Carraco Oil Co. v. Mid-Continent Cas. Co.

• Decision Date: 20 April 1971
• Docket Number: MID-CONTINENT,No. 42612,42612
• Citation: 484 P.2d 519
• Parties: CARRACO OIL COMPANY, a corporation, Plaintiff in Error, v.CASUALTY COMPANY, a corporation, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 519

484 P.2d 519

CARRACO OIL COMPANY, a corporation, Plaintiff in Error, v. MID-CONTINENT CASUALTY COMPANY, a corporation, Defendant in Error.

No. 42612.

Supreme Court of Oklahoma.

April 20, 1971.

Syllabus by the Court

1. A policy of insurance should be construed as every other contract, that is, where not ambiguous, according to its terms.

2. An insurance policy covering liability of an oil producer on premises but excluding coverage if an accident occurs away from such premises or the ways immediately adjoining, does not cover an automobile accident occurring upon a state highway.

3. To justify reformation of a written contract, the proof must be full, clear and unequivocal and sufficiently convincing to establish the facts to a moral certainty.

Appeal from the District Court of Osage County; Don H. Hampton, Trial Judge.

From adverse judgment in suit on insurance policy, plaintiff appeals. Affirmed.

Carloss Wadlington, Ada, and Shoemake & Briggs, George Briggs, Pawhuska, for plaintiff in error.

Hudson, Wheaton & Brett, Tulsa, for defendant in error.

WILLIAMS, Justice.

Plaintiff in error, plaintiff below, brings this appeal from a judgment of the district court in an action wherein plaintiff sought to establish that a manufacturers' and contractors' liability insurance policy issued by defendant Mid-Continent Casualty Company included within its coverage a certain automobile accident, or, in the alternative, to reform the policy to provide coverage of the accident.

Plaintiff is a corporation engaged in the business of producing oil and gas in this State. Its principal office is in Ada, Oklahoma. Plaintiff owns no automobiles itself and its employees use their own vehicles when necessary to perform work at the various lease locations. On February 13, 1960, Thomas A. Britton, an employee of plaintiff and a brother of its president, W. R. Britton, was involved in an accident with another vehicle in Osage County. At the time of this accident, Thomas Britton, driving his own 1959 pickup truck, was acting within the scope of his employment. As a result of this accident, a woman passenger in the second vehicle was fatally injured and her husband was seriously injured.

Subsequently, the injured husband brought suit against both Thomas Britton and plaintiff to recover damages for his injuries and for the death of his wife. Plaintiff gave notice of the suit to defendant Mid-Continent, which carried plaintiff's manufacturers' and contractors' liability insurance, but the latter denied the policy covered any possible liability of plaintiff arising from the automobile accident and refused to defend the suit. The suit resulted in a judgment for plaintiff husband in the total amount of $47,500.00 against both named defendants. We affirmed this judgment in Carraco Oil Co. v. Morhain, Okl., 380 P.2d 957 (1963), conditioned upon plaintiff filing remittitur in the amount of $475.00. Plaintiff husband did file remittitur.

Thereafter, plaintiff herein instituted this suit in the trial court, setting forth in its petition the facts of the accident, the refusal of its insurance carrier (defendant) to defend the ensuing law suit, the judgment entered against it and Thomas Britton and the payment on the judgment by Britton's automobile liability carrier of the policy limit amount, $20,000.00. As noted earlier, plaintiff sought judgment determining the accident was within the insurance coverage provided by the terms of its policy issued by defendant, or, in the alternative, if coverage were not provided by the policy as written, plaintiff requested judgment reforming the policy to provide coverage. In either event, plaintiff requested defendant be held liable for the amount of the judgment against plaintiff, less the amount paid by Britton's insurance carrier, and for the amount plaintiff expended for attorney fees to defend the suit.

At the conclusions of trial, the court held the accident was not within the coverage provided by the policy issued by defendant and the evidence did not warrant reformation of the insurance policy.

The policy in question herein was issued February 18, 1959, and was in force and effect on the day of the described automobile accident. This policy was a renewal of a policy issued in 1958 when plaintiff first began active operations. Both policies were purchased by plaintiff, through its president W. R. Britton, from an M. M. Norvill, who represented defendant in Ada, Oklahoma.

The provision of the insurance policy requiring the description of the location of all premises owned, rented or controlled by the insured was not completed when issued in 1959. However, an attached schedule provides:

'1. Premises--Operations

Oil Lease Operators--all operations N.O.C. (not otherwise classified). Erecting or dismantling of derricks, drilling, installation or recovery of casing, well shooting, cementing, tank building, topping operations or gasoline recovery to be separately rated Clerical Office Employees N.O.C.'

By its terms, the policy agrees that defendant shall pay all sums for which plaintiff becomes legally obligated to pay because of bodily injury or property damage caused by accident and arising out of the defined hazards. In the 'Definition of Hazards', the policy states:

'Division 1--Premises--Operations: The ownership, maintenance or use of premises, and all operations.'

In its section...