Minneapolis, St. P. & S.S.M.R. Co. v. St. Paul Mercury Indem. Co.

• Decision Date: 26 June 1964
• Docket Number: No. 38902,38902
• Parties: MINNEAPOLIS, ST. PAUL & SAULT STE. MARIE RAILROAD COMPANY, Appellant, v. ST. PAUL MERCURY INDEMNITY COMPANY and St. Paul Fire & Marine Insurance Company, Respondents.
• Court: Minnesota Supreme Court

Page 777

129 N.W.2d 777

268 Minn. 390

MINNEAPOLIS, ST. PAUL & SAULT STE. MARIE RAILROAD COMPANY, Appellant, v. ST. PAUL MERCURY INDEMNITY COMPANY and St. Paul Fire &amp Marine Insurance Company, Respondents.

No. 38902.

Supreme Court of Minnesota.

June 26, 1964.

Syllabus by the Court

1. Provision in the original automobile liability policy issued to a transfer company excluding coverage for injury to employee of said insured does not apply when said insured injures the employee of another named insured, and more especially since the policy issued in the instant case defines the word 'insured' as including the 'Named Insured.'

2. Where a reasonable doubt exists as to the meaning of the provisions of an insurance contract, the ambiguity must be resolved in favor of the insured.

3. The Soo Line in the instant case became entitled to coverage as effectively as though the exact duplicate and the endorsements attached thereto had been issued as a separate insurance contract.

4. The workmen's compensation exclusion in the policy in the instant case does not apply where a named insured claiming coverage was not the employer of the injured person.

5. In connection with a summary judgment, an appellate court normally has to examine the record with two fundamental questions in view: (1) Whether there were any material issues of fact to be determined, and (2) whether the court erred in its application of the law.

Patrick J. McPartland and Fordyce W. Crouch, Minneapolis, for appellant.

Meagher, Geer, Markham & Anderson, O. C. Adamson, II, and M. J. Coyne, Minneapolis, for respondent.

NELSON, Justice.

Suit was brought by Minneapolis, St. Paul & Sault Ste. Marie Railroad Company against St. Paul Mercury-Indemnity Company and St. Paul Fire & Marine Insurance Company upon an automobile liability policy. Judgment was entered in favor of defendants, hereinafter referred to as St. Paul Companies, following motions for summary judgment by both parties, and plaintiff, hereinafter referred to as Soo Line, appealed from that judgment.

This action arises out of a prior action brought against the Soo Line by one Oscar Ahlstrom wherein the Soo Line was held liable for personal injuries sustained by Ahlstrom and a verdict was ultimately entered against it in the amount of $175,000. The detailed facts surrounding the injury to Ahlstrom are relevant to the issues raised by this appeal but are set forth in Ahlstrom v. Minneapolis, St. P. & Sault Ste. Marie R. Co., 244 Minn. 1, 68 N.W.2d 873, and need not be recited at length. Suffice it to say that on October 7, 1947, Ahlstrom was an employee of O'Hara Fuel & Transfer Company. Pursuant to a contract between O'Hara and Soo Line, he drove one of the O'Hara trucks to Soo Line's warehouse in Thief River Falls, Minnesota, to pick up freight to be delivered to consignees within the city. After several items of freight were loaded onto the truck by Ahlstrom and an employee of Soo Line named Amundson, the two men decided to load a large, top-heavy crate weighing about 900 pounds. The crate was placed on a two-wheel handcart and pulled toward the truck. Somehow the wheels of the cart became stuck. There was conflicting evidence as to the exact location. A steel plate, which was 3 feet wide, had been placed over the crack between the warehouse floor and the tailgate of the truck. The cart either became stuck while being raised onto the steel plate, or it passed over the steel plate and became wedged in a crevice between the tailgate and the rear edge of the truck bed. ¹ When the men could no longer move the cart, Amundson went to get additional help, leaving the crate in a tilted position. While Ahlstrom was alone the crate began to topple. In attempting to push the crate upright, Ahlstrom was crushed.

At the time of the accident the St. Paul Companies insured O'Hara under an automobile liability policy, a copy of which was also delivered to Soo Line. Soo Line contends that this policy, which had limits of $50,000 per person, insured it for $50,000 of its liability to Ahlstrom as well as for attorney's fees incurred in defense of Ahlstrom's suit. A special endorsement was attached to the policy which read:

'It is understood and agreed that this policy is hereby extended to cover the liability, if any, of Minneapolis, St. Paul and Sault Ste. Marie Railroad Company, for the use in its business of any motor vehicle or trailer owned or operated by Ed O'Hara, Gerald O'Hara, Clair O'Hara, doing business as O'Hara Fuel and Transfer Company, and that failure of said O'Hara Fuel and Transfer Company to report newly acquired vehicles or trailers will not invalidate the coverage thereon for said Minneapolis, St. Paul & Sault Ste. Marie Railroad Company.

'It is further understood and agreed that notice of cancellation of any change in the limits or conditions of this policy must be given to Minneapolis, St. Paul & Sault Ste. Marie Railroad Company by registered mail fifteen days before cancellation or change in the limits or conditions may become effective.

'It is further understood and agreed that this endorsement shall not operate as an estoppel to prevent the payment hereunder of claims for property damage made by said Minneapolis, St. Paul & Sault Ste. Marie Railroad Company.'

A similar special endorsement named the Great Northern Railway Company.

Under the policy, St. Paul Companies agreed--

'SECTION I. COVERAGE A--BODILY INJURY LIABILITY

'TO PAY on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of the liability imposed upon him by law for damages, including damages for care and loss of services, because of bodily injury, including death at any time resulting therefrom, sustained by any person or persons, caused by accident and arising out of the ownership, maintenance or use of the automobile.'

Item 5 of the declarations provided:

'* * * (c) Use of the automobile for the purposes stated includes the loading and unloading thereof.'

It was also agreed:

'SECTION II. DEFENSE, SETTLEMENT, SUPPLEMENTARY PAYMENTS. As respects such insurance as is afforded by the other terms of this Policy (a) under Coverages A * * * the Company shall (1) defend in his name and behalf any suit against the Insured alleging such injury * * * and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the Company shall have the right to make such investigation, negotiation and settlement of any claim or suit as may be deemed expedient by the Company.'

Under exclusions the policy provided:

'This Policy does not apply:

'(d) under Coverages A * * * to bodily injury to or death of any employee of the Insured while engaged in the employment, other than domestic, of the Insured, or * * * while engaged in the operation, maintenance or repair of the automobile;

'(e) under Coverage A, to any obligation for which the Insured or any company as his insurer may be held liable under any workmen's compensation law.'

The section defining 'insured' states:

'* * * The unqualified word 'insured' wherever used in Coverages A * * * includes the Named Insured and, except where specifically stated to the contrary, also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the Named Insured.'

The policy also contained the following conditions:

'1. Notice of Accident. Coverages A, B and C. When an accident occurs written notice shall be given by or on behalf of the Insured to the Company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the Insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.'

'2. Notice of Claim or Suit. Coverages A and B. If claim is made or suit is brought against the Insured, the Insured shall immediately forward to the Company every demand, notice, summons or other process received by him or his representative.'

'6. Action Against Company. Coverages A and B. No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this Policy, nor until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.'

'17. Assistance and Cooperation of the Insured. Coverages A, B, D, E, F, G, H, I and J. The Insured shall cooperate with the Company and, upon the Company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits. The Insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.'

The suit against the Soo Line was commenced by Ahlstrom December 14, 1950. He was represented by William DeParcq of Minneapolis, and H. O. Chommie of Thief River Falls. Ahlstrom had been paid $10,000 for permanent total disability by the St. Paul Companies as workmen's compensation benefits and $9,410.50 medical expenses. Representatives of the St. Paul Companies conferred with DeParcq relative to their claim for subrogation throughout the Ahlstrom litigation. They obtained a full recovery thereof through the representation and services of Ahlstrom's attorneys. The commencement of the action against the Soo Line on December 14, 1950, was the first claim for Ahlstrom's injuries to reach the Soo Line. The Soo Line, under the foregoing circumstances, retained its own attorneys to defend against the Ahlstrom claim. It...