American Home Assur. Co. v. State Farm

• Decision Date: 31 October 1969
• Court: California Court of Appeals Court of Appeals
• Parties: AMERICAN HOME ASSURANCE COMPANY, Plaintiff and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Respondent. Civ. 12090.

Page 732

81 Cal.Rptr. 732

1 Cal.App.3d 355

AMERICAN HOME ASSURANCE COMPANY, Plaintiff and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Respondent.

Civ. 12090.

Court of Appeal, Third District, California.

Oct. 31, 1969.

Rehearing Denied Nov. 28, 1969.

Hearing Denied Dec. 23, 1969.

Coshow & Barr, by John D. Barr, Redding, for plaintiff-appellant.

Hardy, Erich & Brown, by Cavan Hardy, Sacramento, for defendant-respondent.

DAVID, Associate Justice pro tem.

Appeal from summary judgment in a proceeding for declaratory relief before the Superior Court of Shasta County.

Mrs. Dorothy L. Crawford, an invitee or independent contractor, was unloading some boxes from the rear of her station wagon, parked in McColl's Dairy parking lot, when she slipped and fell because of a defect in the parking lot. She sued McColl's Dairy, which was insured for public liability with appellant American Home Assurance Company. Mrs. Crawford was insured for injuries with respondent State Farm Mutual for liability incurred for injuries To others arising out of the use of her automobile.

American Home claimed that its insured, McColl's, was an additional insured under the State Farm policy. Its argument then depends on construction of the clause which excludes coverage for injuries to the insured. It claims that since McColl's is the 'insured' seeking coverage, the exclusion applies to it, and since McColl's did not sustain injuries, the State Farm policy covers Mrs. Crawford's injuries.

American Home tendered the defense of Crawford's action against McColl's Dairy to State Farm, which refused it. The present action for declaratory relief was thereupon brought by American Home against State Farm, and judgment for the latter is now appealed. The judgment must be affirmed.

This matter was presented to the trial court, as a matter of law predicated on the State Farm policy. No facts are before us concerning the incident itself, except the statement above, substantially conceded in the briefs and argument.

Appellant candidly opened its brief by the observation that 'coverage problems such as this often require a substantial amount of mental gymnastics.' Appellant now urges us to take one leap further than Entz v. Fidelity & Casualty Company of New York (1966) 64 Cal.2d 379, 50 Cal.Rptr. 190, 412 P.2d 382, which held that 'loading and unloading' constitute use of the automobile, which 'use' continues throughout the process. However, here, McColl's Dairy was Not engaged in any operation shown by the record to have constituted 'loading and unloading.' The condition of the premises herein was static, Not actively in use in the unloading process (cf. Columbia Southern Chemical Corp. v. Manufacturers and Wholesalers Indemnity Exchange (1961) 190 Cal.App.2d 194, 202, 11 Cal.Rptr. 762; Shippers Development Co. v. General Insurance Co. of America (1969) 274 A.C.A. 733, 740--745, 79 Cal.Rptr. 388).

We are unable to make the double backflip of holding that a policy of insurance, issued to C to protect her against any liability she might incur as to M in the use of her vehicle, protects M against liability to her for personal injury incurred due to M's negligence, when the policy excludes any coverage for injury to herself.

Dorothy L. Crawford was the named insured in the State Farm policy. The policy specifically excluded coverage for bodily injury to the insured. Under the terms of the policy, State Farm agreed to 'pay on behalf of the insured all sums which the insured shall be legally obligated to pay as damages because of (A) bodily injury sustained by other persons, and (B) property damage. * * *' It insured (1) the named insured, (2) also, (if residing in the same household) the spouse of the named insured and their respective relatives (3) the use of the auto by the named insured or spouse within the scope of such permission, and (4) under personal injury and property damage coverages, any person or organization legally responsible for the use of such an insured automobile by any insured person in the categories listed.

We are not impressed with the contention that McColl's Dairy, owner of the defective premises, was a person or organization 'using' the Crawford automobile with Crawford's permission while She unloaded it and hence was covered for liability to her resulting from injuries which she incurred. (Entz v. Fidelity & Casualty Co., supra, 64 Cal.2d at p. 385, 50 Cal.Rptr. 190, 412 P.2d 382; Columbia Southern Chemical Corp. v. Manufacturers and Wholesalers Indemnity Exchange, supra, 190 Cal.App.2d at p. 202, 11 Cal.Rptr. 762; Veh. Code, § 16451; Truck Ins. Exchange v. Webb (1967) 256 Cal.App.2d 140, 145--146, 148, 63 Cal.Rptr. 791.) Appellant claims that McColl's 'is an organization legally responsible for the use of the automobile which Mrs. Crawford was unloading in its parking lot.' (AOB, p. 6) The definition of 'insured' involved is: '(5) under coverages A and B any person or organization legally responsible for the use of such owned automobile by an insured as defined under the four subsections above.'

A passive, dangerous and defective condition of the premises upon which the automobile is parked is not to be conjured into 'the actual use of such automobile.' The phrase, 'person or organization legally responsible for use of such owned automobile,' does not in ordinary usage of the language include one responsible for the parking area on which it rests. (Pacific Indemnity Co. v. Truck Ins. Exchange (1969) 270 A.C.A. 776, 76 Cal.Rptr. 281.) Under the case last cited, we must hold that this injury arose from an intervening cause wholly independent and remote from the use of the automobile. (Cf. Great American Ins. Co. v. General Accident Fire & Life Assur. Corp. (1963) 5 Cir., 321 F.2d 948.) Rather, we ascribe to the phrase 'organization legally responsible' the recognized responsibilities of a principal, where agency is involved, of an employer, where an injury arises out of the scope of employment, or the vehicle owner, under the owner's statutory liability.

Accordingly, upon the facts and policy involved here, appellant's reliance is misplaced...