Canal Insurance Company v. Brooks

• Citation: 201 F. Supp. 124
• Decision Date: 23 January 1962
• Docket Number: Civ. A. No. 7754.
• Parties: CANAL INSURANCE COMPANY v. J. C. BROOKS, Jr., Willard O. Martin, Mrs. Doris Martin, Margaret Ann Martin, Mickey Lane Martin and Ernestine Hemphill.
• Court: U.S. District Court — Western District of Louisiana

201 F. Supp. 124

CANAL INSURANCE COMPANY v. J. C. BROOKS, Jr., Willard O. Martin, Mrs. Doris Martin, Margaret Ann Martin, Mickey Lane Martin and Ernestine Hemphill.

Civ. A. No. 7754.

United States District Court W. D. Louisiana, Shreveport Division.

January 23, 1962.

Thomas M. Hayes, Jr., Hayes, Harkey & Smith, Monroe, La., for plaintiff.

Sidney E. Cook, Cook, Clark, Egan, Yancey & King, Shreveport, La., Julian E. Bailes and Gerard F. Thomas, Jr., Natchitoches, La., Cas B. Moss, Moss & Moss, Winnfield, La., John Makar, Natchitoches, La., R. C. Martin, Nelken & Martin, Natchitoches, La., for defendants.

BEN C. DAWKINS, Jr., Chief Judge.

Canal Insurance Company (insurer) brings this action for a declaratory judgment (28 U.S.C.A. §§ 2201, 2202), against (1) J. C. Brooks, its insured under a certain automobile liability insurance policy issued on May 23, 1959, and (2) persons (as well as their collision insurer) injured as a result of the alleged negligence of the insured while driving an automobile which the insured claims, and the insurer denies, was included within the coverage of the policy.

The policy, referred to as a "scheduled policy," contains the following terms prescribing "automatic coverage" for newly acquired automobiles:

"(4) Newly Acquired Automobile — an automobile, ownership of which is acquired by the named insured or his spouse if a resident of the same household, if (i) it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and (ii) the named insured or such spouse notifies the company within thirty days following such delivery date; * * The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile." (Emphasis added.)

August 15, 1959, the insured purchased a used 1957 Ford automobile for use in his trucking business. August 17, 1959, while driving the Ford, he was involved in a collision with an automobile driven and occupied by the other defendants. August 21, 1959, Brooks notified plaintiff of the "newly acquired automobile," and it was added to the policy, an additional premium of $70.03 being paid and accepted. At the same time notice of the accident was given. On the date of issuance, May 23, 1959, the policy schedule listed the following units as owned by the insured: (1) one 1957 Chevrolet 2½-ton tractor truck, (2) one 1958 Dunham Dump Trailer, (3) one 1959 International V-195A truck, (4) one 1958 Dunham Dump trailer, (5) one 1959 International V-195 truck, (6) one 1959 Dunham Dump Trailer, (7) one 1956 Pontiac Fordor, and (8) one 1957 Pontiac Sedan. By endorsement dated June 5, 1959, but effective June 3, 1959, one 1956 Dorsey Trailer was added to the above schedule of coverage. No further endorsements were added prior to the accident.

The record shows that, upon the delivery date of the 1957 Ford, the insured owned four vehicles which were not scheduled under the policy, viz., (1) one Gator boat trailer, (2) one 1956 Nabors lumber trailer, (3) one Nabors semi-trailer, and (4) one Lufkin semi-trailer. We forego consideration of whether the 1957 Ford was a "replacement" for some other vehicle scheduled under the policy (because we do not believe it was) and decide whether, under the "automatic coverage" provisions for newly acquired automobiles, coverage resulted because the company insured all automobiles owned by the insured on the date of delivery of the 1957 Ford, August 15, 1959.

Plaintiff alleges that "automatic coverage" was not extended to include the newly acquired 1957 Ford because the insured owned several vehicles which were not insured with the company; that the 1957 Ford was not a replacement for an already insured vehicle; that upon the date of the accident, it did not know of the uninsured vehicles owned by the insured; that it has been called upon to defend a suit in State Court against the insured and to pay any sum for which the insured may become obligated arising out of the accident of August 17, 1959. Accordingly, plaintiff seeks to be declared not liable to its insured (or persons injured in the accident or their collision insurer), and that it be held to be under no duty to appear and defend any suit(s) arising out of that accident.

We think that, under the terms of the policy, coverage was extended to include the 1957 Ford and conclude that plaintiff's argument must fall for the following reasons:

The Gator boat trailer was covered even though not listed on the policy schedule and was comprehended by the phrase "all automobiles owned by the named insured and such spouse on the date of delivery, * * *" This is shown by the testimony of Cody C. Beasley, general agent for plaintiff in Louisiana, who testified on direct examination as follows:

"THE WITNESS: It is not necessary to include a trailer if it has been abandoned — a truck or trailer. If it has been abandoned—not licensed —it is not compulsory.

"THE COURT: That is like the little boat trailer —

"THE WITNESS: If it has been abandoned.

"THE COURT: If you don't use it for business, you don't have to list it; is that right?

"THE WITNESS: That's right.

"THE COURT: In other words, you wouldn't schedule that on the policy?

"THE WITNESS: It is not even necessary.

"THE COURT: Thank you.

"BY MR. THOMAS:

"Q. If you come down to Natchitoches to go fishing or squirrel hunting, you wouldn't list your boat trailer on the policy — where you carry your dogs in?

"A. No.

"Q. You are covered?

"A. That's right."

Clearly, the Gator boat trailer was extended coverage under the policy due to the nature of its use, namely, pleasure and recreation. This is further borne out by the testimony of Willard W. Harlan, the insurance broker in Winnfield, Louisiana, with whom Brooks negotiated for the policy. Harlan testified as to his understanding of the distinction as follows:

"Q. * * * Would you consider the coverage on the small boat trailer to be necessary?

"A. It is determined by the use made of that trailer.

"Q. If it is used only for personal purposes and not commercial?

"A. What do you mean, `personal'?

"Q. Putting a boat on it and taking it on the lake?

"A. The way I understand the insurance policy, if a trailer is not used for commercial or business purposes and if it is attached to an automobile, it becomes part of that automobile.

"Q. In other words, there would be no necessity for insurance separately on a small boat trailer or utility trailer?

"A. Precluding commercial use, it would not." (Emphasis added.)

Brooks testified undisputedly that the Gator boat trailer was used solely for pleasure purposes, including fishing and hunting, and that it was not used in connection with his trucking business or for commercial purposes. It follows, therefore, that coverage was extended to this trailer by the policy without a separate endorsement or scheduling.

Brooks' unscheduled Nabors and Lufkin semi-trailers were worn-out, unserviceable equipment, which had not been used for approximately six months prior to the accident.

Beasley testified on direct examination that he knew of the two "junk trailers" before countersigning the policy; that he was advised of their abandonment and that, if abandoned, it was unnecessary that they be scheduled. Coleman C. Taylor described these two trailers as follows:

"Q. Are you familiar at all with two trailers that were parked on one portion of his lot?

"A. Yes, sir.

"Q. Did you have occasion to see them many times?

"A. Every day.

"Q. What were the condition of those trailers?

"A. Well, one of them — the body — the floor was all out of it and there was no tires on the one on the south side. The one on the front side had three tires, the best I remember.

"Q. Did they have the appearance of having been used recently?

"A. They hadn't been used for several months.

"Q. What was the condition of the lot surrounding the trailers?

"A. The grass was grown up around it and once in a while we cut it, which was very seldom.

"Q. Would you consider those vehicles operable without considerable repairs?

"A. They would have to have a lot of repairs in order to make them operable.

"THE COURT: Would you classify them as junk?

"THE WITNESS: Yes, sir, you could have. They would have had to have right smart repair on them. The fact of the business, the man who bought it had bought tires and refloored it and put brakes and all on it before he could use it."

Nothing short of a strained and highly technical construction of the policy would result in the conclusion that, despite the physical condition of these two trailers, it was necessary to schedule them in order to satisfy the requirements of the "automatic coverage" provision for newly acquired automobiles. There was no reason to include them in the policy because they were totally unserviceable. Brooks testified that it never occurred to him that the "junk trailers" should be scheduled under the policy, and we find without a doubt that his impression is entirely reasonable and understandable in light of what men of ordinary understanding would reasonably expect under these circumstances and from a reading of this insurance policy.

Harlan reached the same conclusion. Testifying as to his impressions relative to the two unserviceable trailers, he said:

"THE WITNESS: My recommendation to Mr. Brooks at the time was that they were not insurable because they were not operative at the time.

"BY MR. MAKAR:

"Q. Did they appear to you to be good trailers or junk trailers?

"A. Junk."

The insured's reasonable expectations will be protected in a case such as this. The intention of the parties being of paramount importance, it is to be determined in accordance with the plain, ordinary and popular sense of the language which they have used in the policy, and by giving consideration, on a practical, reasonable and fair basis, to the instrument in its entirety. Where...