Mission Ins. Co. v. Barnett

• Decision Date: 11 September 1979
• Docket Number: Civ. A. No. 78-611-H.
• Citation: 476 F. Supp. 925
• Parties: MISSION INSURANCE COMPANY, Plaintiff, v. Gary BARNETT, Albert Nelson, M. C. Hamilton, Joe Ernest, Perry Fendley, Douglas Parden, John Bradford, Dwight Harrigan, Tom O'Melia, and Wendell DeWayne Bedwell, Defendants.
• Court: U.S. District Court — Southern District of Alabama

476 F. Supp. 925

MISSION INSURANCE COMPANY, Plaintiff, v. Gary BARNETT, Albert Nelson, M. C. Hamilton, Joe Ernest, Perry Fendley, Douglas Parden, John Bradford, Dwight Harrigan, Tom O'Melia, and Wendell DeWayne Bedwell, Defendants.

Civ. A. No. 78-611-H.

United States District Court, S. D. Alabama, S. D.

September 11, 1979.

Larry U. Sims, Champ Lyons, Jr., Mobile, Ala., for Mission Ins Irvin J. Langford, Mobile, Ala., Gilmore & Keahey, Grove Hill, Ala., M. A. Marsal, Mobile, Ala., for Wendell DeWayne Bedwell cross-claim defendant.

Joseph C. Sullivan, Jr., Butler & Sullivan, Mobile, Ala., Warren B. Lightfoot and Robert K. Spotswood, Birmingham, Ala., for Gary Barnett, Albert Nelson, M. C. Hamilton, Joe Ernest, Perry Fendley, Douglas Parden, John Bradford, Dwight Harrigan and Tom O'Melia.

John N. Leach, Jr., Mobile, Ala., for U. S. Fire Ins. Co.

Robert H. Smith, Mobile, Ala., for Ins. Co. of North America.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HAND, District Judge.

I. Introduction

This declaratory judgment action was filed by Mission Insurance Company ("Mission") to determine whether it has the duty to defend and provide coverage for the defendants in Wendell DeWayne Bedwell v. Tom O'Melia, et al., a state court proceeding filed in the Circuit Court for Clarke County, Alabama. In response to Mission's complaint all defendants except Bedwell (hereinafter "defendants") filed an answer and counterclaim. In their answer, defendants contend that Mission is obligated to provide them coverage and a defense.

In their counterclaim, defendants added as plaintiffs herein three additional insurers, Insurance Company of North America ("INA"), Jefferson Insurance Company of New York ("Jefferson"), and United States Fire Insurance Company ("U.S. Fire"), and added as a defendant herein Thomas H. O'Melia, Jr. Defendants seek a declaratory judgment that the plaintiff insurers are obligated to defend them and pay any judgment against them in Bedwell's Clarke County lawsuit.

Mission has filed a motion for summary judgment contending that a certain exclusion contained in its insurance policy relieves it of the obligation to provide the defendants coverage and a defense as to Bedwell's claim. Defendants have filed a response to Mission's motion and a motion for summary judgment against the four plaintiff insurers. Counterclaim-defendants INA and Jefferson have both filed motions for summary judgment.¹

Based upon the briefs, the oral argument, the affidavits and other evidence submitted by counsel, and the applicable law, the following Findings of Fact and Conclusions of Law are entered in this action pursuant to Fed.R.Civ.P. 54(b).

II. Findings of Fact

1. On April 27, 1977, Wendell DeWayne Bedwell ("Bedwell"), an employee of Scotch Lumber Company ("Scotch"), was injured on the premises of Scotch. On May 16, 1978, Bedwell filed a complaint in the Circuit Court for Clarke County, Alabama against Thomas H. O'Melia, Dwight Harrigan, John Gerald Bradford, Jr., Millard Calvin Hamilton, Cecil Albert Nelson, Douglas Parden, Joseph Bettis Ernest, Jr., William Perry Fendley, and Gary Barnett. Bedwell has amended his complaint by adding to paragraph 2 of the first and second causes of action the name of Thomas H. O'Melia, Jr. as an additional defendant.

2. INA Policy Number GAL 34 49 56 was in force on April 27, 1977. Scotch was the "Named Insured" under that policy, and Thomas H. O'Melia, Thomas H. O'Melia, Jr., and Dwight Harrigan were "Persons Insured" under the Comprehensive General Liability Insurance portion of the policy. INA's total liability limit under said policy resulting from one occurrence is $100,000.00.

3. Jefferson Policy Number JE 65096 was in force on April 27, 1977. Scotch and defendants Thomas H. O'Melia, Sr., Thomas H. O'Melia, Jr., and Dwight Harrigan are "Named Insureds" under that policy. The Jefferson policy provides $300,000.00 of "excess" coverage over and above the $100,000.00 of primary insurance provided by INA.

4. Mission Umbrella Liability Policy Number M 835421 was in force on April 27, 1977. Thomas H. O'Melia, Sr., Thomas H. O'Melia, Jr., and Dwight Harrigan, along with Scotch Lumber Company, are "Named Assureds" under said policy. Mission's policy provides coverage for the total sum which the "Assured", as defined in the policy, becomes obligated to pay in excess of the $400,000.00 primary insurance provided by INA and Jefferson up to $3,000,000.00 if the "occurrence", as defined in the policy, is covered by the primary insurance policies. If the primary insurance policies do not cover the "occurrence", then Mission is obligated to pay the excess of $10,000.00 up to the sum of $3,000,000.00.

5. U.S. Fire Policy Number XS 3331 was in force on April 27, 1977. Defendants Thomas H. O'Melia, Sr., Thomas H. O'Melia, Jr., and Dwight Harrigan, along with Scotch Lumber Company, are "Named Insureds" under that policy. The U.S. Fire policy provides excess coverage in the amount of $5,000,000.00 for each occurrence where the insureds' liability is in excess of the $3,000,000.00 coverage provided by Mission's Umbrella Policy.

6. Bedwell was injured when logs fell from a trailer located on the premises of Scotch. After studying the state-court complaint it is unclear to the Court precisely what Bedwell is claiming.

7. On the one hand, Bedwell's complaint may be read to allege that the defendants failed to provide safe premises.² Specifically, Bedwell may be alleging that the defendants either (a) provided negligent instructions as to how high the logs should be stacked (Bedwell answers to interrogatories numbered 11 and 12), or (b) negligently established a method or procedure for unloading logs, including the use of the Letourneau (Bedwell Interrogatory answers 7, 8, 9, 10, 11 and 12). If this is what the complaint alleges then none of the defendants are charged with a negligent act occurring during the unloading process when Bedwell's injury occurred. The record shows that none of the defendants were present at the situs of Bedwell's accident. See exhibits "A" through "J".

8. Alternatively, this Court recognizes that the state-court complaint of Bedwell may simply be alleging negligence in the loading and unloading of the logs from his trailer. The Court specifically finds that Bedwell's complaint may be read either way.

9. On April 27, 1977, defendants Thomas H. O'Melia, Sr., Thomas H. O'Melia, Jr., and Dwight Harrigan were corporate officers, executive officers, and directors of Scotch. Exhibits "A", "B" and "C".

III. Conclusions of Law

1. The Court has jurisdiction of this action under 28 U.S.C. § 2201 and 28 U.S.C. § 1332.

A. INA's Comprehensive General Liability Policy

2. In its motion for summary judgment, Mission contends that it is relieved of its obligation to provide the defendants coverage and a defense under the following language in its policy:

THIS POLICY IS SUBJECT TO THE FOLLOWING EXCLUSIONS:

This Policy shall not apply:—

. . . . .

Except insofar as coverage is available to the Assured in the underlying insurances as set out in the attached Schedule, this policy shall not apply:

. . . . .

(o) to any employee with respect to injury to or the death of another employee of the same Employer injured in the course of such employment.

Mission Insurance Policy at pp. 3-7 of Umbrella Liability Insurance Policy. The "underlying insurances" are the INA and Jefferson policies. The Court finds that if coverage is available to the defendants under the INA and Jefferson policies, exclusion (o) is inapplicable under the express terms of the Mission policy. Accordingly, it is necessary to address initially the motions for summary judgment filed by INA and Jefferson and the coverage issues raised under those policies.

3. The INA policy consists of two relevant parts under which the defendants claim coverage, Comprehensive General Liability Insurance and Comprehensive Automobile Liability Insurance. INA contends first that its Comprehensive General Liability Insurance is inapplicable to Bedwell's accident under an exclusion for "bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of (1) any automobile or aircraft owned or operated by or rented or loaned to any Insured, or (2) any other automobile or aircraft operated by any person in the course of his employment by any Insured" (hereafter "loading or unloading exclusion").

4. Defendants contend that the loading or unloading exclusion is inapplicable for two reasons. First, one basis of Bedwell's complaint could be that the defendants failed to use in a specified manner a certain piece of "mobile equipment." Mobile equipment is specifically excepted from the loading or unloading exclusion. Second, one reading of the complaint shows that the negligence of the defendants is alleged by Bedwell to be of a prior decisional or policy-making nature; under this construction of the complaint none of the defendants are charged with a negligent act occurring in the actual process of unloading which allegedly injured Bedwell.

5. "Automobile", as defined by the INA policy, "means a land motor vehicle, trailer or semitrailer designed for travel on public roads (including any machinery or apparatus attached thereto), but does not include mobile equipment". (emphasis added.) "Mobile equipment" is defined in the INA policy as follows:

"mobile equipment" means a land vehicle (including any machinery or apparatus attached thereto), whether or not self-propelled, (1) not subject to motor vehicle registration, or (2) maintained for use exclusively on premises owned by or rented to the Named Insured, including the ways immediately adjoining, or (3) designed for use principally off public roads, or (4) designed or maintained for the sole purposes of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle: power cranes, shovels, loade

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