P. E. O'Hair & Co. v. Allstate Ins. Co.

• Decision Date: 07 November 1968
• Citation: 267 Cal.App.2d 195,72 Cal.Rptr. 690
• Court: California Court of Appeals Court of Appeals
• Parties: P. E. O'HAIR & CO., a corporation, Plaintiff and Respondent, v. ALLSTATE INSURANCE COMPANY, Defendant and Appellant. Civ. 23646.

Page 690

72 Cal.Rptr. 690

267 Cal.App.2d 195

P. E. O'HAIR & CO., a corporation, Plaintiff and Respondent, v. ALLSTATE INSURANCE COMPANY, Defendant and Appellant.

Civ. 23646.

Court of Appeal, First District, Division 4, California.

Nov. 7, 1968.

Rehearing Denied Dec. 3, 1968.

Hearing Denied Dec. 30, 1968.

Bronson, Bronson & McKinnon, San Francisco, for appellant.

John D. St. Clair, Edward J. McFetridge, Hauerken, St. Clair, Zappettini & Hines, San Francisco, for respondent.

DEVINE, Presiding Justice.

The question in this case is whether an activity, described below, constitutes the loading of a truck. If it can be so held, an insurance policy issued by appellant Allstate Insurance Company subjects that company to liability resulting from a certain accident.

Liability Under the Vehicle Policy

P. E. O'Hair & Co., a corporation, has brought this action for declaratory judgment at the behest of its insurer, American Insurance Company, which had issued a general liability policy to O'Hair. Allstate is the insurer of Richard Oppermann, a plumbing contractor, having issued a liability policy covering injuries resulting from the 'use' of his vehicle. The policy further provides that 'use' includes 'loading and unloading' of the vehicle. It also provides that any person using the vehicle with the permission of the named insured is also insured. Thus, O'Hair is insured by the Allstate policy if the vehicle was being used, which means, in this case, if it was engaged in a loading operation when the accident occurred.

On October 14, 1963, Oppermann drove his truck to the premises of O'Hair, a seller of plumbing supplies, and parked at a loading dock at the rear of the building. He walked to the purchasing counter and ordered two or three lengths of four-inch diameter, double hub, soil pipe, five feet in length. Each length of pipe weighed about 45 to 50 pounds. James Keough, an employee of O'Hair, whose duties included the taking and filling of orders, waited on Oppermann as he had done a number of times in the past.

The supply of soil pipe was stacked, pyramid style, approximately 100 feet to the rear of the building. Soil pipe was always kept in the yard, never in the building. Opermann drove his truck from the loading dock to a point between ten and thirty feet from this pile. Each individual section of pipe is bound together by two steel bands. Keough had attempted to take some pipes from the pile before he found that the band had to be cut. Oppermann stated that Keough broke the band on one end with the claw of a hammer. (Keough testified that it had already been cut.) Since the band on the other end of the pipe was still taut, it prevented Keough from removing any pipe. Keough asked Oppermann if he had any 'snips' to cut the steel band; Oppermann replied that he did, got a pair from his truck, and, while standing in front of the pile, cut the band. The pipes were released and fell on Oppermann, causing the injuries for which he seeks recovery in a superior court action.

It was Keough's job to load the pipe onto customers' trucks; however, customers would often assist in this task. Oppermann had done so previously. It was the intention of both Keough and Oppermann that immediately after the band was cut, Keough would place the pipe on Oppermann's truck. Prior to the cutting of the band, nothing had been removed from the pile or had been placed on the truck.

The trial judge decided that under the facts recited above, which were contained in an agreed statement, the accident arose out of the loading of the truck within the meaning of the Allstate policy, and that Allstate was obliged to defend O'Hair as an additional insured and to indemnify O'Hair to the extent of $50,000, the amount of the policy, and to reimburse O'Hair for any costs, expenses and attorneys' fees theretofore incurred because of Allstate's rejection of a tender of defense.

Although the term 'unloading has been construed a number of times in relation to insurance policies, the word 'loading' apparently has not yet been interpreted in this state. There is no doubt, however, that in California the 'complete operations' doctrine has supplanted the more restrictive 'coming to rest' rule. (Entz v. Fidelity & Causalty Co., 64 Cal.2d 379, 383, 50 Cal.Rptr. 190, 412 P.2d 382; Truck Ins. Exch., etc. v. Webb, 256 A.C.A. 157, 162, 63 Cal.Rptr. 791.) The acceptance of the more liberal doctrine in place of the 'coming to rest' theory finds its application in the matter of the termination and not the beginning of a loading or unloading operation. The fact that the more liberal rule is adopted in California (as it has gained acceptance generally (see 95 A.L.R.2d 1129)) is an indication that a liberal, although, of course, reasonable, interpretation ought to be made in favor of the insured as to what constitutes the commencement of a loading operation. This comports not only with the rule that uncertainties in insurance policies are to be resolved against the insurer (Continental Casualty Co. v. Zurich Ins. Co., 57 Cal.2d 27, 32, 17 Cal.Rptr. 12, 366 P.2d 455,) but also with the rule that the 'loading and unloading' clause is one of 'extensions,' that is, the insertion of such a clause in an insurance liability policy leads to the conclusion that it was inserted for the purpose of extending the coverage of the policy to accidents not covered by the other provisions of the standard motor vehicle liability policy. (American Auto. Ins. Co. v. American Fidelity & Casualty Co., 106 Cal.App.2d 630, 235 P.2d 645.)

Before passing from the rules of interpretation set forth above to their application to the facts, we remark that although insurance is present in this case (Oppermann had automobile liability insurance, O'Hair had premises liability insurance), we must decide the single question whether O'Hair is an additional insured under the Allstate policy. The principle involved is the same as if a person who did not participate in the operation, a passerby, were injured by the falling pipe. (Such an unfortunate accident happened to a school girl in an unloading operation, as described in American Auto. Ins. Co. v. Transport Indem. Co., 200 Cal.App.2d 543, 19 Cal.Rptr. 558.) Let us suppose that in such a case the only parties able to respond to a judgment were the owner of the vehicle and his insurer: would the operation constitute 'loading' within the meaning of the vehicle owner's insurance policy?

We remark, too, that although the action of Oppermann, the named insured, in bringing the lawsuit against an unnamed party, O'Hair, as an additional insured, seems at first blush incongruous, such action is supported by authority. (Travelers Ins. Co. v. Norwich Union Fire Ins. Society, 221 Cal.App.2d 150, 34 Cal.Rptr. 406.)

We support the trial court's conclusion that the accident arose out of loading of the truck within the meaning of the Allstate policy. Our reasons are:

1. It is said in the agreed statement that it was the job of Keough to load the trucks of customers. It is a fair, if not inescapable inference that when Keough went to the pile of pipes he was going about his job of loading them. Oppermann, in assisting Keough, was then engaged in the same operation.

2. Nothing remained in the performance of the transaction except the loading. The sale had been made. No preliminary steps, such as selection of merchandise, measuring, weighing, or the like were to be accomplished.

3. The fact that the soil pipe was always kept in the yard and never in the building tends to show no preparatory steps were to be performed at any distance. Indeed, there is nothing in the agreed statement to show that any preparatory steps, such as cutting the pipe to length, were ever performed in the yard.

4. While Keough proceeded to the place where the pipe was stacked, Oppermann drove his truck to a place close to the pile. Thus, both vehicle and the man (Keough) who was charged with the duty of loading proceeded toward the same place.

5. The snips with which the cut was made were carried in the vehicle.

6. Direct motions toward transportation of the pipe were made by both men. It is agreed that Keough attempted to move the pipe. If motion of the pipe itself be required actual motion was caused by the severing of the band. Although the motion took a direction which was not intended, since the pipe fell on Oppermann, nevertheless the process of cutting the steel band was intended to, and did cause the pipes to be moved as part of the plan of both men to lift them into the truck.

The combination of all of these factors constitutes 'loading.'

The case of Spurlock v. Boyce-Harvey Machinery (La.App.) 90 So.2d 417, is one in which the accident occurred when wire bands binding bundles of grader blades were severed, and the operation was held to be 'loading.' It is true that one bundle had been loaded. We do not regard this distinction as significant. The intention of the parties to the case before us certainly was to load the vehicle. The fact that the pack was not a second bundle does not seem important. In fact, in the Spurlock case, there was a preparatory step still to be performed on the second bundle, that is, tagging the blades. In the case before us, no such preliminary step was contemplated. We do not regard the case of General Accident Fire & Life Assur. Corp. v. Jarmuth, 32 Misc.2d 424, 150 N.Y.S.2d 836, to be persuasive. In that case, the driver of the insured automobile went to a public garage to pick up his car. While awaiting its arrival he set down two pieces of luggage he intended to load into the car. An employee of the garage fell over the bags. The court held that the 'complete operation' of loading the bags had not yet commenced. We have some doubt that the case would have been decided in the same way in this state. (See criticism of it as having minimized the causal factor in American Auto. Ins. Co. v. Master Bldg. Supply & Lumber Co., D.C., ...