Metcalf v. Hartford Acc. & Indem. Co.

• Decision Date: 28 February 1964
• Docket Number: No. 35573,35573
• Citation: 126 N.W.2d 471,176 Neb. 468
• Parties: William N. METCALF, Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, an insurance corporation, Appellant.
• Court: Nebraska Supreme Court

Page 471

126 N.W.2d 471

176 Neb. 468

William N. METCALF, Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, an insurance corporation, Appellant.

No. 35573.

Supreme Court of Nebraska.

Feb. 28, 1964.

Syllabus by the Court

1. The use of an automobile by a person involves its employment for some purpose or object of the user while its operation by him involves his direction and control of its mechanism as its driver for the purpose of propelling it as a vehicle.

2. The words 'use' and 'actual use' when used in the omnibus clause of an insurance policy will ordinarily be treated as synonymous terms.

3. Where an omnibus clause in an insurance policy defines the word 'insured' as including the named insured and any person while using an owned or hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, a person who assists the user of the automobile in a permitted use by taking over the manual operation of the car is an additional insured within the meaning of the omnibus clause.

4. Where a person is responsible over to another, either by operation of law or express contract, and he is duly notified of the pendency of the suit against the person to whom he is liable over, and full opportunity is afforded him to defend the action, the judgment, if obtained without fraud, collusion, or bad faith, will be conclusive against him, whether he appeared or not.

5. Under section 44-359, R.R.S.1943, when a beneficiary or person entitled thereto brings an action on an insurance policy, the court, upon rendering judgment against the insurer, shall allow the plaintiff a reasonable attorney's fee to be taxed as costs and, if the cause is appealed, an additional attorney's fee shall be allowed by the appellate court for the appellate proceedings.

6. In allowing an attorney's fee in an action on an automobile liability insurance policy, the trial court may consider the amount involved, the responsibility assumed, the questions of law raised, the time and labor necessarily required in the performance of duties, the results of service performed, and the professional diligence and skill employed.

7. The allowance of a reasonable attorney's fee under section 44-359, R.R.S.1943, is unaffected by the fact that plaintiff contracted to pay his attorney on a contingent fee basis.

8. An attorney's fee allowed under section 44-359, R.R.S.1943, is taxable as costs and constitute no part of the judgment. Interest may not be assessed on an attorney's fee which is no part of the judgment.

Cline, Williams, Wright, Johnson, Old-father & Thompson, Charles E. Wright, Lincoln, for appellant.

Healey & Healey, Lincoln, for appellee.

M. M. Maupin, C. J. Gatz, North Platte, amici curiae.

Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ.

CARTER, Justice.

This is an action brought by the plaintiff on an automobile insurance contract issued by the Hartford Accident and Indemnity Company. A jury was waived. The trial court found for the plaintiff and entered judgment against the defendant in the amount of $6,423.52. The defendant appeals.

The defendant was the insurance carrier for the City Sanitary Exterminating Company. Its policy of insurance covered a 1958 Chevrolet station wagon belonging to the insured, providing liability coverage with limits of not less than $10,000 for bodily injury to each person and not less than $5,000 for property damage for each occurrence arising out of the maintenance and use of the station wagon. By the terms of the policy defendant agreed to defend any suit alleging bodily injury or property damage payable under the terms of the policy and to pay all costs taxed against the insured and all interest accruing after the entry of judgment. On February 10, 1961, the station wagon, while driven by Robert A. Holder, was involved in an accident with the automobile of the plaintiff. Defendant was notified of the occurrence of damage. Plaintiff commenced an action against Holder for personal injury and property damage. Demand was made upon defendant to defend the action, which was refused. Holder employed counsel and defended the action. During the course of the trial the parties agreed upon a judgment in the amount of $4,500 and costs in the amount of $37.05, which was duly entered. No appeal was taken from this judgment and it has become final Plaintiff commended this action against the defendant insurance company to collect the judgment for $4,500 and the costs amounting to $37.05, and accrued interest thereon in the amount of $280.59. The foregoing facts are not in dispute.

The primary question is whether or not Robert A. Holder is an additional insured under the provisions of the insurance policy. The definition of the insured as contained in the insurance policy provides in part as follows: 'The unqualified word 'insured' includes the name insured and also includes * * *, and (2) under coverages A and C, any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, * * *.'

The insurance policy was issued to the City Sanitary Exterminating Company, a corporation. Monroe Usher is the president of the corporation and the sole owner of its stock. The station wagon was described in the policy as being used for pleasure and business. The term 'pleasure and business' was defined by the policy as follows: 'The term 'pleasure and business' is defined as personal, pleasure, family and business use.'

The evidence shows that Monroe Usher used the station wagon daily for his personal use. He drove it to and from work, keeping it at his home at night. His wife drove the station wagon when she needed it, and it was driven by the sons of Monroe Usher on occasion. While owned by the corporation, it was used by Monroe Usher as a family-purpose car, a use within the purposes of use as defined in the insurance policy.

Monroe Usher had a son, Douglas, who was approximately 17 years of age on February 10, 1961. He had an automobile which was maintained for his use which was shopped for repairs on the above date. He requested permission of his father to use the station wagon during the evening of February 10, 1961, for the purpose of transporting Robert A. Holder and two young ladies to and from a basketball game. Permission to so use the station wagon was granted. Nothing was said about any restrictive use or operation of the station wagon that evening. There is evidence in the record that Monroe Usher had told Douglas on previous occasions that he was not to permit anyone else to drive the family cars while he was using them. There is evidence in the record that the automobile used by permission of the father was not to be driven outside the city of Lincoln. The latter evidence is not material here, for the reason that the accident did not occur during the period of the alleged deviation.

Douglas proceeded to take Holder and the two girls to the basketball game. Thereafter they proceeded north of Lincoln for several miles, Douglas doing the driving. Douglas developed a headache and he either requested or permitted Holder to assume the operation of the automobile. After their return to Lincoln, and while Holder was driving, the accident occurred which became the subject of the present litigation.

It is contended by the defendant that the omnibus clause of the policy does not make Robert A. Holder an additional insured for the reason that he was not granted permission by the insurer or the named insured to operate the station wagon. The plaintiff contends on the other hand that permission was given to Douglas Usher to use the station wagon and that he was using it even though it was being operated by Robert A. Holder.

No issue is here made that there is any difference in meaning of the terms 'use' and 'actual use' that would affect liability under the omnibus clause of the policy. Some courts have made a distinction as an escape from the strict interpretations placed on the words 'actual use.' Protective Fire & Cas. Co. v. Cornelius, 176 Neb. 75, 125 N.W.2d 179. We think the effort to place different meanings on the two terms creates a distinction without a difference and that liability or nonliability does not depend upon which of the two terms are used in the language of the policy.

We think the correct rule is stated in Maryland Cas. Co. v. Marshbank, 3 Cir., 226 F.2d 637, wherein it is said: 'As the basis for a contrary conclusion the plaintiff seeks to read the term 'use of the automobile' as contained in the policy definition as the equivalent of 'operation of the automobile' and on this premise it argues that Marshbank did not give permission to Charles to operate his automobile. We think, however, that the premise is unsound and that the plaintiff is attempting to create an ambiguity in the language of the policy definition in order by construction to resolve it in its favor. To us the language of the clause seems so clear as to require no construction. The fallacy in the plaintiff's position is that the words 'use' and 'operation', which it seeks to equate as synonymous, are in this setting words of quite different meaning. For the 'use' of an automobile by an individual involves its employment for some purpose or object of the user while its 'operation' by him involves his direction and control of its mechanism as its driver for the purpose of propelling it as a vehicle. It is perfectly clear that an automobile is being used by an individual who is traveling in it regardless of whether it is being operated by him or by another. It is only the actual or particular use of the automobile at the time of the accident by the individual who is claiming to be an additional insured that he...