Continental Casualty Co. v. Fireman's Fund Insurance Co.

• Decision Date: 01 November 1968
• Docket Number: A No. 9508,9509.
• Citation: 403 F.2d 291
• Parties: CONTINENTAL CASUALTY COMPANY, an Illinois corporation, Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Appellee. FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Cross-Appellant, v. CONTINENTAL CASUALTY COMPANY, an Illinois corporation, Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

403 F.2d 291 (1968)

CONTINENTAL CASUALTY COMPANY, an Illinois corporation, Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Appellee.

FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Cross-Appellant, v. CONTINENTAL CASUALTY COMPANY, an Illinois corporation, Cross-Appellee.

A Nos. 9508, 9509.

United States Court of Appeals Tenth Circuit.

November 1, 1968.

COPYRIGHT MATERIAL OMITTED

Wesley H. Doan, Denver, Colo. (Yegge, Hall, Treece & Evans, Denver, Colo., on the briefs), for Continental Casualty Co.

Kenneth C. Groves, and V. G. Seavy, Jr., Denver, Colo., for Fireman's Fund Ins. Co.

Before MURRAH, Chief Judge, BREITENSTEIN, Circuit Judge, and DELEHANT, Senior District Judge.^*

DELEHANT, Senior District Judge.

It is in order, preliminarily to identify the insurance corporation parties litigant, and their respective insureds; and to disclose, at least in a general and summarized way, the setting out of which the suit arose, whose determination in the trial court is presently under review. Thus, one may the better understand what alone is now directly before the court; for it is rooted in antecedent and presently terminated litigation in a state court, and, more remotely, in the historical framework of that earlier controversy.

From time to time, October 7, 1963 will be mentioned herein, after the manner of a time critical to this litigation. On that date the misadventure occurred which underlies this suit, as well as all antecedent litigation relevant hereto, infra.

Then, and for some time theretofore, one Harry Linch, as lessee, operated at 7201 Grandview Avenue, Arvada, Colorado, an oil and gasoline service station, characterized as a "Standard Service Station." The main building wherein he operated such station had been erected at an earlier date by one Victor C. Ries under a contractual agreement by him with Cook Bros. Oil Co., pursuant to plans therefor provided or approved by Standard Oil Company and The American Oil Company. But, as lessee, Harry Linch was at the critical time in the public and active management of the business of the service station. As a feature of such business, and from time to time therein, he purchased and acquired petroleum products for resale to his customers, and probably for incidental other purposes, from Petroleum Products Company, which, out of deference to counsel herein and to the trial court from which this case has come to this court, infra, and for the sake of brevity, is later herein ordinarily referred to as "Petco."

In the operation of his business, supra, Harry Linch, under the name and style of "Harry Linch Standard Service, 7201 Grandview, Arvada, Colorado," procured and had in operation from April 25, 1963 to April 25, 1964 (thus, inclusive of October 7, 1963) a garage liability policy of insurance issued to him, as "insured," by Fireman's Fund Insurance Company, a corporation, hereinafter referred to either as "Fund" or "The Fund", but generally as "Fireman's Fund," whose home office was in San Francisco, California, as insurer. A copy of such policy of insurance is attached to the AGREED STATEMENT OF FACTS duly executed and filed in the United States District Court for the District of Colorado in Case No. 66-C-90, Civil therein, out of which these appeals directly arise, infra, and constitutes a part of the record herein. In and by that policy, its coverage is defined clearly and adequately, but at a length rather too great to warrant its complete duplication or extended restatement herein.

Continental Casualty Company, an Illinois corporation, herein generally referred to as "Continental," under date of October 17, 1962, issued, effective from 12:01 standard time, October 1, 1962 until cancelled, its COMPREHENSIVE AUTOMOBILE LIABILITY POLICY NO. CCA 2659167, as insurer, to and in favor of THE PERMIAN CORPORATION AND/OR ANY OF ITS AFFILIATES AND SUBSIDIARIES, the latter explicitly including PETROLEUM TRANSPORT COMPANY (i. e. PETCO), as insureds. A copy of that policy is also attached to the AGREED STATEMENT OF FACTS in Case No. 66-C-90 in the United States District Court for the District of Colorado, infra. That policy included, among other coverage, the following insuring and conditioning language:

"INSURING AGREEMENTS

1. Coverage A — Bodily Injury Liability

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness, or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of any automobile.

Coverage B — Property Damage Liability

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of any automobile.

* * * * * *

"III Definition of Insured

The unqualified word `insured\' includes the named insured and also includes any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured. * * *

* * * * * *

"4. Purposes of Use Defined

* * * * * *

(c) Use of an automobile includes the loading and unloading thereof."

Attention is also directed to the language applicable to coverage, and the limitation thereof, in (a) the AGREED STATEMENT OF FACTS, and (b) the MEMORANDUM OPINION AND ORDER, both Infra.

On or shortly before October 7, 1963, Harry Linch, doing business as Harry Linch Standard Service, 7201 Grandview, Arvada, Colorado, in the course of his business purchased and ordered from PETCO approximately 6000 gallons of liquid gasoline for transportation to, and delivery at, such service station by Petco on October 7, 1963. Petco was then, and for some years theretofore had been engaged in the business, among other things, of transporting and delivering to service stations petroleum products, including gasoline, and had theretofore made like transportation and delivery to the station just identified, though in quantities smaller than 6,000 gallons. At that station deliveries of such gasoline were usually made through its unloading and introduction by an employee of the seller thereof into underground storage tanks in the Linch station premises, and south of the service station building, from which tanks the fluid was thereafter, and as its use was required, removed by the station's gasoline pumps. Those underground tanks were equipped, as a part thereof, with a venting system, concerning which see the AGREED STATEMENT OF FACTS, infra.

At the time of, and during the interval of, the delivery by Petco to Harry Linch of such gasoline, one Chris Eugene Glunz, an employee of McBride Lighting Company, and acting in that capacity, was lawfully at the Linch station, and was engaged therein in the cleaning of lighting fixtures located in such premises. Thus present and engaged, he then considered it to be necessary for him to use, and he did use, the station's restroom facilities. Such use of the restroom facilities, at least partially concurred, in point of time, with the arrival at the station, and the unloading operations in respect, of the Petco truck and its gasoline cargo content. While engaged in his utilization of the station's restroom facilities, and being present personally in the restroom, Mr. Glunz ignited a match for the purpose of lighting a cigarette. An explosion and subsequent fire ensued, in consequence whereof, Glunz sustained physical injuries, vide infra.

After the foregoing explosion and fire, and prior to May 3, 1965, Chris Eugene Glunz, as plaintiff, filed in the District Court of Jefferson County, Colorado, a civil action against Harry Linch, Cook Bros. Oil Co., a Colorado corporation, The American Oil Company, a Maryland corporation, authorized to do and doing business in Colorado, Standard Oil Company, an Indiana corporation, authorized to do and doing business in Colorado, and Petroleum Transport Company, a Colorado corporation, being Civil Action No. 20151 in the District Court in and for the County of Jefferson, State of Colorado. Therein, Harry Linch was sued as the actual operator of the service station; Cook Bros. Oil Co. was sued as the alleged owner, on October 7, 1963, and as an entity which, on said date maintained and asserted an interest (beyond the exact knowledge of Mr. Glunz), of and in the real estate on which the service station was and is located, together with the Standard Service Station itself, its pumps, tanks, pipes, vents, and other facilities and equipment; The American Oil Company, in the capacity of the alleged corporate parent of Standard Oil Company, and Standard Oil Company, in the capacity of a corporate entity thus erected by the American Oil Company, were sued together, as corporations thus connected, which were allegedly engaged in the business of manufacturing, refining, distributing and selling petroleum products, including, but not limited to, gasoline, motor oils, greases and related by-products, in the course whereof, The American Oil Company distributed and sold its manufactured products within the State of Colorado, by and through Standard Oil Company, a division of The American Oil Company, and it was charged that such gasoline, motor oils and related petroleum products, so manufactured, were sold and offered for sale in the manner and form set out in the complaint in such suit at the Standard Service Station so operated by Harry Linch at 7201 Grandview, Arvada, Colorado, in furtherance of an arrangement generally asserted but without exact definition, in the complaint. In that...