EMPLOYERS'LIABILITY ASSUR. CORP. v. Indemnity Ins. Co.

• Decision Date: 05 May 1964
• Docket Number: Civ. A. No. 13902.
• Citation: 228 F. Supp. 896
• Parties: The EMPLOYERS' LIABILITY ASSURANCE CORP., Ltd., Plaintiff, v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, and Charles W. Ireland, Defendants.
• Court: U.S. District Court — District of Maryland

228 F. Supp. 896

The EMPLOYERS' LIABILITY ASSURANCE CORP., Ltd., Plaintiff, v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, and Charles W. Ireland, Defendants.

Civ. A. No. 13902.

United States District Court D. Maryland.

May 5, 1964.

Alva P. Weaver, III, and Robert E. Coughlan, Jr., Baltimore, Md., for plaintiff.

Herbert F. Murray, Baltimore, Md., for defendant Indemnity Ins. Co. of North America.

Max R. Israelson, Baltimore, Md., for Charles W. Ireland.

WINTER, District Judge.

This declaratory judgment action is brought to determine which insurer is obligated to defend a suit for personal injuries brought by Defendant Charles W. Ireland against the Procter and Gamble Manufacturing Company (hereafter called "Procter and Gamble"), in the Superior Court of Baltimore City, and to respond to any verdict the plaintiff may obtain. If it should be concluded that both insurers have obligations in those regards, a declaration is sought as to the proportion in which their obligations exist.¹

The Employers' Liability Assurance Corp., Ltd. (hereafter called "Employers'") issued a comprehensive liability policy to Procter and Gamble. Indemnity Insurance Company of North America (hereafter called "Indemnity") issued an automobile liability policy to Kane Transfer Company. On July 19, 1960, Defendant Ireland, an employee of Kane Transfer Company, was sent to a warehouse, at Pier 3 Pratt Street, Baltimore, occupied by Procter and Gamble under sublease, to pick up a load of soap. The warehouse had an overhead door and, in order to load the truck, it was necessary that the truck be backed to the warehouse opening and the door raised.

Precisely how the door was raised is not clear, because Defendant Ireland, in an appearance before the Workmen's Compensation Commission of the State of Maryland, testified to one version of the ensuing accident and, in a discovery deposition in the suit which he subsequently filed against Procter and Gamble Manufacturing Company, in the Superior Court of Baltimore City, testified to a different version. For the purposes of this case, the correct version is not an issue or material.

By one version, an employee of Procter and Gamble opened the warehouse door with a fork lift truck customarily used to move loads of soap. That employee then instructed Defendant Ireland's helper on the Kane truck to put a prop under the open door. By the other version, Defendant Ireland raised the door above the safety catch at the top of the door and put a block underneath to hold it. In either event, it is certain that when the door was raised to the level of the safety catch at the top, the opening was insufficient to accommodate the full height of the load so that the door was raised above the safety catch and propped into that position by the use of a wooden block to facilitate loading.

After the door was opened, the employee of Procter and Gamble, again with the use of the fork lift truck, deposited a load of soap on the truck. That employee drove off into the warehouse to write up a ticket for the load. The articles on the truck began to shift, whereupon Defendant Ireland stood beside the load to hold it in place. At that time, for reasons unknown, but not claimed to be any striking or jarring of the door, the overhead door fell, striking Defendant Ireland and causing personal injuries. Defendant Ireland has received Workmen's Compensation benefits, but he has sued Procter and Gamble for $50,000.00 upon allegations of negligence in failing to secure the door, failing to discover a dangerous condition on its premises, and failing to warn him of a dangerous condition on the premises.

When the suit in the state court was filed by Defendant Ireland, demand was made upon Indemnity to defend. When Indemnity declined the demand, Employers' began the defense of the suit and instituted this proceeding for a determination of the rights of the parties.

Employers' policy insures Procter and Gamble, and its constituent companies, against bodily injury liability to the extent of $200.00 per person per occurrence. Indemnity's policy, stripped of unnecessary verbiage, insures Kane Transfer Company, Procter and Gamble,² and others, against all sums which they shall become legally obligated to pay as damages because of bodily injuries "arising out of the * * * use of any automobile," to the extent of $100,000.00 for bodily injury per person per occurrence. Both policies contain the customary provisions obligating the insurer to defend the persons insured against any claim alleging injury with respect to insurance afforded by the policy.

The crucial language in Indemnity's policy for the first issue which this case presents is the definition of "use" which, by the terms of the policy, is defined: "Use of an automobile includes the loading and unloading thereof." Thus, the first question to be determined is whether Indemnity could be liable under its policy, within the limits of coverage, to pay damages on behalf of Procter and Gamble and also to defend Procter and Gamble in the suit filed against it by Defendant Ireland. If this question is answered in the affirmative, the next question presented is what proportion (if less than all) of the costs of defending Procter and Gamble, including the costs of litigation and reasonable attorneys' fees incurred to date, and any judgment rendered against it, must be paid by Indemnity.

I

There are many authorities which consider the scope of coverage to be afforded an automobile insurance policy provision insuring against liability for bodily injury arising out of the loading and unloading of any automobile. These authorities are not harmonious. Any consideration to be given to them must recognize two basic distinctions.

The first distinction is that there is a difference between a policy which affords coverage for bodily injury sustained as a result of the "ownership, maintenance and use" of a motor vehicle, but which does not expressly mention loading or unloading operations, and one which expands the definition of use to include loading and unloading. The cases construing the former require that before coverage is found to exist there must be a showing of a causal relationship between the vehicle and the ensuing injury. John Alt Furniture Co. v. Maryland Casualty Co., 88 F.2d 36 (8 Cir. 1937), is typical of this line of authorities. There, an accident occurred in the course of delivery of furniture to the second floor of an apartment building. The furniture had been transported in the insured truck. To carry the furniture from the truck to the second floor, employees removed a door from the rear of the building and leaned it against a clothes pole in the back yard. The door fell, striking and injuring a tenant. Coverage was found not to exist, because the Court concluded that the accident was not caused by a vehicle. Conversely, where the insurance policy defines "use" to include the loading and unloading of the vehicle, as in the case at bar, the insurance protection afforded is broadened. This point is best established by comparing the Alt Furniture case, supra, with Lumbermens Mut. Cas. Co. v. Employers' L. Assur. Corp., 252 F.2d 463 (1 Cir. 1958), which are similar on their facts. In the Lumbermens case, a truck was dispatched to move furniture from a second floor apartment. The truck was parked at the curb on a public street adjacent to the premises from which furniture was to be removed. It became necessary to lower a divan from the second floor porch to the ground by the use of a web strap. During this operation the plaintiff, who was assisting in this operation, fell from the porch, sustaining personal injuries. Applying the test that the plaintiff's activities were necessary in order to carry out the delivery, and that they were an integral part of the unloading process, the Court concluded that the policy protected the insured. Indeed, the Court specifically stated (252 F.2d p. 465) that the "loading and unloading clause" was intended to broaden the definition of the use of a motor vehicle. Because of the distinction between policies the protection of which is limited to use, and policies the protection of which is expanded to include loading and unloading, the Alt Furniture case, supra, cited and relied on by Indemnity, is clearly distinguishable from the case at bar, as is United States Fidelity & Guaranty Co. v. Breslin, 243 Ky. 734, 49 S.W.2d 1011 (1932), which concerned an exclusionary clause excluding damages resulting from the use, ownership and operation of an automobile.

A second distinction which must be observed is to distinguish between the jurisdictions which have adopted the "coming to rest" doctrine and those which have adopted the "complete operation" doctrine. See discussion, Raffel v. Travelers Indemnity Co., 141 Conn. 389, 106 A.2d 716 (1954), and American Auto Ins. Co. v. Master Bldg. Supply & Lbr. Co., 179 F.Supp. 699 (D.C.Md.1959). The former is a doctrine of narrow construction, and has been held to embrace only the operation of taking the goods from the vehicle to a place of rest out of the vehicle, while the latter is a doctrine of broad construction, and it holds that any occurrence during, or arising out of, the process of loading or unloading is covered, 7 Appleman, Insurance (Rev. ed. 1962), § 4322; 6 Blashfield, Cyclopedia of Automobile Law (Part I Perm. ed., 1945), § 3972.5. In the Master Bldg. case, supra, Chief Judge Thomsen has held that, in the absence of any specific Maryland decision, the "complete operation" doctrine would be applied by the Maryland courts. I agree that this doctrine would be applied in a case like that at bar.

While temporally the accident here occurred before the soap had been fully secured on the truck, so that it may be argued that the loading was not completed and the distinction between which of the "coming to rest" or "complete operation" doctrines is the law of Maryland is not important, a...