Liberty Mut. Ins. Co. v. American Emp. Ins. Co.

• Decision Date: 27 July 1977
• Docket Number: No. B-6566,B-6566
• Citation: 556 S.W.2d 242
• Parties: LIBERTY MUTUAL INSURANCE COMPANY, Petitioner, v. AMERICAN EMPLOYERS INSURANCE COMPANY et al., Respondents.
• Court: Texas Supreme Court

Page 242

556 S.W.2d 242

LIBERTY MUTUAL INSURANCE COMPANY, Petitioner, v. AMERICAN EMPLOYERS INSURANCE COMPANY et al., Respondents.

No. B-6566.

Supreme Court of Texas.

July 27, 1977.

Rehearing Denied Sept. 27, 1977.

A. L. Breeland, Dallas, Brown, Herman, Scott, Dean & Miles, Massie Tillman and J. Shelby Sharpe, Fort Worth, for petitioner.

Shannon, Gracey, Ratliff & Miller, Eugene J. Dozier and Harold A. Mueller, Fort Worth, for respondents.

SAM D. JOHNSON, Justice.

American Employers Insurance Company sought a declaratory judgment that a policy issued by Liberty Mutual Insurance Company to U. S. Plywood required Liberty to defend Homette Corporation, American's insured. The trial court rendered a judgment that Liberty's policy created a duty to defend Homette. The court of civil appeals affirmed. 545 S.W.2d 216. We reverse and render judgment that Liberty has no obligation to defend Homette.

The sole question is whether the evidence supports the conclusion of the courts below that a truck and flatbed trailer were "borrowed" by Homette under the provisions of a comprehensive automobile liability insurance policy issued by Liberty to U. S. Plywood, a division of Champion International Corporation. Liberty issued a policy to U. S. Plywood which provided coverage for bodily injuries suffered as a result of a loading or an unloading of a vehicle owned by U. S. Plywood. The coverage was limited to employees of U. S. Plywood and lessees or "borrowers" of vehicles owned by U. S. Plywood. ¹

Don Dragoo, an employee of U. S. Plywood, delivered a load of plywood decking to a plant owned by Homette. After parking the vehicle, Dragoo removed the nylon webbing used to secure the six-foot stacks of Novadeck, a type of plywood decking. Homette's employees began to unload the decking, using forklifts to unload about twenty sheets at a time. Dragoo was standing on the side of the truck opposite from that on which the unloading was begun. Dragoo was not aiding the unloading in any manner. He was merely rolling up the webbing used to secure the decking on the delivery truck when several sheets of the decking struck and killed him.

Subsequently, Dragoo's widow sued Homette, alleging negligence on the part of Homette, its agents, or its employees which proximately caused Dragoo's death. American, Homette's insurance carrier, then sought a declaratory judgment that, under the policy issued by Liberty to U. S. Plywood, Liberty had a duty to defend Homette. American asserted that Homette had "borrowed" U. S. Plywood's vehicle in order to unload it and, thus, Homette came within the protection of the policy as a "borrower" of U. S. Plywood's vehicle. The trial court, sitting without a jury, rendered judgment for American. The court filed findings of fact ² and conclusions of law that Dragoo was not engaged in "unloading" the truck at the time of his death, that Homette exercised no control over the movement of Dragoo or the truck, that Dragoo's death occurred while the truck was being "unloaded," and that Homette had "borrowed" the truck for the purpose of unloading it.

The court of civil appeals defined "borrower" as "someone who has, with permission of the owner, temporary possession and use of the property of another for his own purposes." 545 S.W.2d 216 at 223. That court concluded that Homette met these requirements and therefore was a "borrower." Although we agree with the court of civil appeals' general definition of "borrower," we do not agree that Homette falls within it because these is no evidence that Homette had possession of the truck and trailer rig.

We base our holding on recent changes in coverage afforded by automobile liability insurance. Prior to the addition of the loading and unloading endorsement to the automobile liability policy neither the automobile policy nor the standard liability policy defined which insurer had liability coverage for injuries sustained upon the premises of one who was insured under a general liability policy during the loading and unloading of a vehicle not owned or hired by the general liability insured. This question was settled by the later addition of the loading and unloading clause: the automobile liability insurer would provide coverage for injuries sustained as a result of negligence in the loading and unloading of the vehicle. Commercial Standard Ins. Co. v. American Gen. Ins. Co., 455 S.W.2d 714, 717 (Tex.1970). The inclusion of the loading and unloading clause expanded the coverage of the policy from that afforded by the phrase "ownership, maintenance or use . . . of any automobile." American Employers Ins. Co. v. Brock, 215 S.W.2d 370, 372 (Tex.Civ.App. Dallas 1948, writ ref'd n.r.e.); Fireman's Fund Insurance Co. v. Canal Insurance Co., 411 F.2d 265, 268 (5th Cir. 1969); Penley v. Gulf Insurance Company, 414 P.2d 305 (Okl.1966); Columbia So. Ch. Corp. v. Manufacturers & W. Ind. Exch., 190 Cal.App.2d 194, 11 Cal.Rptr. 762 (Dist.Ct.App.1961). Texas has adopted the broader majority view that "loading and unloading" embraces not only the immediate transfer of the goods to or from the vehicle, but also the complete operation of transporting the goods between the vehicle and the place from or to which they are being delivered. Travelers Insurance Co. v. Employers Casualty Co., 380 S.W.2d 610 (Tex.1964). Under the complete operation approach the coverage provided by a loading and unloading clause extended to a broad group of persons who were not employees of the owner of the vehicle; the only requisite for coverage was that they were using (unloading) the truck with the consent of the owner. Travelers Insurance Co. v. Employers Casualty Co., supra, at 614. ³

General rules of construction lead us to conclude that the policy exclusion for persons who were unloaders but not "borrowers" of the vehicle was intended to limit the insurer's liability for injuries resulting from acts of these nonemployees of the owner of the vehicle. The purpose of an exclusion is to take something out of the coverage that would otherwise have been included in it. Maryland Casualty Co. v. Texas Fireproof Storage Co., 69 S.W.2d 826, 827 (Tex.Civ.App. Waco 1934, writ ref'd). An interpretation that gives a reasonable meaning to all provisions is preferable to one that leaves a portion of the policy useless, inexplicable, or creates surplusage. Melton v. Ranger Insurance Co., 515 S.W.2d 371, 374 (Tex.Civ.App. Fort Worth 1974, writ ref'd n.r.e.). The inquiry then becomes whether, given the limiting effect that the exclusion was intended to have, the court of civil appeals correctly analyzed the evidence in the present case.

The evidence in the record reflects that Dragoo parked the truck and Homette then began to unload. Homette's employees did not move the truck on this occasion nor is there evidence that U. S. Plywood consented on any other occasion to the movement of the truck by Homette's employees. There is no evidence that Homette's employees had ever in the past moved a U. S. Plywood truck as part of the unloading operation. There is no evidence that Homette's employees had ever instructed Dragoo to move the truck from one location to another. There is no evidence who had the keys to the truck at the time of the accident. The only evidence in the record is the statement by the sales manager of U. S....