Federal Insurance Co. v. Michigan Mutual Liability Co., 12950

• Decision Date: 25 March 1960
• Docket Number: No. 12950,12951.,12950
• Citation: 277 F.2d 442
• Parties: FEDERAL INSURANCE COMPANY, a Corporation, v. MICHIGAN MUTUAL LIABILITY COMPANY, a Corporation, Appellant, and J. Robert Bazley, Inc. and Lamar P. Conrad and S & E McCormick, Inc.
• Court: U.S. Court of Appeals — Third Circuit

277 F.2d 442 (1960)

FEDERAL INSURANCE COMPANY, a Corporation, v. MICHIGAN MUTUAL LIABILITY COMPANY, a Corporation, Appellant, and J. Robert Bazley, Inc. and Lamar P. Conrad and S & E McCormick, Inc.

Nos. 12950, 12951.

United States Court of Appeals Third Circuit.

Argued January 5, 1960.

Decided March 25, 1960.

Norman Paul Harvey, Philadelphia, Pa. (John J. McDevitt 3rd, Philadelphia, Pa., for Michigan Mutual Liability Co., on the brief), for appellant.

Robert E. Jones, Philadelphia (Rawle & Henderson, George M. Brodhead, J. Welles Henderson, Jr., Philadelphia, Pa., on the brief), for Federal Ins. Co.

Kimber E. Vought, Philadelphia, Pa. (Orr, Williams & Baxter, Philadelphia, Pa., on the brief), for Lamar P. Conrad.

Before McLAUGHLIN, KALODNER and STALEY, Circuit Judges.

McLAUGHLIN, Circuit Judge.

These are appeals¹ from the district court's determination that an automobile insurance policy issued by the appellant, Michigan Mutual Liability Company (Michigan) constitutes the primary coverage in any actions for personal injuries or property damage arising out of an accident which occurred in October 1956, and that appellee's, Federal Insurance Company (Federal), policy constitutes solely excess insurance to the extent that Michigan's policy does not cover due to policy limits.

On October 2, 1956, S. & E. McCormick, Inc., (McCormick) transported a dragline shovel to a site in Pennsylvania. The body of the shovel was carried to the unloading site on an I-beam trailer and the counterweight was transported on a similar trailer. Both tractor-trailer combinations were owned and operated by McCormick and insured by Michigan. Because of the size and weight of the shovel and its counterweight, McCormick engaged J. Robert Bazley, Inc. (Bazley) to provide a mobile truck crane and operator to aid in the unloading. Bazley, not having one of its own cranes available, provided one which had been leased from a third party (not a party here). Bazley was the insured of Federal under a comprehensive liability policy.

In order to unload the body of the shovel, it was first necessary to remove the rear wheels of the I-beam trailer so that the shovel could be driven off the trailer bed under its own power. Upon completion of this operation it became necessary to replace the rear wheels. This normally was done by hand or, where circumstances made hand replacement difficult, by means of a winch attached to the trailer. Here, however, someone suggested that the truck crane be used to replace these wheels. McCormick's driver, Witczak, agreed. The left rear dual wheels were replaced without incident but in the course of replacing the right wheels the boom, or a guy wire, of the crane came in contact with or in close proximity to an overhead high tension wire transmitting an electric current downward and injuring the driver Witczak.

Witczak instituted actions, in the district court, against Bazley and Lamar P. Conrad (Conrad), Bazley's employee and the operator of the crane, for personal injuries. Federal brought this declaratory judgment suit against Michigan and included as parties defendant Bazley, Conrad and McCormick, and Conrad cross-claimed against Michigan, seeking the determination that Michigan was required to defend and pay any judgment in the causes against Bazley and Conrad. Federal and Conrad moved for summary judgment, their motions were granted and these appeals followed. The issues in both appeals are the same and will be treated together.

In its policy issued to McCormick, Michigan contracted to pay all sums for which the insured shall become legally obligated to pay because of bodily injury caused by accident and arising out of the ownership, maintenance or use of the automobile. The policy contained the usual "omnibus clause"² and a "loading and unloading clause".³ There being no dispute as to the facts, Federal and Conrad moved for summary judgment which was granted. The district court concluded the injury arose out of the use of the I-beam trailer and, in passing, stated:

"Although it is not necessary to decide whether this use falls under the terms `the loading and unloading thereof\' * * * the undersigned concludes that the Pennsylvania cases would consider this use part of `unloading\'." 172 F.Supp. 858, at page 864.

Michigan contends, on this appeal, that the accident did not arise out of the use (including unloading) of the I-beam trailer and that even if it did, such use was not with the permission of McCormick.

Although the judgment of the district court can be sustained solely on the basis of "use clause" of the policy vehicle without going into the "unloading clause", the facts here indicate that one should not be considered without the other.

Since an unloading clause is involved there has been much discussion, in the briefs on appeal, concerning the "Coming to Rest" doctrine and the "Complete Operation" doctrine. Michigan asserts that Pennsylvania law applies and that Pennsylvania has adopted the "Coming to Rest" doctrine, citing Kaufman v. Liberty Mut. Ins. Co., 3 Cir., 1959, 264 F. 2d 863 and Ferry v. Protective Indemnity Co., 1944, 155 Pa.Super. 266, 38 A. 2d 493. Under this conception the process of unloading is complete when the cargo has been lifted or removed from the truck and set down, or the movement which took it from the truck ceases. The theory with supporting cases is set forth in 160 A.L.R. 1259, 1261, 1264-1267. Appellant argues that since the dragline shovel had been removed from the trailer and was standing idle 150 feet away at the time the accident happened, the unloading process was complete so that the unloading clause has no application.

Federal, on the other hand, urges that Pennsylvania has adopted the "Complete Operation" doctrine, citing Wheeler v. London Guarantee & Acc. Co., 1928, 292 Pa. 156, 140 A. 855. According to this the unloading process includes all intermediate steps from the time the goods are removed from the truck until they are turned over to the party for whom intended. See 160 A.L.R. 1259, 1261, 1267-1272. Since the crane operator, Federal argues, had still to remove the counterweight from the second trailer and assemble the shovel, the unloading process was still incomplete.

It should be pointed out that there is no clear enunciation of which rule Pennsylvania would apply. In Kaufman, supra, this court felt that the Wheeler and Ferry opinions, supra, were in harmony in that they required a connection between the use of the insured vehicle and the accident but explicitly stated: "In view of Wheeler and Ferry we need not discuss the conflicting `coming to...