Commercial Standard Ins. Co. v. American General Ins. Co.

• Decision Date: 17 June 1970
• Docket Number: No. B--1760,B--1760
• Citation: 48 A.L.R.3d 1,455 S.W.2d 714
• Parties: COMMERCIAL STANDARD INSURANCE COMPANY et al., Petitioners, v. AMERICAN GENERAL INSURANCE COMPANY, Respondent.
• Court: Texas Supreme Court

Page 714

455 S.W.2d 714

48 A.L.R.3d 1

COMMERCIAL STANDARD INSURANCE COMPANY et al., Petitioners, v. AMERICAN GENERAL INSURANCE COMPANY, Respondent.

No. B--1760.

Supreme Court of Texas.

June 17, 1970.

Dyer, Redford, Burnett, Wray, Woolsey & Dunham, J. M. Burnett, Corpus Christi, for petitioners.

Branscomb, Gary, Thomasson & Hall, Richard A. Hall, Corpus Christi, for respondent.

McGEE, Justice.

Respondent American General Insurance Company brought this suit against petitioners Commercial Standard Insurance Company and Berry Contracting, Inc., and its employees, Eugene J. Adams and J. W. Rosson, seeking a judgment declaring that its automobile liability policy (issued to Harris Concrete Co.) did not provide coverage to Berry and its employees against claims asserted against them by employees of the general contractor, Fuller Construction Company. Commercial filed a cross-action to recover all sums paid by it in settlement of the claims. The trial court severed the declaratory judgment suit from the cross-action and granted American's motion for summary judgment on an agreed statement of facts. This judgment was affirmed by the Court of Civil Appeals. 444 S.W.2d 347.

For all practical purposes, this is a controversy between the two insurance companies, involving the interpretation and applicability of standard provisions in American General Insurance Company's automobile liability policy, concerning the loading and unloading clause, the omnibus clause with reference to additional insureds, the employee exclusion clause, and the severability of interests clause.

For convenience we will abbreviate the names of the parties to: American, Commercial, Berry, Adams, Rosson, Harris, and Fuller.

The following facts are undisputed: Fuller, the general contractor, employed Harris to deliver concrete, 'F.O.B. Jobsite.' American had issued an automobile liability policy to Harris. Fuller secured the services of Berry, who furnished the crane and two operators, Adams and Rosson, for the purpose of transporting the concrete from the transit mix truck, over the sidewalk fence down to the basement and into the forms. In the operation, concrete was poured from the truck into a bucket which was suspended from the cables on the crane. The bucket attached to the cables on the crane was filled by an employee of Fuller, not by a Harris employee. It was then lifted into the air by Adams and Rosson, Berry employees, and instructions and signals as to where it would be deposited were given by another Fuller employee.

At this point, Cain, Castillo, and Saenz, who were Fuller employees, positioned and emptied the bucket into the forms. The accident happened after several of such deliveries, but before the Harris truck had been completely unloaded. While Cain, Castillo and Saenz were positioning the bucket for release of the concrete into the forms, the turnbuckles on the cable supporting the jib extension on the crane became unscrewed to a point where the threads became stripped, allowing the jib to fall, dropping the concrete bucket on Cain, Castillo and Saenz, injuring them.

Commercial's liability policy covered only the owner of the crane (Berry) under the doctrine of Respondeat superior. This policy did not cover Berry's employees, Adams or Rosson. Fuller had at the time of the accident a policy of workmen's compensation insurance under which Cain, Castillo, and Saenz received various sums of money and benefits.

Thereafter, the three Fuller employees, and their compensation insurance carrier asserted claims for their damages against Berry, Adams and Rosson, and Castillo instituted suit against Berry. Demand was made by Berry, Adams and Rosson upon American to assume liability under the policy issued to Harris and to defend or settle these claims. American declined. Commercial effected settlement with all of these claimants. In this proceeding, by way of a cross action, Commercial sought recovery of the amounts of the various settlements together with attorneys' fees and expenses from American.

We must first determine whether Berry (crane owner) and Adams and Rosson (his employees and crane operators) were insureds under American's policy. They are insureds if they were in fact 'using' the Harris cement truck at the time the accident occurred. It was stipulated that if the injuries arose during loading or unloading of the concrete truck within the terms of the loading and unloading provision of American's policy, then Fuller, the general contractor, was also an insured (omnibus) under American's policy.

American's policy, issued to Harris, contained these provisions:

'III Definition of Insured * * *. With respect to the insurance for bodily injury liability * * * the unqualified word 'insured' includes the named insured * * * and also includes Any person while using the automobile and and person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured * * * or with the permission of (the named insured).' (emphasis ours.)

With reference to the requirement that the person claiming coverage by 'using' the automobile, the policy also provides in Paragraph IV(e):

'(3) Use of the automobile for the purposes stated includes the loading and Unloading thereof.' (emphasis ours.)

It was unanimously held in Travelers Insurance Co. v. Employers Casualty Co., 380 S.W.2d 610 (Tex.Sup.1965), under an almost identical fact situation, that the crane operator was covered by the liability policy on the truck because the cement trip in the bucket to such place of ultimate delivery (the forms) was merely an incident in the unloading operation. There, as here, the unloading of the truck had not been completed at the time of the accident. We rejected the minority view, the 'coming to rest' doctrine, that loading begins when the transported object has been brought into the immediate vicinity of and is being physically carried or lifted into the vehicle, and unloading ends when the object reaches a place of rest and is no longer being carried or lifted off of the vehicle.

In that opinion (at 612), we adopted the majority view, the broader construction that 'loading and unloading' embraces not only the immediate transference of the goods to or from the vehicle, but the 'complete operation' of transporting the goods between the vehicle and the place from or to which they are being delivered. St. Paul Mercury Insurance Co. v. Huitt, 215 F.Supp. 709 (W.D.Mich.1963), affm'd in part 336 F.2d 37 (6th Cir. 1964); Lamberti v. Anaco Eqmt. Co., 16 A.D.2d 121, 226 N.Y.S.2d 70 (1962); Wagman v. American Fidelity & Casualty Co., 304 N.Y. 490, 109 N.E.2d 592 (1952); American Employers Ins. Co. v. Brock, 215 S.W.2d 370 (Tex.Civ.App.--Dallas 1948), writ ref'd n.r.e.); see also, U.S. Fidelity & Guaranty Co. v. Hartford Accident & Indemnity Co., 209 Va. 552, 165 S.E.2d 404 (Va.1969); Annot., 160 A.L.R. 1259 (1946); Annot., 95 A.L.R.2d 1122 (1964); Risjord, Loading & Unloading, 13 Vand.L.Rev. 903 (1960).

American would distinguish the instant case from Travelers Insurance Co. v. Employers Casualty Co., supra, in that Fuller's purchase agreement in this case provided that Harris was to 'furnish and deliver, f.o.b. jobsite,' transit-mixed concrete. American argues that once the concrete had arrived at the jobsite, the unloading operation was complete because the owner of the concrete truck who furnished the concrete had nothing further to do with it. American contends that it is immaterial which doctrine ('coming to rest' or 'completed operation') is applied; under the former, the cement came to rest when it was deposited in the bucket provided by the general contractor; under the latter, the delivery of the particular concrete was completed when it was delivered at the site by being placed in the bucket, and there was no causal connection between the unloading by the truck and the accident which resulted in personal injuries.

American's latter contention--no causal connection between the accident and the ownership, maintenance or use of the vehicle--has also been rejected by this Court in Travelers Insurance Co. v. Employers Casualty Co., 380 S.W.2d 610. In that case Employers, Borders and Capitol were in the position of American, Berry and Harris in this case. We said, at 614:

'The issue here is not who owned or controlled the concrete but whether Borders was unloading the truck, and thereby using it, while the bucket full of concrete was being moved from the truck to the contractor's forms. If Capitol had rented or borrowed the crane and bucket, and its employees were using the same to unload the truck, the automobile liability policy would clearly protect Capitol and its employees against liability arising out of the accident involved in this case. Under the terms of the policy, the same protection is afforded Borders who was an additional insured using (unloading) the truck with the consent of Capitol.

'Employers also relies on the rule that there must be a causal relation or connection between the accident or injury and the ownership, maintenance or use of the vehicle. This does not mean that the accident must be caused by negligent operation of the vehicle or some defect therein. When a vehicle is being unloaded it is being used to the same extent as if it were being driven, and the person doing the unloading is entitled to the same protection as the owner or operator. In this instance the accident resulted from the collapse of the crane which was transporting concrete from the truck to the forms. Since the injuries arose out of the use (unloading) of the vehicle, it is our opinion that Borders was, as a matter of law, entitled to the protection afforded by the policy covering the truck.' (emphasis ours.)

That the contract between Harris and Fuller provided for delivery F.O.B. jobsite does not alter the law applicable to this case. The pertinent inquiry is not whether the contract had...