Continental Cas. Co. v. Phoenix Const. Co.
| Decision Date | 08 June 1955 |
| Citation | 284 P.2d 554 |
| Court | California Court of Appeals Court of Appeals |
| Parties | CONTINENTAL CASUALTY COMPANY, Plaintiff and Appellant, v. PHOENIX CONSTRUCTION COMPANY, a corporation, Oilfields Trucking Company, a corporation, Transport Indemnity Company, a corporation, James E. Mason, Harvey Leming, Virginia Leming, Roger Ralph Rife, Richard Neal Rife, Lorraine Ellen Rife, Luella Rife, James Laverne Rife, and Eva Johnson as Guardian ad litem of Roger Ralph Rife, Richard Neal Rife, Lorraine Ellen Rife and James Laverne Rife, Minors, Defendants, Phoenix Construction Company, a corporation, Oilfields Trucking Company, a corporation, Transport Indemnity Company, a corporation, Harvey Leming and James E. Mason (Defendants), Underwriters at Lloyd's London, an unincorporated association (Plaintiff in Intervention in Certain Pleadings), Respondents, and Certain Underwriters at Lloyd's London, Pacific Marine Insurance Agency, Inc., E. C. Evans Agencies, Managers, and Willis Faber & Dumas, Ltd. (Plaintiffs in Intervention in Certain Pleadings). Civ. 20414. |
Jennings & Belcher, Los Angeles, for appellant.
Robert W. Stevenson, Los Angeles, for respondents, Oilfields Trucking Co., Transport Indem. Co. and Underwriters at Lloyd's London.
Martin, Hahn & Camusi, Los Angeles, for respondent, Phoenix Const. Co.
Oscar F. Catalano, Bakersfield, for respondent, Harvey Leming.
In this declaratory relief action, the major controversy revolves around the question of liability of certain insurance companies to protect defendants Phoenix Contruction Company, Oilfields Trucking Company and James E. Mason from a judgment in favor of defendant Harvey Leming, who was injured in an accident on July 10, 1951, which the proved to have been caused by negligence of defendant Mason while driving a truck then and there owned by defendant Oilfields. Defendants Phoenix and Oilfields as joint venturers had a contract with the State Highway Department for a certain road construction job in Kern County known as Haypress Canyon job. Phoenix' business was that of highway and similar construction; that of Oilfields was the truck hauling of oil surfacing materials and heavy construction equipment. These two companies had taken the highway contract pursuant to an agreement between themselves that they should engage in certain unspecified joint ventures. Defendant Mason was found by the trial court to be a general employee of Oilfields and a special employee of Phoenix. It was also found that at the time and place of the accident, he was 'acting in the scope and course of his employment as such employee and agent.' Leming sued Phoenix, Oilfields and Mason for recovery of damages for his injuries. On a first trial he recovered judgment against all of them in the sum of $212,585.69. This judgment became final as to the driver Mason, but a new trial was granted to Phoenix and Oilfields. At the conclusion of same, a verdict was rendered against both for $213,460.02. The judgment thereon was recently affirmed by the Supreme Court, Leming v. Oilfields Trucking Co., 44 Cal.2d 343, 282 P.2d 23. Phoenix, Oilfields and Mason and their respective insurers are faced with this onerous liability and Continental Casualty Company brings this action for a determination of various questions arising under outstanding insurance policies.
The primary problems emanate from Continental's policy No. CLP5707316 and defendant Transport Indemnity Company's policy No. 46-001. 1 The Continental policy names defendant Phoenix Construction Company, Inc., a corporation, as insured and the Transport policy names defendant Oilfields Trucking Company, a corporation, as such. Certain excess insurance policies present questions peculiar to that subject which can be solved only after determination of those arising under the policies just mentioned by number. The question most debated by counsel is whether Phoenix is covered by the Continental policy with respect to the accident in question. That policy was obtained by Phoenix, which became obligated for the premium and which as stated was named as insured, its business being given therein as 'general engineering contractor.' It was stipulated and found that Phoenix was not protected by any insurance covering the instant accident except to the extent that the Continental line of policies (No. CLP5707316 and the excess certificates related thereto) might so operate.
Phoenix having been named as insured in the Continental policy, the primary protection is thus stated in paragraph I of the 'insuring agreements': An endorsement required by the Public Utilities Commission of this state contains this further language: '* * * the Company agrees that within the classes of coverage provided by the policy it will pay any final judgment rendered against the insured for bodily injuries to or death of any person or persons other than the named insured, or damage to or destruction of property, or both, arising out of the ownership, maintenance or use of any vehicle operated under authority of the aforesaid statutes, although such vehicle may not be specifically described in the policy.' Two other endorsements or riders operate to name Oilfields Trucking Company as an insured. One of them, designated R6309202, reads as follows: 'It is agreed Oil Fields Trucking Company is added as an additional insured in connection with construction operations conducted as a joint venture with the Phoenix Construction Company, Inc.
'It is further agreed that this policy excludes coverage for all operations of Oil Fields Trucking Company other than construction operations conducted as a joint venture with Phoenix Construction Company, Inc.'; the other, R6309208, says: 'It is agreed that this policy does not apply to automobiles owned, maintained or used by the Oil Fields Trucking Company, even though, they might be used in a joint venture operation with other named insureds.' 2 Appellant Continental claims that rider 208 withdrew any coverage of Phoenix as well as Oilfields with respect to the accident in question. The trial judge found to the contrary.
The language of these endorsements is ambiguous as will appear from further discussion. No parol evidence was introduced in aid of construction; but there were certain stipulations made which were not susceptible of divergent inferences. The construction of the instruments therefore becomes a question of law. Western Coal & Mining Co. v. Jones, 27 Cal.2d 819, 826, 167 P.2d 719, 164 A.L.R. 685.
Certain settled rules of interpretation are here applicable. The language of the policy and of the riders is presumed to be that of the insurer, Ogburn v. Travelers Ins. Co., 207 Cal. 50, 53, 276 P. 1004, and when ambiguous is to be construed most favorably to the insured, in such manner as to provide full coverage of the indicated risk rather than to narrow the protection. Olson v. Standard Marine Ins. Co., 109 Cal.App.2d 130, 135, 240 P.2d 379; Miller v. United Ins. Co., 113 Cal.App.2d 493, 497, 248 P.2d 113; Pendell v. Westland Life Ins. Co., 95 Cal.App.2d 766, 769, 214 P.2d 392; Fageol Truck & Coach Co. v. Pacific Indemnity Co., 18 Cal.2d 748, 751, 117 P.2d 669. If the insurer would create an exception to the general import of the principal coverage clauses, the burden rests upon it to phrase that exception in clear and unmistakable language. Pendell v. Westland Life Ins. Co., supra, 95 Cal.App.2d at page 770, 214 P.2d at page 395. If this is not done any ambiguity or uncertainty is resolved in favor of the policyholder. The courts will not sanction a construction of the insurer's language that will defeat the very purpose or object of the insurance. Miller v. United Ins. Co., supra, 113 Cal.App.2d at page 497, 248 P.2d at page 115; Narver v. California State Life Ins. Co., 211 Cal. 176, 180, 294 P. 393, 71 A.L.R. 1374. Indeed an exception must be couched in terms which are 'clear to the ordinary mind', Pendell v. Westland Life Ins. Co., supra, 95 Cal.App.2d at page 770, 214 P.2d at page 395, or any doubts as to meaning will be resolved against the insurer.
At the top of the Continental policy, in the first line of the first page, appears this caption in prominent letters 'Comprehensive General--Automobile Liability Policy.' Such captions are properly considered in construing the policy. Zimmerman v. Continental Life Ins. Co., 99 Cal.App. 723, 726, 279 P. 464. The word comprehensive 'means extensive or embracing much', Hemel v. State Farm Mut. Automobile Ins. Co., La.App., 25 So.2d 357, 358; or, as stated in State ex rel. Hewlett v. Womach, 355 Mo. 486, 196 S.W.2d 809, 812, it signifies "including much; comprising many things; having a wide scope; inclusive." If the responsible officer of Phoenix read as far as Coverage A, which he is presumed to have done, he would have met with no disappointment because the language is broad enough to cover the company in any and all activities pertaining to its contracting business. It is not limited to automobile accidents or any other specified type. On the contrary it embraces any and all untoward happenings incident to a construction business. In this respect it is in contrast with Coverage B which is designated 'Property Damage Liability--Automobile' and agrees to pay property damage 'caused by accident and arising out of the ownership, maintenance or use of any automobile.' And the endorsement prescribed by the Public Utilities Commission above quoted specifically defines the coverage as including automobiles 'operated under authority of the aforesaid statutes', which language...
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