National Union Fire Ins. Co. of Pittsburgh, Pa. v. Bruecks

• Decision Date: 28 January 1966
• Docket Number: No. 36057,36057
• Citation: 179 Neb. 642,139 N.W.2d 821
• Court: Nebraska Supreme Court
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, a corporation, Appellee and Cross-Appellant, v. Joseph M. BRUECKS, Sr., et al., Appellees and Cross-Appellees. Impleaded with Allstate Insurance Company, Appellant and Cross-Appellee, St. Paul Fire & Marine Insurance Company, a corporation, Appellee and Cross-Appellant.

Page 821

139 N.W.2d 821

179 Neb. 642

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, a corporation, Appellee and Cross-Appellant, v. Joseph M. BRUECKS, Sr., et al., Appellees and Cross-Appellees Impleaded with Allstate Insurance Company, Appellant and Cross-Appellee St. Paul Fire & Marine Insurance Company, a corporation, Appellee and Cross-Appellant.

No. 36057.

Supreme Court of Nebraska.

Jan. 28, 1966.

Syllabus by the Court

1. The words 'arising out of' are very broad, general, and comprehensive terms, and are ordinarily understood to mean originating from, growing out of, or flowing from.

2. The term 'accident arising out of the use' in the insurance policies herein contemplates an accident immediately identifiable with the ownership, maintenance, or use of the vehicle.

3. The accidental discharge of a loaded gun in an automobile being used to transport a minor home after a hunting trip is not an accident within the contemplation of the term 'arising out of the use' of an automobile, under the facts in this case.

4. Equitable estoppels cannot in the nature of things be subjected to fixed and settled rules of universal application like legal estoppels, nor be hampered by the narrow confines of a technical formula.

5. Equitable estoppel rests largely on the facts and circumstances of the particular case.

6. Assumption of complete control of a matter involving a possible claim for a period of 17 months, with the consequent need of cooperation under the terms of the policy, constitutes a sufficient showing of prejudice as a basis for urging estoppel.

7. An insurer's duty to defend an action against the insured is measured in the first instance by the allegations of the pleadings in the action against the insured.

8. If such pleadings state facts bringing the injury within the coverage of the policy, insurer must defend irrespective of the insured's ultimate liability to the plaintiff.

Stoehr, Rickerson & Caporale, Omaha, for appellant.

Haney, Walsh & Wall, Omaha, for National Union Fire Ins. Co.

Sodoro & Meares, Omaha, for St. Paul Fire & Marine Ins. Co.

Kennedy, Holland, DeLacy & Svoboda, Omaha, for Campbell.

Floersch & Floersch, Omaha, for Bruecks.

Heard before WHITE, C. J, and CARTER, SPENCER, BOSLAUGH, BROWER, SMITH, and McCOWN, JJ.

SPENCER, Justice.

This is an action for a declaratory judgment to have determined the coverages afforded to MacDowell Campbell and Scott Campbell by insurance policies issued by National Union Fire Insurance Company of Pittsburgh, Pennsylvania, hereinafter referred to as National; St. Paul Fire & Marine Insurance Company, hereinafter referred to as St. Paul; and Allstate Insurance Company, hereinafter referred to as Allstate. The action is brought by National against Joseph M. Bruecks, Sr., Joseph M. Bruecks, Jr., MacDowell Campbell, Scott Campbell, Allstate, St. Paul, and Nancy L. Campbell.

MacDowell and Scott Campbell are defendants in another lawsuit arising out of the shooting of Joseph M. Bruecks, Jr., by a gun in the hands of Scott Campbell. That action will hereinafter be referred to as the tort action. At the time of the shooting, National insured the Campbells under a comprehensive personal liability policy. Allstate insured Joseph M. Bruecks, Sr., and his family, including persons using the automobile with his consent, under an automobile liability policy covering the car which Bruecks, Jr., was driving at the time of the shooting. St. Paul had in force an automobile liability policy on an automobile owned by the Campbells which extended coverage for the use of nonowned automobiles.

In the petition in the tort action it is alleged that on or about the 26th day of December 1961, Scott Campbell was hunting with certain other minors in west Omaha; that about 5:30 p. m. on said date, Bruecks, Jr., a minor, drove an automobile owned by his father and covered by the Allstate policy, to pick up said minors and return them to their homes in Omaha; that Scott Campbell sat in the right rear seat of said car and on the way back to Omaha, while said car was in motion, negligently and carelessly attempted to unload his rifle; and that in the process thereof said gun discharged, causing a bullet to penetrate the front seat of the automobile, striking Bruecks, Jr., the driver of said car, and causing serious injuries.

There are many allegations of negligence alleged in the petition against the Campbells as well as against Sears Roebuck & Company, a corporation, which sold the gun to the Campbells. However, there is no allegation of any nature suggesting a causal relationship of the incident pleaded to the use of the automobile. Bruecks, Jr., had not been hunting with the boys but had been sent out by his stepmother to pick up the boys and return them to their homes.

Immediately after the accident, notice was given by MacDowell Campbell to National, and he was told he had $50,000 coverage under his comprehensive personal liability policy. The matter was referred by National to the law firm of Haney & Walsh, who will hereinafter be referred to as National's attorneys, for investigation. While there is a dispute as to the facts, for the purposes of this case we determine the following to be the facts: National's attorneys conducted an investigation by contacting persons having knowledge of the facts, including the Campbells. This initial investigation extended over a period of several weeks, and continued periodically until June 8, 1963. The entire investigation was under the control of National's attorneys. No notice of the accident was given to Allstate or to St. Paul prior to August 13, 1962.

In August of 1962, National's attorneys contacted the Campbells, suggesting the possibility of coverage being afforded under the Allstate policy written on the automobile in which the shooting incident occurred. They thereafter sent the Campbells a letter written by them for Scott Campbell's signature, to be returned to them for forwarding to Allstate. This was done.

The Campbells were led to believe that National was affording coverage and left the matter entirely in the hands of National's attorneys. The tort action was filed on May 17, 1963. The papers and summons served on the Campbells were immediately forwarded to National's attorneys. On June 8, 1963, some 3 weeks subsequent to the filing of the action against the Campbells, National's attorneys sent a notice to MacDowell Campbell that National did not intend to afford coverage under its policy. This was the first indication given the Campbells that National was denying coverage. A few days prior thereto, National's attorneys had indicated to the Campbells that the matter was progressing satisfactorily, and that the propects of a settlement looked good. The Campbells then consulted other counsel. On June 17, 1963, National's attorneys filed a special appearance in the tort action on behalf of the Campbells. On July 17, 1963, a reservation of rights agreement was executed between the Campbells and National, and National's attorneys have continued to represent the Campbells in the tort action.

The judgment of the trial court may be summarized as follows: (1) National is required to defend MacDowell Campbell in the tort action and to participate in any judgment against him; (2) National is estopped to deny coverage to MacDowell and Scott Campbell, and shall be primarily liable to participate in any judgment against them; (3) Scott Campbell was using the Bruecks' automobile within the meaning of the terms of the Allstate policy, and Allstate has a primary duty to participate with National in the defense of the tort action as well as in any judgment entered; (4) National's and Allstate's participation shall be in proportion to the applicable limits of their respective policies; and (5) Scott Campbell was using the Bruecks' automobile within the meaning and terms of the St. Paul policy, and St. Paul shall be liable as an excess carrier in the event a judgment is rendered in excess of the combined coverage of National and Allstate. Allstate perfected an appeal to this court, and St. Paul and National have perfected cross-appeals.

The Allstate policy issued to Bruecks, Sr., afforded liability coverage to any person actually using the automobile with his permission for '* * * bodily injury sustained by any person * * * arising out of the ownership, maintenance or use, including loading and unloading, of the owned automobile or a non-owned automobile.' The St. Paul policy issued to MacDowell Campbell afforded coverage to him and members of his family, including Scott, for '* * * bodily injury * * * arising out of the ownership, maintenance or use of the owned automobile' and also 'with respect to non-owned automobile * * * provided his actual operation or (if he is not operating) the other actual use thereof is with the permission, or reasonably believed to be with the permission, of the owner and is within the scope of such permission, * * *.' The insurance policy issued by National to MacDowell Campbell afforded comprehensive coverage for him and for Scott Campbell as follows: 'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury,' and provided an exclusion from the above coverage of 'the ownership, maintenance, operation, use, loading or unloading of (1) automobiles while away from the premises * * *.'

It would seem that the obligation to defend a suit for an insured should be determined on the basis of whether the petition filed against him attempts to allege a liability within the terms of the policy. In the tort action, which is the basis for this declaratory judgment action, there is no allegation set out in the petition which would indicate that the action was brought as one arising out of the use of a motor vehicle. Ignoring, for purposes of discussion herein, the allegation of negligence as against ...