Zurich General Accident & Liability Ins. Co. v. Clamor

• Decision Date: 26 January 1942
• Docket Number: No. 7584.,7584.
• Citation: 124 F.2d 717
• Parties: ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Ltd., v. CLAMOR et al.
• Court: U.S. Court of Appeals — Seventh Circuit

124 F.2d 717 (1941)

ZURICH GENERAL ACCIDENT & LIABILITY INS. CO., Ltd., v. CLAMOR et al.

No. 7584.

Circuit Court of Appeals, Seventh Circuit.

November 28, 1941.

Rehearing Denied January 26, 1942.

Edward R. Adams and Wm. Simon, both of Chicago, Ill., for appellant.

Robert E. Wright, Robert E. Barrett, and John W. Costello, all of Chicago, Ill. (Edward Wolfe, of Chicago, Ill., of counsel), for appellees.

Before MAJOR and KERNER, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

Plaintiff, (hereinafter referred to as "Zurich") on May 7, 1940, filed a complaint by which it sought a declaratory judgment, Section 274d, Judicial Code, 28 U.S.C.A. § 400, as to the rights and liabilities of Zurich, and the defendant, Car & General Insurance Corporation, Ltd., (hereinafter referred to as "Car & General") arising from the issuance of two insurance policies, one by the former and the other by the latter. Zurich disclaimed liability in toto and Car & General, by counterclaim, disclaimed liability until Zurich had paid the principal amount named in its policy. The District Court heard the cause upon a stipulation of facts and the pleadings of the parties. It entered a decree finding Zurich liable to the extent of its policy, and Car & General liable only as an "excess insurer" over and above the limits of Zurich's policy. The appeal is from this decree, thus adjudicating the rights and liabilities of Zurich and Car & General.

On March 11, 1939, Zurich issued its policy of insurance to one James Dottini, insuring him against liability for personal injuries arising out of the operation of a named automobile. The policy also contained a so-called omnibus clause which extended the coverage to any person "while using the automobile * * * with the permission of the named assured." The omnibus clause was not applicable to "any person * * * with respect to any loss against which he has other valid and collectible insurance." On January 28, 1939, Car & General issued its policy of insurance to one James Clamor, insuring him against liability by reason of the operation of a certain automobile, which policy remained in force in the same form until June 7, 1939. On the latter date there was attached to this policy what was entitled "Drive Other Private Passenger Automobiles Endorsement." By this endorsement, Clamor's coverage was extended to include the driving of an automobile other than the one mentioned in the policy, with certain exceptions, among which are: (b) Such use is with the permission of any person having the right to grant such permission, and (e) the insurance shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to the automobile or otherwise, against a loss covered hereunder.

On February 4, 1940, Clamor, while driving an automobile owned by Dottini, and covered by the Zurich policy, struck and injured the defendant Rose Hyman. At the time of the accident Clamor was driving the car with Dottini's permission. Thereafter, Rose Hyman brought suit in the Superior Court of Cook County for damages alleged to have been the result of Clamor's negligence in the operation of the car. The essential controversy presented by the instant appeal is, which of these insurance companies is liable for damages which may be awarded against Clamor.

That each of said policies was in force at the time of the accident is not questioned. It is also beyond dispute that either of said insurers would be liable except for the policy of the other. Both endeavor to justify their respective positions by the exception provision of their policies. Zurich argues that Clamor, because of his contract with Car & General, had "other valid and collectible insurance" and, therefore, was not covered by Zurich. On the other hand, Car & General argues that because of the coverage afforded Clamor by Zurich, he had "other valid and collectible insurance" and, therefore, it is liable only as an excess insurer, i. e., Zurich is liable for the amount of its policy, and that Car & General is liable, if at all, only for an amount in excess of Zurich's liability.

The old controversy as to which came first, the hen or the egg, would be almost as easy of solution as the instant problem. Much of the argument is devoted to the point as to which of the policies first covered Clamor. Each of the insurers claims it was the policy of the other. This point, no doubt, is regarded as material for the reason that there is a line of authorities which fix liability upon the insurer which first covered the risk. Gutner v. Switzerland General Ins. Co. of Zurich, 2 Cir., 32 F.2d 700; New Amsterdam Casualty Co. v. Hartford Accident & Indemnity Co., 6 Cir., 108 F.2d 653; Michigan Alkali Co. v. Bankers Indemnity Ins. Co., 2 Cir., 103 F.2d 345, 347. From a memorandum opinion it appears that the District Court embraced this theory in deciding the case. It concluded that Zurich, when it issued its policy on March 11, 1939, insured not only Dottini, but a class of persons, one of whom was Clamor, and that Car &...