and settlements.