Maryland Cas. Co. v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 10 October 1966 |
| Docket Number | No. 7788,7788 |
| Citation | 1966 NMSC 205,77 N.M. 21,419 P.2d 229 |
| Parties | MARYLAND CASUALTY COMPANY, Plaintiff-Appellee and Cross-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant and Cross-Appellee. |
| Court | New Mexico Supreme Court |
We are here called upon to determine the relative rights of two insurance companies in connection with a loss covered by policies issued by each.
At all material times the plaintiff, Maryland Casualty Company, hereinafter referred to as 'Maryland,' had in force a comprehensive general liability policy insuring R. R. Burke and Sons, hereinafter referred to as 'Burke.' The insuring agreement read:
'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'
The policy contained an exclusionary clause, reading:
'This policy does not apply: * * *.
(b) to the ownership, maintenance, operation, use, loading or unloading of (1) automobiles while away from the premises or the ways immediately adjoining.'
A provision regarding 'other insurance' also appeared in the policy. This paragraph read:
'If the insured has other insurance against a loss covered by this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss.'
Defendant, State Farm Mutual Automobile Insurance Company, hereinafter referred to as 'State Farm,' at all material times, had in effect a policy of automobile insurance covering a 1953 Studebaker 2-ton tank truck owned by Burke. The property damage liability coverage was limited to $25,000.00. The material part of the insuring agreement read:
'(1) To pay all damages which the insured shall become legally obligated to pay because of . . ..
(B) injury to or destruction of property of others, caused by accidents arising out of the ownership, maintenance or use, including loading or unloading, of the automobile.'
The policy defined 'insured' insofar as pertinent, as follows:
'Insured--under Coverages A and B, the unqualified word 'insured' includes the named insured, and if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use is by the named insured or such spouse or with the permission of either.'
This policy likewise had a provision covering 'other insurance' reading:
'If the insured has other insurance against liability or loss covered by this policy, the company under all coverages except Coverages C and M, shall not be liable for a greater proportion of such liability or loss than the applicable limit of liability bears to the total applicable limit of liability of all collectible insurance against such liability or loss. * * *'
State Farm paid $15,759.90 on account of a loss resulting to several property owners when gasoline blew back from an underground tank on the premises of Atlas Lumber Company, installed and owned by Standard Oil Company of Texas, hereinafter referred to as 'Standard Oil,' while delivery of gasoline was being made by one Bowden, an employee of Burke, from the 1953 Studebaker tank truck insured by State Farm. A fire resulted causing damages for which judgments were recovered jointly and severally against Burke and Standard Oil totalling $31,519.81. Standard Oil or its general liability insurer, on its behalf, paid one-half the judgment and Maryland, as Burke's general liability insurer, reimbursed it and took a receipt and assignment of Standard Oil's rights. In this action Maryland seeks to recover from State Farm the amount of $9,240.10, representing the difference between $15,759.90 and the $25,000.00 limit of State Farm's policy. Defendant contends that $15,759.90 paid by it is the limit of its obligation. In so asserting, principal reliance is placed upon the 'other insurance' provision in its policy quoted above.
Plaintiff points to the fact that in the trial wherein Burke and Standard Oil were held jointly and severally liable, special interrogatories were submitted to the jury whereby they determined that Burke 'was an agent of Standard Oil, as distinguished from an independent contractor,' and further that both Burke's driver, Bowden, and Burke were negligent, and the negligence of both were proximate contributing cause of the fire.
It is defendant's position that notiwthstanding the finding of negligence on the part of Burke and Bowden, Standard Oil owned the tanks and had a duty to maintain them so that a blowback would not occur, and that the proof before the court did not foreclose the presence of negligence of Standard Oil in this particular. Because of this fact, and the absence of direct evidence in this case, defendant asserts that the finding by the court that Bowden was negligent in 'permitting gasoline to overflow and ignite' is not supported by the evidence.
Defendant concedes that if the fire resulted solely from negligence of Bowden, the driver of the truck, in permitting the tank to overflow, the court's conclusion that the primary liability was defendant's to the amount of its coverage, and the excess was plaintiff's would be correct.
It seems to us that there can be no question that the damages resulted from negligence of Bowden and Burke during the course of delivering gasoline, and that liability under its policy accordingly attached, nor do we understand that defendant asserts to the contrary. No issue is made of whether causal connection was present between the operation of the truck and the unloading, or if the 'complete operation' doctrine or the 'coming to rest' doctrine is the correct one to be applied. See Anno. 160 A.L.R. 1259; 95 A.L.R.2d 1122. Rather, it is defendant's theory that the proof does not establish that the accident resulted alone from the negligence in unloading, but rather that the concurring negligence of Standard Oil in failing to properly install and maintain the tanks also entered in, and accordingly the situation is one calling for contribution between insurers, without primary liability of either as opposed to the other.
The court found nothing concerning any negligence on the part of Standard Oil, apart from that of Burke, its agent, 'in failing to keep the vent pipe open or clear, or in failing to notify Mr. Bowden' of trouble experienced on previous deliveries. Is the finding of this negligence on the part of Burke in conflict with the court's finding that the loss resulted from Bowden's negligence in permitting the gasoline to overflow and ignite? We do not think so. Neither do we consider it material tha the court found the specific manner in which the loss occurred. Rather, it would appear that Bowden having been found negligent and Burke having also been found negligent 'in failing to keep the vent pipe open or clear, or in failing to notify Mr. Bowden, or one of the parties, that when the previous delivery had been made the vent pipe had been stopped up or partially stopped up, causing gasoline to blow back from the inlet pipe to the underground tank,' both of which acts of negligence concurred proximately to cause the accident, defendant's liability was clear. We see neither finding nor request for a finding of negligence on the part of Standard Oil apart from that resulting from their position as principal to their agent Burke. What was said in Bogle v. Potter, 72 N.M. 99, 105, 380 P.2d 839, and American Hospital and Life Insurance Co. v. Kunkel, 71 N.M. 164, 376 P.2d 956, we consider to be a complate answer to defendant's arguments concerning shortcomings and errors in...
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