Industrial Indem. Co. v. General Ins. Co. of America

• Decision Date: 30 November 1962
• Citation: 26 Cal.Rptr. 568,210 Cal.App.2d 352
• Court: California Court of Appeals Court of Appeals
• Parties: INDUSTRIAL INDEMNITY COMPANY, Plaintiff and Appellant, v. GENERAL INSURANCE COMPANY OF AMERICA, Defendant and Respondent. Civ. 26027.

Page 568

26 Cal.Rptr. 568

210 Cal.App.2d 352

INDUSTRIAL INDEMNITY COMPANY, Plaintiff and Appellant, v. GENERAL INSURANCE COMPANY OF AMERICA, Defendant and Respondent.

Civ. 26027.

District Court of Appeal, Second District, Division 4, California.

Nov. 30, 1962.

Betts, Ely & Loomis and John A. Loomis, Los Angeles, for plaintiff and appellant.

Bolton, Groff & Dunne and Gene E. Groff, Los Angeles, for defendant and respondent.

BURKE, Presiding Justice.

In this suit for declaratory relief determination is sought, as respects two insurance companies, of the order of incidence, if any, of their respective contractual obligations to defend and indemnify Joseph F. Howe (crane operator) and the Young and Anderson Company (crane owners), defendants in a certain personal injury action commenced in Santa Barbara County by James R. Lee (truck driver) to recover damages for injuries received by reason of the negligence of the crane operator. The crane owners are made parties thereto on the ground of respondeat superior. At the time the briefs were filed herein the truck driver's action was pending in Santa Barbara.

The stipulated facts, in substance, recite that the injured truck driver was employed by Hurst Concrete Products Company (Hurst). On July 8, 1958, Hurst delivered a load of concrete pipe to the crane owners near the latter's job site at a point away from premises owned, rented or controlled by the crane owners or the ways immediately adjacent to such premises. The truck driver had transported the pipe on a flat bed truck owned by Hurst and in the course of delivery requested and received the assistance of the crane which was operated by the crane owners' employee. To effect the unloading the truck driver affixed a pipe hook to a section of pipe and then signalled the crane operator to lift the pipe whereby the pipe sections were removed from the Hurst truck.

While a section of pipe was being removed the truck driver, standing on the bed of the truck, was struck by a section of pipe depending from the crane and thereby sustained his injuries. Thereafter, the truck driver brought suit in Santa Barbara County against the crane operator and the crane owners to recover damages arising from such injuries.

The present suit was commenced by Industrial Indemnity Company (Industrial), which had issued a policy of insurance to the crane owners to have declared the liabilities and order of incidence of their policy as against an outstanding policy issued by General Insurance Company (General), the insurer of the Hurst truck. General was named defendant in this suit.

The trial court concluded (1) that the crane operator and its owners are covered by the Industrial policy and Industrial is obligated to furnish them a defense against the truck driver's suit, and (2) that the crane operator and its owners were not insureds within the meaning of the General policy.

Industrial, appellant herein, contends that its policy provides no coverage to the crane operator or to its owners both by reason of the fact the crane was not an automobile under the definition of its policy so that the crane operator, as the negligent employee, was not covered, and that since the unloading operation includes 'use' of the Hurst truck, the General policy applies both to the primary liability of the crane operator and to the crane owners' liability under the doctrine of respondeat superior. The trial court found, among other things, that the crane was an automobile within the meaning of the Industrial policy and, since the Hurst truck did not form a basis of liability in the truck driver's suit, the General policy is inapplicable.

For reasons hereinafter developed we have reached the following conclusions:

'1. The General policy issued to Hurst, covering the flat bed truck which was being unloaded at the time of the accident, includes the crane operator as an additional insured, because at the time of the accident he was using (unloading) an automobile (the flat bed truck) owned by the named insured (Hurst).

2. The crane operator is not an additional insured under the Industrial policy, which under its general liability provisions covered only the crane owners for any claim arising out of the operation of the truck crane and did not cover, under the definition of additional insured contained in the policy, any person operating a power crane unless he was an officer or director or partner.

3. The General policy, which is the only policy which covers the employee crane operator, is primary insurance and General is obligated to furnish a defense to him and to pay any judgment rendered against him to the extent of its policy limit.

4. The crane owners are also an additional insured under the General policy because they are a 'person or organization legally responsible for the use' (unloading) of the flat bed truck owned by Hurst.

5. Result: General must defend and pay any judgment in the action brought by the injured truck driver.

The General policy covers liability for sums the insured is legally obligated to pay 'for damages because of injury * * * arising out of * * * use of automobiles, including the loading and unloading thereof.' The term 'insured' includes 'any person while using an automobile owned * * * by the named insured * * * provided the actual use is with the permission of the named insured.'

Where a person is loading or unloading a truck it has been uniformly held that such person is 'using' that truck within the meaning of insurance policies similar to those present here and is therefore an additional insured under the policy. (See Columbia Southern Chemical Corp. v. Manufacturers & Wholesalers Indem. Exch., 190 Cal.App.2d 194, 203, 11 Cal.Rptr. 762; Pleasant Valley Assn. v. Cal-Farm Ins. Co., 142 Cal.App.2d 126, 134, 298 P.2d 109.)

There is no contention that the crane operator was not unloading the Hurst truck with the permission of the named insured. General argues, however, that if the truck is not 'a legal basis of liability with respect to [the truck driver's] injury, the General policy is inapplicable.' It further states that 'Where the injured party's asserted basis of liability does not come within the terms and conditions of the liability covered under an automobile policy, such automobile policy does not attach irrespective of whether said policy extends coverage to loading and unloading.'

Here, while the truck does not form a legal basis of liability to the truck driver, under the terms and conditions, General is obligated to defend and indemnify the crane operator and its owners as additional insureds because their liability to the truck driver was incurred in 'using' that truck. For example, in the first California case to consider this point (American Auto. Ins. Co. v. Amer. Fid. & Cas. Co., 106 Cal.App.2d 630, 235 P.2d 645), a truck covered by defendant's policy of liability insurance delivered a load of oil to a receiving depot. Activities at the receiving depot were provided with liability coverage by plaintiff's policy. Certain valves in a stationary pumping apparatus of the receiving depot were negligently left open by the pump operator employed by the depot and the oil delivered by the truck was pumped into an adjacent bay instead of the intended storage tanks. Although the cause of the accident was negligence of persons operating facilities apart from the truck, and such negligent persons performed no operation directly upon the truck, the court held that the negligent conduct occurring during the unloading operation was a use of the truck within the meaning of defendant's policy. The court said at page 635, 235 P.2d at pages 647, 648: 'It has uniformly been held that the 'loading and unloading' provision in insurance contracts, such as involved here, is one of extension. It expands, rather than limits, the term 'the use of' the motor vehicle somewhat beyond its usual connotation so as to bring within the policy some acts in which the motor vehicle itself does not play any part.' The court further stated, at page 637, 235 P.2d at page 649: 'Such a policy does not require that the injury be a direct and proximate result, in any strict legal sense of that term, of the use of the motor vehicle covered by the policy. [Citations.]' Failure to observe this rule of construction of insurance policies was error in the court below, since it is clearly applicable in the present case.

Here the crane operator was using the Hurst truck in the sense of unloading it. The mere fact the crane, as an independent instrumentality, was also used to accomplish this objective does not change the result. For example, in the American Auto. Ins. Co. case, supra, the direct cause of injury was the use of apparatus independent of the truck. More recent California cases have reached the same result. Thus, in Columbia Southern Chemical Corp. v. Manufacturers & Wholesalers Indem. Exch., supra, 190 Cal.App.2d 194, 11 Cal.Rptr. 762, the driver of a truck insured by defendant was taking on a load of soda ash at plaintiff's chemical plant. The truck, equipped with covered compartments, was loaded by means of a flexible spout introduced into the truck through hatches to the compartments. The spout was lifted and maneuvered by a rope attached thereto. This rope, for which plaintiff was responsible in all respects, was frayed and worn. While the truck driver was manipulating the spout, the rope broke because of plaintiff's negligent maintenance thereof and he fell off his truck and was injured. Plaintiff settled with the driver for $21,000 and then brought suit against the insurer who insured the blameless truck and its owner. It was held that plaintiff was 'using' the truck while loading the soda ash and therefore entitled to recover from the insurance carrier of the injured...