Caribou Four Corners, Inc. v. Truck Insurance Exchange

• Decision Date: 10 June 1971
• Docket Number: No. 109-70,110-70.,109-70
• Citation: 443 F.2d 796
• Parties: CARIBOU FOUR CORNERS, INC., Howard Williams, United States Fidelity and Guaranty Company, Plaintiffs-Appellees, v. TRUCK INSURANCE EXCHANGE, Defendant-Appellant and Cross-Appellee, and Imperial Casualty and Indemnity Company, Defendant-Appellant and Cross-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

443 F.2d 796 (1971)

CARIBOU FOUR CORNERS, INC., Howard Williams, United States Fidelity and Guaranty Company, Plaintiffs-Appellees, v. TRUCK INSURANCE EXCHANGE, Defendant-Appellant and Cross-Appellee, and Imperial Casualty and Indemnity Company, Defendant-Appellant and Cross-Appellant.

Nos. 109-70, 110-70.

United States Court of Appeals, Tenth Circuit.

June 10, 1971.

COPYRIGHT MATERIAL OMITTED

Harold G. Christensen, of Worsley, Snow & Christensen, Salt Lake City, Utah, for plaintiffs-appellees.

Don J. Hanson, Salt Lake City, Utah (Hanson & Garrett, Salt Lake City, Utah, on the brief), for defendant-appellant and cross-appellee Truck Ins. Exchange.

Ray R. Christensen, Salt Lake City, Utah (Christensen & Jensen, Salt Lake City, Utah, on the brief), for defendant-appellant and cross-appellant Imperial Casualty and Indemnity Co.

Before BREITENSTEIN, McWILLIAMS and DOYLE, Circuit Judges.

BREITENSTEIN, Circuit Judge.

This is a three-way fight to determine the liability of insurance carriers. Williams, a truck driver employed by-Ashworth Transfer, Inc., was injured while pipe consigned to Caribou Four Corners, Inc., an oil company, was being unloaded on a public street in Davis County, Utah. The accident occurred when a crane used to unload pipe from the truck struck a high-voltage power line and the electrical discharge burned Williams.

In effect at the time of the accident were (1) a comprehensive liability policy issued by Truck Insurance Exchange to Ashworth and covering its vehicles, (2) a comprehensive automobile liability policy issued by Imperial Casualty and Indemnity Company to Caribou, and (3) a comprehensive general liability policy issued by United States Fidelity & Guaranty Company (USF&G) to Caribou. Williams sued Caribou. Notices of the suit were sent to Truck Insurance and Imperial both of whom refused to defend. USF&G undertook the defense. Later Caribou, Williams, and USF&G brought this declaratory judgment action against Truck Insurance and Imperial to determine the respective liabilities of the insurance carriers. Jurisdiction is based on diversity. On motion for summary judgment, the district court concluded that all of the policies afforded coverage to Caribou and that the policies of Truck Insurance and Imperial were primary to that of USF&G.

At the threshold we are met by an unusual situation. After the appeals had been filed in this court, Truck Insurance discovered that it had submitted the wrong policy form to opposing counsel and to the district court, and moved to remand for determination by the district court of a motion for relief under Rule 60(b), F.R.Civ.P. We granted the motion. Rule 60(b) relief was then sought from the district court on the grounds of mistake, inadvertence, excusable neglect, and inability of the court to do substantial justice without the proper insurance policy before it. Affidavits disclosed that, because of a blunder by the home office of Truck Insurance, its counsel submitted a wrong policy form. The matter came to light during settlement negotiations with Williams after the district court had entered the judgment in the declaratory judgment action.

The district court put the blame on Truck Insurance, saying that it "permitted the case to go forward to final judgment without furnishing the information the company had in its files which counsel well might not have been expected to know." The court denied Rule 60(b) relief on the grounds that there was no mistake, inadvertent surprise, excusable neglect, new evidence which could not have been discovered by diligence, fraud, misrepresentation, or other improper conduct of an adverse party.

Truck Insurance argues that the remand was a directive to the district court to overturn its original decision and cites Baruch v. Beech Aircraft Corporation, 10 Cir., 172 F.2d 445, cert. denied 338 U.S. 900, 70 S.Ct. 251, 94 L.Ed. 554; Wm. Goldman Theatres, Inc. v. Loew's, Inc., 3 Cir., 163 F.2d 241, cert. denied 334 U.S. 811, 68 S.Ct. 1016, 92 L.Ed. 1742, and Zig Zag Spring Co. v. Comfort Spring Corp., 3 Cir., 200 F.2d 901, as holding that a remand should not be granted unless the showing suffices to justify a new trial. In each of those cases the remand was denied. In the case at bar the court of appeals entered a minute order remanding the case to the district court to permit the court to consider the Rule 60(b) motion, directing the transmittal of a supplemental record, and retaining jurisdiction for all other purposes. Nothing in the remand order suggests any consideration by the court of appeals of the merits of the remand motion. We are not now concerned with whether the remand should have been granted but with whether the district court ruled properly after the remand. The remand order left the issues raised for district court consideration and cannot be taken as any determination of those issues.

In a Rule 60(b) proceeding the motion is addressed to the sound discretion of the trial court. Abel v. Tinsley, 10 Cir., 338 F.2d 514, 516, cert. denied 375 U.S. 851, 84 S.Ct. 108, 11 L.Ed.2d 78; 7 Moore's Federal Practice, 2d ed., ¶ 60.19, p. 322 et seq. Cases such as Tozer v. Charles A. Krause Milling Co., 3 Cir., 189 F.2d 242, which hold that Rule 60(b) should be given a liberal construction to provide relief from default judgment and assure a trial on the merits, have no application here. Truck Insurance had a full trial on the merits. It made the mistake and it inexcusably neglected to correct the mistake until after the adverse judgment. In effect Truck Insurance now says that it has newly discovered evidence which justifies a new trial. A motion for new trial on such ground is addressed to the sound discretion of the trial court and its ruling thereon will not be disturbed except for manifest abuse of discretion. McCullough Tool Company v. Well Surveys, Inc., 10 Cir., 343 F.2d 381, 410, cert. denied 383 U.S. 933, 86 S.Ct. 1061, 15 L.Ed.2d 851. Truck Insurance had the evidence in its own files at all pertinent times. By the exercise of any diligence it would have found it. Truck Insurance did not convince the trial court, and has not convinced us, that a different result would be reached in this case if consideration is given to the policy produced after the trial. The trial court correctly denied the requested Rule 60(b) relief and in so doing did not abuse its discretion.

In its answer Truck Insurance admits that "pipe was being unloaded by a crane operated by the employee of Caribou Four Corners, Inc." The policy contains a "loading and unloading" provision. Truck Insurance does not contend that Caribou is not within the "persons insured" provisions of its policy.

The Truck Insurance policy excludes loading and unloading coverage for injury "if the accident occurs on premises (including the ways immediately adjoining) owned, rented or controlled by the person or by the employer of the person against whom the claim is made."¹ The person against whom the claim is made is Caribou and the question is whether the exclusion applies.

The accident occurred on a public street about 550 feet east of the east boundary of the Caribou property. The pipeline under construction by Caribou was intended to carry oil products and by-products to and from the Caribou premises. It was to be constructed in part along a public street under agreements between Caribou, Davis County, and Woods Cross City. The unloading procedure was that one length of pipe would be removed from the truck and laid on the ground. The truck would then proceed for the length of the section of pipe and another section would be removed and placed on the ground in linear fashion. After the trench was dug the pipe would be placed in it. The district court held that under the facts the "on premises" exclusion did not apply.

Two questions are presented. The first is the meaning of "owned, rented or controlled." Caribou neither owned nor rented the portion of the street where the accident occurred. It had permits from Davis County and Woods Cross City for "Excavation, Crossing or Alteration" along a designated street. As we read those permits, control over the street remained in the public bodies. The rights of Caribou were limited to the construction and use of the pipeline. Although Caribou had a right to lay the pipe, it had no right to control the street.

The second argument on this point is that the exclusion applies because the accident site was "immediately adjoining" the Caribou premises. The uncontested finding of the trial court that the accident site was on a public street 550 feet from the boundary of the Caribou premises disposes of this point. Adjoining in its ordinary sense means touching or contiguous. See United States v. Great American Indemnity Co. of New York, 9 Cir., 214 F.2d 17, 19, which held that the phrase "immediately adjoining" embraced only that portion of a sidewalk abutting or touching a store. Immediately means with no space intervening. See Long v. London & Lancashire Indemnity Co. of America, 6 Cir., 119 F.2d 628, 630, where the court held that "immediately adjacent" did not encompass an accident occurring on a street 60 feet from an insured's premises. We see no pertinence in decisions relating to policy language different from that in the Truck Insurance contract. United States v. Pan American Refining Corporation, 5 Cir., 219 F.2d 685, and Republic Oil Refining Co. v. Granger, 3 Cir., 198 F.2d 161, are tax cases which do not persuade us. We agree with the trial court that Truck Insurance cannot escape liability because of the "on premises" exclusion.

Truck Insurance also relies on the employee exclusion clause of its policy. The pertinent language reads that the insurer is not liable for "bodily injury to any employee of the insured arising out of and In (sic) the course of his employment by the Insured."² The injured man was an employee of Ashworth, the named insured, and not of Caribou, an additional...