Security Ins. Co. of Hartford v. Owen, 5--5794

• Decision Date: 29 May 1972
• Docket Number: No. 5--5794,5--5794
• Parties: SECURITY INSURANCE CO. OF HARTFORD, Appellant, v. William Maurice OWEN et al., Appellees.
• Court: Arkansas Supreme Court

Page 558

480 S.W.2d 558

252 Ark. 720

SECURITY INSURANCE CO. OF HARTFORD, Appellant, v. William Maurice OWEN et al., Appellees.

No. 5--5794.

Supreme Court of Arkansas.

May 29, 1972.

Bridges, Young & Matthews & Davis, Pine Bluff, for appellant.

Jones & Matthews, Pine Bluff, for appellees.

BYRD, Justice.

Appellant Security Insurance Company of Hartford had issued to W. H. Marks an automobile liability insurance policy with limits of $50,000 for each person and also a Farmer's Comprehensive Personal Liability policy with limits of $25,000 for each person. As a result of an injury received by William Maurice Owen on August 7, 1965, when he was 16 years of age, a judgment was entered against Marks in favor of appellees William Maurice Owen and his father, Maurice Owen, in the total amount of $34,250. Appellant paid the policy limits under its Farmer's Comprehensive Personal Liability but denied coverage under the automobile liability policy because of the following exclusion:

'This policy does not apply:

(d) under coverage A to bodily injury to or sickness, disease or death of any employee of the insured arising out of and in the course of (1) domestic employment by the insured, if benefits therefor are in whole or in part either payable or required to be provided under any Workmen's compensation law, or (2) other employment by the insured.'

The jury found the issues in favor of appellees and a judgment in the total amount of $14,091 including penalty and attorney's fees was entered. For reversal appellant contends that Instructions 6 and 8 were erroneous and that the court erred in refusing its requested Instructions 9 and 11.

The record shows that young Owen's grandfather and Mr. Marks were good friends. As such they used the same duck club and on occasions young Owen was permitted to hunt at the duck club. On the day in question Mr. Marks was using his pickup truck to pull a tractor and 'bush hog' to the duck club. This required a person to ride on the farm tractor to guide and brake the tractor when appropriate to prevent the tractor from colliding with the truck. When the regular tractor driver did not show up, Mr. Marks asked young Owen to ride on the farm tractor. While enroute to the duck club an accident occurred which resulted in the judgment against Marks.

At the trial young Owen testified that Mr. Marks had never paid him any compensation or told him that he would be working for him. Admittedly he admired his grandfather's friend and of course followed any directions that Mr. Marks gave him.

Mr. Marks testified that he did not pay young Owen by check during the entire year 1965, and did not make any income tax deduction for anything paid. He may have paid him something out of his pocket but he sometimes worked without pay. He had intended to pay the boy on the day in question but had not told the boy so. The boy did not ask for pay--he got to go hunting down there.

Appellant introduced some signed statements by both young Owen and Mr. Marks to the effect that young Owen was to be paid $7.50 for his day's work. While the statements are rather cogent evidence, there is other evidence in the record that insinuates that perhaps appellant's adjuster had suggested to the parties that Mr. Marks had no coverage unless young Owen could be classified as an employee under the Farmer's Comprehensive Liability Policy.

Instruction No. 6 given by the court provided:

'Contracts of insurance should receive reasonable construction so as to effectuate the purposes for which they are made.'

Instruction No. 7 provided:

'If the terms used in an insurance policy are clear, they are to be taken and understood in their plain, ordinary and popular sense.'

Instruction No. 8 provided:

'If the language used in an insurance policy is not clear, and reasonable doubt exists as to the construction of the policy, it should be interpreted against the insurance company which has drawn the agreement.'

Appellant's requested Instruction No. 9 provided:

'The automobile liability policy issued to W. H. Marks by defendant (or its predecessor) which was in effect on August 7, 1965, specifically provides that there is no liability coverage for bodily injury to any employee of the insured, W. H. Marks, arising out of and in the course of employment by the insured. Therefore, if you find from a preponderance of the evidence that at the time of the August 7, 1965, accident, William Maurice Owen was an employee of W. H. Marks, whether part-time, temporary, casual or otherwise, then you are told to return a verdict in favor of defendant.'

Upon the refusal to give the above Instruction, appellant offered a modification thereof which the court gave as follows:

'The automobile liability policy issued to W. H. Marks by defendant (or its predecessor) which was in effect on August 7, 1965, specifically provides that there is no liability coverage for bodily injury to any employee of the insured, W. H. Marks, arising out of and in the course of employment by the insured. Therefore, if you find from a preponderance of the evidence that at the time of the August 7, 1965, accident William Maurice Owen was an employee of W. H. Marks, then you are told to return a verdict in favor of the defendant.'

Appellants requested Instruction No. 11 provided:

'The term 'employment' means a relationship existing between one person called an employer and another person called an employee. An employee is one who performs services for the employer, under an express or implied agreement, and who is subject to the employer's supervision, direction and control as to the manner of performing the services.'

The trial court refused appellant's requested No. 11. Appellant then suggested the following modification:

'The term 'employment' means a relationship existing between one person called an employer and another person called an employee. An employee is one who performs services for the employer, under an express agreement for compensation, or in anticipation that he will be compensated for his services, and who is subject to the employer's supervision, direction and control as to the manner of performing the services.'

The court agreed to give the modified Instruction No. 12 on condition that Instructions No. 6 and 8, supra, which had been tentatively declined, be also given.

The trial court properly refused appellant's requested Instructions No. 9 and 11. Exclusions such as the one here involved are generally recognized and construed as excluding that coverage which is usually available through workmen's compensation insurance. In fact appellant in this instance recognized that construction of the exclusion by stating to the trial court:

'Judge, the whole purpose of this exclusion is not to cover under liability coverage people who are eligible to be covered under workmen's compensation and if Mr. Marks had workmen's compensation for his employees this boy would be covered as an employee just as sure as I am sitting here . . ..'

The term 'employee' under our Workmen's Compensation Law, Ark.Stat.Ann. § 81--1302(b) is defined as follows:

"Employee' means any person, including a minor, whether lawfully or unlawfully employed, in the service of an employer under any contract of hire or apprenticeship, written or oral, expressed or implied, but excluding one whose employment is casual and not in the course of the trade, business, profession or occupation of his employer.'

Having admitted that the exclusion of 'bodily injury to . . . any employee of the insured arising out of and in the course of . . . employment by the insured,' had reference to persons eligible to coverage under the Workmen's Compensation Law, the trial court in construing the policy language most strongly against the insurer...