Hartford Acc. & Indem. Co. v. Transport Indem. Co.

• Decision Date: 10 May 1966
• Citation: 51 Cal.Rptr. 168,242 Cal.App.2d 90
• Court: California Court of Appeals Court of Appeals
• Parties: HARTFORD ACCIDENT AND INDEMNITY COMPANY, a corporation, Plaintiff and Appellant, v. TRANSPORT INDEMNITY COMPANY, a corporation, Respondent and Cross-Appellant. Civ. 29429.

Page 168

51 Cal.Rptr. 168

242 Cal.App.2d 90

HARTFORD ACCIDENT AND INDEMNITY COMPANY, a corporation, Plaintiff and Appellant, v. TRANSPORT INDEMNITY COMPANY, a corporation, Respondent and Cross-Appellant.

Civ. 29429.

District Court of Appeal, Second District Division 1, California.

May 10, 1966.

Schell & Delamer and Fred B. Belanger, Los Angeles, for appellant.

Harold Q. Longenecker and Gerald G. Reppetto, Los Angeles, for respondent and cross-appellant.

LILLIE, Justice.

Cross-appeals are here presented from a declaratory judgment determining the relative and respective rights and obligations of the parties to this action under policies of insurance issued by them.

The controversy arose under the following circumstances: Ronald Berman, while employed by Western Truck Lines (referred to hereinafter as 'Western-Gillette') drove his employer's pick-up truck to the premises of Cutting Edge Supply (Cutting Edge) of pick up a heavy steel blade. An employee of Cutting Edge, one Hendrix, was the operator of a fork lift truck upon which the blade was situated; as the blade was being lowered onto the bed of the truck, it struck and injured the middle right finger of Berman's hand. Berman then filed an action against Cutting Edge, another company, two named individuals and certain Does; Hendrix was not named as a defendant. The case was subsequently settled before trial by Hartford, as Cutting Edge's insurer under a general liability policy, for $4,750.00. Meantime, Hartford had brought this action against Transport to have it declared that a comprehensive automobile policy issued to Western-Gillette, providing general coverage for that company and any other person using the pick-up truck with the permission of Western-Gillette, required such company to defend and indemnify Cutting Edge in the action instituted by Berman. (At the time of trial, by stipulation, the complaint was deemed amended to state a cause of action for the recovery by Hartford of the settlement sum.)

Hartford contended that its policy insured Cutting Edge but not its employee Hendrix, whose negligence was said to be the sole proximate cause of Berman's injuries; on the other hand, since Hendrix was using the pick-up truck and since Cutting Edge was alleged to be legally responsible for its permissive use, both were insured under transport's comprehensive policy which issued, among other reasons, pursuant to section 16451(b) of the Vehicle Code then in full force and effect and providing for mandatory coverage of permissive users. It, therefore, relied on the rule that a policy (Transport) which covers the liability of an additional insured (Hendrix) is primary over a policy (Hartford) which covers only the vicarious liability of the employer (Cutting Edge) under the doctrine of respondeat superior. Cited in this connection is Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 428, 296 P.2d 801, 804, 57 A.L.R.2d 914: 'Where a judgment has been rendered against an employer for damages occasioned by the unauthorized negligent act of his employe, the employer may recoup his loss in an action against the negligent employe. (Citations.)' The trial court took cognizance of the above rule; nevertheless, it concluded that the present case could not be distinguished from Standard Acc. Ins. Co. of Detroit, Michigan v. Hartford Acc. & Indem. Co., 206 Cal.App.2d 17, 23 Cal.Rptr. 424, where it was held that both policies covered the risk and, accordingly, both were concurrent or primary insurers. It was therefore adjudged that the amount of settlement in the Berman action, including a sum fixed as attorney's fees, be borne equally by Hartford and Transport.

It is Hartford's position on this appeal that Vicarious liability should automatically be considered 'excess' liability; too rather than be required in circuitous fashion to institute an action against Hendrix, this court should declare that Transport provided primary coverage for Hendrix to whom Hartford owes no obligation and that it be reimbursed for its payment and costs in the settlement of the Berman suit. Transport's cross-appeal, on the other hand, advances the claim that the trial court erred in failing to prorate the policies pursuant to the ratio of their basic limits: Since Transport's policy afforded a $10,000 coverage, and Hartford's limit was $50,000 for injuries to one person, the ratio of 1--5 should have been applied.

Because it was further declared in Continental Casualty that 'as between employer and employe in such a situation, the obligation of the employe is primary and that of the employer secondary' (46 Cal.2d at 429, 296 P.2d at 804), it must here be determined whether the liability of Cutting Edge to Berman was predicated on respondeat superior. Transport vigorously disputes such claim. In the first place, it says, Hendrix was not named as a defendant nor was he served; second, the complaint alleges negligent control, management and entrustment of the truck on the part of Cutting Edge, there being no such allegation with respect to Hendrix or any other employees of Cutting Edge. As we are authorized to do (Cal.Rules of Court, Rule 12), we have ordered the original record transmitted here; it does not fully support the last statement. Paragraph III alleges that 'at all times herein referred to the defendants and each of them were the agents, servants and employees of each other and were authorized to act and did act for each other within the scope of their duties under their said employment.' Paragraph IV, after reference to plaintiff's presence on the premises at defendant's invitation, then alleges that 'at said time and place said defendants so negligently, carelessly and unlawfully controlled, managed and entrusted the work of loading said truck that a heavy piece of steel was caused to fall on plaintiff's right...