Sears, Roebuck & Co. v. Hartford Acc. & Indem. Co.
| Decision Date | 20 June 1957 |
| Docket Number | No. 33431,33431 |
| Court | Washington Supreme Court |
| Parties | SEARS, ROEBUCK AND CO., a corporation, Appellant, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, a corporation, Respondent. |
Elliott, Lee, Carney & Thomas, Seattle, for appellant.
George H. Bovingdon, Seattle, for respondent.
Sears, Roebuck and Co., a New York corporation, hereinafter referred to as Sears, operates a downtown retail store in Seattle, fronting on Utah street.
Hartford Accident and Indemnity Company, hereinafter referred to as Hartford, is a Connecticut corporation, and, in the course of its business, issues public liability policies.
Sears maintains parking lots in the immediate area for the use of its customers, including a large lot immediately east of and across Utah street from its store building. Surrounding this particular lot is a concrete sidewalk owned by the city. Sears has blacktopped this entire lot inside the sidewalks, including a two-food strip of property adjacent thereto, which is also owned by the city.
Sears issues licenses to concessionaires to locate in this parking lot and sell their products. In 1945, such a license was issued to Cosmo B. Rockey, hereinafter referred to as Rockey, to locate and operate a refreshment stand at a specific place in the parking lot. As part of that license, Rockey was to
'* * * keep and maintain the space subject of the license and the adjoining and surrounding areas of said parking lot clean and free from debris, refuse and/or other extraneous material that may be occasioned by the operations of Second Party [Rockey] or the presence of patrons of Second Party in said area.'
Furthermore,
Rockey had insurance coverage with Hartford, and, for added consideration furnished by him, Hartford issued a policy of liability insurance in which C. B. Rockey and/or Sears, Roebuck and Co., were named as the insured. The policy, written by Hartford and accepted by Sears, contains the following material provisions:
'Hartford Accident and Indemnity Company * * *
'Agrees with the Insured, named in the declarations mdde a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy:
'Insuring Agreements
'I. Coverage A--Liability
'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any persor or injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the premises for the purposes stated in the declarations, or operations necessary or incidental thereto. * * *
'II. Defense, Settlement, Supplementary Payments
'As respects the insurance afforded by the other terms of this policy under coverage A the Company shall:
'(a) defend any suit against the Insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, * * * but the Company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient; * * *
'IV. Premises, Contract, Elevator, Products Hazard Defined
'(a) Premises. The unqualified word 'premises' means (1) Designated Premises--the premises designated in the declarations; (2) Incidental Premises--premises not so designated, if used in connection with the designated premises as parking areas where no charge is made by the named Insured. * * *
'The word 'premises' includes the ways immediately adjoining.'
This policy was renewed periodically and was in effect on June 16, 1952.
In May of 1947, Rockey, with Sears' knowledge, approval, and designation of a specific location, applied for and received permission from the city to make permanent water and sewage connections to the city water system. Authority to have the permit issued was furnished by Mr. D. W. Wandell, then assistant manager of the downtown retail store; that authority coming through the same office that issued the license to Rockey in 1945.
Making connections to Rockey's stand necessitated tearing up the blacktop, located in the two-foot strip of city-owned property adjacent to and inside the cement sidewalk. The evidence relating thereto was stricken, and the trial court concluded that there was no more than a 'likely hypothesis' that improper backfilling of the excavation resulted in a small hole or dip in the blacktop above the point where the water connection was made. In any event, on June 16, 1952, Mrs. Helen M. Bench, while carrying a large mirror from Sears' downtown retail store, entered the parking area, tripped and fell in proximity to that small hole or dip, and sustained serious injuries. Rockey assisted her after the fall.
Mrs. Bench filed a claim against the city on July 14, 1952. The claim being rejected, she brought an action against the city and Sears, serving the latter with summons and complaint October 2, 1952. These papers were forwarded to the Pacific Coast division office of Sears in Los Angeles, and, through its counsel there, were transmitted to counsel in Seattle, coming into the hands of the latter on October 11, 1952.
A demurrer and motions to the complaint were interposed, and counsel conducted an investigation including pre-trial discovery proceedings. Negotiations for a settlement were also carried on with Mrs. Bench's attorney.
Sears is generally a self-insurer and, consequently, its counsel made no effort to explore the possibility of insurance coverage. As the investigation progressed, it developed that the hole that was probably caused by the installation of sewer and water connections to Rockey's stand might have occasioned Mrs. Bench's fall, and this led to the file in Mr. Wandell's office, which contained a copy of Rockey's license and a reference to the insurance policy issued by Hartford, which was in the Pacific Coast division office of Sears.
Immediately after the policy came to his attention, Sears' counsel went to Hartford's Seattle Claims attorney, Mr. Wendell Bonesteel, and explained that he had information concerning the possibility of coverage by Hartford. The notice to Hartford was given to Mr. Bonesteel immediately preceding the Thanksgiving holiday, which fell on November 26, 1953. The trial was scheduled to begin on December 1, 1953.
The trial court found, on conflicting testimony, that no formal tender of defense was made to Hartford, and that if a tender was made, it was not accepted. Mr. Bonesteel made no objection to Sears' counsel continuing with the defense of the suit and with negotiations for settlement. He immediately proceeded to inform his superiors by mail of the pending action.
The cause came on for trial on December 1, 1953, against Sears and the city of Seattle. The action against the city was dismissed December 2, and December 3, Sears settled with Mrs. Bench for $7,000.
This action was brought as a result of Hartford's refusal to reimburse Sears in the amount of $7,946.09 for the payment to Mrs. Bench, together with expenses incurred in the defense of her suit.
Sears appeals from a judgment in favor of the defendant, Hartford.
It is Sears' contention that it is covered by the liability policy for the injury to Mrs. Bench; that notice of accident and pending suit was given to the insurer, Hartford, immediately upon Sears' becoming aware of the coverage; and that there was no prejudicial delay in notice which would excuse the insurer from liability.
At the outset, there is a question whether or not the policy covers the injury to Mrs. Bench when, concededly, she was not on the premises for purposes benefiting Rockey, or in any way connected with his business. Hartford would have us read the policy in light of the Rockey-Sears' license.
Hartford, by the terms of its contract of insurance, became obligated to pay damages because of bodily injury sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the premises for the purposes stated in the declarations, or operations necessary or incidental thereto. The declaration in the policy states that the premises are to be used for the purposes of a refreshment stand: "premises' includes the ways immediately adjoining,' and 'premises not * * * designated, if used in connection with the designated premises as parking areas where no charge is made by the named Insured.'
Hartord prepared the contract, and this is not an action to reform it. For a specific consideration, Hartford added Sears as a party insured. At that time it could have defined and limited the coverage it intended to give to Sears, but did not do so.
That Sears received a greater coverage than Rockey was obligated to furnish, and than Hartford intended to give, is not a matter with which we are here concerned. Since an insurance policy is merely a written contract between and insurer and the insured, courts cannot rule out of the contract any language which the parties thereto have put into it; cannot revise the contract under the theory of construing it; and neither abstract justice nor any rule of construction can create a contract for the parties which they did not make for themselves. Jeffries v. General...
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