Richfield Oil Corp. v. Harbor Ins. Co., 5556

• Decision Date: 31 March 1969
• Docket Number: No. 5556,5556
• Citation: 452 P.2d 462,85 Nev. 185
• Parties: RICHFIELD OIL CORPORATION, a foreign corporation, and Humphrey, Inc., Appellants, v. HARBOR INSURANCE COMPANY, and Hartford Accident and Indemnity Company, Respondents.
• Court: Nevada Supreme Court

Page 462

452 P.2d 462

85 Nev. 185

RICHFIELD OIL CORPORATION, a foreign corporation, and Humphrey, Inc., Appellants, v. HARBOR INSURANCE COMPANY, and Hartford Accident and Indemnity Company, Respondents.

No. 5556.

Supreme Court of Nevada.

March 31, 1969.

Elwin C. Leavitt, Las Vegas, for appellants.

Foley Brothers, Singleton, DeLanoy, Jemison & Reid, and George W. Johnson, Las Vegas, for respondents.

OPINION

WILKES, District Judge.

Prior to the event upon which this action is based Respondent HARBOR INSURANCE COMPANY had issued a fire insurance policy to Pacific Fruit Express Company covering Pacific's building in Las Vegas, Nevada. After the building burned HARBOR paid Pacific FIVE THOUSAND SEVEN HUNDRED EIGHT DOLLARS AND SIX CENTS ($5,708.06) for the loss. HARBOR was subrogated to the rights of Pacific by an agreement and instituted this action against RICHFIELD OIL CORPORATION, FRED HUMPHREY and others alleging negligence.

RICHFIELD and HUMPHREY answered HARBOR and also filed a Third Party Complaint wherein HARTFORD ACCIDENT AND INDEMNITY COMPANY was named as Third Party Defendant. HARTFORD answered this Complaint. RICHFIELD and HUMPHREY asserted that if liability was established the responsibility to respond in damages was that of HARTFORD, and not HARBOR.

On August 17, 1964, George Evans, an employee of Bilt-Rite Construction Company, while acting within the scope of his employment, drove a pick-up truck along-side the loading dock at Richfield's Bulk Plant in Las Vegas, Nevada, for the purpose of making a purchase of a petroleum product. The plant was being operated by HUMPHREY, INC., a commission agent of RICHFIELD. Mr. Bernard Spink, the plant manager of HUMPHREY, was there to serve customers at the time and was in charge of the bulk plant. He set about to take care of Bilt-Rite's needs.

Spink commenced the process of transferring a petroleum product from a gasoline drum on the dock into another such barrel situated in the truck. As he removed the bung from the drum on the dock the product spewed up and out of the drum showering Spink and the area. Spink immediately ran along the dock to a small gasoline powered engine and was seen to extend his finger to the engine at which time a 'whoof' occurred. Spink and the immediate area were engulfed in flames which soon spread. Richfield's plant was destroyed and Pacific's building on some adjacent ground was also burned.

The gasoline powered engine was used to power a transfer pump which in turn was used to transfer liquid petroleum products from drum to drum at the bulk plant. The small engine was stopped by pressing a metal strap to the spark plug as is commonly the case with gasoline powered lawn mowers. When this is done a spark is or may be produced.

Appellants complain that HARBOR has not met the burden of establishing negligence on the part of Appellants. We feel that this assignment of error is without merit.

The Court has repeatedly held that where a question of fact is left to the determination of the trial court, the appellate court will not interfere with the trial court's determination if there is substantial evidence to support it. Austin v. Smith, 73 Nev. 155, 311 P.2d 971 (1957); Cram v. Wes Durston, Inc., 68 Nev. 503, 237 P.2d 209 (1951); Fialkoff v. Nevil, 80 Nev. 232, 391 P.2d 740 (1964); Miller v. Schnitzer, 78 Nev. 301, 371 P.2d 824 (1962); Foster v. Bank of America, 77 Nev. 365, 365 P.2d 313 (1961). Nor in cases tried without a jury will the Supreme Court substitute its judgment for that of the trial judge as to the weight given to the evidence. Gersenhorn v. Walter R. Stutz Enterprises, 72 Nev. 293, 304 P.2d 395, 306 P.2d 121 (1956).

In this case there was evidence that the bulk plant was a flammable area; that the gasoline engine is a spark producing device; that a spark producing device used in a flammable area can cause ignition at any time; that the use of a portable gasoline driven transfer pump in a flammable area is not an accepted procedure; that the pump was stopped by pressing a piece of metal on top of the spark plug which generated a spark; that upon the petroleum product spewing out of the drum Appellant's agent Bernard Spink was seen to immediately run to the gasoline driven engine and extend his finger to the same at which time there occurred a 'whoof' resulting in the area becoming engulfed in flames; that a spark is being generated in a gasoline engine at all times and is capable of producing a spark at any time which can ignite vapors. This is but a part of the total evidence. The trial court's finding of negligence is supported by substantial evidence. We will not disturb this finding.

Appellants next contend that they are not liable in this case for the reason that HARTFORD is primarily liable under the loading and unloading clause of its policy of automobile insurance ¹ issued to Bilt-Rite Construction Company and which provided coverage for the pick-up truck.

Two doctrines have evolved concerning the construction to be given the phrases 'arising out of the * * * use' and 'loading and unloading.' Wagman v. American Fidelity & Casualty Company, 304 N.Y. 490, 109 N.E.2d 592 (1952).

By the more narrow construction, referred to as the 'coming to rest' doctrine, 'unloading' has been held to embrace only the operation of taking the goods from the vehicle to a place of rest out of the vehicle. 'Loading' would embrace only the operation of taking the goods from a place of rest to the place of rest within or on the vehicle. Stammer v. Kitzmiller, 226 Wis. 348, 276 N.W. 629 (1937); American Casualty Co. v. Fisher, 195 Ga. 136, 23 S.E.2d 395, 144 A.L.R. 533 (1942).

The majority of the courts have adopted a broader construction and have held that the phrases in question comprehend not only the immediate transfer of the goods but also that any occurrence during, or arising out of the, process is covered. Raffel v. Travelers Indemnity Co., 141 Conn. 389, 106 A.2d 716 (1954); American Auto. Ins. Co. v. Master Bldg. Supply & Lbr. Co., 179 F.Supp. 699 (D.C.Md.1959); Spurlock v. Boyce-Harvey Machinery, Inc., 90 So.2d 417 (La.App.1956); Allstate Ins. Co. v. Valdez, 190 F.Supp. 893 (D.C.Mich.1961); Wagman v. American Fidelity & Casualty Company, supra; August A. Busch & Co. of Mass. v. Liberty Mut. Ins. Co., 339 Mass. 239, 158 N.E.2d 351 (1959); See also, Annot., 95 A.L.R.2d 1114, 1134.

Whether adopting one of the specific theories described above, or speaking to the individual circumstances of an accident or injury, the decisions in this area almost universally refer, at least implicitly, to the need for some causal relationship between the unloading process and an accident or injury before coverage under a policy exists. American Auto. Ins. Co. v. American Fidelity & Cas. Co., 106 Cal.App.2d 630, 235 P.2d 645 (1951); Raffel v. Travelers Indemnity Co., 141 Conn. 389, 106 A.2d 716 (1954); Nichols & Co. v. Travelers Ins. Co., 343 Mass. 494, 179 N.E.2d 593 (1962); See also, Annot., 95 A.L.R.2d 1114, 1146.

When these decisions are examined closely it can be seen that the causal relation requirement is actually only another means of, or a part of, any interpretation of the scope of coverage since it means some connection must exist between the accident or injury and some 'use', more specifically the 'loading' or 'unloading' as the case may be, of the insured vehicle. Johnson, Drake & Piper, Inc. v. Liberty Mutual Insurance Co., 258 F.Supp. 603 Co., 258 F.Supp. 603 (D.C.Minn.1966).

Thus, while a causal relation rule or test may appear simpler and more precise than the wide confusion and divergence generated by the choice between the variations of the 'coming to rest' and 'complete operation' rules, the decisions employing or emphasizing this factor have generally merely found another term to define besides 'loading' or 'unloading'. Probably the recent emphasis on the casual relation factor results from a desire to avoid the inconsistency in the case law as regards 'loading-unloading' clauses. Unfortunately, the product of these attempts has been an equally wide divergence among the authorities as to what constitutes a causal relation or a sufficient causal relation, i.e., those jurisdictions wishing to establish broad coverage under 'loading-unloading' clauses require little in the way of causal relation and those jurisdictions favoring a narrow scope of coverage seek more definite causal relation. Johnson, Drake & Piper, Inc. v. Liberty Mutual Insurance Co., supra.

Even though the cases favoring a narrow scope of coverage find such coverage only if the loading or unloading is the 'efficient and predominating cause of the accident or injury' or is 'an active factor' in causing the loss or there is absent 'some indpendent factoor or intervening cause wholly disassociated with and remote from the use of the truck' it is generally conceded that the issue of causal relation is not one of proximate cause as in tort law, or whether the vehicle 'caused' the accident or injury, but one in the field of contract law, i.e., coverage under the wording of an insurance policy. St. Paul Mercury Ins. Co. v. Huitt, 336 F.2d 37 (6th Cir. 1964); Travelers Ins. Co. v. Employers Cas. Co., 380 S.W.2d 610 (Tex.1964); Johnson, Drake & Piper, Inc. v. Liberty Mutual Insurance Co., supra.

It thus appears to this court that the 'loading and unloading' clause is a phrase of extension of the...