California Packing Corp. v. Transport Indem. Co.

• Court: California Court of Appeals
• Writing for the Court: ELKINGTON; MOLINARI, P.J., and SIMS
• Citation: 275 Cal.App.2d 363,80 Cal.Rptr. 150
• Parties: CALIFORNIA PACKING CORPORATION, a corporation, Plaintiff and Appellant, v. TRANSPORT INDEMNITY COMPANY, a corporation, Defendant and Respondent. Civ. 24921.
• Decision Date: 01 August 1969

Page 150

80 Cal.Rptr. 150 275 Cal.App.2d 363 CALIFORNIA PACKING CORPORATION, a corporation, Plaintiff and Appellant,
v.
TRANSPORT INDEMNITY COMPANY, a corporation, Defendant and Respondent. Civ. 24921. Court of Appeal, First District, Division 1, California. Aug. 1, 1969.
Rehearing Denied Aug. 26, 1969.
Hearing Denied Sept. 24, 1969.

Page 151

[275 Cal.App.2d 365] Bronson, Bronson & McKinnon, San Francisco, for appellant.

Toff, Gordon & Royce, Mountain View, for respondent.

ELKINGTON, Associate Justice.

Plaintiff California Packing Corporation (Cal-Pack) appeals from a judgment entered in a declaratory relief action brought against defendant Transport Indemnity Company (Transport) for the purpose of determining the respective liabilities of Cal-Pack's insurance carrier Fireman's Fund Insurance Company (the Fund) and Transport, for personal injuries sustained by one David E. Thomas.

Thomas, an employee of Miles Motor Transport System (Miles), drove his employer's truck onto premises of Cal-Pack to pick up a load of empty boxes. He was injured when a forklift, operated by Cal-Pack's employee Moses Melton, became entangled in the truck's tie-down cable. At the time Melton (as was determined by a jury in the instant action) was engaged in loading the Miles truck. Thomas commenced an action for personal injuries, naming both Cal-Pack and Melton as defendants. These parties tendered defense of the action to Transport whose insurance policy covered the Miles truck. The tender was rejected by Transport. Subsequently, the case was settled by the Fund, as Cal-Pack's insurer, for $13,875. The Fund incurred an obligation of $700 in attorney fees in defending the Thomas action.

Page 152

Under its policy, the Fund's liability limit was $100,000 for each person injured. Transport's limit, as indicated by a policy in evidence at the trial, appeared to be $10,000 for each [275 Cal.App.2d 366] person injured. The trial court concluded that the two insurance carriers were liable for the Thomas settlement in proportion to their respective coverage limits. The Fund's liability was computed at $100,000/110,000 of the whole, or $13,250, and Transport's share at $10,000/110,000, or $1,325. It was accordingly adjudged that Transport pay to the Fund's insured, Cal-Pack, $1,325.

Cal-Pack contends, as a matter of law, that the trial court's allocation of liability was erroneous. It points out that Miles and its insurance carrier have a 'primary' liability for Thomas' injuries since Melton, the tort-feasor, was directly insured as a permissive user of the Miles truck. Cal-Pack then argues that its own liability is 'secondary' since it arises solely by virtue of the doctrine of Respondeat superior.

Relying on Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 296 P.2d 801, 57 A.L.R.2d 914; United States Fire Ins. Co. v. Transport Indem. Co., 244 Cal.App.2d 110, 52 Cal.Rptr. 757; and Pleasant Valley Lima Bean Growers and Warehouse Ass'n v. Cal-Farm Ins. Co., 142 Cal.App.2d 126, 298 P.2d 109, Cal-Pack contends that Transport must contribute toward the Thomas settlement the full amount of its policy limit, which the parties in their briefs agreed was $10,000. These cases hold that where an employer's tort liability exists solely by virtue of the unauthorized negligence of an employee, automobile liability insurance directly covering the employee must first be exhausted before resorting to insurance covering only the secondarily liable employer.

This contention of Cal-Pack is unacceptable for the reason that its liability for Thomas' damages is also Primary. This liability arises from the admitted fact that Melton's permissive use of the Cal-Pack owned forklift, during the loading operation, proximately contributed to Thomas' injuries.

The Fund's policy insures against liability arising out of the use of any 'automobile.' It then proceeds to define that term rather enigmatically. ¹ Our best effort

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to [275 Cal.App.2d 367] understand this definition and apply it to the facts and circumstances of the instant case leads us to this meaning: An insured automobile is an owned automobile or land motor vehicle, unless it is equipment designed for use principally off public roads and is not subject to motor vehicle registration. ²

The parties concede that a forklift is a 'land motor vehicle.' Such a vehicle is obviously designed 'for use principally off public roads.' But if it is subject to motor vehicle registration it is nevertheless an insured automobile under the Fund policy.

Vehicle Code section 4000 generally provides that all motor vehicles used upon highways shall be registered. An exception is provided by Vehicle Code section 4013 which states: 'Any forklift truck which is designed primarily for loading and unloading and for stacking materials and is operated upon a highway only for the purpose of transporting products or material across a highway in the loading, unloading or stacking process, and is in no event operated along a highway for a greater distance than one-quarter mile is exempt from registration.' It is apparent that whether a forklift which is a motor vehicle is subject to registration, can be determined [275 Cal.App.2d 368] only by reference to the use to which the individual machine is put.

It follows that forklifts generally Are subject to registration when operated on a highway, other than for crossing, and in any event when used along a highway for more than a quarter mile. On the other hand they Are not subject to registration when operated within the limits set by section 4013.

The Fund policy exempts from coverage certain motor vehicles 'not subject to motor vehicle registration.' It is not clear whether the reference is only to classes of motor vehicles which are per se exempt from registration (e.g., special construction equipment; see Veh.Code, § 4010), or if it includes individual vehicles ordinarily subject to such registration, but exempt therefrom because of the limited nature of their use (e.g., forklifts; see Veh.Code, § 4013.)

'If the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the doubt relates to extent or fact of coverage, * * * the (policy's) language will be understood in its most inclusive sense, for the benefit of the insured.' (Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 437--438, 296 P.2d 801, 809--810; Pleasant Valley Lima Bean Growers and Warehouse Ass'n v. Cal-Farm Ins. Co., 142 Cal.App.2d 126, 132, 298 P.2d 109.)...