Farmers Insurance Exchange v. Joe Rose, Jr., and Veronica Rose, His Wife

In May, 1964, Farmers Insurance Exchange (company) brought this diversity suit in the United States District Court for the District of Arizona. The company sought a judgment declaring, among other things, that: (1) a $50,-000-$100,000 automobile liability insurance policy it issued to David R. Vassar in January, 1964, is void, and (2) the company is not legally obligated thereunder to pay any portion of any judgment for damages rendered against Vassar, arising out of a March, 1964, automobile accident. Vassar, Joe Rose, Jr. and Veronica Rose, his wife, both of whom were injured in the accident, and others, were named defendants.

The company maintained that it was entitled to such relief because in applying for his policy, Vassar made certain statements and representations which were fraudulent and were material to the acceptance of the risk by the company. The assertedly fraudulent statements and representations related to Vassar’s past driving and insurance record.

The Roses moved for summary judgment in their favor, arguing that the company was liable as a matter of law. For the purposes of the motion it was necessary for them to assume that Vassar had made the fraudulent…