Oil Base, Inc. v. Transport Indem. Co.
| Decision Date | 27 July 1956 |
| Citation | 299 P.2d 952,143 Cal.App.2d 453 |
| Court | California Court of Appeals Court of Appeals |
| Parties | OIL BASE, Inc., a corporation, Plaintiff, Appellant and Cross-Respondent, v. TRANSPORT INDEMNITY COMPANY, a corporation, Hardware Mutual Insurance Company of Minnesota, a corporation, and Security Mutual Casualty Company, a corporation, Defendants, Respondents and Cross-Appellants. Elmo Herbert SCHERER, Plaintiff, Appellant and Cross-Respondent, v. TRANSPORT INDEMNITY COMPANY, a corporation, Mercury Transport Company, a corporation, Southwest Tank Lines, a corporation, Mercury Tank Transport Service, a corporation, Security Mutual Casuality Company, a corporation, Defendants, Respondents and Cross-Appellants, Hardware Mutual Insurance Company of Minnesota, a corporation, Defendant and Respondent. Civ. 21152, Civ. 21158. |
William W. Waters, and Martin, Hahn & Camusi, Los Angeles, for appellant Oil Base, Inc.
Dudley Gray, Gardena, for appellant Elmo Herbert Scherer.
Robert W. Stevenson, John F. O'Hara, Los Angeles, for respondents Transport Indemnity Co., Mercury Transport Co., Southwest Tank Lines, and Security Mutual Casualty Co.
C. F. Jorz and Gary W. Sawtelle, Los Angeles, for respondent Hardware Mutual Insurance Co. of Minn.
These actions for declaratory relief both involve the interpretation to be placed upon the same policies of insurance. The cases were consolidated for the purposes of the trial, but separate findings of fact and judgments were entered in each action. 1
Hereinafter the first case named in the title will be called the Oil Base action; and the second one, the Scherer action.
In the Scherer action plaintiff, by his complaint, sought to have it declared that he was an insured under the policies of insurance issued by each of the insurance companies who is a defendant, and was entitled as such an insured to be indemnified in accordance with the provisions of the various policies. He joined as defendants Hardware Mutual Insurance Company (hereinafter called Hardware); Transport Indemnity Company (hereinafter called Transport); Security Mutual Casualty Company (hereinafter called Security); Mercury Transport Company (hereinafter called Mercury); Southwest Tank Lines (hereinafter called Southwest); and others.
The plaintiff Oil Base, the named insured in the policy issued by the defendant Hardware and one of the named insureds in the policies issued by defendant Transport and defendant Security, sought by its amended and supplemental complaint to have its rights as against Transport, Security, and Hardware, under the policies issued by them, and the obligations of said insurers under said policies, declared. It also sought a money judgment on account of attorney's fees and costs of defense of certain actions hereinafter mentioned brought against it, and for the sum of $100,000 against Hardware on account of payments made in the settlement of the claim of one Smith, to which claim further reference is hereinafter made.
The facts are not in dispute, and the findings made by the trial court in each action insofar as any issues here are concerned are not based upon any conflict in the evidence but upon the trial court's interpretation of the various contracts involved.
The relevant facts are:
The defendant (in the Scherer action) Southwest was the owner of a certain tractor and semitrailer. By lease dated June 1, 1952, it leased this equipment to the defendant Mercury for a period of one year. The lease provided that during the term of the lease the equipment should be solely and exclusively under the direction and control of Mercury.
On the 5th of November, 1952, Mercury leased the equipment to Oil Base for a period of one month. The purpose of the lease was to enable Oil Base to transport certain drilling mud to Texas by use of its own equipment, Mercury not having an interstate commerce license which would enable it to contract this work. This lease provided that Mercury would furnish required lubricants and fuel and one or more competent drivers, and that during the period of the lease the equipment should be 'solely and exclusively under the direction and control of the Lessee.'
Pursuant to the lease last mentioned, the equipment was delivered to Oil Base at its plant in Compton, California, on the 5th of December, 1952. At that time the equipment was in the charge of Scherer and another driver furnished by Mercury; at that time the truck was loaded by Oil Base, and Scherer and his co-employee were given detailed directions by Oil Base as to the route to be followed and the times of day during which they should travel while in Texas.
On the morning of November 8, 1952, while returning to Compton, California, from Texas, the equipment, while being driven by Scherer, collided with a vehicle driven by one Smith and in which one Lowe, the owner of the vehicle, was riding. In this accident both Smith and Lowe sustained serious injuries.
At the time of the accident the following policies of insurance were in effect: Policy No. CGAL 476238, issued by Hardware to Oil Base as its named insured, with limits of liability of $100,000 each person, $300,000 each accident. By the insuring agreements of this policy Hardware undertook, under coverage A, to 'pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * at any time resulting therefrom, sustained by any person and caused by accident.' By the insuring agreements it further undertook to 'defend any suit against the insured alleging such injury * * *.' The word insured is defined by the insuring agreements of the policy as follows: 2 'The unqualified word 'insured' includes the named insured and also includes * * * (2) under coverages A and B, and person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured. The insurance with respect to any person or organization other than the named insured does not apply under division (2) of this insuring agreement:
'* * * '(d) with respect to any hired automobile, to the owner thereof or any employee of such owner.'
By the conditions of the policy the term owned automobile is defined as 'an automobile owned by the named insured.' The term hired automobile is defined as one used under contract by or loaned to the named insured and which is not owned or registered in its name. The term nonowned automobile is defined as 'any other automobile,' the term automobile being defined as a 'land motor vehicle or trailer * * *.'
It is further provided by the conditions of the policy as follows: 'Such insurance as is afforded by this policy for bodily injury liability * * * shall comply with provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use during the policy period of any automobile insured hereunder, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy * * *.' 3
Transport issued its policy No. 12-101 in which Mercury Transport Company, Mercury Tank Transport, and Southwest Tank Lines were named as insureds, the company's liability under which was $10,000 each occurrence. By rider executed and attached to the policy at the time of the lease made by Mercury to Oil Base, Oil Base was named as an insured. 4
By the insuring agreements of this policy Transport agreed 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay for damages, arising out of the occupation of the named insured, as a result of bodily injury * * *.' It further agreed to defend or settle all suits filed against the insured and to pay all costs of investigation and litigation.
By the terms of the policy the term named insured is defined to mean the insured named in the declarations. The unqualified word insured is defined to mean 'any partner, executive officer, managing employee, director or stockholder' of the named insured while acting within the scope of his duties.
Paragraph 6 of the conditions of the policy provides in substance that the insurance afforded by the policy shall comply with the provisions of the motor vehicle responsibility law of any state or province, and for all practical purposes is identical with that contained in the policy issued by Hardware.
Security issued to the same named insureds as are named in Transport's policy No. 12-101 its policy No. T-212, entitled 'Excess Loss Contract.' By the declarations of the policy it is provided, 'Company's Maximum Liability: $40,000.00 each occurrence over $10,000.00 primary each occurrence, such primary coverage with Transport Indemnity Company * * *.' The only persons named as insureds in this policy are the persons so named in the declarations. There is no omnibus clause such as that contained in the Hardware policy.
By section 1 of the insuring agreements the company agreed to indemnify the insureds for all sums which they should by law be liable to pay and shall pay, or by final judgment be adjudged liable to pay, on account of bodily injuries sustained by any person. By section 2 it is in substance provided that Security should only be liable for the ultimate net loss in excess of $10,000 or of such greater amount as the insured shall be covered by primary insurance, but only up to the sum of $40,000. By section 3 it is agreed that liability under the policy should not attach until the insureds or their primary carriers should have...
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