United States Fidelity & Guaranty Co. v. Church

• Decision Date: 20 May 1952
• Docket Number: No. 28766.,28766.
• Citation: 107 F. Supp. 683
• Court: U.S. District Court — Northern District of California
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. CHURCH et al.

107 F. Supp. 683

UNITED STATES FIDELITY & GUARANTY CO. v. CHURCH et al.

No. 28766.

United States District Court N. D. California, S. D.

March 18, 1952.

As Amended May 20, 1952.

Knight, Boland & Riordan, San Francisco, Cal., for plaintiff.

Russell F. King, Richmond, Cal., for defendant Church.

Emmett R. Burns, San Francisco, Cal., for defendants Thomas Rigging Co. and Canadian Indemnity Co.

Hadsell, Sweet, Ingalls & Murman, Sydney P. Murman, Everett A. Ingalls, San Francisco, Cal., for defendant Headrick & Brown Co.

Tinning & DeLap, J. Vance Porlier, Richmond, Cal., for defendant Thomas Goff.

MURPHY, District Judge.

Petitioner brings this action under the provisions of the Federal Declaratory Judgment Act, §§ 2201 and 2202 of Title 28 U.S. C., for a declaration of the respective rights, duties and liabilities of the named parties growing out of a judgment for personal injuries recovered by defendant Church in a state action. There is diversity of citizenship and the sum in issue exceeds $3,000.

Facts

The controversy giving rise to this action had its origin in an injury sustained by Walter M. Church while engaged in unloading a girder from a truck owned and operated by the Thomas Rigging Co. On April 1, 1948, the said truck delivered a girder to the premises of the Butler Manufacturing Co., in Richmond, California, pursuant to a contract with the owner of the girder to deliver it F.O.B. that destination. Upon its arrival, Thomas Goff, an employee of Headrick & Brown, a partnership performing certain work for Butler Bros., assumed supervision of the unloading. Slings were placed around the girder. The rear chain binders were released by the truck driver. Church, who had accompanied the driver (in what capacity does not appear), was then directed to remove the front chain binder. While so doing, and while the girder was still resting upon the trailer bed, Goff negligently allowed the beam to shift, precipitating Church to the ground.

Suit was filed in the Superior Court of Contra Costa as a consequence of the severe injuries sustained by Church in the fall. Named as defendants in the second amended complaint were, inter alia, "Butler Manufacturing Co., a corp., * * * Headrick & Brown, a copartnership consisting of Bern Headrick Sr., and Russell Brown, Thomas Goff, * * *". (The defendants in that action who did not figure in the verdict and judgment are omitted from this recitation of facts.) The pleadings were drawn, case tried, and proposed verdicts framed upon the theory that Thomas Goff, while acting in the scope of his employment by Headrick & Brown, negligently caused the injury.

The jury brought in a verdict as follows:

"* * * for the plaintiff Walter M. Church and against Headrick & Brown, et al. and Butler Mfg. Co., and assess damages in the sum of $47,500.00 * * *." (Emphasis added.)

The verdict against Butler Mfg. Co. was later vacated and set aside.

Judgment was entered in the following terms:

"That said plaintiff Walter M. Church do have and recover of and from said defendants Headrick & Brown, a co-partnership consisting of Bern Headrick, Sr. and Russell Brown, and Thomas Goff, the sum of Forty-Seven Thousand Five Hundred ($47,500.00) Dollars, together with all the said plaintiff's costs and disbursements incurred herein in this action, amounting to the sum of $1,294.27."

Motions for judgment notwithstanding the verdict and for new trial were denied. Headrick & Brown appealed, the judgment was affirmed, and it has now become final as to each of the defendants. Execution against Goff was returned unsatisfied. He is apparently judgment proof. Hence this action to determine ultimate liability of the respective insurance carriers.

On April 1, 1948, there was in force the Canadian Indemnity Company's Comprehensive Bodily Injury and Property Damage liability policy issued to Thomas Rigging Company, owners and operators of the truck. The applicable limit of liability under it is $100,000. It carries an omnibus clause which extends coverage to anyone using the vehicle with the permission of the named insured, the Thomas Rigging Co. The contract defines assured as:

"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 is with the permission of the named insured." (Emphasis added.)

The next succeeding definition is that of "automobile":

"Automobile means a land motor vehicle, trailer or semi-trailer (and the loading or unloading thereof), which is owned, maintained or used by or for the insured * * *." (Emphasis added.)

There is no definition of "using" other than that appearing above.

On April 1, 1948 there was also in force United States Fidelity and Guaranty Company's Manufacturer's or Contractor's Scheduled liability policy, insuring the individuals constituting the copartnership of Headrick & Brown. It is not an automobile policy and does not have an extended insurance or omnibus clause. It insures Headrick & Brown against loss which that company shall become obligated to pay by reason of liability imposed on it by law. It affords coverage in the amount of $50,000. There is contained in the contract the usual subrogation provisions.

Finally, both policies contain "other insurance" clauses. Canadian Indemnity's is of the type commonly referred to as an "excess insurance" clause:

"If at the time of an accident there is any other insurance available to the insured * * * there shall be no insurance afforded hereunder as respects such accident except that if the applicable limit of liability of this policy is in excess of the applicable limit provided by the other insurance available to the insured this policy shall afford excess insurance over and above such other insurance * * * to the applicable limit of liability afforded by this policy. * * * Insurance under this policy shall not be construed to be concurrent or contributing with any other insurance which is available to the insured." (Emphasis added.)

U. S. F. & G.'s policy contains what has been designated as a "pro-ration" clause:

"If the Insured has other insurance against a loss covered by this policy the Company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declaration ($50,000.00) bears to the total applicable limit of liability of all valid and collectible insurance against such loss.

There are two cross-complaints in this action, one by Thomas Goff against the Canadian Indemnity Co. in which he sets out that he is an insured under the subject policy, that he has outstanding against him a judgment which with interest now exceeds $50,000, that he has no assets to satisfy it, and that Canadian has refused to pay it. He seeks exoneration and costs of litigation. The other, that of Walter Church, the injured man, sets out substantially the same facts and he therefore asks that he be given a judgment against Canadian plus costs in this proceeding. Since this case was submitted U. S. F. & G. has paid to Church, in satisfaction of his judgment, the sum of $56,576.48. Headrick & Brown have filed counterclaims, one against U. S. F. & G. and one against Canadian, in which they ask that the liability of the companies be declared and that they be awarded costs of litigation. U. S. F. & G. also claims that Canadian should answer for their costs of defense and suit.

Issues

Four principal questions are posed by the various counsel in their briefs:

1. Is the judgment against Thomas Goff valid?

2. Is Goff an insured under the provisions of Canadian's omnibus clause?

3. Upon whom does ultimate liability fall?

4. Against whom should costs and attorney's fees be assessed?

Discussion

Validity of the Judgment:

It is the contention of Canadian that the state court's judgment is invalid as to Goff because "it enlarges the verdict." It is not denied that the only defendants remaining in the action at the time of judgment were Headrick & Brown as a copartnership, and Thomas Goff, the employee thereof. Nor is it denied that as to these the pleadings, trial, instructions and proposed verdicts were framed on the theory that Goff was the primary tort-feasor and Headrick & Brown were liable through him on the basis of respondeat superior. There is no evidence that plaintiff contended for other than derivative liability of the employer. There is no claim in this proceeding that the state court lacked jurisdiction of the persons or the subject matter. Pioneer Land Co. v. Maddux, 109 Cal. 633, 42 P. 295.

Judgment is defined by the Code as the "final determination of the rights of the parties in an action or proceeding", Calif. Code of Civil Procedure, § 577. It is to be entered in accordance with the verdict. In construing the verdict reference may be had to the pleadings, the evidence and the charge of the court, Snodgrass v. Hand, 220 Cal. 446, 448, 31 P.2d 198. In the light of the factors adverted to above, it does not appear that the trial court's interpretation of the verdict was in error. Snodgrass v. Hand, supra; Johnson v. Visher, 96 Cal. 310, 31 P. 106; Ochoa v. McCush, 213 Cal. 426, 2 P.2d 357.

However this may be, authority to enter such a judgment includes the power to enter an erroneous one. If the judgment was not in accord with the verdict, the Code provides certain remedies for its correction. These were not employed nor has Goff ever made objection to the form of the judgment as entered. As stated in 15 California Jurisprudence at page 82, "Where a court has jurisdiction it has a right to decide every question arising in the cause, and whether its decision be correct or otherwise its judgment until reversed or set aside is binding on every other court." It will not be disturbed in this collateral proceeding.

Coverage of Canadian's Policy:

By its omnibus definition of insured, Canadian's policy explicitly extends coverage to "Any person...