Fireman's Fund Ins. Co. v. Chasson
| Decision Date | 25 September 1962 |
| Citation | 207 Cal.App.2d 801,24 Cal.Rptr. 726 |
| Parties | FIREMAN'S FUND INSURANCE COMPANY, a corporation, Plaintiff and Appellant, v. Illa CHASSON, Leo K. Gold, Russell L. Miller, Leroy C. Thompson and Bernard H. Vanderstein, copartners dba The Normandle Club, Defendants and Respondents. Civ. 25911. |
| Court | California Court of Appeals Court of Appeals |
Henry E. Kappler, Los Angeles, for plaintiff and appellant.
Dryden, Harrington, Horgan & Swartz, by Vernon G. Foster, Los Angeles, for defendants and respondents.
This action for declaratory relief was commenced by Fireman's Fund Insurance Company ('Fireman's') seeking a declaration of its obligations under a policy of automobile liability insurance issued to defendant Lou Chasson ('Chasson') on an automobile owned by him. The insured vehicle was involved in an accident in which Chasson's passengers, defendants Schneiderman, Rubin and Ostrofsky, were injured. Each of the passengers filed his own independent personal injury action against Chasson and his alleged employers Gold, Miller, Thompson and Vanderstein, copartners doing business as The Normandie Club. The Normandie Club conducted a poker parlor in the City of Gardena and it was alleged in the personal injury actions that at the time of the accident Chasson was an employee of the club and acting within the course and scope of his employment. The Normandie Club and the copartners (hereinafter collectively designated 'The Normandie Club') were also named as defendants in the declaratory relief action because of their claim that they are entitled to the extended coverage provisions of the Chasson insurance policy should Chasson be found to be acting in his capacity as their employee at the time of the accident which they deny.
In the declaratory relief action Fireman's sought to be relieved on any and all obligations under the policy of insurance because of the alleged use of the insured vehicle by Chasson as a 'public or livery conveyance' for which use coverage under the policy was specifically excluded.
At the trial certain specific issues of fact were submitted to the jury by stipulation of the parties which the jury answered by finding that the automobile in question was being used by Chasson as a public or livery conveyance at the time of the accident; that Chasson was not at that time the servant, agent or employee of The Normandie Club and was not acting within the course and scope of his employment by The Normandie Club. The trial court expressly adopted these findings. The court further found that the insurance policy in question contained an exclusion reading in part as follows:
'a) * * * while the automobile is used as a public or livery conveyance, unless such use is specifically declared and described in this policy;'
With reference to this exclusion the court further found that '* * * the use of such vehicle as a public or livery conveyance was not specifically declared or described in the policy of insurance * * *.'
The court further found Fireman's was obligated under the language of the policy to 'a) Defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient;'.
With reference to the parties included under the definition of 'insured' the court found that the policy provided:
'a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the 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 such spouse or with the permission of either * * *.'
Predicated upon these findings the court further found that Fireman's was not obligated to pay any judgment which might thereafter be rendered against Chasson or The Normandie Club because the vehicle was being used at the time of the accident 'as a public or livery conveyance' within the provisions of the exclusion in the policy.
In his memorandum of decision the trial judge noted that the duty to defend is a separate coverage from the duty to indemnify citing Liberty Building Co. v. Royal Indemnity Co., 177 Cal.App.2d 583, 587, 2 Cal.Rptr. 329; Firco v. Fireman's Fund Ins. Co., 173 Cal.App.2d 524, 527, 343 P.2d 311 and Lamb v. Belt Casualty Co., 3 Cal.App.2d 624, 630, 40 P.2d 311. He further asserted that the duty to defend is only excused where the complaint in the case against the insured shows plainly on its face the injury complained of is not covered by the policy, citing Liberty Building Co. v. Royal Indemnity Co., supra, and Remmer v. Glen Falls Indemnity Co., 140 Cal.App.2d 84, 295 P.2d 19, 57 A.L.R.2d 1379.
The three complaints in the personal injury actions against the insured Chasson were received as exhibits by reference in the declaratory relief action and the court pointed out in its decision that they do not show on their face that the injuries complained of are not covered by the policy. Thus, as stated in the recent case of Karpe v. Great American Indemnity Co., 190 Cal.App.2d 226, 223-234, 11 Cal.Rptr. Co., 190 Cal.App.2d 226, 233-234, 11 Cal.Rptr. complaint show a potential liability within policy coverage, the duty to defend exists. The obligation to defend is broader than the obligation to indemnify.'
In the Rubin and Ostrofsky actions the complaints alleged that each of the respective plaintiffs was a passenger in the car driven by Chasson; that Chasson was the agent of The Normandie Club and was acting within the scope of his agency. In the Schneiderman action the complaint alleged that the plaintiff therein was 'a passenger for hire.' Thus, it is clear that in the Rubin and Ostrofsky cases it is not apparent on the face of the complaints that the liability sued upon came within the exclusion in the policy. In the Schneiderman action the mere allegation that the plaintiff was a passenger for hire does not have the...
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