Donahue Constr. Co. v. Transport Indem. Co.

• Decision Date: 06 May 1970
• Citation: 86 Cal.Rptr. 632,7 Cal.App.3d 291
• Parties: DONAHUE CONSTRUCTION COMPANY and United States Fire Insurance Company, Plaintiffs and Appellants, v. TRANSPORT INDEMNITY COMPANY, Defendant and Respondent. Civ. 25639.
• Court: California Court of Appeals Court of Appeals

Page 632

86 Cal.Rptr. 632

7 Cal.App.3d 291

DONAHUE CONSTRUCTION COMPANY and United States Fire Insurance Company, Plaintiffs and Appellants, v. TRANSPORT INDEMNITY COMPANY, Defendant and Respondent.

Civ. 25639.

Court of Appeal, First District, Division 1, California.

May 6, 1970.

Hoge, Fenton, Jones & Appel, by Charles R. Keller, Monterey, for plaintiffs and appellants.

Toff, Gordon & Royce, by F. John Royce, Mountain View, for defendant and respondent.

MOLINARI, Presiding Justice.

Plaintiffs Donahue Construction Company (hereinafter referred to as 'Donahue') and United States Fire Insurance Company (hereinafter referred to as 'U.S. Fire') appeal from a judgment in a declaratory relief action brought by them to determine the extent of liability and indemnification available under certain policies issued by defendant Transport Indemnity Company (hereinafter referred to as 'Transport') which policies insured a truck owned by West Transportation Company (hereinafter referred to as 'West'). This action followed a judgment against Donahue in a personal injury action arising out of an accidental injury to one George Reese during the unloading of West's truck by a crane owned by Donahue. Having satisfied the judgment for $25,524, in the instant action Donahue sought indemnification against Transport under its policy issued to West for said sum of $25,524 together with the sum of $4,146.37, for attorneys' fees and costs incurred in the action brought by Reese against Donahue. Following submission of the cause on an agreed statement of facts, the trial court determined that the policy of insurance issued to Donahue by U.S. Fire was the sole primary insurance for the loss in question and that Transport's policies provided excess coverage only; and Transport was therefore not liable for any portion of the judgment against Donahue.

Facts

On November 9, 1962, West was the owner of a truck which had been sent to a Pacific Gas and Electric Company construction site with a load of pipe to be unloaded at the jobsite along the Carmel Valley Road, a public highway, in Monterey County. Donahue was the owner of a 20-ton mobile truck-crane, also dispatched to this construction site for the purpose of unloading the pipe from the truck. The latter vehicle was licensed and registered under the Vehicle Code of the State of California and required an oversize, overweight permit under the provisions of section 35780 of the Vehicle Code so that it could be moved over public highways. It was being operated under such a permit at the time of the accident.

While the crane was engaged in the process of unloading pipe from the truck, the crane operator, Bazil Kizer, dislodged a piece of pipe from the bed of the truck. This pipe struck and injured George Reese, an employee of the Pacific Gas and Electric Company. In the process of unloading the pipe from the truck, the two vehicles were backed up to one another. Then one or two lengths of pipe were unloaded by affixing a hook to a piece of pipe and then lifting it off the truck. Thereupon the truck and the crane were moved forward a short distance so that the sections of pipe could be unloaded end to end. At the time of the accident both the truck and the crane were stopped. However, the outriggers on the crane had not been extended to make the crane immobile. At the time of this accident, Donahue was insured under a policy of liability insurance issued by U.S. Fire and West was insured by such a policy issued by Transport.

The Issues

The primary issue in this appeal is whether the insurance policy issued by Transport to West subjects Transport to liability for any portion of the judgment rendered against Donahue, or for costs and attorneys' fees expended by U.S. Fire in defending Donahue. Resolution depends, initially, upon whether, under the terms of the policy issued by U.S. Fire to Donahue, the crane was a 'motor vehicle,' and, if so, whether this policy provides the sole insurance for the loss occasioned. If it is determined that U.S. Fire does not provide the sole primary insurance, a corollary issue is whether Transport was also primarily liable, and, if so, whether its liability was excess or was subject to proration.

The Liability Coverage

At the time of the accident the policy of insurance issued by U.S. Fire to Donahue contained the following provisions: 'Coverage A--Bodily Injury Liability--Automobile. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, * * * sustained by any person, 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. * * *

'3. * * * (b) Automobile. Except where stated to the contrary, the word 'automobile' means a land motor vehicle or trailer as follows:

'(1) Owned automobile--an automobile owned by the named insured; * * *

'The following described equipment shall be deemed an automobile while towed by or carried on an automobile as above defined solely for purposes of transportation or while being operated solely for locomotion, but not otherwise; if of the non-crawler type, any power crane or shovel, * * *'

The U.S. Fire policy issued to Donahue was amended by two endorsements pertinent to the issues of this case. One of these endorsements, designated as the 'Oversize--Overweight Permit Endorsement' (hereinafter referred to as the 'Oversize--Overweight endorsement') provided for coverage to the limit of $600,000 for bodily injury for each accident on 'ALL VEHICLES OPERATED BY THE INSURED' incident to a permit granted to the insured to operate oversize and overweight vehicles and transport loads. The other endorsement, designated as the 'STANDARD FORM OF ENDORSEMENT PRESCRIBED BY THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA' (hereinafter referred to as the 'Public Utilities endorsement') and issued pursuant to the orders and rules of the Public Utilities Commission, provided for coverage to the limits of $25,000 for bodily injury 'resulting from the operation, maintenance, or use of motor vehicles for which a certificate of public convenience and necessity or permit is required or has been issued to the insured by the Public Utilities Commission of the State of California, regardless of whether such motor vehicles are specifically described in the policy or not.'

The primary policy of insurance issued by Transport to West contained the following provisions relevant to this appeal:

'I. COVERAGE CLAUSES (1) To pay on behalf of the insured all damages which the Insured shall become legally obligated to pay, including contractual obligations, for damages which arise out of the occupation of the named insured as stated in the Declarations, as a result of personal injury, bodily injury, * * *

'CONDITIONS * * * (3) * * * (b) INSURED The unqualified word 'insured' includes the named insured and also includes as respects Coverage Clause 1: if a corporation, any executive officer, director or stockholder thereof while acting within the scope of his duties as such or in so far as he is or may be liable by reason of his occupying such position, or if a partnership, each partner thereof while acting within the scope of his duties as such. * * *

'(6) REGULATORY AUTHORITY REQUIREMENTS Such insurance as is afforded by this policy shall comply with the provisions of the motor vehicle financial responsibility law and motor carrier regulatory authority requirements of any state or province which shall be applicable with respect to any such liability arising out of the existence, ownership, maintenance or use of any automobile during the policy period but only to the extent of coverage and amount of limits of liability required by such law.'

In determining that the sole coverage in the instant case was that provided for in the U.S. Fire policy, the trial court found that the crane was a motor vehicle as defined by Vehicle Code section 670 ¹ and that it was an 'automobile' and a 'motor vehicle' under the provisions of the U.S. Fire policy. Plaintiffs contend that this finding is not supported by the facts or the applicable law.

Plaintiffs place strong reliance on Home Indem. Co. v. Transport Indem. Co., 263 Cal.App.2d 100, 69 Cal.Rptr. 504. There, the reviewing court was called upon to interpret language identical to that in the U.S. Fire policy which defines 'owned automobile.' In that case a crane similar to that in the instant case was held not to be an 'automobile' under the terms of the policy because at the time of the accident it was not 'being operated Solely for locomotion.' ² (P. 108, 69 Cal.Rptr. 504; emphasis added.) The basis for this determination is that under the facts of the Home case, the crane was, at the time of the accident, rendered immobile and stationary Home case, the crane was, at the time of were in place. As observed by the appellate court, 'It could not be moved by its own power, or otherwise, until those outriggers were retracted.' (P. 108, 69 Cal.Rptr. p. 509.) With specific reference to the policy coverage, the reviewing court noted as follows: 'While it covers a crane while being operated as an automobile, it clearly does not cover a crane which is being operated solely for lifting purposes. The mere fact that both before and after its use as a crane it could be operated as an automobile in nowise made its use as a crane one of operation 'solely for locomotion. " (Pp. 108-- 109, 69 Cal.Rptr. p. 509.) In discussing...