Murry v. Bankers Fire & Marine Ins. Co.

Decision Date26 April 1967
Docket NumberNo. 1997,1997
Citation198 So.2d 532
PartiesJordan Slay MURRY, Sr., Plaintiff-Appellee, v. BANKERS FIRE & MARINE INSURANCE COMPANY, Defendant-Appellant, and Aetna Insurance Company, Defendant-Appellee.
CourtCourt of Appeal of Louisiana — District of US

Voorhies, Labbe , Fontenot, Leonard & McGlasson, by H. Lee Leonard, Lafayette, for defendant-appellant.

Nathan A. Cormie, & Assoc., by Robert Morgan, Lake Charles, for plaintiff-appellee.

Lewis & Lewis, by John M. Shaw, Opelousas, for defendant-appellee, Aetna Ins. Co.

Before TATE, SAVOY and HOOD, JJ.

TATE, Judge.

This suit results from a collision at a city intersection. Both drivers contended that the traffic signal was green for them. The trial court found in favor of Murry, the plaintiff driver. A defendant insurer (Bankers) appeals from judgment awarding Murry substantial damages for his personal injuries.

There is no substantial issue on appeal as to fault. The trial court found that Mrs. Jordan, the defendant driver, ran the red light and that her negligence was the sole proximate cause of the accident. Its evaluation of the evidence is clearly not erroneous.

By its appeal, Bankers chiefly contends that its liability policy did not cover the vehicle operated by Mrs. Jordan, the defendant driver. Alternatively, it contends that another defendant insurer (Aetna) was either the primary insurer or a co-insurer of Mrs. Jordan's automobile at the time of the accident, so that Bankers's liability should be limited accordingly. Finally, Bankers argues that the personal injury award is excessive.

1. Coverage under Bankers's 'Comprehensive Liability Policy'.

At the time of the accident Mrs. Jordan, the negligent driver, was operating a Chevrolet sedan owned by the named insured (Dominique). Dominique had secured from Bankers a 'Comprehensive Liability Policy (General-Automobile)', which was in effect at the time of the 1964 accident.

Bankers contends that the comprehensive policy did not cover operation of Mrs. Jordan's 1961 Chevrolet because this automobile was not incuded in the list of 35 motor vehicles attached as a schedule to the policy.

The pertinent insuring clause of the policy ('Coverage A--Bodily Injury Liability--Automobile') provides that the insurer agreed 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of any automobile.'

Under the policy terms, the Chevrolet driven by Mrs. Jordan was an 'owned automobile'. The policy provides liability coverage for any person 'while using an owned automobile' with the permission of the named insured. The evidence is uncontradicted that Mrs. Jordan was using the automobile with the permission of Dominique and was therefore an omnibus insured at the time of the accident (if indeed, as the trial court held, the Bankers policy otherwise covered the operation of the Chevrolet in question). Nowhere in the insuring agreements or exclusions of the policy is there any applicable provision limiting the policy's coverage of the operation of owned automobiles with the permission of the insured. 1

Nevertheless, Bankers contends that its comprehensive liability policy did not cover operation of the Chevrolet operated by Mrs. Jordan because Dominique had not included it in a list of 35 other vehicles attached by Schedule A-1 as a 'declaration' under Item 4 of the policy. Bankers relies upon the statement in Item 5 of the declarations that such schedules 'disclose all hazards insured hereunder known to exist at the effective date of this policy' and 'contain a complete list of all automobiles and trailers owned by the named insured at the effective date of this policy * * *.'

The Louisiana Supreme Court has rejected identical contentions of an insurer. Indiana Lumbermens Mutual Ins. Co. v. Russell, 243 La. 189, 142 So.2d 391. There, the insuring agreement covered use of any owned automobile, whereas the declarations (by language similar to that relied upon by the present insurer) indicated that the insured owned only a Pontiac automobile. Nevertheless, the Supreme Court upheld coverage as to another owned car, a Ford, which was not listed in the declarations.

In rejecting the insurer's contentions, our Supreme Court held that the coverage clauses of the contract should not be amended so as to conform with the representations or declarations of the insured, even if the latter reflected the true intent of the parties, because '* * * the insuring clause, being free from any ambiguity, is the law between the parties and must be enforced as written. The fact that the declaration of the insured is in conflict with the coverage clause does not, of itself, lessen the coverage given under the policy or justify modification by the Court .' 142 So.2d 394.

In accord with the holding of the Russell case, the present trial court also correctly excluded as inadmissible parol evidence to the effect that, by omitting the Chevrolet from the automobiles listed in the declarations, Dominique actually intended to exclude it from the coverage of the policy. Pel-State Oil Co. v. Weimer, La.App. 2 Cir., 155 So.2d 218, certiorari denied.

We should note again that this particular vehicle was not excluded by endorsement from the coverage of the insuring clauses of the policy and that nowhere in the insuring agreements, exceptions, or exclusions of the policy is there any provision limiting coverage to the hazards, vehicles, or employees to be listed in the declarations. 2

In contending to the contrary of the Russell holding, Bankers relies on inapposite decisions. They are either contrary to the holding of the Louisiana Supreme Court in Russell 3 or else they involve policies which (different from the present) had insuring clauses specifically limited to the coverage of scheduled or described motor vehicles. 4

We therefore affirm the trial court's holding that the Bankers liability policy afforded coverage of the operation of Dominique's Chevrolet at the time of the accident.

2. Coverage of the Aetna 'Garage Liability Policy'.

Bankers appealed from the trial court judgment, which had both (a) awarded the plaintiff damages and also (b) dismissed the plaintiff's claim seeking to hold another insurer (Aetna) solidarily liable with Bankers. Bankers now alternatively contends that Aetna is a co-insurer with it of the loss and that the trial court erred in dismissing Aetna from the suit. 5

At the time of the accident the negligent driver, Mrs. Jordan, was operating Dominique's car under the following circumstances, according to the uncontradicted showing:

Dominique had left his car with Attaway Darbonne for him to sell it. Darbonne operated a used car sales lot and service station business, in connection with which Aetna had issued him a 'Garage Liability Policy'. Dominique entrusted the car to Darbonne with full permission for him to let any potential customer use the car. The frequent custom of the used car sales business is to let potential customers try out a vehicle before its final purchase is concluded. A day or two before the accident Darbonne had let Mrs. Jordan have the car on trial, with the understanding that she would purchase it if she was satisfied with its performance during the trial period. The collision occurred while Mrs. Jordan was driving the vehicle during the agreed trial period.

Aetna's garage liability policy included coverage of 'The use in connection with garage operations 6 of any automobile which is neither owned nor hired by the named insured * * ' (Clause 2 of automobile hazards), as well as 'The ownership, maintenance or use of any automobile for the purpose of garage operations * * *' (Clause 1A). The persons insured by the policy included any person who with the consent of the named insured was using any such vehicle covered by the policy. 7

Under these unambiguous provisions, Mrs. Jordan was an omnibus insured protected by Darbonne's policy while using with Darbonne's permission the car left on his lot for resale purposes. 'When a dealer permits a prospective purchaser to try out one of the dealer's automobiles, the automobile beyond question is being used in the dealer's business within the meaning of a dealer's and garage keeper's liability policy', Hardware Mutual Cas. Co. v. Jones, C.A.4, 330 F.2d 1014, 1016 (1964). See also: Kershaw v. Deshotel, La.App. 3 Cir., 179 So.2d 528; Safeco Insurance Co. of Amer. v. Pacific Indemnity Co., 66 Wash.2d 38, 401 P.2d 205 (1965); Travelers Indemnity Co. v. Dees, 235 F.Supp. 515 (D.C.1964); 7 Am.Jur.2d Automobile Insurance, Section 95.

We therefore find to be without merit Aetna's suggestion that the vehicle was not covered because it had been furnished to Mrs. Jordan only temporarily and not for her regular use. This argument is based on the holding in Lincombe v. State Farm Mutual Auto. Ins. Co., La.App. 3 Cir., 166 So.2d 920, 924, which however concerned an entirely different type of policy and clause. 8 To the contrary, the present policy expressly insures those who with the named insured's permission are driving non-owned vehicles used in connection with automobile sales operations of the named insured.

Nevertheless, the district court dismissed the plaintiff's suit against Aetna, holding that Aetna's policy provided only excess coverage. The trial court reached this conclusion by virtue of the 'other insurance' clauses of the policies issued by Aetna and Bankers respectively.

We feel that in this respect our trial brother fell into error.

The other insurance clauses of each policy provides that, when the claimant had other insurance covering the same loss, there will be 'pro rata' liability between the insurers proportionate to the respective policy limits....

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