Hagans v. Glens Falls Insurance Company, No. 71-1540.

• Decision Date: 08 November 1972
• Docket Number: No. 71-1540.
• Citation: 465 F.2d 1249
• Parties: Matthew Lee HAGANS, Jr., as Trustee for Ryder Truck Rental, Inc., a Florida Corporation, and Liberty Mutual Insurance Company, a Massachusetts Corporation, Plaintiffs-Appellants, v. GLENS FALLS INSURANCE COMPANY, a New York Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

465 F.2d 1249 (1972)

Matthew Lee HAGANS, Jr., as Trustee for Ryder Truck Rental, Inc., a Florida Corporation, and Liberty Mutual Insurance Company, a Massachusetts Corporation, Plaintiffs-Appellants, v. GLENS FALLS INSURANCE COMPANY, a New York Corporation, Defendant-Appellee.

No. 71-1540.

United States Court of Appeals, Tenth Circuit.

September 5, 1972.

Rehearing Denied November 8, 1972.

Michael C. Stewart and A. T. Elder, Jr., Oklahoma City, Okl. (B. J. Cooper, of Rinehart, Cooper & Stewart, Oklahoma City, Okl., on the brief), for plaintiffs-appellants.

Calvin W. Hendrickson, Oklahoma City, Okl. (Pierce, Couch, Hendrickson, Gust, & Short, Oklahoma City, Okl., of counsel, on the brief), for defendant-appellee.

Before BREITENSTEIN, SETH and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

This is a dispute between two insurance companies as to which is the primary insurer on the particular accident here under consideration. The case was tried to the court on a somewhat involved agreed statement of facts.

Far-Go Van Lines, Inc., is a Virginia based corporation whose principal business is the transportation of goods for hire throughout the United States, and as such operates under authority granted by the Interstate Commerce Commission to transport goods for hire in interstate commerce, and by the Oklahoma Corporation Commission to transport goods for hire within the State of Oklahoma, and by all other states where it does business. Far-Go leases some of its equipment, and the particular truck-tractor involved in the accident here in question was leased from Ryder Truck Rental, Inc., a Florida corporation. Since considerable emphasis is sought to be placed on the lease agreement, reference thereto shall now be made.

Ryder and Far-Go entered into a written lease agreement wherein Ryder agreed, among other things, as follows:

"* * *.

"G. To procure and maintain in full force and effect public liability and property damage insurance for all vehicles leased hereunder with LESSEE named as an additional assured in the following limits:

                    Bodily Injury        $100,000 per person
                    Bodily Injury        $300,000 per accident
                    Property Damage      $ 25,000 per accident."
                

In that section of the lease agreement setting forth the obligations of Far-Go appears the following:

"* * *.

"F. To procure and maintain in full force and effect (furnishing OWNER with evidence satisfactory to OWNER) standard public liability and property damage insurance for all vehicles leased hereunder written by a company or companies satisfactory to OWNER and with OWNER named as an additional assured in the following limits:

                    Bodily Injury     $  -0-   per person
                    Bodily Injury     $  -0-   per accident
                    Property Damage   $  -0-   per accident
                

"LESSEE further agrees to indemnify and hold OWNER harmless from and against any claims or causes of action for death or injury to persons or loss or damage to property arising out of or caused by the ownership, maintenance, use or operation of any vehicle leased hereunder."

At the time of the accident, Liberty Mutual Insurance Company, a Massachusetts corporation, had in force and effect a policy of liability insurance with limits of $100,000 each person, $300,000 each accident, issued in the name of Ryder which afforded coverage to Far-Go and its employees. Also, at the time of the accident, Glens Falls Insurance Company, a New York corporation, had in force and effect a policy of liability insurance with limits of $100,000 each person, $300,000 each accident, issued in the name of Far-Go affording coverage to Far-Go and its employees.

Having issued the aforesaid policy to Far-Go, Glens Falls filed certificates of insurance on Far-Go with the Interstate Commerce Commission and the Oklahoma Corporation Commission and all other states where Far-Go did business. The certificate filed with the Interstate Commerce Commission certified that Glens Falls had issued Far-Go,

"a policy * * * of Automobile Bodily Injury Liability and Property Damage Liability Insurance which, by the attachment of endorsement, form number B.M.C. 90, approved by the Interstate Commerce Commission, has * * * been amended to provide the coverage or security for the protection of the public required with respect to the operation, maintenance, or use of motor vehicles under certificate of public convenience and necessity or permit issued to the insured by the Interstate Commerce Commission * * *."

In this general connection, Interstate Commerce Commission rules and regulations provide that the following endorsement contained in ICC form B.M.C. 90 be attached to all policies issued motor carriers:

"Within the limits of liability hereinafter provided it is further understood and agreed that no condition, provision, stipulation, or limitation contained in the policy, or any other endorsement thereon or violation thereof, of this endorsement, by the insured, shall relieve the Company from liability hereunder or from the payment of any such final judgment, irrespective of the financial responsibility or lack thereof or insolvency or bankruptcy of the insured."

It was in this setting that one Matthew Lee Hagans, Jr., an employee of Far-Go, while driving a truck-tractor leased from Ryder in the course of his employment for Far-Go, was involved in a collision with two other passenger vehicles in Del City, Oklahoma, resulting in one death and serious injuries to the several occupants of the passenger cars. Far-Go made a written report of the accident to Glens Falls, as required by its policy. Ryder, in turn, commenced its investigation of the accident and upon learning of the Glens Falls policy made a demand upon Glens Falls to defend. Glens Falls refused to defend either Hagans or Far-Go.

Without going into unnecessary detail, all of the various claims growing out of the aforesaid collision were either settled or reduced to judgment, and then paid, in the main, by Liberty Mutual and, in part, by Ryder under a deductible clause. The present action was then brought by Liberty and Hagans, as trustee for Ryder, against Glens Falls seeking reimbursement for sums thus paid.

After the facts were stipulated to by the parties, the two plaintiffs, i. e., Liberty Mutual and Hagans, as trustee, filed a motion for summary judgment, the grounds therefor being as follows: (1) Hagans was an "insured" under the Glens Falls policy; (2) the Glens Falls policy provided coverage on the truck-tractor being operated by Hagans; and (3) the coverage provided by the Glens Falls policy would be primary coverage at the time of the accident.

Thereafter, Glens Falls also filed a motion for summary judgment and the gist of this motion was: (1) Under the Glens Falls policy, Hagans was not a primary insured with respect to the particular action to which this litigation relates; (2) the policy provided no primary coverage on the truck-tractor being...