Pennsylvania Manufacturers' Ass'n Ins. Co. v. Aetna Cas. & Sur. Ins. Co.
| Decision Date | 26 September 1967 |
| Citation | 233 A.2d 548,426 Pa. 453 |
| Parties | PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY v. AETNA CASUALTY AND SURETY INSURANCE COMPANY, Appellant. |
| Court | Pennsylvania Supreme Court |
T E. Byrne, Jr., Philadelphia, Robert K. Wood, Michael E Quinlan and Krusen, Evans and Byrne, Philadelphia, of counsel, for appellant.
Joseph H. Foster, White & Williams, Philadelphia for appellee.
Before BELL, C.J., and MUSMANNO, JONES, EAGEN, O'BRIEN and ROBERTS, JJ.
The instant appeal presents a dispute between two insurance companies over the interpretation of the word 'insured' in the employee exclusion of the Standard Automobile Insurance Policy. The appeal is from the grant of plaintiff's motion for judgment on the pleadings.
The facts are as follows: Plaintiff-appellee, Pennsylvania Manufacturers Association Insurance Company (PMA), issued a standard automobile bodily injury liability policy to Harry B. Niehaus, Jr. (Niehaus), as well as a separate workmen's compensation policy. Defendant-appellant, Aetna Casualty and Surety Insurance Company (Aetna) insured Delaware Valley Wool Scouring Company (Delaware) for comprehensive bodily injury liability. Aetna's policy with Delaware provided that if the insured (Delaware) had other insurance against a loss covered by the policy, the Delaware policy should be excess insurance where the loss arises out of the use of any non-owned automobile. Since the PMA policy, if Delaware is insured under it, is sufficient to cover the claim, which does arise out of the use of a non-owned automobile, the question becomes whether Delaware is insured under the PMA policy.
The accident occurred on September 23, 1963, at which time Clyde A. Skinner (Skinner), a driver of a Niehaus truck, was injured. He had driven the truck to Delaware's premises, where a Delaware employee, Arthur C. Scott, in the course of his employment, negligently operated a Delaware-owned fork-lift in unloading the Niehaus truck, and thereby injured Skinner.
Skinner instituted suit against Delaware in the Court of Common Pleas of Philadelphia County. By agreement, PMA undertook the defense, and settled prior to trial for $37,500. The agreement between PMA and Aetna provided that the defense was assumed on condition that the two companies would submit the question of liability to the court as one of law.
Both Aetna and PMA agreed that Delaware became PMA'S insured under the PMA policy's 'omnibus clause'. That clause provided insurance for bodily injury 'arising out of the * * * use of the automobile.' The unloading of the Niehaus truck was an insured use of the truck.
The question for this court is limited to whether the employee exclusion clause of the PMA policy excludes liability to an employee of Niehaus, the named insured, in an action against Delaware, the omnibus-insured. Exclusion (d) provides that the policy does not apply: '* * * to bodily injury * * * of any employee of the Insured * * *' (Emphasis added). The dispute centers upon the meaning of 'insured'. Appellee, PMA, contends that the exclusion applies, pointing to the definition of Insured in the policy:
Aetna, on the other hand claims that 'insured' in the employee exclusion must be confined to mean the particular insured claiming coverage, here Delaware. Since Skinner is not an employee of Delaware, the exclusionary clause would be inoperative, and PMA would be liable under the policy.
The court below held that employees of the named insured fall within the employee exclusion and accordingly found for the plaintiff, PMA. We affirm that decision.
Appellant, Aetna, as we have pointed out, feels that 'insured' in the employee exclusion clause must be read as 'insured being sued'. It bases such a view on its interpretation of the 'Severability of Interests' clause inserted into the Standard policy in 1955, stating that 'the term 'the insured' is used severally and not collectively.' Aetna relies heavily on the interpretation of that clause by certain members of the insurance industry who were instrumental in its adoption.
We are not swayed by those views, for several reasons. In the first place, it is doubtful that these industry spokesmen were really placing great emphasis upon the severability of interests clause, for they had adhered to the same interpretation even before that clause was added. We might point out here that it is somewhat incongruous that Aetna should rely so heavily on authorities for whom the severability of interests clause is practically irrelevant, and at the same time place much emphasis on subtle differences of language between the instant clause and that in Great Am. Ins. Co. v. St. Farm Mut. Ins. Co., 412 Pa. 538, 194 A.2d 903 (1963).
Moreover, we have little fear of the chambers of horrors conjured up by Norman Risjord, Aetna's chief authority. He seems to feel that a holding here that 'insured' does indeed include the named-insured will have serious repercussions in several other areas of automobile insurance law. Such an ominous reading of this decision would indeed, as Aetna says fail to give effect to all of the terms and conditions of the PMA policy, thus violating accepted criteria for contract interpretation. However, appellant misreads the impact of the lower court decision here. 'The insured' has Not been interpreted to mean 'an insured' or 'any insured'. It has merely been interpreted as the language dictates, to include the named insured. Only under appellant's hypothetical interpretation is the assault and battery condition rendered meaningless, or the cooperation condition, or the reporting requirement mutilated. Consider for instance the cooperation condition: 'The insured shall cooperate with the company * * *.' A holding that insured includes the named insured surely cannot have adverse effects. Even if it were to be held that insured also includes a driver who does not cooperate, this does not preclude recovery for the named insured, for the very reason that the 'Severability of...
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