Pullen v. Employers' Liability Assur. Corp.

• Decision Date: 07 May 1956
• Docket Number: Nos. 41919,41920,s. 41919
• Citation: 89 So.2d 373,230 La. 867
• Parties: Mrs. Vola Evelyn PULLEN v. The EMPLOYERS' LIABILITY ASSURANCE CORPORATION, Ltd., et al. In re V. J. MITCHELL Applying for Certiorari or Writ of Review, Parish of Orleans. In re Mrs. Vola Evelyn PULLEN Applying for Certiorari or Writ of Review, Parish of Orleans.
• Court: Louisiana Supreme Court

Page 373

89 So.2d 373

230 La. 867

Mrs. Vola Evelyn PULLEN v. The EMPLOYERS' LIABILITY ASSURANCE CORPORATION, Ltd., et al. In re V. J. MITCHELL Applying for Certiorari or Writ of Review, Parish of Orleans In re Mrs. Vola Evelyn PULLEN Applying for Certiorari or Writ of Review, Parish of Orleans.

Nos. 41919, 41920.

Supreme Court of Louisiana.

May 7, 1956.

Rehearing Denied June 29, 1956.

Joseph A. Gladney, Baton Rouge, Amos L. Ponder, Jr., Simon & Wicker, Warren M. Simon and Thomas C. Wicker, Jr., New Orleans, for petitioners.

Montgomery, Barnett, Brown & Sessions and Cicero C. Sessions, New Orleans, for intervenor and appellant.

Porteous & Johnson, Wm. A. Porteous, Jr., Parnell J. Hyland, Weiss & Weiss and S. Paul Weiss, Jr., New Orleans, amici curiae.

Deutsch, Kerrigan & Stiles, New Orleans, for defendant-respondent.

WATKINS, Justice ad hoc.

This proceeding, which calls for the interpretation of certain provisions of a policy of public liability insurance, arises from an action in tort, in response to which exceptions of no cause of action and no right of action were filed. Hence, it is before us upon the basis of the allegations of fact shown by the pleadings and the accompanying documents, which disclose the pertinent factual situation hereinafter set out.

L. Edward Pullen was engaged as a truck driver for Southern Equipment and Tractor Company (hereinafter referred to as Southern) on April 14, 1952, and in the course and scope of his employment was helping in loading a dragline onto a motor truck. V. J. Mitchell had traded in the dragline on the purchase of new equipment from Southern and, at the latter's request, was helping to load it onto the truck. Mitchell was operating the dragline in the act of loading, and when the boom came into contact with a high tension electric wire Pullen was electrocuted. It is alleged that Mitchell was an independent contractor and that his engligence was the cause of Pullen's death.

At the time of the accident a policy of public liability insurance written by the Employers' Liability Assurance Corporation, Ltd. (hereinafter referred to as Employers') was in force and affected the dragline (which was included in the policy definition of automobile) and insured Southern, and also (under the omnibus clause) any persons using it with the permission of such named insured, against bodily injury to a maximum of $100,000 for each person (coverage A). The workmen's compensation insurer of Southern at that time was Maryland Casualty Company (hereinafter referred to as Maryland), which was also the public liability insurer of Mitchell, the applicable limit of its policy being $10,000.

The widow of Pullen instituted this action against Mitchell (the alleged tort feasor) and Employers' (assertedly the public liability insurer under the omnibus clause of its policy issued to Southern) to recover damages for the death of her husband.

Mitchell denied liability and called in warranty his codefendant, Employers', invoking the additional insured provisions of the mentioned omnibus clause of the latter's policy in which Southern was the named insured. Maryland intervened in the suit, claiming indemnification from Employers' for workmen's compensation payments required of it on account of Pullen's death. Employers' filed exceptions of no cause or right of action to (a) plaintiff's petition, (b) Mitchell's call in warranty and (c) Maryland's petition of intervention.

The District Judge sustained the exceptions and rejected all demands made against Employers'. Appeals to the Court of Appeal, Orleans Circuit, resulted in an affirmance of the judgment. See 72 So.2d 353.

On the applications of plaintiff and Mitchell certiorari was granted to review the judgment, largely because the important question involved is res novo in the jurisprudence of this state.

The theory of the demands of plaintiff, of Mitchell and of Maryland as against Employers' is that Mitchell, the tortfeasor, is an additional insured under the omnibus coverage of the liability policy, as follows:

'Definition of 'Insured'.

'The unqualified word 'insured' includes the named insured and also includes * * * (2) * * * any 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. * * *.'

No question is raised by Employers' under the exceptions as to the defendant Mitchell being an insured under the provisions of the omnibus clause of its liability policy. Hence, for the purposes of the exceptions, he was under the coverage of the policy and was insured by Employers' against liability for damages.

Defending under the exceptions of no cause of action, and directing attention to the admitted fact that the decedent Pullen was an employee of (and acting within the scope of his employment with) Southern when the accident occurred, Employers' invokes and relies on certain exclusions, the interpretation of which is the crucial point in the case, defined in the policy as follows:

'This policy does not apply:

'* * *

'(c) under Coverages A and B * * * to any obligation for which the insured or any company as his insurer may be held liable under any workmen's compensation law;

'(d) under Coverage A, to bodily injury to or sickness, disease or death of any employee of the insured while engaged in the employment * * * of the insured * * *.'

To such defense the plaintiff, Mitchell and Maryland respond that the exclusions 'mean simply that coverage is denied only as to injury to or death of an employee of the insured against whom liability therefor is sought to be imposed', and that since the decedent Pullen was not in the employment of Mitchell, the omnibus insured and the tort feasor from whom damages are demanded herein, the exclusions are inapplicable.

Thus, the only question raised by the exceptions involves the interpretation of the exclusion clause. That question is whether the defendant Mitchell is 'the insured' referred to in that clause as the insured who is excluded from coverage, or, to put it more precisely, from whom coverage is withdrawn, by the provisions thereof.

For the sake of certainty in delineating the problem to be resolved, we refer to the judgment of the appellate court, which accurately states the issue, as well as its position and that of the parties, 72 So.2d 353, 355, as follows:

'Appellants contend that whereas the claim arose by virtue of the fault of an omnibus insured, properly construed, the word 'insured' where it occurs in the exclusions should be treated as referring to the person to whom the omnibus coverage clause applies and not to the named insured, and therefore it should be taken to refer solely to Mitchell. They argue, consequently, that since Pullen was not in the employ of Mitchell and that as Mitchell was not liable for any workmen's compensation benefits, the exclusions relied upon by appellee have no application and the omnibus coverage afforded Mitchell is unaffected thereby.

'An examination of the policy leads to the conclusion that it is not open to such a construction as appellants contend for. The contract states specifically and unambiguously that 'the unqualified word 'insured' includes the named insured.' To hold for appellants would necessitate striking out of the policy such quoted language of the insuring agreements. (Italics ours.)

'Such definition of the 'insured' in the omnibus clause has the effect of placing the persons covered by the omnibus clause in exactly the same position as the named insured, and subject to all of the conditions of the policy as they would apply to the named insured, and subject to all the limitations upon coverage set forth in the policy. * * *'

It will be observed that the court made specific reference to the language of the omnibus clause in construing the meaning and import of the word 'insured' in the exclusion clause.

The liability policy, the omnibus clause and the exclusion clause were clearly designed for certain express purposes. They evince such purposes by their very nature, viz.:--the policy is intended to offer protective coverage, the omnibus clause to describe its extent, and the exclusion clause to define its limitations. And each should be construed in the light of its objects and purposes.

The omnibus clause states with unmistakable certainty that 'the unqualified word 'insured' includes the named insured', but it also states with equal certainty that it includes the omnibus or additional insured. Thus, the word 'insured' relates not only to the named insured, but also to the omnibus insured. Indeed, it can be said to cover, comprehend, include and refer to every character of insured covered or intended to be covered by the policy, whether the named insured, the omnibus insured, the additional insured, or any other insured.

The omnibus clause, by its own term and title and its use of the word 'includes', indicates extensiveness and comprehensiveness and an evident purpose and intent to refer to any and every person entitled to protection under the policy. It draws no distinctions except as shown by the selfevident fact that the named insured and the omnibus insured are separate and distinct persons. It defines no relationship other than that the named insured and the omnibus insured are both included under the coverage of the same liability policy. It describes and identifies no particular insured, because there is nothing in the word 'insured' as used in the clause that indicates, or even suggests, a specific reference to the named insured or any other insured. The omnibus clause, in the sense in which it uses the unqualified word 'INSURED', MAKES POTENTIAL REFERENCE TO every insured, and thus evidences...