Carolina Casualty Ins. Co. v. Transport Indemnity Co., 73-1461.

• Citation: 488 F.2d 790
• Decision Date: 10 December 1973
• Docket Number: No. 73-1461.,73-1461.
• Parties: CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v. TRANSPORT INDEMNITY COMPANY et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

488 F.2d 790 (1973)

CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v. TRANSPORT INDEMNITY COMPANY et al., Defendants-Appellees.

No. 73-1461.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted October 15, 1973.

Decided December 10, 1973.

Ray R. Christensen, Salt Lake City, Utah, for plaintiff-appellant.

Leonard H. Russon, Salt Lake City, Utah, for defendant-appellee Transport Indemnity Co.

Before HILL and BARRETT, Circuit Judges, and SMITH,^* District Judge.

HILL, Circuit Judge.

This is a dispute between two insurance companies as to which is the primary insurer on the accident here under consideration.

Andico, Inc., is a Utah corporation having its office and principal place of business in that state. Ringsby Truck Lines, Inc., is a Nebraska corporation having its office and principal place of business in Colorado. Ringsby's principal business is the transportation of goods for hire throughout the United States, and as such operates under authority granted by the Interstate Commerce Commission to transport goods in interstate commerce. Andico and Ringsby entered into a written lease whereby Andico leased a truck tractor and a trailer to Ringsby for the purpose of hauling certain cargo from Salt Lake City, Utah, to Los Angeles, California. The lease provided, inter alia, the following:

Lessor agrees to be responsible for and pay driver\'s salary, workmen\'s compensation coverage, and all taxes, state, federal or local, based on payroll, and all other expenses incident to driver\'s employment. Lessor agrees to indemnify and save harmless Lessee against any loss resulting from the injury or death to such drivers. The Drivers of the said equipment shall at no time be an employee of lessee.

Lessor agrees to indemnify and save harmless the Lessee from any loss, damage or happening giving rise to any claim from Third parties against Lessee. . . .

It is understood that the leased equipment under this agreement is in the exclusive possession, control and use of the Lessee during the period of this lease, and the Lessee assumes full responsibility in respect to the equipment operation to the public, the shippers, the Interstate Commerce Commission and other concerned state and regulatory bodies. It is agreed, however, that Lessor shall carry acceptable Public Liability and Property Damage Insurance in sufficient amounts to indemnify, hold harmless and reimburse Lessee for any and all losses incurred and sustained by Lessee which may result from the use of the said equipment.

Prior to the execution of the lease Carolina Casualty Insurance Company, a Florida corporation qualified to engage in the insurance business in the State of Utah, had in force and effect a policy of public liability insurance issued in the name of Andico. The policy afforded public liability insurance coverage for certain vehicles owned by Andico, including the truck tractor and trailer leased to Ringsby. The policy contained an endorsement in the language of ICC form B.M.C. 90, required by the ICC rules and regulations to be attached to all policies issued to motor carriers. That endorsement provides:

In consideration of the premium stated in the policy to which this endorsement is attached, the Company hereby agrees to pay, within the limits of liability hereinafter provided, any final judgment recorded against the insured for bodily injury to or death of any person, or loss of or damage to property of others . . . resulting from negligence in the operation, maintenance, or use of motor vehicles under certificate of public convenience and necessity or permit issued to the insured by the Interstate Commerce Commission. . . .

Within the limits of liability . . . it is further understood and agreed that no condition, provision, stipulation, or limitation contained in the policy . . . shall relieve the Company from liability hereunder. . . .

The policy issued by Carolina contained two other clauses pertinent to this case. The first is an excess insurance clause which provides:

With respect to any automobile of the commercial type while leased or loaned to any person or organization, other than the named insured, engaged in the business of transporting property by automobile for others . . . the insurance shall be excess insurance over any other valid and collectible insurance.

The second clause of importance is an omnibus coverage clause which provides that an insured under the policy includes not only the named insured but also includes any person or organization legally responsible for the use of the automobile, if the use is with the named insured's permission.

At the same time, Transport Indemnity Company had in force and effect a policy of public liability insurance naming Ringsby as the named insured. Transport's policy contained no omnibus coverage clause, but did contain an excess insurance clause and an endorsement in the language of ICC form B.M. C. 90 (identical to Carolina's). Transport had filed a certificate with the ICC certifying the issuance of the policy.

It is in this setting that Lamoine Freeze, an employee of Andico, while driving the truck tractor and trailer leased to Ringsby, was involved in a collision with other vehicles on U.S. Highway 91 near Levan, Utah. As a result of the accident several persons sustained severe injuries and others were killed. The heirs of the deceased persons threatened to sue Ringsby, Freeze and Andico to recover for the wrongful death of their decedents. Persons injured threatened to sue the same parties to recover damages for personal injuries.

Both Carolina and Transport deny all coverage on the accident. Both have refused to enter into negotiations for settlement and both have declared they will refuse to defend any action which may be commenced against Ringsby, Freeze, or Andico, or to pay any damages which may be awarded. Each contends the other has the...