St. Paul-Mercury Ind. Co. v. American Fidelity & Cas. Co.

• Decision Date: 02 November 1956
• Docket Number: Civ. A. No. 1174-N.
• Court: U.S. District Court — Middle District of Alabama
• Parties: ST. PAUL-MERCURY INDEMNITY COMPANY, a Corporation, Plaintiff, v. AMERICAN FIDELITY AND CASUALTY COMPANY, Inc., a Corporation, Larsen & Larsen, Inc., a Corporation, John Doe and Richard Roe, Individuals, Whose Names are Otherwise Unknown to the Plaintiff but will be Added by Way of Amendment when Ascertained, Leroy Osborne, d/b/a Osborne & Company, or as Osborne & Company Truck Lines, and Solan Estes, Defendants.

146 F. Supp. 39

ST. PAUL-MERCURY INDEMNITY COMPANY, a Corporation, Plaintiff, v. AMERICAN FIDELITY AND CASUALTY COMPANY, Inc., a Corporation, Larsen & Larsen, Inc., a Corporation, John Doe and Richard Roe, Individuals, Whose Names are Otherwise Unknown to the Plaintiff but will be Added by Way of Amendment when Ascertained, Leroy Osborne, d/b/a Osborne & Company, or as Osborne & Company Truck Lines, and Solan Estes, Defendants.

Civ. A. No. 1174-N.

United States District Court M. D. Alabama, N. D.

November 2, 1956.

Martin & Blakey, Birmingham, for plaintiff.

Ball & Ball, Montgomery, Ala., for American Fidelity & Casualty Co. and Leroy Osborne, d/b/a Osborne & Company, or as Osborne & Company Truck Lines, defendants.

Hill, Hill, Stovall & Carter, Montgomery, Ala., for defendant Solan Estes.

Rushton, Stakely & Johnston, Montgomery, Ala., for defendant Larsen & Larsen.

JOHNSON, District Judge.

This cause, coming on to be heard, was tried by the Court without a jury on October 25, 1956. The issues in controversy, which appear in the Court's order on pre-trial hearing entered in this cause on October 15, 1956, are as follows:

Proceeding under the Federal Declaratory Judgment Act, 28 U.S.C.A. § 2201, on behalf of the plaintiff, St. Paul-Mercury Indemnity Company, seeking a declaration by the Court with respect to the rights, privileges, duties, obligations, and other legal relations of the parties to this cause under the terms and provisions of liability insurance policies issued by the plaintiff, St. Paul-Mercury Indemnity Company, to Larsen & Larsen, Inc., and by the defendant American Fidelity and Casualty Company, Inc., to Leroy Osborne, d/b/a Osborne & Company or as Osborne & Company Truck Lines, being policy number 14-26508 issued by the plaintiff, St. Paul-Mercury Indemnity Company to Larsen & Larsen, Inc., and policy number NYPT-15408 issued by the defendant American Fidelity and Casualty Company to Leroy Osborne, d/b/a Osborne & Company or as Osborne & Company Truck Lines. Said action seeks a declaration of such rights, privileges, duties, obligations, and other legal relations of the parties to this cause under the terms and provisions of said policies as they relate to the defense, satisfaction of judgment rendered, and other obligations involving the disposition and satisfaction of the cause styled Solan Estes versus Larsen & Larsen, and others, being civil action No. 1165-N now pending in this Court.

Upon consideration of the pleadings, the testimony of witnesses taken orally before the Court, the exhibits offered by the respective parties, the stipulations of the parties, and the briefs and oral arguments of counsel of the respective parties, the Court now makes and enters the following findings of fact, conclusions of law, and judgment.

Findings of Fact

Pursuant to a written motor vehicle lease agreement executed March 29, 1954, a 1953 model G. M. C. truck tractor, Alabama license tag No. 1 H3-617, and a Fruehauf trailer, Alabama license tag No. 1 T2-466, the property of one Solan Estes, were leased to Leroy Osborne, doing business as Osborne & Company, said truck tractor and trailer both being designated by the company number 63L. Said lease agreement was in force and effect up to and including March 2, 1955.

On March 2, 1955, Leroy Osborne, doing business as Osborne & Company, was engaged in the delivery of 76 rolls of wire mesh to the premises of the Hazel Atlas Glass Company in the City of Montgomery, Alabama, said shipment being consigned to Larsen & Larsen, Inc., a corporation, which was engaged in the performance of a contract of construction upon the premises of Hazel Atlas Glass Company in the City of Montgomery, Alabama, on that date. Said delivery was made in the truck tractor and trailer referred to above in paragraph one, the property of Solan Estes, and was being driven by him at the time of the delivery.

It was the duty of the consignee, Larsen & Larsen, Inc., to unload said truck on arrival. While the employees of Larsen & Larsen were so engaged in the unloading of the material consigned to it, the driver of the truck, Solan Estes, was struck and injured by a roll of wire mesh. The unloading of said wire was undertaken by the employees of Larsen & Larsen, Inc., by and with the consent of Leroy Osborne, doing business as Osborne & Company, and with the consent of Solan Estes, the driver of the truck.

On or before March 2, 1955, the date of the accident herein above referred to, the defendant American Fidelity and Casualty Company, Inc., had issued and had in force and effect a National Standard automobile liability policy, being policy No. NYPT-15408, in which the defendant Leroy Osborne, doing business as Osborne & Company, was the named insured. Said policy enumerated the automobile truck tractor and trailer owned by Solan Estes and leased to Leroy Osborne, doing business as Osborne & Company, referred to above, among those vehicles which were insured by the company. The policy contained the following provision designated "Definition of Insured":

"The unqualified word `insured' wherever used in coverages A & B and in other parts of this policy, when applicable to such coverages, includes the named insured and, except where specifically stated to the contrary, also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured."

American Fidelity and Casualty Company agreed "To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed * * * for damages * * * because of bodily injury * * * sustained by any person * * * caused by accident and arising out of the * * * use of the automobile." Item 5(c) provides that "use of the automobile for the purposes stated includes the loading and unloading thereof".

The policy contained the following provision under the title "Insuring Agreements":

"II. Defense, Settlement, Supplementary Payments. As respects such insurance as is afforded by the other terms of this policy under coverages A and B the company shall

"(a) defend in his name and behalf any suit against the insured alleging such injury or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company shall have the right to make such investigation, negotiation and settlement of any claim or suit as may be deemed expedient by the company;

"(b) pay all premiums on bonds to release attachments for an amount not in excess of the applicable limit of liability of this policy, all premiums on appeal bonds required in any such defended suit, but without any obligation to apply for or furnish such bonds, all costs taxed against the insured in any such suit, all expenses incurred by the company, all interest accruing after entry of judgment until the company has paid, tendered or deposited in court such part of such judgment as does not exceed the limit of the company's liability thereon, and expenses incurred by the insured, in the event of bodily injury, for such immediate medical and surgical relief to others as shall be imperative at the time of accident;

"(c) reimburse the insured for all reasonable expenses, other than loss of earnings, incurred at the company's request.

"The company agrees to pay the amounts incurred under this insuring agreement, except settlements of claims and suits, in addition to the applicable limit of liability of this policy."

The policy also contained the following provisions under the title "Exclusions":

"This policy does not apply:

"(D) under coverages A & C, to bodily injury to or death of any employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the

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