Sam Finley, Inc., for Use and Benefit of Fidelity & Cas. Co. of N. Y. v. Standard Acc. Ins. Co.

• Decision Date: 27 July 1956
• Citation: 295 S.W.2d 819,41 Tenn.App. 417
• Parties: SAM FINLEY, INC., for the use and benefit of FIDELITY AND CASUALTY COMPANY OF NEW YORK v. STANDARD ACCIDENT INSURANCE COMPANY.
• Court: Tennessee Court of Appeals

Page 819

295 S.W.2d 819

41 Tenn.App. 417

SAM FINLEY, INC., for the use and benefit of FIDELITY AND CASUALTY COMPANY OF NEW YORK v. STANDARD ACCIDENT INSURANCE COMPANY.

Court of Appeals of Tennessee, Middle Section, at Nashville.

July 27, 1956.

Rehearing Denied Aug. 31, 1956.

Certiorari Denied by Supreme Court Dec. 7, 1956.

Allen R. Cornelius, Jr., Nashville, for plaintiff.

Hume, Howard, Davis & Boult, Edwin F. Hunt, Nashville, for defendant.

SHRIVER, Judge.

The parties will be referred to as they appeared in the Court below.

I

This suit involves the question of coverage under a policy of liability insurance. Complainant, a highway contractor, brought suit for the use and benefit of Fidelity and Casualty Company of New York, to recover contribution from Standard Accident Insurance Company toward the amount paid and expenses incurred by Fidelity and Casualty in settlement of claims arising out of an explosion that occurred during the unloading of asphalt from a railroad tank car, by employees of complainant.

The contractor had insurance policies in both companies but the Chancellor held that defendant's policy did not render it liable and dismissed the bill.

Complainants appealed.

II Assignments of Error

There are six assignments of error but, taken together, they simply assert that the Chancellor erred in finding that the policy in question provided coverage only for liability arising out of an accident occurring on premises owned, rented or controlled by the insured, or the ways immediately adjoining those premises; and if the coverage was so restricted, in holding that the accident did not occur on premises owned, rented or controlled by the insured.

The fifth and sixth assignments of error are too general for us to consider, since they only assert that the Lower Court was in error in finding that the defendant was not liable under the insurance policy in question and erred in dismissing complainant's bill.

III

Counsel for defendant, in his brief and argument states his position as follows:

'By the terms of its policy, Standard is not liable for accidents in connection with the use of automobiles while away from premises owned, rented or controlled by Sam Finley, Inc., the named insured, and the accident here involved occurred in connection with the use of automobiles while away from such premises.'

He states as a further defense that Standard's policy expressly excepts property damage to automobiles from coverage, and that it does not apply to damage occurring from, or as an incident to, the loading or unloading of motor vehicles.

IV The Facts

Complainant, Sam Finley, Inc., was engaged in highway construction work on two projects in Montgomery County, Tenn., at the time of the accident in question.

Complainant also operated an asphalt plant and stone quarry situated about eight miles southeast of Clarksville, and, in connection with its operations, was insured under two insurance policies, to wit, Policy No. A22259, issued by defendant, Standard Accident Insurance Co., which provided general liability coverage for accidents occurring 'On premises owned, rented or controlled' by the insured, and Policy No. XA18187, issued by the Fidelity and Casualty Company of New York, which was an automobile liability policy.

Fidelity and Casualty admitted liability under its policy and, after suit was brought against complainant, effected a settlement with third parties who were claimants by reason of the accident in question.

Under Standard's policy, coverage for bodily injury liability is subject to an exclusion by endorsement 1910, contained in said policy, which exclusion, with omissions not relevant to the present controversy, reads as follows:

'It is agreed that the policy does not apply under coverage A * * * (1) to the ownership, maintenance or use of automobiles while away from premises owned, rented or controlled by the named insured or the ways immediately adjoining. * * *.'

The word 'automobile' is defined by the policy as 'a land motor vehicle or trailer'.

Coverage B of Standard's policy is for 'Property Damage Liability--Automobile--'none", Sam Finley, Inc. as insured did not carry this coverage.

Coverage 'C' of Standard's policy is for 'Property Damage Liability--Except Automobile'. This coverage is subject to an exclusion (IV, e) in the body of the policy, which exclusion, with omissions not relevant to the present controversy, provides:

'This policy does not apply * * * (e) under coverage C * * * to automobiles while away from premises owned, rented or controlled by the named insured or the ways immediately adjoining, or the loading or unloading thereof.'

Sam Finley, Inc., as insured, carried coverage 'C' subject to the quoted exclusion.

At the time in question, complainant was taking team track delivery of railroad tank cars on a track in the yard of the Tennessee Central Railway near Clarksville, Tenn. Complainant did not have any contract or industrial track agreement covering such yard or siding.

It is shown by the proof that team tracks, as distinguished from industrial tracks, are part of the facilities owned by railroads and available to all members of the shipping public. These team tracks are analogous to freight depots in that they bear the same relation to carload freight that such depots bear to less than carload freight. Such tracks are owned, operated and maintained by the railroad carrier.

The team track on which the complainant received delivery was frequented by the trucks of complainant several times a day and complainant kept a tank car heater and booster there. Workmen of Sam Finley, Inc. started work from this yard or siding, which was used by complainant for a period of about twelve months. Said siding, or team track, was several miles distant from the asphalt plant and stone quarry operated by complainant, and was a substantial distance from the road project of complainant in Montgomery County.

At the time in question, employees of complainant were unloading cutback asphalt from a railroad tank car, and said liquid asphalt was being loaded into a transport truck with a tank truck distributor being used as a pump to convey the material into the tank truck.

The distributor truck and the transport truck were parked side-by-side along the railroad track, the distributor truck being about six feet from the railroad tank car, and the transport truck about four feet from the distributor.

While this operation was proceeding, there was an explosion which blew out the front of the tank truck and hurled flaming liquid asphalt out over the surrounding area.

In this accident, Mrs. Carter Baggett, who resided near by, sustained personal injuries, and the owner of the property and the woman's husband sustained damages.

The automobile insurer, Fidelity and Casualty Company of New York, admitted liability under its policy and comprised and settled the claims of Mrs. Baggett and the others.

Defendant Standard Accident Insurance Company denied liability under its policy but did not question the reasonableness of the amounts paid in settlement by Fidelity and Casualty.

The record shows that the distributor, which was used as a pump to convey the material from the tank car to the vehicles of complainant, was 'a tank and pump mounted on a truck'. Both the transport truck and the distributor truck were used to transport asphalt from the railroad cars to a storage tank some distance away, and complainant's witnesses, Haskins, Bowder and Gulledge...