Berry v. Aetna Cas. & Sur. Co.
| Decision Date | 29 June 1970 |
| Docket Number | No. 11437,11437 |
| Citation | 240 So.2d 243 |
| Parties | Hollis BERRY, Jr., Plaintiff-Appellee, v. AETNA CASUALTY & SURETY COMPANY et al., Defendants-Appellants. |
| Court | Court of Appeal of Louisiana — District of US |
Lunn, Irion, Switzer, Johnson & Salley, by Richard H. Switzer, Shreveport, for defendants-appellants.
Pugh & Nelson, by Sydney B. Nelson, Shreveport, for plaintiff-appellee.
Feist, Schober & Gray, by Malcolm Feist, Shreveport, for defendant-appellee.
Before BOLIN, PRICE and WILLIAMS, JJ.
Plaintiff seeks to recover damages for personal injuries sustained in an accident occurring during the course and scope of his employment as an electrician with Libbey-Owens-Ford Glass Company. Named as defendants are C. W. Goldsby, operator of a fork lift truck, and two of his insurers; James E. Mambourg, plant manager; Curtis Davis, Jr., vice-president in charge of the Window Glass Division; Melvin Burwell, vice-president in charge of Employee Relations; and Aetna Casualty & Surety Company, comprehensive liability insurer for all executive officers of Libbey-Owens-Ford Glass Company, alleged to include Dale H. Kuhlman, personnel director of hourly employees and safety officer, as well as Mambourg, Davis and Burwell. C. W. Goldsby's insurers obtained summary judgments in their favor prior to trial, affirmed by this court in 221 So.2d 272. Following trial on the merits the jury returned a verdict in favor of C. W. Goldsby, the correctness of which is not disputed on this appeal. Judgment was rendered in favor of plaintiff against Aetna Casualty & Surety Company as the insurer of Mambourg, Davis, Burwell and Kuhlman and against James E. Mambourg, Curtis Davis, Jr. and Melvin Burwell in solido in the amount of $450,000, less a credit in favor of Aetna Casualty & Surety Company for all workmen's compensation paid by it to plaintiff. From this judgment all defendants, except C. W. Goldsby, have appealed.
On December 15, 1967, while working in his capacity as an electrician for Libbey-Owens-Ford Glass Company, plaintiff was ordered to replace large overhead light bulbs in the warehouse. Defendant Goldsby was assigned to drive a battery-powered electric fork lift truck. Attached to this truck was a large metal cage in which plaintiff was to stand in order to change the bulbs. The rectangular cage rested on four metal legs, and to each leg was welded a rectangular piece of channel iron. The prongs of the fork lift could thus be inserted through these rear rectangular channel irons and partially through those toward the front of the cage. By means of a safety chain with an open-end hook the rear legs of the cage were fastened to the fork lift truck.
After changing some 50 to 60 bulbs, Goldsby began a backing maneuver, lowering the cage partially to clear a steel beam. Plaintiff ducked as the cage passed under the beam and upon arising noticed the cage was headed directly toward an overhead electric fan . Plaintiff yelled to Goldsby to stop, and Goldsby immediately released the lever which controls the brakes on the fork lift. However, the fork lift failed to stop in time to avoid a collision between the cage and the overhead fan. As a result of the collision, the safety chain came off causing the basket to slide forward. The front channel irons being free of the prongs, the rear channel irons broke due to the combined weight of the cage and its contents. The cage fell forward off the fork lift truck throwing plaintiff onto the floor of the warehouse resulting in the serious injuries for which he brings this suit.
Defendants assert ten errors on the part of the trial court which can be summarized into five issues on this appeal:
I. Who are executive officers and thereby insureds under Aetna's Comprehensive liability policy?
II. Is plaintiff's action against the executive officers excluded from coverage under the insurance policy?
III. What is the liability of executive officers of a corporation toward an employee of the corporation?
IV. Are any of these defendants liable for plaintiff's injuries?
V. Did the jury abuse its discretion as to the quantum of damages awarded the plaintiff herein?
The resolution of some of the issues may pretermit the necessity of considering others. However, because we think this case has great legal significance, we shall discuss them all except quantum.
The liability policy in pertinent part defines an insured as:
'The unqualified word 'Insured' includes the named Insured and also includes (1) under Coverages C and D, any executive officer, director or stockholder thereof while acting within the scope of his duties as such * * *'
Defendants concede that Davis and Burwell, being vice-presidents of Libbey-Owens-Ford Class Company, are unquestionably executive officers and therefore insureds under the policy. However, defendants contend that Mambourg and Kuhlman are not executive officers of the corporation.
In Bruce v. Travelers Insurance Company, 266 F.2d 781, 784 (CCA5th, 1959), the court stated:
'The term (executive officer) implies some sort of managerial responsibility for the affairs of the corporation generally and it imports a close connection with the board of directors and high officers of the company.'
The above language has been quoted with approval by the Louisiana courts. Employers Liability Assurance Corporation v. Upham, 150 So.2d 595 (La.App. 4 Cir. 1963); Thibodeaux v. Parks Equipment Company, 185 So.2d 232 (La.App. 1 Cir. 1965).
It is clear the term 'executive officer' covers something more than, and is not restricted to, 'corporate officers'. If not, certainly the insurance company which drew up the contract would have used that terminology. Guillory v. Aetna Insurance Company, 415 F.2d 650, 652 (CCA5th, 1969).
Mambourg's testimony reflects he was plant manager of the Shreveport plant of Libbey-Owens-Ford from August 1965 until his retirement on June 23, 1969. He was the man in charge of all employees, totaling from 550 to 650. Under Mambourg were numerous department heads who reported directly to him. Under each department head there was a foreman or supervisor, following which were one or two shift superintendents. Lastly, there were the hourly laborers. Mambourg had the overall responsibility for the management of the plant. His immediate supervisor was C. W. Davis, Jr., vice-president in charge of Window Glass, whose primary duties consisted of supervising the operations at the Shreveport plant and the other window glass plant in West Virginia. Mambourg had the authority to fire an employee at the local plant, although he ordinarily consulted Davis before doing so.
We conclude that since Mambourg was directly under a corporate officer, Davis, and participated in the formulation and execution of company policy with respect to all areas of production at the Shreveport plant, he was an executive officer of the corporation within the terms and provisions of the insurance policy.
Kuhlman's testimony shows he is personnel director of Hourly Employees, his duties encompassing safety, first-aid, employment and recreation for all eleven plants of the corporation. Kuhlman's immediate supervisor is Melvin Burwell, vice-president in charge of Employee Relations. His duties involve responsibility for the safety of all the hourly employees of the corporation generally, and his position is one closely connected with the officers of the corporation at the home office in Toledo, Ohio. Although not a corporate officer, he is an executive officer and an insured under the policy.
Since we are of the opinion that Mambourg and Kuhlman, as well as Davis and Burwell, were factually and legally executive officers within the terms of the policy, this pretermits the necessity of determining whether or not the question should have been submitted to the jury or left to the court.
Defendant Aetna contends the policy extends no coverage because of the following exclusionary clause:
'This policy does not apply: (d) under Coverages A and C, to any obligation for which the Insured or any carrier as his insurer may be held liable under any workmen's compensation, unemployment compensation or disability benefits law, or under any similar law; * * *'
Defendants' argument was rejected by the trial court. In his reasons for refusing to grant a motion for summary judgment the judge stated:
We conclude the quoted portion of the decision of the district court was correct. While we have not been cited a Louisiana case dealing with the same exclusionary clause as the one herein, plaintiff has called our attention to the case of Curran Development Company v. Security Insurance Company, 194 F.Supp. 727 (W.D.Ark.1961), in which the court reached the same result as the trial court in this case. The reasoning in Curran is in accord with the policy of the Louisiana courts to construe strictly exclusionary clauses against the insurer. Bezue v. Hartford Accident & Indemnity Company, Hartford, Connecticut, 224 So.2d 76, (La.App. 1 Cir. 1969) Wilks v. Allstate Insurance Company, 195 So.2d 390, (La.App. 3 Cir. 1967); Commercial Union Insurance Company of New York v. Hardcastle, 188 So.2d 698, (La.App. 2 Cir. 1966).
Defendants argue an officer, employee or agent of a corporation is not personally liable to a third party except for...
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