Opinion
No. 243084
Decided February 13, 1964.
Discovery — Insurance limits — Perpetuation of testimony — Section 2319.33, Revised Code — Obstacle preventing immediate commencement of action — Section 3929.06, Revised Code — Supplemental petition against insurer — Time for filing.
1. Perpetuation of testimony is a procedure to assist in the just determination of litigation by informing a prospective party to a lawsuit concerning the true value of his claim.
2. The limits of liability insurance coverage held by a prospective defendant in an action for a tort which would be covered thereby is a fact material to the conduct of the litigation, although it may not be admitted into evidence at the trial.
3. Since a liability insurance policy is written subject to Section 3929.06, Revised Code, which establishes the right of the injured party to collect directly from the insurer any judgment rendered against its insured and not paid within thirty days, insurers should not be permitted to avoid divulgence of their policy limits.
4. An allegation in a petition for perpetuation of testimony against an insurer who is alleged to be subject to an action under Section 3929.06, Revised Code, upon a recovery by the plaintiff in an intended action against its insured, sufficiently states the obstacle preventing immediate commencement of the action on the supplemental petition, as required by Section 2319.33, Revised Code.
Mr. Richard Cunningham. Mr. James Olds. Mr. Bruce Sanderson.
This matter is before the court upon a motion filed jointly by the two defendants herein to vacate, rescind, and set aside the court's order made on December 6, 1963, and upon a perusal of the briefs and pleadings filed herein the court finds that on or about the 16th day of August, 1963, Pryor Evans, the plaintiff, was allegedly injured by an automobile driven by one John Summerfield, son of John Summerfield, Sr., and grandson of Leroy Summerfield. Plaintiff further claims that the father had insurance with Nationwide Insurance Company and the grandfather was insured with Grange Mutual Casualty Company, and prays that the court permit the perpetuation of testimony of the three Summerfields upon interrogatories as attached to the petition.
Perpetuation of testimony is a procedural instrument to assist in the just disposition of litigation by informing one party or another in advance of the filing of a lawsuit as to the true value of his claim.
In The People, ex rel. Terry, v. Fisher, Judge, 12 Ill.2d 231, 145 N.E.2d 588,
Headnote 3:
"Discovery interrogatories respecting the existence and amount of a defendant's liability insurance policies may be deemed to be related to the merits of the matter of litigation as provided in the Civil Practice Rules, since they apprize injured plaintiffs of rights arising out of the action, otherwise unknown, and give plaintiff's counsel a realistic appraisal of his adversary in the case he must prepare for, and afford a sounder basis for settlement of dispute."
Depositions are matters of discovery after the cause is pending — an action for perpetuation of testimony may be commenced before the suit is filed. A deposition can only be directed to matters that would be material to the direct issues in the trial of a case, however a petition for perpetuation of testimony is for the purpose of determining certain facts pertinent to the final determination of a lawsuit, but objectionable in the trial of a case, when the inquiry extends to insurance coverage.
The defendants quote State, ex rel. Allen, v. Second Judicial District Court, 69 Nev. 196, 245 P.2d 999, however the court is of the opinion that since Nevada does not have a law comparable to that of California or of Ohio then this case is not applicable.
California has a similar statute as does the state of Ohio with one exception and that is that when an applicant for perpetuation of testimony expects to be a plaintiff, he must state the obstacle which prevents immediate commencement of the action.
Superior Ins. Co. v. Superior Court of Los Angeles County, 37 Cal.2d 749, 235 P.2d 833:
Headnote 2:
"Where applicant, who expected to be a party plaintiff in an action against insurance company and insured to enforce payment of judgment which was expected to be recovered in pending personal injury action, expected to prove in deposition of company and insured the existence of automobile casualty insurance contracts for protection against liability for personal injuries and property damage and provisions of insurance policies, including effective dates and amounts of insurance, applicant laid a sufficient basis for issuance of order providing for perpetuation of testimony and production of insurance policies."
Headnote 4:
"Provisions of automobile liability insurance policy, are not a matter for sole knowledge of the named assured and insurance carrier to the exclusion of injured person, and the pendency of an action by an injured person brought in good faith against the named insured person gives the injured person a discoverable interest in the policy."
Gallimore v. Dye, Admr., 21 F. R. D. 283, is a case wherein the court held that if the plaintiff be permitted to discover the amount of insurance carried by a person, it could logically follow he could discover the amount of that person's bank account, bonds, real estate, etc., but this is not true. While the insured is the nominal party, the insurance company is to a greater extent the real party in interest for it agrees to pay the judgment against the insured up to the amount of its coverage.
There is no doubt that insurance companies have an interest in claims against their insured. Truly the contract of insurance between the company and the insured is actually a contract for the benefit of a third party who has been aggrieved as well as for the protection of the negligent party.
If the party damaged recovers a judgment against the negligent insured, he would have a right to inquire into and ascertain the limits and other provisions of the insurance policy for this policy inures to his benefit and it is for the protection of the insured against judgments that the insured has paid his premium.
In Volume 27, Page 298 of the University of Cincinnati Law Review, the author sets forth the fact that in the field of personal injury litigation today, the defendant's liability insurer, although not named as the defendant, generally undertakes the investigation, negotiation of settlement, and if necessary, furnishes the defense of the suit. The policy limits may be vital to the settlement and with knowledge of the extent of the insurance the attorney for the plaintiff is in a position to better judge the value of his case and the amount of settlement and it is a just declaration of the law that makes this possible.
The insuring companies in this instance accept the premiums for the protection of its insured and then attempt to place themselves in a position of being noncommittal about the entire matter. This should not be permitted.
Section 3929.05, Revised Code, provides in part:
"Whenever a loss or damage occurs on account of a casualty covered by a contract of insurance made between an insurance company and any person * * * by which contract such person * * * is insured against loss or damage on account of the bodily injury or death by accident of any person for which loss or damage such person * * * is responsible, the liability of the insurance company is absolute, and the payment of said loss does not depend upon the satisfaction by the assured of a final judgment against him for loss, damage, or death occasioned by such casualty.
"No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after said assured has become responsible for such loss, damage, or death, and any such cancellation or annullment is void."
In Luntz v. Stern, 135 Ohio St. 225, it was held that by this section the liability of an insurance company becomes absolute only in the sense that the payment of loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss or damage or death occasioned by such casualty.
Section 3929.06, Revised Code, provides in part:
"Upon the recovery of a final judgment against any * * * person * * * by any person * * * for loss or damage on account of bodily injury or death, for loss or damage to tangible or intangible property of any person * * * if the defendant in such action was insured against loss or damage at the time when the rights of action arose, the judgment creditor * * * is entitled to have the insurance money provided for in the contract of insurance between the insurance company and the defendant applied to the satisfaction of the judgment. If the judgment is not satisfied within thirty days after it is rendered, the judgment creditor * * * to reach and apply the insurance money to the satisfaction of the judgment, may file a supplemental petition in the action in which said judgment was rendered, in which the insurer is made new party defendant in said action * * *."
Thus under the law the liability of the insurance company attaches absolutely upon the rendition of a judgment against the insured, however the company's interest in the case precedes this situation for the insurer investigates, defends and even settles claims. The only reason they are not made a party defendant by law is that such would apprize the jury that the negligent defendant is covered with insurance.
Accident Indemnity Co. v. Randall, 125 Ohio St. 581:
Chief Justice Marshall stated at page 585: "It must be held that by virtue of Section 9510-4, General Code, an injured person has a potential interest and a substantial right in the policy from the very moment of his injury and 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 thus make them effective in his behalf in the event the insured fails to discharge his duty under the policy."
Note: Section 9510-4, General Code, is now Section 3929.06, Revised Code.
Section 2319.33, Revised Code, provides in part:
"The applicant desiring to have testimony perpetuated shall:
"1. file a verified petition in the office of the Clerk of Common Pleas Court;
"2. in which must be set forth specifically the subject matter relative to which testimony is to be taken;
"3. the names of the persons interested * * *
"4. the petition also shall state the names of the witnesses to be examined;
"5. and the interrogatories to be propounded to each;
"6. that the applicant expects to be a party to an action in a court in this state * * *
"7. that such testimony as he believes, will be material in the trial of such action;
"8. and when the applicant expects to be the plaintiff, the obstacle preventing the immediate commencement of the action."
Reading the petition I find:
1. The plaintiff did file in the clerk's office a duly verified petition.
2. He has set forth the subject matter relative to which testimony is about to be taken.
3. The names of the parties interested are included in the petition.
4. The names of witnesses to be examined are included.
5. The interrogatories are set forth addressed to certain parties.
6. It is therein stated that the applicant expects to be a party to an action in a court in this state.
7. I find that such testimony asked for in the interrogatories attached to the petition will be material to such action.
8. That the obstacle preventing the immediate commencement of the action is that the applicant expects to recover a judgment in his favor upon filing a petition after a complete determination of the extent of his injuries and that he will file a supplemental petition against Grange Mutual Casualty Company and Nationwide Insurance Company immediately thereafter to collect this judgment — thus the applicant pleads the obstacle or obstacles preventing the immediate commencement of the action.
In all of the respects set out in the statute there has been a compliance. The court therefore is of the opinion that the motion of the defendants should be overruled but that the matter be stayed until final disposition of the first branch of the motion.
Motion overruled.