Indemnity Ins. Co. v. Pacific Clay Products Co.

• Decision Date: 04 December 1970
• Citation: 91 Cal.Rptr. 452,13 Cal.App.3d 304
• Parties: INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Plaintiff and Respondent, v. PACIFIC CLAY PRODUCTS CO. et al., Defendants and Appellants. Civ. 9951.
• Court: California Court of Appeals Court of Appeals

Page 452

91 Cal.Rptr. 452

13 Cal.App.3d 304

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Plaintiff and Respondent, v. PACIFIC CLAY PRODUCTS CO. et al., Defendants and Appellants.

Civ. 9951.

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

Dec. 4, 1970.

Higgs, Jennings, Fletcher & Mack and Pitts Mack, San Diego, for appellants, Pacific Clay Products Co. and Fidelity and Casualty Co. of New York.

Holt, Rhoades, Hollywood & Miller, Harrison R. Hollywood and Douglas R. Reynolds, San Diego, for appellant Bernard Allison on behalf of all interested Underwriters at Lloyd's London.

Luce, Forward, Hamilton & Scripps, Robert G. Steiner, San Diego, and Henry F. Walker, Los Angeles, for plaintiff and respondent.

OPINION

COUGHLIN, Associate Justice.

Defendants appeal from a judgment determining the rights and obligations of insurance carriers respecting liability for loss occasioned by an accident resulting in injuries to a man named Toombs, and the death of a man named Flores, while they were unloading a truck-trailer at a construction site.

Defendants Fidelity and Casualty Company of New York, hereinafter referred to as Fidelity, and Underwriters at Lloyd's London, hereinafter referred to as Lloyd's, were insurers, respectively, under a policy of insurance and a certificate, hereinafter referred to as a policy, issued to Pacific Clay Products Co., hereinafter referred to as Clay Products, insuring against loss on account of liability for damages because of injury or death sustained by any person resulting from, among other things, use of the truck-trailer. Neither policy insured against loss payable under the Workmen's Compensation Act, i.e., Labor Code sections 3201 et seq. The policy issued by Lloyd's provided insurance excess to that provided by Fidelity; referred to Fidelity as the primary insurer; and provided liability attached only after the primary insurer paid or was liable to pay the full amount of its ultimate net loss liability, i.e., $50,000.

Plaintiff Indemnity Insurance Company of North America, hereinafter referred to as Indemnity, was insurer under policies of insurance issued, respectively, to Sorrento Valley Development Co., hereinafter referred to as Sorrento, owner of the construction site where the accident occurred and Einer Bros., Inc., hereinafter referred to as Einer Bros., a general contractor engaged in construction work on the site in question, insuring against loss on account of liability for damages because of injuries sustained by or the death of any person, and resulting from, among other things, the maintenance or use of the construction site.

The evidence in the case was presented by written and oral stipulations which establish the facts. On the day of the accident Toombs and Flores were employed by Clay Products, the former as driver of the truck and the latter as a helper; used the truck, which was owned exclusively by Clay Products, to deliver a load of pipe to the construction site of Sorrento and Einer Bros.; and unloaded the pipe. Toombs had been instructed by Clay Products to relocate previously delivered pipe 'to where EINER BROS., INC. wanted it moved' ¹; contacted a foreman employed by Einer Bros., named Valkoff; accompanied Valkoff, in the latter's automobile, to another place on the construction site which he designated as the place where the previously delivered pipe should be relocated; and then returned with Valkoff to the place where the previously delivered pipe then was located. 'The pipe was delivered to the job site at the instigation only of Einer Bros., Inc.' Toombs and Flores loaded the truck with the previously delivered pipe; transported it to the location designated by Valkoff; and proceeded to unload. The truck was equipped with a crane used to unload the pipe. In the process of unloading, the crane contacted an overhead high voltage power line injuring Toombs and electrocuting Flores. Valkoff was not present at the accident site when the accident occurred.

The stipulated facts support inferences Einer Bros. requested Clay Products to move the previously delivered pipe to a new location; Einer Bros. knew a truck with a crane would be used to fulfill this request; Valkoff, on behalf of Einer Bros., without warning respecting the presence of the overhead high voltage power line, directed Toombs to relocate the pipe at the place beneath the power line where the accident occurred; and in unloading the pipe at that place Toombs and Flores were acting in response to the directions given them by Valkoff.

Toombs and the heirs of Flores, respectively, brought actions for damages against Sorrento and Einer Bros. premised on their alleged negligence in maintaining the high voltage power line without proper insulation and at a dangerous height, and in directing Toombs and Flores to unload the pipe under the power line without warning them of the presence of the power line with its incident danger; and recovered judgments in substantial amounts which were satisfied by Indemnity.

The Fidelity policy contained a provision extending coverage to 'any person while Using an owned automobile or a hired automobile * * * provided the actual use of the automobile is by the named insured or with his permission' (Emphasis added); defined an owned automobile as 'an automobile owned by the named insured'; and provided 'use of an automobile includes the loading and unloading thereof'.

Lloyd's policy provided: 'This certificate is subject to the same warranties, terms and conditions as are contained in or as may be added to the policy/ies of the Primary Insurers (i.e., Fidelity) * * *.'

Indemnity brought the action at bench to recover from Fidelity and Lloyd's the amounts paid in satisfaction of the judgments in favor of Toombs and the heirs of Flores and in the defense of the actions resulting in those judgments, contending Sorrento and Einer Bros., within the meaning of the extended coverage provisions of the Fidelity and Lloyd's policies, were using the truck during the unloading process when the accident occurred, and this use was related causally to the accident; for this reason Sorrento and Einer Bros. were insureds under the Fidelity and Lloyd's policies; the insurance thus provided was primary; and the insurance provided by its policy was secondary or excess by virtue of the 'other insurance' provision therein, 'If the insured has other insurance against a loss covered by this policy * * * the insurance under this policy with respect to a loss arising out of * * * the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance.'

In defense, Fidelity and Lloyd's contended Sorrento and Einer Bros. were not using the truck within the meaning of their policies.

The court found the accident occurred on premises under the dominion and control of Sorrento and Einer Bros.; the truck and its equipment was owned exclusively by City Products; the unloading of the pipe from the truck at the time of the accident was with the actual permission of Clay Products; the unloading of the pipe was a use of the truck under the Fidelity and Lloyd's policies; and, at the time of the accident, Sorrento and Einer Bros. were insureds under and within the meaning of the Fidelity and Lloyd's policies, which implies a finding Sorrento and Einer Bros., at the time of the accident, were using the truck within the meaning of the Fidelity and Lloyd's policies. ² On appeal Fidelity and Lloyd's contend, in substance, the evidence does not support the finding Sorrento and Einer Bros. were using the truck.

Each of the parties cites and digests, analyzes and categorizes to its satisfaction, distinguishes or applies, and relies upon or rejects as authority what one court has described as that 'plethora of cases * * * in which insurance carriers engaged in an internecine struggle' to determine which shall bear the loss under an extended coverage clause, which have not been productive of 'any thread of principle' (American Auto Ins. Co. v. Transport Indem. Co., 200 Cal.App.2d 543, 544, 19 Cal.Rptr. 558, 559), and which, as stated by another court, 'decide whether the unusual facts fit the generalized formulae of extended coverage which, relative to those facts, are now metamorphosed into ambiguity.' (Pacific Indem. Co. v. Truck Ins. Exch., 270 Cal.App.2d 700, 703, 76 Cal.Rptr. 281, 283.)

Many of the cases cited deal with issues not present in the case at bench, such as whether the accident occurred during the loading and unloading constituting a use of truck, and whether there is a causal relationship between the use of the truck and the accident resulting in injury.

From the stipulations of fact and reasonably deducible inferences, the trial court was entitled to conclude Einer Bros. had control over the construction site; requested Clay Products to move the previously delivered pipe to another location knowing compliance with this request would require the use of one of its trucks equipped with a crane; in the exercise of its control over the premises, exerted control over the place where the previously delivered pipe should be relocated; in further exercise of this control, specifically directed the employees of Clay Products to unload the pipe at a place where the contemplated unloading process would be dangerous because of the overhead high voltage power line; and in this manner participated in the unloading of the truck. These circumstances support the implied finding Einer Bros., at the time of the accident, was using the truck within the meaning of the Fidelity and Lloyd's policies. (P. E. O'Hair & Co. v. Allstate Ins. Co., 267 Cal.App.2d 195, 198, 72 Cal.Rptr. 690; California Steel Buildings, Inc. v. Transport Indemnity Co., 242 Cal.App.2d 749, 755--756, 51 Cal.Rptr. 797; American Auto Ins. Co. v. Transport Indem. Co., Supra, 200 Cal.App.2d 543, 555, 19 Cal.Rptr. 558; Hake v. Eagle Picher Company, 7 Cir., 406 F.2d 893, 895; ...