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Gudgel v. St. Louis Fire And Marine Ins. Co.

SEPTEMBER 30, 1971.




APPEAL from the Circuit Court of Cook County; the Hon. EDWIN T. BREEN, Judge, presiding.


The facts of this case arose out of a motor vehicle accident which occurred on June 30, 1963, at Danville, Illinois. The plaintiff-appellant, John T. Gudgel, a citizen of Indiana, was driving a car which collided with a truck-tractor driven by one Bud Freischlag, a citizen of Illinois. Gudgel instituted a negligence action to recover for injuries he sustained naming as defendants: Freischlag; Southern Shippers, Inc., a Mississippi corporation and common carrier which had leased the tractor for a period of one year on November 8, 1962; Wally Fondaw, a Mississippi citizen who is the President of Southern Shippers, Inc.; Gene Moffett, an Illinois citizen whose name appears as owner-lessor of the lease agreement covering the tractor; and Cecil Shockley, an Illinois citizen who had apparently purchased the tractor from Moffett prior to the collision and regularly drove the truck.

The alleged liability of Southern Shippers, Inc. in the previous action was based on the theory that there was a master-servant relationship between Southern Shippers, Inc. and Freischlag. This theory was evidenced by the lease and testimony of Freischlag, corroborated in part by a co-worker that Shockley and Freischlag had received certain directions from Southern Shippers, Inc. to haul some corn on the day prior to the accident. Freischlag alleged that it was pursuant to such directions that he was operating the trailer on the day of the accident. The co-worker's testimony agreed with Freischlag as to the destination, but he stated the corn was to be transported for Shockley.

Southern Shippers' theory of the case was that no master-servant relationship existed at the time of the accident with Gudgel, because the lease had been effectively cancelled by Southern Shippers, Inc. as of June 28, 1963, two days prior to the accident, as a result of which they no longer had any control of the tractor. They also contended they gave no instructions of any nature to Freischlag or Shockley on the day prior to the accident.

The case came to trial in the United States District Court for the Eastern District of Illinois. At the close of the plaintiff's case the trial court granted motions dismissing defendants Moffett and Fondaw from the case and denied Southern Shippers' motion to dismiss. Shockley was apparently never served and thus did not appear. Southern Shippers, Inc. moved for a directed verdict at the close of the defendant's case, and the court denied its motion. The jury returned a general verdict against defendants Freischlag and Southern Shippers, Inc. Southern Shippers, Inc. moved for a judgment notwithstanding the verdict, and the trial court granted the motion. The trial court concluded that as a matter of law the plaintiff "had failed to prove by any evidence any negligence which would authorize or support any verdict against defendant Southern Shippers." The trial court rendered a final judgment against Freischlag in favor of the plaintiff in the amount of $9,939.93.

The plaintiff appealed the granting of the judgment n.o.v. to Southern Shippers, Inc. The United States Court of Appeals for the Seventh Circuit affirmed the judgment concluding that the evidence in favor of Southern Shippers' theory of the case was overwhelming.

Gudgel has now filed suit in Cook County against the instant defendant, St. Louis Fire and Marine Insurance Company, the insurer of Southern Shippers. In this action the plaintiff contends that Freischlag was an "insured"' within the meaning of that term as defined in the policy of insurance issued by the defendant to Southern Shippers, Inc. which was in effect at the time of the collision. Therefore, the insurance company is bound to indemnify Freischlag against the judgment.

The insurance policy in question, which was made a part of the record here, includes in the definition of an "insured party" the following language:

"With respect to the insurance for Bodily Injury Liability and for Property Damage Liability the unqualified word "insured" includes the named insured and also includes any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission. . . ." Emphasis added.

The plaintiff argues that regardless of whether Freischlag was acting as an "agent or servant" of Southern Shippers at the time of the collision, he was operating the vehicle with their permission and hence fits within the definition of "insured" as set out in the aforementioned policy. Therefore, plaintiff argues that the defendant is liable to indemnify Freischlag in the amount of the final judgment of $9939.93.

Prior to trial, the defendant moved to dismiss the complaint alleging that the plaintiff's cause of action was barred by the previous rulings of the federal courts in the original case involving Southern Shippers, Inc. Defendant argued that these decisions including findings of fact which are effective to bar the present action under the doctrine of collateral estoppel or "estoppel by verdict."

The plaintiff filed a motion to strike the defendant's motion stating that the defendant's motion was insufficient in law to show a defect in the complaint, and that the defendant was pleading conclusions unsupported by factual matters of record and that defendant's Exhibits A and B (which were copies of the opinions of the District Court and the Court of Appeals in the original action) were not properly authenticated, and the affidavit of defendant's attorney was factually insufficient to support the defendant's motion.

The trial court dismissed with prejudice the motion of the plaintiff to strike, and allowed the defendant's motion to dismiss and entered judgment in ...

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