Ryder Truck Rental, Inc. v. Guaranty Nat. Ins. Co., 85CA0386

• Decision Date: 02 February 1989
• Docket Number: No. 85CA0386,85CA0386
• Citation: 770 P.2d 1380
• Parties: RYDER TRUCK RENTAL, INC., a Florida corporation, Plaintiff-Appellee, v. GUARANTY NATIONAL INSURANCE COMPANY, Defendant-Appellant. . IV
• Court: Colorado Court of Appeals

Page 1380

770 P.2d 1380

RYDER TRUCK RENTAL, INC., a Florida corporation, Plaintiff-Appellee, v. GUARANTY NATIONAL INSURANCE COMPANY, Defendant-Appellant.

No. 85CA0386.

Colorado Court of Appeals,

Div. IV.

Feb. 2, 1989.

Hall & Evans, Barbara A. Duff, Richard A. Hanneman, Denver, for plaintiff-appellee.

Watson, Nathan & Bremer, J. Andrew Nathan, Denver, for defendant-appellant.

KELLY, Chief Judge.

In this declaratory judgment action brought by Ryder Truck Rental, Inc., the defendant, Guaranty National Insurance Company, appeals the trial court's adverse judgment. The trial court concluded that all conditions precedent to coverage had been met and interpreted the policy to require Guaranty to indemnify or defend Ryder in a lawsuit filed in Louisiana by Alfred Daniel Williams. We affirm.

Ryder owned vehicles which it leased to Merchant's Dutch Express pursuant to a truck lease and service agreement which specified that vehicle maintenance was to be performed by Ryder. The lease also stated that Merchant's would provide direct primary liability coverages for Ryder with respect to the ownership, maintenance, use, or operation of the leased vehicles. Pursuant to this provision, Merchant's purchased a trucker's liability policy from Guaranty, the provisions of which are here in dispute. The policy contained an endorsement naming Ryder as an additional insured.

During the policy period, Alfred Daniel Williams, an employee of Merchant's, was in a one-vehicle accident in Texas in which he sustained personal injuries. Nearly a year later, Ryder was served with a summons and complaint in an action in which Williams sought recovery for his personal injuries based on allegations of Ryder's negligent maintenance of the truck. Within a week thereafter, Ryder notified Guaranty of this lawsuit. Guaranty, however, had not been previously notified by Ryder or by Merchant's of the occurrence of the accident.

Guaranty declined to afford Ryder either indemnity or a defense, claiming that all conditions precedent to coverage had not been met, and that an endorsement to the policy under which Ryder was named as an additional insured limited the coverage for Ryder to imputed liability only. On these two issues, the trial court ruled that the policy did not require Ryder to give notice of the occurrence of the accident and that the endorsement to the policy does not limit the policy terms so as to restrict Ryder's coverage to imputed liability. We agree with these rulings.

I.

Guaranty contends that it is relieved of its responsibilities to Ryder under the policy and the policy endorsement because Ryder failed to notify the company of the occurrence of the accident. We disagree.

Under this policy, two types of notice are required to be given to the company: notice of the occurrence of the accident or loss, and notice of the commencement of litigation in connection with the accident or loss. Under the plain language of the policy, only the named insured, Merchant's, is required to notify the company of the accident or loss. An "other involved insured" is required immediately to forward, to Guaranty, notices or legal papers received in connection with the accident or loss.

Part VII.A of the policy issued by Guaranty states in relevant part:

"1. You must promptly notify us or our agent of any accident or loss. You must tell us how, when and where the accident or loss happened. You must assist in obtaining the names and addresses of any injured persons and witnesses.

2. Additionally, you and other involved insureds must:

....

b. Immediately send us copies of any notices or legal papers received in connection with the accident or loss." (emphasis in original indicating terms defined elsewhere in the policy)

It is undisputed that the word "you" in the policy refers to Merchant's Dutch Express, the named insured. Accordingly, Ryder, being an "other involved insured," fulfilled its obligation when it notified Guaranty of the lawsuit immediately after service upon it.

Guaranty argues, nevertheless, that the failure of Merchant's to notify it of the accident precludes coverage for Ryder. We disagree.

Part I.F of the policy provides that "the insurance afforded applies separately to each insured who is seeking coverage or against whom a claim is made or suit is brought." This severability-of-interest clause protects Ryder against Merchant's failure to give notice of...