LaPointe v. Shelby Mut. Ins. Co.

• Decision Date: 07 April 1972
• Citation: 361 Mass. 558,281 N.E.2d 253
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Edward LaPOINTE v. The SHELBY MUTUAL INSURANCE COMPANY.

Page 253

281 N.E.2d 253

361 Mass. 558

Edward LaPOINTE v. The SHELBY MUTUAL INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts, Worcester.

Argued Feb. 10, 1972.

Decided April 7, 1972.

John C. Burns, Worcester, for defendant.

Joseph F. Sawyer, Jr., Worcester, for plaintiff.

Before TAURO, C.J., and SPIEGEL, REARDON and BRAUCHER, JJ.

SPIEGEL, Justice.

This is a bill in equity for declaratory relief brought in behalf of the Continental Casualty Company (Continental). The plaintiff is a retail distributor of bottled gas which is supplied to him from Home Gas Company (Home). Continental was the liability insurer of Home which afforded coverage to the plaintiff for personal injury and property damage liability under a manufacturers' and contractors' liability policy. The plaintiff was insured by the defendant The Shelby Mutual Insurance Company (Shelby) under a motor vehicle liability policy which covered the loading and unloading of goods. The bill seeks a declaration that Shelby is indebted to the plaintiff for certain sums of money paid in settlement of several law actions for personal injuries and property damage brought against the plaintiff. The trial judge made 'Findings, Rulings and Order for Decree.' A final decree was entered declaring, inter alia, that Shelby is indebted to the plaintiff in the sum of $26,350, from which decree Shelby appealed. The judge adopted his 'Findings, Rulings and Order for Decree' as his 'Report of Material Facts.' The evidence is reported.

We summarize pertinent portions of the judge's findings. On or about September 2, 1961, the plaintiff was in the furniture business and was also in the business of selling at retail, and delivering, 'tanks of propane gas.' The motor vehicle liability policy issued by Shelby became effective on January 1, 1961, and was in effect on September 2, 1961. The plaintiff had two customers for gas who lived at the same address (Smith Lane, Northbridge). One of them was the owner of the building (Gendron) and the other was a tenant (Lapierre). Lapierre placed an order for a 'new tank of gas,' and an employee of the plaintiff, one Labelle, took the tank of gas (furnished by Home) on the plaintiff's '1957 Chevrolet pickup truck' to the premises occupied by the tenant. The truck was covered under the motor vehicle liability policy issued to the plaintiff by Shelby. When Labelle arrived at the tenant's address he 'called up to a young boy who was at a second floor window and asked where the . . . tanks were located, and the boy replied 'At the end of the house.' . . . Labelle saw two tanks on a platform at the left side of the building toward the back. He removed one tank from the platform . . . (and) unloaded the full tank from the truck and transported it by a two-wheeled dolly to the installaction. He connected the fresh tank to a tube and to the regulator . . . on the left side of the dwelling. He then returned to the truck and drove away.'

Four hours later there was an explosion on the premises which caused damage to property and personal injuries to two occupants of the dwelling.

'(T)here were in fact two gas tank locations at the Smith Lane premises. The location for the Lapierre tanks was at the rear of the dwelling and the location for the Gendron tanks was at the left side of the property. By mistake . . . Labelle had connected the fresh tank at the Gendron location. . . . Gendron had ceased taking gas from the . . . (plaintiff), and the pipe or tube inside the dwelling from the Gendron location had been cut or severed before the time of delivery. . . . (G)as seeping or escaping into the dwelling house had accumulated and exploded, causing the aforementioned damage and injuries.'

The judge also found that the plaintiff's 'employee should have known the correct location of tanks for use by Lapierre, and, if he did not, he should have made greater efforts to locate the correct installation.' The judge concluded that 'the damage and injuries aforesaid were due to negligence for which the . . . (plaintiff) was liable.'

Within a day or two after the accident, LaPointe 'contacted' one Gerald Gaudette, president of the Gaudette Insurance Agency, who had written the insurance on the LaPointe vehicle as agent for Shelby. Gaudette 'customarily prepared statements addressed to . . . (Shelby) when accidents were reported to him.' In this case, however, he neither forwarded a report of the accident to Shelby nor requested the plaintiff to file a written report.

'(A)n adjuster or investigator from Continental . . . visited the . . . (plaintiff) on or about October 3, 1961, and received a full statement from . . . (him) as to the occurrence. . . . (The) adjuster discussed with . . . (the plaintiff) the matter of other coverage . . . (he) might have, such as motor vehicle insurance.'

The plaintiff 'approximately a month after the gas explosion occurrence, wrote a letter to Shelby . . ., notifying . . . (it) of the circumsances relating to the September 2, 1961, accident. . . . (A) representative of Shelby . . . visited . . . (the plaintiff) within the latter months of 1961 and discussed the Smith Lane accident with him, advising . . . (him) that this loss did not come under his automobile policy.'

Actions were brought against the plaintiff by those suffering personal injuries or property damage from the September 2, 1961, accident by writs dated December, 1962, and August, 1963. The plaintiff's attorney, on or about January 17, 1963, demanded, in writing, that Shelby take over the defense of the first action. 'By letter dated January 29, 1963, Shelby . . . notified . . . (the) attorney that it would not voluntarily take over . . . (the) defense. On or about June 6, 1963, Shelby . . . advised the . . . attorney that 'The incident was not caused by any activities on the part of our assured . . . that would fall within the activities covered by the Loading and Unloading provision of said policy.''

'At the time . . . (the) cases were reached for trial, the . . . (plaintiff's) attorney notified Shelby . . . of the imminence of trial. Again Shelby . . . did not come in to handle the defense.'

At the time the cases were reached for trial, Continental paid a total of $26,350 in settlement of the actions brought against the plaintiff. This money was paid to the plaintiff in the form of a loan, repayable to Continental 'only in the event and to the extent that any net recovery is made by . . . (the plaintiff) under a motor vehicle liability policy . . . for bodily injuries and property damage arising out of the operation of a motor vehicle . . . and the loading and unloading thereof as a result of personal injuries and property damage sustained on or about September 2, 1961, at Smith Lane.' Under a document captioned, 'Loan Receipt,' the plaintiff agreed to promptly commence suit against the insurer described above, in his own name, 'but at the expense and under the exclusive direction and in control of . . . Continental.'

1. The Shelby policy covers liability 'caused by the ownership, operation, maintenance, control or use of the insured motor vehicle.' The declaration, which is part of the policy, provides that the 'use of the motor vehicle . . . includes the loading and unloading thereof.' Shelby contends that the trial judge erred in ruling that the 'loss occurred within the coverage afforded by the Loading and Unloading provisions of the policy.'

This question has received varied treatment from the courts. See Annotations, 160 A.L.R. 1259 and 95 A.L.R.2d 1122. Couch, Insurance (2d ed.) § 45:123 et seq. We have adopted the so called 'complete operation' rule rather than the narrower 'coming to rest' theory. August A. Busch & Co. of Massachusetts, Inc. v. Liberty Mut. Ins. Co., 339 Mass. 239, 241--243, 158 N.E.2d 351, 354; F. W. Woolworth Co. v. Lumbermen's Mut. Cas. Co., 355 Mass. 211, 214, 243 N.E.2d 919. In the Busch case, we discussed the various considerations in interpreting a 'loading and unloading' clause, and we need not repeat them here. In particular, we stated that the operation of unloading was a 'continuous transaction ending with the deposit of the goods in the hands of the purchaser.' Shelby urges that the tank had been completely delivered, and hence the accident was beyond the scope of the policy's coverage. We cannot accept this contention in light of the language in the Busch case. A delivery cannot be 'complete' until the product reaches its intended purchaser. Mohawk Valley Fuel Co. Inc. v. Home Indem. Co., 8 Misc.2d 445, 448, 165 N.Y.S.2d 357.

Several cases from other jurisdictions support this view. In Raffel v. Travelers Indem. Co., 141 Conn. 389, 106 A.2d 716, the plaintiffs' employee delivered a roll of linoleum to a customer. It was left standing upright on the customer's porch and later fell on the customer's daughter causing her serious injury. The court, after reviewing the authorities and adopting the 'complete operation' rule, stated at page 396, at page 719 of 106 A.2d that: 'It is reasonable to assume that the operation of unloading did not end until the linoleum was placed where it could be used by its purchaser. If the driver, in carrying forward this mission, was negligent in leaving it where it could, and did, cause injury, that negligent...