Universal Underwriters Insurance Company, a Corporation v. American Motorists Insurance Company, a Corporation

Plaintiff, Universal Underwriters Insurance Company (Universal), seeks re imbursement from defendant, American Motorists Insurance Company (American), for money expended by Universal in settlement of a personal injury suit. Universal is the insurer of K. B. McCarthy (McCarthy), a partnership engaged in the sale of new and used automobiles in Eureka, California; and American is the insurer of Crocker-Anglo National Bank. Federal jurisdiction is conferred by 28 U.S.C. § 1332 (1964).

The present controversy between the two insurance companies arises from the ownership and use of a 1957 Dodge automobile which was involved in the personal inju3^y suit settled by Universal. This Dodge was sold on August 6, 1957 by McCarthy to Cecil Wolf on a conditional sale contract. McCarthy immediately assigned the conditional sale contract to the bank with recourse. Simultaneously with the execution of the conditional sale contract, Wolf signed a document authorizing the bank to transfer and deliver the certificate of ownership of the automobile only to McCarthy upon satisfaction of the contract. This apparently was to secure McCarthy for any materials installed or work performed on the Dodge. The…