Michigan Mut. Liability Co. v. Ohio Cas. Ins. Co.

• Decision Date: 13 May 1983
• Docket Number: Docket No. 56204
• Citation: 333 N.W.2d 327,123 Mich.App. 688
• Parties: MICHIGAN MUTUAL LIABILITY COMPANY, a corporation, Plaintiff-Appellant, v. OHIO CASUALTY INSURANCE COMPANY, a corporation, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 327

333 N.W.2d 327

123 Mich.App. 688

MICHIGAN MUTUAL LIABILITY COMPANY, a corporation, Plaintiff-Appellant, v. OHIO CASUALTY INSURANCE COMPANY, a corporation, Defendant-Appellee.

Docket No. 56204.

Court of Appeals of Michigan.

Submitted March 4, 1982.

Decided March 8, 1983.

Released for Publication May 13, 1983.

Baxter & Hammond (by Kenneth R. Oosterhouse and Phillip J. Nelson), Grand Rapids, for plaintiff-appellant.

Nelson & Kreuger (by Steven L. Kreuger), Grand Rapids, for defendant-appellee.

Before WALSH, P.J., and CYNAR and HOOD, JJ.

W.F. HOOD, Judge.

Plaintiff brought this declaratory action seeking a determination that defendant was obligated to defend John M. Uganski, doing business as Uganski Crane & Truck Service, in a suit for damages for personal injury brought against Uganski by Richard Helmer. From a grant of summary judgment in defendant's favor, plaintiff appeals as of right.

Helmer was an employee of defendant's insured, Michigan Foundry & Supply Company, and on the day he was injured he was driving his employer's truck on his employer's premises when the truck became stuck. An employee of Uganski was working nearby and undertook to assist Helmer in freeing the truck. To do so Uganski's employee positioned a vehicle described as a Case Loader 4200, belonging to Uganski, a few feet from the mired truck, intending to tow it. When Helmer went between the two vehicles to attach a tow chain to the truck, the Case Loader rolled backward pinning Helmer against the truck and injuring him. Plaintiff insured Uganski under a comprehensive liability policy and pursuant thereto undertook to defend Uganski in Helmer's suit. Plaintiff brought this action against Michigan Foundry & Supply Company's insurer, the defendant herein, claiming that defendant, also, was obligated to defend Uganski because Uganski was an omnibus insured under defendant's policy with Michigan Foundry.

The insuring clause of defendant's policy reads in pertinent part:

"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

Coverage C. bodily injury * * * to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use, including loading and unloading, of any automobile, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury * * * "

The policy defines the term "insured" as follows:

"II. PERSONS INSURED. Each of the following is an insured under this insurance to the extent set forth below:

(a) * * *

(b) * * *

(c) any other person while using an owned 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 * * *

(d) any other person or organization but only with respect to his or its liability because of acts or omissions of an insured under (a), (b) or (c) above."

Plaintiff contends that Uganski's employee was an insured under clause (c) because the employee's actions in preparing to tow the Michigan Foundry truck constituted use of that truck and that Uganski was an insured under clause (d) because Uganski was legally responsible for the acts of his employee.

The trial court held that Uganski and his employee were not additional insureds under the omnibus clause in defendant's policy because the action of Uganski's employee in preparing to tow the Michigan Foundry truck did not constitute use of the truck. The trial court further held that even if Uganski and his employee were additional insureds under defendant's policy, there was no coverage with respect to Helmer's claim because Helmer was an employee of defendant's named insured, Michigan Foundry, and a policy provision expressly excluded coverage of claims for bodily injury to an employee of the insured arising out of and in the course of his employment by the insured. We reverse as to both holdings.

We note initially that plaintiff is not seeking a declaration that the defendant has the primary responsibility to defend and pay any judgment against Uganski and is not seeking a declaration that plaintiff has no responsibility to Uganski under plaintiff's policy. If both policies provide coverage to Uganski, then how that coverage should be shared or allocated between plaintiff and defendant will be decided in subsequent proceedings. The sole issue involved in this appeal is whether or not Uganski is entitled to coverage under defendant's policy. The fact that Uganski is also covered by other insurance is immaterial to the issue here presented.

The language of the omnibus clause is to be construed broadly to effectuate a strong legislative policy of assuring financial protection for innocent victims of automobile accidents. Chicago Ins. Co. v. Security Ins. Co. of Hartford, 111 N.J.Super. 291, 295, 268 A.2d 296 (1970). The phrase "using an automobile", for the purpose of the omnibus clause, is not limited to operating or having the benefit of the automobile, but includes doing something "to or with" an automobile. 1 Long, Law of Liability Insurance, § 1.22, p. 1-62.1. Illustrative of this concept is the case of Liberty Mutual Ins. Co. v. O'Rourke, 122 N.J.Super. 68, 298 A.2d 725 (1973), where the court held that omnibus coverage was afforded to men helping the named insured's wife restart an automobile after it became stalled on the highway. One of the men was pouring gasoline into the carburetor when an explosion occurred and the gasoline can caught fire. The man threw the container away from him and in the direction of the insured's son, who was severely burned. The court said: "It is reasonable to describe this activity as a 'use' of the automobile within the meaning of the omnibus clause of the insurance policy". 122 N.J.Super. 75, 298 A.2d 725.

In Neice v. Nationwide Mutual Ins. Co., 100 Misc.2d 595, 419 N.Y.S.2d 799 (1978), a person was attempting to attach a trailer to a Jeep and had his hand crushed when the trailer rolled forward against the Jeep. The court held that the Jeep was clearly being used, regardless of the fact it was motionless at the time of the injury.

In keeping with the "to or with" concept, towing operations are generally considered to be within the meaning of the phrase "using an automobile". Thus in Dairyland Ins. Co. v. Drum, 193 Colo. 519, 568 P.2d 459 (1977), where the owner of an automobile was sitting in and steering his vehicle while it was being towed by another vehicle, the court held that the operator of the towing vehicle and the driver of the towed vehicle were each using the other's vehicle as well as his own, so that each was entitled to the protection of the policies covering both vehicles.

Towing, as a "use" of an automobile, extends to activities directly relating to the preparation for such towing or termination thereof. 7 Am.Jur.2d, Automobile Insurance, § 131, p. 608. The case of St. Paul Fire & Marine Ins. Co. v. Hartford Accident & Indemnity Co., 244 Cal.App.2d 826, 53 Cal.Rptr. 650 (1966), involved facts very similar to the instant case. A sand truck became mired in mud at a construction site, and a water truck was used in an attempt to tow it out. The attempt was unsuccessful. The sand truck driver went between the two vehicles to disconnect the tow chain and was injured when the water truck rolled forward, pinning him against the sand truck. The court held that the water truck driver was "using" the sand truck at the time of the accident.

In Hall v. United States Fidelity & Guaranty Co., 107 Ohio App. 13, 155 N.E.2d 462 (1957), the plaintiff owned two vehicles, a Jeep and a Studebaker, which were separately insured with different companies. The Jeep stalled and plaintiff decided to try to start it by towing it with his Studebaker. An assistant went between the two vehicles to attach the tow line and was injured when plaintiff negligently allowed the Studebaker to roll backward, pinning the assistant between the two vehicles. The court held that the Jeep was being used at the time of the injury, despite the fact it was motionless, and that the owner was entitled to the protection of both policies.

In the case of Bituminous Casualty Corp. v. Aetna Life & Casualty Co., 599 S.W.2d 516 (Mo.App., 1980), a truck became mired at a landfill site. An employee of the landfill operation was asked to assist in extricating the truck by pushing it with a bulldozer. After the truck had been pushed free, the bulldozer blade struck and injured the truck driver. The court held that the truck was being used by the bulldozer operator so that he and his employer were insured under the truck policy's omnibus provisions. It was regarded as immaterial that contact between the truck and bulldozer may have ceased prior to the injury.

We conclude that the activity of Uganski's employee in positioning his Case Loader and holding it in readiness for the attachment of the tow chain to the Michigan Foundry truck constituted "using" such truck within the meaning of the omnibus clause of defendant's policy.

In the cases last mentioned, as well as in the case at bar, the proximate cause of injury was alleged to be the negligent operation of the rescue vehicle; and it was not claimed the insured vehicle was...