Nicollet Properties, Inc. v. St. Paul Mercury Ins. Co.

• Citation: 135 N.W.2d 127,271 Minn. 65
• Decision Date: 23 April 1965
• Docket Number: No. 39377,39377
• Parties: , 18 A.L.R.3d 804 NICOLLET PROPERTIES, INC., et al., Appellants, v. ST. PAUL MERCURY INSURANCE COMPANY, et al., Respondents, James Oxborough, Appellant.
• Court: Minnesota Supreme Court

Page 127

135 N.W.2d 127

271 Minn. 65, 18 A.L.R.3d 804

NICOLLET PROPERTIES, INC., et al., Appellants, v. ST. PAUL MERCURY INSURANCE COMPANY, et al., Respondents, James Oxborough, Appellant.

No. 39377.

Supreme Court of Minnesota.

April 23, 1965.

Syllabus by the Court.

An employee of an outdoor theater company who stood near adjacent highway and indicated to prospective patrons the entrance to the theater area was not 'using' an automobile which was involved in a collision while turning into such entrance within the purview of omnibus clause contained in liability insurance policy covering the automobile, which clause provided:

'With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured * * * and also includes any person while using the automobile and any person or organization legally responsible for the use thereof.'

Under the circumstances, the function of the employee was much the same as that of a mechanical device indicating the entrance to a parking area and too remote to constitute a use. Liberty Mutual Ins. Co. v. Steenberg Const. Co. (8 Cir.) 225 F.2d 294, and Woodrich Const. Co. v. Indemnity Ins. Co., 252 Minn. 86, 89 N.W.2d 412, distinguished.

Nathan A. Cobb, Minneapolis, for plaintiffs-appellants.

Benjamin M. Kail, St. Paul, for defendant-appellant.

Altman, Geraghty & Mulally, and Ralph E. Koenig and James M. Corum, St. Paul, for respondent.

MURPHY, Justice.

The plaintiffs and defendant James Oxborough appeal from the judgment and from orders denying their motions for amended findings or a new trial.

This litigation has its origin in an action for damages by Lowell Zube and members of his family who were occupants in an automobile which collided with an automobile driven by Herbert A. Long. Other defendants in the action brought by the Zubes included Nicollet Properties, Inc. (hereinafter referred to as Nicollet), Kraus-Anderson, Inc. (hereinafter referred to as Kraus-Anderson), and Oxborough, an employee of Nicollet. The particular appeals we consider grow out of an action for declaratory judgment brought by Nicollet, Kraus-Anderson, and Employers Mutual Liability Insurance Company of Wisconsin (hereinafter referred to as Employers), which had issued a public liability policy to Nicollet. The declaratory judgment action sought a determination to the effect that under the terms of an automobile liability policy issued to Zube by St. Paul Mercury Insurance Company and St. Paul Fire & Marine Insurance Company (hereinafter referred to as the St. Paul companies), Nicollet, Kraus-Anderson, and Oxborough were insured so as to obligate the St. Paul companies to pay whatever sums those parties might be obligated to pay by reason of injuries sustained by the Zubes, and that the recovery against Employers is limited to the excess of the limit provided for in the St. Paul companies' policy. Oxborough, named as a defendant in the declaratory judgment action, also claimed that the policy issued to Zube protected him. The St. Paul companies deny that the provisions of their policy included protection for the plaintiffs and Oxborough or that there was any duty on their part to assume the defense of the action instituted by the Zubes.

Numerous errors are assigned by appellants, but it is only necessary for us to review one relating to the correctness of the trial court's determination that plaintiffs and Oxborough were not protected as insureds under the terms of the policy issued by the St. Paul companies to Lowell Zube.

From an examination of the record it appears that Nicollet owns and operates a drive-in theater located on the north side of Highway No. 13 in Dakota County and that Kraus-Anderson was also joined in the Zube action as an owner, although it has no interest in the theater. At the point where patrons enter the theater area from Highway No. 13 there are two avenues, an entrance and an exit, with an island between them. On August 26, 1962, Oxborough, a minor, was employed by Nicollet to stand at the entrance of the driveway to the theater area and indicate the entrance to prospective customers by use of a flashlight. At about 8 p.m., daylight savings time, while driving east on Highway No. 13, Zube approached this entrance. When he was about two blocks away, he saw the boy standing on the island. He intended to make a left turn into the theater area. When he was at a point about 50 or 100 feet from the driveway, he gave a signal for a left-hand turn for the benefit of following vehicles. He saw the youth waving his flashlight, indicating the entrance to the theater area. He followed the directions given, but before he commenced his turn, he looked to the east to observe the traffic. In making his lefthand turn and while his car was on the westbound lane of Highway No. 13 and entering the driveway, his car was struck at the right front door by the Long vehicle, which approached from the opposite direction.

As a result of the action brought by the Zubes to recover damages because of this accident, the original defendants, Nicollet, Kraus-Anderson, and Oxborough, now claim that they are protected by the policy issued to Zube by the St. Paul companies and that those companies should defend and indemnify them for any judgment entered against them. The provision of the policy with which we are concerned recites:

'With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured * * * and also includes any person while using the automobile and any person or organization legally responsible for the use thereof.'

The policy further provided:

'With respect to such insurance as is afforded by this policy for bodily injury liability and for property damage liability, the company shall:

'(a) Defend any suit against the insured alleging such injury, sickness, disease or destruction, and seeking damages on account thereof, even if such suit is groundless, false or fraudulent.'

By the insuring agreement of such policy, the St. Paul companies 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 * * *, hereinafter called 'bodily injury,' sustained by any person.'

The findings of the trial court in the declaratory judgment action recite:

'That on August 26, 1962, plaintiff Nicollet Properties, Inc. had in its employment the defendant James Oxborough who was at said time employed to show to and give directions to drivers on said Highway 13 who were desirous of entering said drive-in theatre property; that said defendant James Oxborough was at said time engaged in said employment and was acting within the scope of his employment.'

The court concluded:

'That the coverage of the policy of insurance issued by St. Paul Mercury Insurance Company and St. Paul Fire and Marine Insurance Company to Lowell Zube does not extend to Nicollet Properties Inc. or Kraus-Anderson, Inc. as insureds with respect to any claims made by the Zubes in the action hereinbefore referred to * * *.

'That no obligation exists on the part of St. Paul Mercury Insurance Company or St. Paul Fire and Marine Insurance Company to pay any damages on behalf of the Nicollet Properties, Inc., Kraus- Anderson, Inc., or defendant James Oxborough because of any bodily injuries and property damages sustained by the Zubes in the said accident of August 26, 1962.

'That there is no duty on the part of St. Paul Mercury Insurance Company or the St. Paul Fire and Marine Insurance Company to assume the defense and its costs and expenses on behalf of any of the plaintiffs herein or James Oxborough in the litigation arising out of the action commenced by the Zubes * * *.

'That the insurance coverage of the plaintiff Employers Mutual Liability Insurance Company of Wisconsin extends primary coverage for the claims made in the actions commenced by the Zubes as aforesaid.'

We direct our attention to the assertion of the plaintiffs in this declaratory judgment action that the operator of the drivein theater, through its employee, James Oxborough, was 'legally responsible for the use' of the Zube automobile so as to entitle them to the contractual benefits of the policy issued by the St. Paul companies on the Zube automobile. In other words, it is their claim that Oxborough was 'using' the Zube automobile within the meaning of the omnibus clause when he indicated the entrance driveway with his flashlight. We have examined the numerous authorities cited and discussed by the parties. Three of them have application to the principles of law involved in this appeal. They are: Woodrich Const. Co. v. Indemnity Ins. Co., 252 Minn. 86, 89 N.W.2d 412; Liberty Mutual Ins. Co. v. Steenberg Const. Co. (8 Cir.) 225 F.2d 294; and J. Scheer & Sons Co. v. Travelers Ind. Co., 35 Misc.2d 262, 229 N.Y.S.2d 248.

In Liberty Mutual Ins. Co. v. Steenberg Const. Co. (8...