Boulter v. Commercial Standard Ins. Co.
| Decision Date | 26 July 1948 |
| Docket Number | No. 27857-R.,27857-R. |
| Citation | 78 F. Supp. 895 |
| Parties | BOULTER et al. v. COMMERCIAL STANDARD INS. CO. |
| Court | U.S. District Court — Northern District of California |
Nathan G. Gray, of Berkeley, Cal., for plaintiffs.
Robert Cathcart and Dana, Bledsoe & Smith, all of San Francisco, Cal., for defendant.
The Reserved Motion for Directed Verdict.
The Defendant's Alternative Motions.
The plaintiffs, by their action, sought to recover from the defendant a total of $5,118.76, with interest, alleged to be due on a judgment secured by them on September 16, 1947, in the Superior Court of the State of California, in and for the City and County of San Francisco, against Allen J. Warner and Robert W. Woodrow.
Warner and Woodrow were co-partners engaged in the transportation of property for hire, as a business, over public highways in the State of California, by means of motor vehicles. They had been authorized by the Railroad Commission of California to operate such business, and obtained a permit, as required by the law of California.1 When the permit was issued, they were required by the Commission to secure a policy of public liability. The policy was issued by the defendant on April 19, 1946, and was in effect on June 22, 1946, when the accident for which the recovery had been had in the Superior Court action occurred. The defendant, having refused to pay the judgment, this action was instituted. A motion for a directed verdict, made by the defendant at the close of the plaintiffs' case, was denied. At the conclusion of all the evidence, the defendant again moved for a directed verdict. Action on the motion was reserved.2 The jury returned a verdict in favor of the plaintiffs. The defendant has moved for a judgment notwithstanding the verdict, or, in the alternative, for a new trial.
The Decisive Question.
Under the interpretation which the Supreme Court has placed on Rule 50(b), we are required to rule on both motions.3 The decision to be arrived at depends on our answer to one question:
Was the accident and the consequent injury to the plaintiffs, for which they recovered, in the Superior Court of the State of California, the judgment sued on here, within the terms of the public liability policy issued by the defendant?
And the answer is conditioned on the meaning of Declaration No. 5 in the policy, which reads:
"The automobiles described are and will be used only for transportation of merchandise purposes and will be operated as follows, and this insurance covers for no other use or operation:"
Compliance with the statutory insurance requirement is a condition precedent to the granting of a permit by the California Railroad Commission.4
Under the Insurance Code of California, common carrier liability insurance includes insurance against any loss "from liability of a common carrier for accident or injury, fatal or nonfatal, to any person."5 And, while such liability includes any loss for which the peril insured against was the proximate cause, it excludes any liability "for a loss of which the peril insured against was only a remote cause."6
The collision between the truck owned by the defendant and the automobile of the plaintiffs, which resulted in injury to them, occurred in Humboldt County, California, at a distance of three miles from the town of Scotia, on Public Highway 101. Warner, one of the partners in the trucking business, is our sole source of information as to the circumstance under which he found himself on June 22, 1946, with the truck, without the trailer, at the place where the accident occurred. His story is contradictory. The version he gave on the first day of the trial as to the object of his trip from San Francisco differs from that which he told at the trial in the Superior Court, and at a hearing in this court in an action for declaratory judgment, to which he was made a party, and in which a declaration of non-coverage was secured against him and his co-partner.7
In those proceedings, he insisted that the trip from San Francisco, where his business is located, to a small lumber town and resort thirty miles south of Eureka, where his sister resides, was purely a pleasure trip. He took his mother and his wife to see his sister, and to vacation. At the trial here, he claimed that the trip combined both business and pleasure. The business feature of the trip lay in the fact that he carried some 750 feet of pipe and some furniture and stoves for his sister, for which she paid him $75. After his arrival in Humboldt County, he remained nearly a week, during which he assisted in the laying of a water line, leaving the work to be finished by more expert mechanics. He returned to San Francisco, a distance of some 250 miles, on June 22, 1946, leaving behind the trailer, which weighs 5 tons, and has a capacity of 15 tons. There was still some pipe on it, and some of the goods which he had brought up. In fact, on his second trip to San Francisco, he took back a large stove which his sister could not use. His wife accompanied him on the return trip. the sole object was to pay a premium on the liability policy here involved, which was due June 22, 1946, and which he claims he paid with the cash into which he converted the travelers' checks in the sum of $75, which his sister had given him in payment for transporting the pipe and the household goods.
After the motion for a directed verdict had been made at the conclusion of all the testimony, Warner was recalled for the purpose of amplifying the version given the day before, and particularly, the statement that in returning to San Francisco, he also had in mind soliciting trucking business from a contractor residing at San Jose — a Mr. Dowdell. So, on the second day of the trial, he added that he had in mind soliciting from Dowdell and another contractor for whom he had previously transported materials, but that, as a fact, he did not do so after reaching San Francisco. On the contrary, after paying the premium, he started back for Humboldt County, where he picked up the trailer returning to San Francisco once more.
We are confronted here with the inherent improbability of a story, which bears almost on the fantastic. Motivation appears in the fact, admitted by Warner on the stand, that he made no mention whatsoever of the transportation of the pipe when he reported the accident to the highway patrol officer who interviewed him at the scene, or to the agent of the defendant, to whom he gave a full statement of the accident, which was reduced to writing and signed by him. In these statements, made shortly after the accident, the aim of the trip was given as a vacation for his mother, wife, and himself. He claimed that the reason for the omission of the fact that he was carrying the pipe and the household goods was that he thought it unimportant. He admitted, however, that he began to think about the possibile significance of the transportation feature of the trip, when, in talking to other truck operators, they reminded him that this transportation might have a bearing upon the liability insurance which he carried. One fact stands out in this narrative: The claimed main purpose of the return trip was to pay the premium. This was, in fact, its sole purpose, because we cannot consider any intention not carried into effect, such as solicitation of business.
The Law Applicable.
It is to be borne in mind that we are interpreting a contract which contains a condition or limitation of liability, regardless of who has the burden of proof.8 Liability does not attach unless the truck, whether alone or with the trailer attached, was actually being used in the transportation of merchandise for hire. And when the facts are not disputed, — whether the truck was, at the time of the accident, engaged in the sole activity covered by the policy is a question of law for the court.9
In interpreting exceptions or limitations of the type here involved, courts have adopted a latitudinarian rule of construction. And, if it appear that a vehicle coverd by the policy, while not strictly used in the activity to which the exception limited it, was being used in the doing of something which, either under the terms of the policy, or under a broad rule of construction, could be considered "incidental" to the main activity, courts will not hesitate to find liability. Illustrative are the following:
When a policy covered a vehicle operated as a "jitney bus," the fact that, at the time of the accident, it was on a different route than the route to which it was limited by municipal ordinance does not affect liability.10
Insurance of an automobile while used in the business of "auto tours" applied to the return trip to a passenger's home, when, by reason of bad weather, the trip to the real estate development was cancelled.11
Liability has also been found when there was deviation from the route of a truck,12 where a tractor and trailer were standing empty on the highway after they broke down and their cargo was removed,13 when the vehicle turned into a garage or shop for repair,14 and when a motor bus, after arriving at its terminal, traversed the streets of a city for the purpose of being gassed or parked.15
Behind all these cases runs the norm that if the vehicle, at the time of the accident, can be said to be on a mission incident to the object to which its use is limited, the courts will give full effect to the policy.
However, if the vehicle is doing something totally unrelated to the use or the physical incident which resulted in the accident is not contemplated by the policy, liability does not exist. Thus, indemnity insurance on vehicles used "incidental to business of funeral director" does not include use of an automobile to transport, for hire, a wedding party.16
A "collision" does not include the turning over of an automobile on the edge of a road without striking or colliding with another object other than the ground,17 or the striking of...
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...Rightly. For, of necessity, such interpretation would involve a purely legal question. See my recent opinion in Boulter v. Commercial Standars Ins. Co., 78 F. Supp. 895. However, a study of the problem leads me to the conclusion that none of the defenses presented by the defendant can be so......