Medlar v. Aetna Ins. Co., 316

• Decision Date: 11 October 1968
• Docket Number: No. 316,316
• Citation: 248 A.2d 740,127 Vt. 337
• Parties: Marcus I. MEDLAR, Jr. and Robert L. Goodrich v. AETNA INSURANCE COMPANY and Travelers Indemnity Company.
• Court: Vermont Supreme Court

Page 740

248 A.2d 740

127 Vt. 337

Marcus I. MEDLAR, Jr. and Robert L. Goodrich v. AETNA INSURANCE COMPANY and Travelers Indemnity Company.

No. 316.

Supreme Court of Vermont.

Oct. 11, 1968.

Latham & Eastman, Burlington, for Marcus I. Medlar, Jr., Bernard R. Dick, Rutland, for Robert L. Goodrich

Wick, Dinse & Allen, Burlington, for Aetna Ins. Co., French & Miller, Rutland, for Travelers Indemnity Co.

Before HOLDEN, C. J., and SHANGRAW, BARNEY, SMITH and KEYSER, JJ.

KEYSER, Justice.

The plaintiffs, Medlar and Goodrich, were co-employees of the street department of the City of Burlington. On March 22, 1965, the plaintiffs were engaged in salting Cliff Street by motor truck. Medlar was the driver of the truck and Goodrich was operating power driven salting equipment from the tailgate on the rear of the truck. The truck went out of control and struck the curb of the sidewalk. This caused plaintiff Goodrich to be thrown to the ground and injured by the truck. This culminated in a negligence suit being brought by Goodrich against Medlar in the United States Federal Court for the District of Vermont to recover damages for his injuries.

The City of Burlington carried policies of liability insurance with the defendants, Aetna Insurance Company (Aetna) and Travelers Indemnity Company (Travelers). This action is brought for a declaration of the rights and liabilities of plaintiff Medlar arising under said contracts of insurance.

Plaintiff Medlar seeks a declaration that each company is required to defend the action brought against him in Federal Court by Goodrich. Also, both plaintiffs request a determination that the defendants are liable in accordance with the terms of their policies for any judgment rendered against Medlar in said law suit.

Defendant Travelers urges that the definition of 'insured' contained in its policy by its very terms excludes coverage of Medlar. Defendant Aetna claims the provision of its policy which requires notice to be given it of an accident was not complied with and that other provisions of the policy excluded coverage of this accident.

The court below decreed that each company was liable to defend Medlar in Federal Court; also that each company was liable on its policy to pay any sums Medlar was legally obligated to pay Goodrich arising out of the accident. From this decree, defendant insurance companies have appealed. Appellee Medlar failed to file a brief on the appeal.

We first consider the appeal of defendant Travelers Indemnity Company.

The Travelers policy is a contract of comprehensive automobile liability insurance issued to the City of Burlington as the named insured. The truck being driven by Medlar was within the coverage afforded by the Policy.

The provision defining who was an 'insured' under the policy reads:

'III Definition of Insured. The unqualified word 'insured' includes the named insured and also includes any person while using an owned automobile * * * provided the actual use of the automobile is by the named insured or with his permission * * *. The insurance with (c) to any employee with respect to injury to or sickness, disease or death of another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance of use of an automobile in the business of such employer.'

respect to any person or organization other than the named insured does not apply:

Appellee Goodrich contends that the exclusion provision III(c) is void as against public policy by virtue of 24 V.S.A. § 1092, and thus, if void, protection would be afforded Medlar on the claim being made against him by Goodrich. He insists the statute makes it mandatory that drivers of municipality owned and operated vehicles be afforded protection against tort liability under all circumstances notwithstanding the exclusionary clause in the contract.

The sole question presented by Travelers appeal is whether clause III(e), supra, is contrary to public policy and void. The liability of defendant Travelers turns on the determination of this issue.

The statute, 24 V.S.A. § 1092, provides:

'By its legislative branch, * * *, a municipal corporation may contract in the name of the municipality as owner, with an insurance company authorized to do business in this state to secure the benefits of all forms of insurance for the employees of such municipality, and for liability insurance to cover motor vehicles owned and operated by such municipality and the drivers thereof, and for fire, extended coverage, and liability insurance to cover public buildings, on such terms and conditions as to contributions and costs as such legislative branch shall determine. Provisions for such insurance heretofore made by a municipality are hereby approved.'

The language of the pertinent part of the statute is 'and for liability insurance to cover motor vehicles owned and operated by such municipality and the drivers thereof.' There has been no change in this language since its enactment by No. 43 of the Acts of 1943.

The general rule of statutory construction is that the true intent and purpose of the legislature should be determined and carried into effect. The ordinary meaning of the language must be presumed to be intended, unless it would manifestly defeat the object of the provisions. Snyder v. Central Vermont Railway, 112 Vt. 190, 193, 22 A.2d 181. And where the meaning is plain, the courts must enforce the statute according to its terms. Mier's Admr. v. Boyer, 124 Vt. 12, 13, 196 A.2d 501.

The plain, ordinary meaning of word 'may' in the statute indicates that the statute is permissive and not mandatory in its character and application. The avowed purpose of 24 V.S.A. § 1092 is to grant discretionary authority to a municipality to contract for various kinds of insurance as a shield against liability claims if it so desires. The statute does not impose an absolute duty on the city to carry liability insurance on its motor vehicles and drivers but if there is insurance coverage the defense of governmental immunity is not available to the municipality since it is waived by the provisions of 29 V.S.A. § 1403. Town of So. Burlington v. American Fidelity Co., 125 Vt. 348, 350, 215 A.2d 508.

It follows that if the statute as a whole allows discretionary action of the municipality as to liability insurance, then each distinct clause and provision therein is likewise of the same tenor and effect.

No question is made but that the Travelers policy did provide tort liability coverage for the drivers of city-owned motor vehicles against all claims with the one exception stated in provision III(c), supra. Provision for insurance coverage was accorded by the policy for 'the drivers' of the city's motor vehicles.

There is no language in the statute which declares it mandatory that the drivers must The Workmen's Compensation Act provides for benefits to an injured employee. It is reasonable to believe that the legislature had this in mind at the time (1943) when it enacted 24 V.S.A. § 1092.

be covered against all tort liability. Conversely, there is no language from which it can be drawn that the right of the city to contract for any kind of insurance is prohibited or delimited.

Before 1943 an injured employee under 21 V.S.A. § 624 was required to elect his remedy-either to claim compensation under the act or to proceed to enforce his claim against the person at fault other than the employer. This section was amended in 1959 (Act No. 232) to permit the employee to be awarded compensation under the Workmen's Compensation Act and also to proceed against the third party. Herbert v. Layman, 125 Vt. 481, 483, 218 A.2d 706. The history of these statutes bears, we think, on the intent and purpose of the legislature in adopting 24 V.S.A. § 1092 particularly as there has been no change in that statute since its enactment.

We find no declared public policy expressed, or inferred, by the language in 24 V.S.A. § 1092. The contract is not in violation of the statute and does not have as its object, operation or tendency any surrender of rights prejudicial to the public welfare or interest.

We hold that provision III(c) of Travelers insurance contract is not reprobated by public policy. The decree that Travelers is liable under its policy is error and must be reversed.

The first exception of defendant Aetna Insurance Company is that its policy does not afford coverage for the accident which caused injury to plaintiff Goodrich.

Aetna's policy provides comprehensive general liability insurance to the City of Burlington and Urban Renewal Agency. It was neither designed nor intended to cover motor vehicle liability as was the policy of Travelers. The general purpose of Aetna's contract was to insure other liabilities outside the area of motor vehicles. And when confronted with information of the pending suit brought against Medlar in Federal Court by Goodrich, the company advised Medlar 'We have a public liability policy which does not provide any coverages for the hazards of use of motor vehicles.'

Although some of the applicable provisions of the policy which Aetna requested to be found are not the subject of findings by the court below we treat them as such since they are not in dispute and are material to the issues raised by the appeal. See Peerless Casualty Co. v. Cole, 121 Vt. 258, 261, 155 A.2d 866. Where an exhibit is incorporated in findings by reference and is material, as here, a copy should be attached to the findings for the benefit of this court on appeal.

Plaintiff Goodrich erroneously argues that Aetna's appeal from the decree raises only the issue of whether the facts found support the decree and that no other issues raised by Aetna's brief are presented for review. Now, under 12 V.S.A. § 2382 notice of appeal from the decree brings the whole case, including all questions litigated in the court below which affect the final decree, if they are briefed, to this...