Employers Cas. Co. v. Glens Falls Ins. Co.

• Decision Date: 19 July 1972
• Docket Number: No. B--2950,B--2950
• Citation: 484 S.W.2d 570
• Parties: EMPLOYERS CASUALTY COMPANY et al., Petitioners, v. GLENS FALLS INSURANCE COMPANY, Respondent.
• Court: Texas Supreme Court

Page 570

484 S.W.2d 570

EMPLOYERS CASUALTY COMPANY et al., Petitioners, v. GLENS FALLS INSURANCE COMPANY, Respondent.

No. B--2950.

Supreme Court of Texas.

July 19, 1972.

Rehearing Denied Oct. 4, 1972.

Graves, Dougherty, Gee, Hearon, Moody & Garwood, Thomas G. Gee and Ben F. Vaughan, III, Austin, Sewell, Junell & Riggs, Harman Parrott, Houston, for petitioners.

Vinson, Elkins, Searls & Smith, B. Jeff Crane, Jr. and Thomas B. Weatherly, Houston, for respondent.

DANIEL, Justice.

This is a declaratory judgment suit filed by Employers Casualty Company, hereinafter called Employers, against Glens Falls Insurance Company, hereinafter called Glens Falls, to determine which of the companies has ultimate responsibility for the cost of defense and satisfaction of a personal injury recovery of one, James Patrick Murphy, against Tobin & Rooney Plastering Company. Employers, as insurer of Tobin & Rooney, defended the Murphy claim and advanced the money for full payment of the judgment, receiving in return the assignment of a judgment which Tobin & Rooney obtained against two of its employees for full indemnity against loss under the Murphy judgment. Employers contends that Glens Falls is liable for the cost of the defense and satisfaction of the Murphy claim because his injuries occurred while the Tobin & Rooney employees were engaged in unloading a suppplier's truck which was covered by a Glens Falls comprehensive automobile liability insurance policy; that Tobin & Rooney and its employees were at such time omnibus insureds under loading and unloading provisions of the Glens Falls liability policy; and that the notice provisions of the policy were met or waived. Glens Falls denied liability and the receipt or waiver of notice as required by its policy.

The Tobin & Rooney employees, Albert Giles and Lanconieu Manuel, intervened, asserting their right as Glens Falls' omnibus insureds to have that company pay the indemnity judgment against them in favor of Tobin & Rooney.

The trial court, after jury findings, rendered judgment for Employers against Glens Falls for $68,000.00, with interest at the rate of 6% Per annum from July 15, 1966, the date of disbursement by Employers to Murphy. The Court of Civil Appeals reformed the judgment of the trial court, affirming only as to two-fifths (2/5ths) of such amount as a pro rata contribution. 469 S.W.2d 829. We reverse the judgment of the Court of Civil Appeals and affirm the judgment of the trial court.

Questions presented in this Court have been narrowed to whether written notice of the accident by the named insured inured to the benefit of the omnibus insureds, Giles and Manuel, or whether there was evidence to support the jury finding that the notice requirement had been waived.

Employers issued a comprehensive general liability insurance policy to Tobin & Rooney, a subcontractor on a multi-story building being erected in Houston. Glens Falls issued a comprehensive automobile liability insurance policy to Shelton W. Greer Co., Inc., hereinafter called Greer, which was a supplier of material used on the job by Tobin & Rooney. The Glens Falls policy covered persons using, including loading and unloading, the truck on which Greer delivered 400 sacks of plastering material to Tobin & Rooney on April 15, 1964. In making the dilivery Greer's truck backed up to an elevator which was used to hoist the sacks of material to the 19th floor of the building. The Greer truck driver then placed the fifty pound sacks on the tailgate of the truck, where they were picked up by the Tobin & Rooney employees, Giles and Manuel, and placed on the elevator. The sacks were then hoisted to the 19th floor, where they were being unloaded by two other Tobin & Rooney employees when a sack fell off the elevator, striking and seriously injuring James Patrick Murphy, who was standing at ground level. A jury finding that Giles and Manuel were unloading the truck with the implied consent of Greer is not challenged here by Glens Falls. Also unchallenged here is the holding of the courts below that the injuries to Murphy were caused by the negligence of Giles and Manuel during the unloading of the truck and that Tobin & Rooney, as well as Giles and Manuel, were omnibus insureds under the policy issued by Glens Falls to Greer.

Both of the insurance policies in question contained the usual notice of accident provision requiring that 'written notice shall be given by or on behalf of the insured to the company . . . as soon as practicable.' On April 23, 1964, the eighth day after the accident, Greer gave written notice to Glens Falls, in which it said:

'For your records we wish to inform you of an accident which occurred during the afternoon of April 15, 1964 on the jobsite of the new American General Insurance Company, 2727 Allen Parkway, Houston, Texas.

'Our delivery truck was not involved, though we were delivering material to the jobsite. Our truck was loaded with 400 bags of Mono-Kote, each bag weighing approximately 50#. Our truckdriver, Aaron Garrett, had unloaded approximately 264 bags of material. When we say unloading, this means taking the material to the tail-gate of our truck where our customer, Tobin and Rooney, has their laborers take charge of material and place it on the hoist.'

It is conceded that this letter complied with the written notice of accident provisions of the Glens Falls policy insofar as the named insured, Greer, is concerned, but Glens Falls denied that it inured to the benefit of or constituted any notice from its omnibus insureds, Tobin & Rooney and Giles and Manuel.

In the meantime, Tobin & Rooney gave Employers notice of the accident immediately, and its adjuster, accompanied by a court reporter and photographer, arrived on the scene before the truck had been moved. Question and answer statements were taken from witnesses, including Giles, Manuel, and the Greer truck driver. The second day after the accident Employers' adjuster gave Glens Falls notice of the accident by telephone and informed Glens Falls that Tobin & Rooney and its employees were asserting coverage as omnibus insureds under the Glens Falls policy issued to Greer. A Glens Falls adjuster was immediately sent to investigate the accident. He talked with witnesses, visited Murphy in the hospital, and on May 5 obtained from the court reporter the question and answer statements of Giles and Manuel and other witnesses.

On April 23, Employers' adjuster conferred in person with a Glens Falls representative who had authority to accept the claim; he repeated the earlier information about coverage being claimed by Tobin & Rooney and its employees; and gave him the results of the Employers' investigation, including the names of Giles and Manuel. In June, Glens Falls assigned the file to National Claims Service for further investigation.

Continuously since the day after the accident Employers has claimed that the Glens Falls policy issued to Greer covered any liability which might be incurred by Tobin & Rooney and its employees because of negligence in unloading the Greer truck. This was expressed by letters from Employers to Glens Falls on July 13 and October 22, 1964, and in the latter was enclosed a copy of a legal opinion to such effect written by the Houston law firm which represented both insurance companies. Glens Falls sought and received on November 10 an opinion from another member of the same firm, and it expressed the same conclusion. In the meantime, Murphy had filed suit against Tobin & Rooney on October 2, and Employers' attorney had answered. On January 18, 1965, while the Murphy suit was pending only against Tobin & Rooney, Glens Falls agreed to and did assume the defense of the claim. Its same Houston law firm filed an amended answer, took depositions, and negotiated toward a settlement for about one year, after which Glens Falls withdrew from the case. The law firm which had previously represented both insurance companies also withdrew from the case, and another firm, as attorneys for Employers, took over the defense of Tobin & Rooney and filed a third-party action against four Tobin & Rooney employees, including Giles and Manuel, for indemnity against any loss sustained by reason of Murphy's claim. Glens Falls was given notice by the Tobin & Rooney employees and was requested to defend them as omnibus insureds under the Greer policy, but Glens Falls refused to do so. That case finally resulted in a judgment for Murphy against Tobin & Rooney for $64,500.00 and a judgment in favor of Tobin & Rooney against Giles and Manuel for full indemnity. See Tobin & Rooney Plastering Company v. Giles, 418 S.W.2d 598 (Tex.Civ.App.1967, no writ).

Employers, after advancing the money to pay Murphy's judgment, filed this suit as assignee and subrogee of Tobin & Rooney, to recover the amount paid in defense and satisfaction of the Murphy judgment upon the theory that Glens Falls, as insurer of Giles and Manuel under the omnibus provisions of its Greer policy, is obligated to satisfy the indemnity judgment of Tobin & Rooney against Giles and Manuel. As heretofore stated, Giles and Manuel intervened, asserting their right to have Glens Falls pay the judgment against them. They made the same...