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March 16, 1961


The opinion of the court was delivered by: Platt, Chief Judge.

This is a garnishment proceeding against State Farm Mutual Insurance Company. Maxine J. Pawlik, the plaintiff and garnisher, now known as Maxine J. Shearin, obtained a verdict of $18,500 against William R. Nichols, and a verdict of $2,000 against Lawrence Nichols. Both verdicts were returned on October 22 and judgment was entered on the verdicts for the full amount on October 23, 1958. Originally this was a personal injury action against the defendant, William R. Nichols, for injuries resulting from a vehicle collision which occurred on November 22, 1956. Nichols was driving a Ford 1 1/2 ton truck which collided with the automobile in which the plaintiff was riding. The truck was owned by Kenneth Hodge, who was also a defendant in the action. Joined with this action was a suit under the Dram Shop Act of Illinois against Lawrence Nichols, (no relation to William R. Nichols) who allegedly sold liquor to William R. Nichols, causing him to become intoxicated. On February 17, 1959, on motion of plaintiff and defendant, Lawrence Nichols, judgment against Lawrence Nichols was set aside and a new trial granted. This action was then dismissed against Lawrence Nichols pursuant to stipulation.

On the date of the collision there was in effect an automobile liability insurance policy issued by State Farm to Kenneth Hodge on his truck. Hodge employed the defendant, Nichols, as a farm hand. The policy contained the usual permissive user clause. Hodge was dismissed at the close of the plaintiff's evidence in the original action because Nichols was not driving the truck at the time of the collision within the scope of his employment but was on a mission of his own.

In reply to the interrogatories in the garnishment action State Farm made the following answer:

    "Because of lack of cooperation on the part of said
  William R. Nichols, as required by said policy. We
  are not willing to pay anything towards said

The policy provided as follows:

In the collision between the truck driven by Nichols and the automobile in which the plaintiff was riding one occupant of the automobile received injuries from which he died, and State Farm settled this claim for $4,000. Another occupant of the same car suffered personal injuries as a result of the collision and State Farm paid in settlement of this claim $3,960.

Nichols gave a complete statement of the description of the occurrence to the Attorney at Danville, Illinois, who represented State Farm shortly after the collision. In this statement Nichols said he was not intoxicated and related facts which indicated he was not negligent in the manner in which he drove the truck at the time of the collision. Thereafter, Nichols was indicted by the grand jury of the Circuit Court of Vermilion County, Illinois, and charged with reckless homicide. State Farm arranged bond for Nichols. Nichols had been staying at Cissna Park, Illinois, but after informing the Danville Attorney for State Farm of his address where he could be reached he went to his home in Big Stone Gap, Virginia. He returned to Danville, Illinois, at his own expense when the homicide case was set for trial in Danville in the Circuit Court of Vermilion County, Illinois, but the cause was continued. He again returned at his own expense for the second setting, at which time the case was tried and Nichols was acquitted.

In May, 1957, before the instant personal injury case was filed on September 6, 1957, in this court, Kenneth Davenport and another representative of State Farm located Nichols at Valley Lake, Virginia, after stopping at his father's home where Nichols was staying. Davenport informed Nichols that should a civil suit be started against him that he should contact him at Bristol, Virginia, and the Company would arrange for his expenses to attend the trial. Nichols was served with summons in the plaintiff's personal injury action on September 7, 1957, in Danville, Illinois, while he was on trial in the criminal action.

On June 2, 1958, Nichols was married. Nichols had a seventh grade education, and was a man of no financial means.

On September 20, 1957, Mr. Kurtock, Superintendent of Claims for State Farm Mutual, sent a registered letter to Mr. Nichols, Rural Route 2, Box 180, Milford, Illinois, informing Mr. Nichols that its Danville Attorney would represent him in the law suit against him by Miss Pawlik. He also requested that he comply with the requests of this Attorney and should co-operate in "the handling of this litigation." The letter also informed Mr. Nichols that the claim in the suit was in excess of the protection afforded by the policy, and that it was agreeable with the company for him to procure his own attorney, at his own expense, in addition to the attorney that the State Farm would employ and compensate. The receipt on this registered letter was returned signed, "William R. Nichols, Mrs. Ray Akers, September 24, 1957." Mrs. Akers was Nichols' sister, and her husband was in the truck with Nichols at the time of the collision. There was no proof that Nichols received this letter.

The personal injury action was set for trial in this court on August 19, 1958. On August 21, 1958, the Danville Attorney for State Farm sent a letter to both Kenneth Hodge at Wellington, Illinois, and to William R. Nichols, P.O. Box 65, Big Stone Gap, Virginia, informing them that the case was set for trial on Monday, October 20, 1958, at 9:30 a.m. D.S.T., and to "Save this time." Enclosed with the letter was a copy of the court's notice of the trial date. In this letter Nichols was also informed "we will be in touch with you before trial time."

On the morning of the trial October 20, 1958, Nichols was not present in court. The Danville Attorney for State Farm representing him appeared in court and the following colloquy occurred:

"The Court: On what grounds?

    "Mr. Stifler: And we say that immediately upon
  receipt of notice of setting we sent notice to the
  defendant, William R. Nichols at Big Stone Gap,
  Virginia. That was in August, 1958, and that on
  October 2nd, 1958 we sent to Mr. Nichols, William R.
  Nichols notice of the setting and asking that he be
  in our office at eight o'clock this morning ready for
  trial which was to be held at 9:30 this morning.
    "Now Mr. Nichols hasn't shown up by eleven o'clock
  in the morning. Therefore, we ask that the cause be
  continued to give us a chance to have him present.
    "The Court: Is there any objection by any of the
    "Mr. Zimmerly: We object, your Honor, on the basis
  that we have subpoenaed our witnesses for the
  plaintiff. Included among those we have down here a
  witness from Chicago, a specialist whose practice is
  such that he can't come down tomorrow, and we
  therefore object and ask that the case be heard at
  this time.
    "The Court: Mr. Stifler, would you consent to the
  one witness — your other witnesses will be here

"Mr. Zimmerly: So far as I know.

    "The Court: Would you consent to pick the jury and
  examine this one witness?
    "Mr. Stifler: That would be out of order, ...

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