Liberty Mut. Ins. Co. v. General Ins. Corp.
| Decision Date | 19 December 1974 |
| Docket Number | No. 782,782 |
| Citation | 517 S.W.2d 791 |
| Parties | LIBERTY MUTUAL INSURANCE COMPANY, Appellant, v. GENERAL INSURANCE CORPORATION et al., Appellees. |
| Court | Texas Court of Appeals |
Brown, Crowley, Simon & Peebles, M. Hendricks Brown, Fort Worth, for appellant.
Cantey, Hanger, Gooch, Cravens & Munn, Sloan B. Blair, Fort Worth, for appellees.
General Insurance Corporation (General) and Continental Casualty Company (Continental) brought suit against Liberty Mutual Insurance Company (Liberty) claiming subrogation as a result of a settlement of a suit General and Continental made in a death case and personal injury case. Trial was before the court without a jury upon stipulated facts, and judgment was rendered for General in the sum of $40,611, and for Continental for $100,000. Liberty appeals on several points, and General and Continental brought a cross-point because the trial court denied their claim for interest before judgment.
On August 1, 1963, Ben E. Keith Company (Keith) entered into a lease agreement with Texas Drive-Ur-Self, Inc. (Texas Drive) whereby (among other provisions) Keith leased from Texas Drive certain listed (by type) motor vehicles under certain stated conditions.
After taking possession of the leased vehicles from Texas Drive, Keith obtained a general liability insurance policy from General in which Keith was named insured with limits of liability $100,000 each person and $300,000 each occurrence. By endorsement the policy covered 'all automobiles leased to Ben E. Keith Company by Texas Drive-Ur-Self, Inc.'
Keith also procured an 'Umbrella Excess Third Party Liability Policy' from Continental with limit of liability $1,000,000 single limit any one occurrence combined personal injury and/or property damage 'in excess of the amount recoverable under the underlying insurance as set out in the attached schedule.' The attached 'Schedule of Underlying Insurance' listed only the policy of Houston Fire and Casualty which is a part of the Houston-General Insurance Group, and for all purposes here, the same as General.
Liberty Mutual Insurance Company had issued to Texas Drive a comprehensive combination policy (automobile and general liability) with bodily injury limits of $100,000 and $300,000 for both general liability and automobile. Texas Drive was the only insured named in the Liberty policy.
On or about December 22, 1967, a truck owned by Texas Drive and leased to Keith collided with two automobiles in Montague County, Texas. One of the automobiles was being operated by John R. Stevenson and also occupied by his wife and two minor children, and the other was being operated by James Kaiser and also occupied by four other people. Stevenson was killed and his wife and minor children seriously injured. The driver and occupants of the other car were also injured. The driver of the truck was James W. Mason, an employee of Keith who was in the course and scope of his employment.
As a result of such collision claims were asserted and suit was filed in the District Court of Montague County against Keith and its driver, Mason, seeking damages for the death of Stevenson and the injuries to his wife and children. Claims were also asserted against Keith and its driver by the driver and occupants of the other automobile involved in the collision. General undertook the investigation and defense of such litigation and claims.
After extensive discovery and investigation of the facts and circumstances General and Continental concluded that a compromise settlement of the aforesaid claims should be negotiated if it could be done. Following lengthy negotiations with counsel for the Stevensons a compromise settlement was consummated whereby all the Stevenson claims were settled for a total consideration of $320,000. Pursuant to such settlement an agreed judgment was entered November 1, 1968, which awarded $250,000 of the total settlement as damages for the death of Stevenson, and $70,000 as damages for the personal injuries sustained by his wife and minor children. The judgment further discharged Keith, Mason and Texas Drive, and all persons in privity with them from any liability by reason of the collision with the Stevenson automobile. The claims of the driver Kaiser and the occupants of the other automobile were settled for $3222 in complete discharge of Keith and Mason.
The judgment in the Stevenson litigation was settled by the payment by General of $100,000 of the death claim settlement and the entire $70,000 of the settlement for personal injuries, and by the payment by Continental of $150,000 of the death claim settlement. In investigating and handling of the defense and settlement of all the claims growing out of the collision General incurred expenses and attorneys fees of $8000.
Prior to the settlement and the entry of the judgment, discussions and consultations were had between representatives and counsel of General and Continental with representatives and counsel for Liberty, and demand was made that Liberty contribute one-half of any settlement to the extent of its limits. Counsel for General and Continental claimed that Texas Drive might be negligent with reference to maintenance and condition of brakes on the involved truck. Liberty refused to make any contribution, and Texas Drive was never made a party to the suit by anyone at any time.
It seems to be without dispute that the General policy afforded primary coverage. The crucial question then is whether the Liberty policy also afforded primary coverage to Keith and its driver. We are of the opinion that it did.
Liberty contends that General is the exclusive primary insurer (1) because Endorsement A6200 to General's policy, with to hired or leased automobiles leased to Keith, provides that General's policy was primary insurance; (2) because the Continental excess policy listed only the General policy as being the underlying and primary coverage; and (3) because the lease contract provided that Keith obtain primary and excess liability coverage on the vehicles leased from Texas Drive.
General and Continental maintain that the policies of both General and Liberty afforded primary coverage, and therefore, General and Liberty were equally obligated to Keith and its driver against third party claims, and that General and Continental having discharged such obligation are subrogated to the rights of Keith and its driver against Liberty.
Endorsement A6200 to General's policy provided:
'With respect to the hired automobile described below or designated in the policy as subject to this endorsement, it is agreed that:
(1) The insurance applies as primary insurance.
(2) * * *
Description of automobile:
All automobiles leased to Ben E. Keith Company by Texas Drive-Ur-Self, Inc. * * *.'
Liberty's policy provided under 'General Provisions,' Sec. IV, paragraph 6:
(Emphasis added.)
General's policy has an identical provision.
Liberty's policy also provided under Part II--Comprehensive Automobile Liability Insurance:
'Persons Insured
Each of the following is an insured under this insurance to the extent set forth below:
(a) the named insured;
(b) * * *
(c) Any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission * * *.' (Emphasis added.)
General's policy and Liberty's policy had identical subrogation clauses:
Both the General policy and the Liberty policy provided that the insurance afforded was primary insurance. It is noted also that under 'Persons Insured' the Liberty policy includes not only the named insured but also any other person using an owned or hired automobile with permission of the named insured if actual operation was within the scope of such permission. It was stipulated that Keith and its driver were operating the truck with permission of Texas Drive and within the scope of such permission. It is apparent that Keith and its driver were insured under the Liberty policy, and that it was primary insurance the same as the General policy. Keith and its driver would have been covered by either policy.
On the question of Continental's excess policy listing only the General policy as being underlying and primary coverage, it should be pointed out that Continental's policy provided:
'11. Other Insurance
If other collectible insurance with any other insurer is available to the Insured covering a loss also covered hereunder, this insurance shall be in excess of, and shall not contribute with such other insurance. Excess insurance over the limits of liability expressed in this policy is permitted without prejudice to this insurance and the existence of such insurance shall not reduce any liability under this policy.'
Continental's policy recognizes that there might be other primary insurance covering the insured in addition to General's policy which is specifically named in Continental's schedule. The above provision provides that Continental's coverage shall be in excess...
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