State Auto. and Cas. Underwriters by Auto. Underwriters v. Hartford Acc. & Indem. Co.

• Decision Date: 08 April 1969
• Docket Number: No. 53192,53192
• Citation: 166 N.W.2d 761
• Parties: STATE AUTOMOBILE AND CASUALTY UNDERWRITERS BY AUTOMOBILE UNDERWRITERS, Attorney in Fact, Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 761

166 N.W.2d 761

STATE AUTOMOBILE AND CASUALTY UNDERWRITERS BY AUTOMOBILE UNDERWRITERS, Attorney in Fact, Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.

No. 53192.

Supreme Court of Iowa.

April 8, 1969.

Whitfield, Musgrave, Selvy, Kelly & Eddy, Des Moines, for appellant.

Davis, Huebner, Johnson & Burt, Des Moines, for appellee.

MOORE, Justice.

The factual background of this case has come to our attention in two earlier appeals, Price v. King, 255 Iowa 314, 122 N.W.2d 318 and Price v. King, 259 Iowa 921, 146 N.W.2d 328. In the latter case we held our workmen's compensation law did not bar an employee, Price, from bringing a common law damage action for injuries, sustained in the course of his employment, against a coemployee, King. Both Price and King were employed by Lee and Johnson, Inc., at the time Price was injured by King's motor vehicle. Subsequent to that decision plaintiff herein, State Automobile and Casualty Underwriters paid Price $21,900 on behalf of its insured, King. Plaintiff made this payment pursuant to its obligations under a family automobile liability policy it had issued to King.

Prior to satisfying the judgment rendered against King plaintiff demanded contribution from defendant herein, Hartford Accident and Indemnity Company, Lee and Johnson's workmen's compensation and employer's liability insurance carrier. Defendant refused to make any contribution.

On February 29, 1967 plaintiff filed its petition at law, seeking contribution from defendant for one-half the amount it had paid Price on behalf of its insured, King. Both policies involved were made a part of plaintiff's petition. Paragraph 13 of the petition alleged: 'That Charles King being an employee of Lee and Johnson, Inc., became an insured under Coverage B of Defendant's aforementioned policy issued to Lee and Johnson, Inc.'

Defendant on June 7 filed a motion to dismiss on the grounds the petition failed 'to state a claim upon which any relief can be granted'.

Following filing of plaintiff's resistance the trial court on March 7, 1968 made the following ruling: 'Upon the general rule of Law, inter alia, that a prerequisite to enforce contribution between insurers, policies must insure same interest against same casualty.

'Therefore: Ordered, Defendant's Motion to Dismiss is Sustained and case dismissed at Plaintiff's costs.'

The issues presented on plaintiff's appeal are whether King was an insured under defendant's employer's liability policy and if so whether the parties had insured the same interest for the same casualty so that plaintiff is entitled to contribution.

Defendant asserts (1) King was not an 'insured' within the meaning of its policy, (2) the parties had not in fact insured the same interest in the same casualty so as to entitle plaintiff to contribution and (3) that if King were found to be an 'insured' under its policy, plaintiff's claim would still fail as it had not complied with the notice provisions of defendant's policy.

We affirm and because of the conclusion reached concerning the status of plaintiff's insured relative to coverage afforded under defendant's employer's liability policy we need not and do not reach the questions of identity of insurable interests and compliance with the notice provisions of the policy.

I. Defendant issued to Lee and Johnson, Inc., what is designated on the face of the policy as a 'Standard Workmen's Compensation and Employers' Liability Policy'. The policy provides two separate and distinct coverages denominated as A and B.

Coverage A of the policy reads: 'Workmen's Compensation; to pay promptly when due all compensation and other benefits required of the insured by the workmen's compensation law.'

Coverage B reads: 'Coverage B--Employers' 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 by accident or disease, including death at any time resulting therefrom, sustained in the United States of America, its territories or possessions, or Canada by any employee of the insured arising out of and in the course of his employment by the Insured either in operations in a state designated in Item 3 of the declarations or in operations necessary or incidental thereto.'

Condition 11 of the policy reads: 'Other Insurance: If the insured has other insurance against a loss covered by this policy, the company shall not be liable to the insured hereunder for a greater proportion of such loss than the amount which would have been payable under this policy, had no such other insurance existed, bears to the sum of said amount and the amounts which would have been payable under each other policy applicable to such loss, had each such policy been the only policy so applicable.'

Plaintiff's policy issued to King contains a similar 'other insurance' provision.

Plaintiff contends its insured, King, is an 'insured' within the meaning of coverage B as set out above and as such is entitled to contribution in accordance with the 'other insurance' provision of defendant's policy. In support of this position plaintiff argues that as the term 'insured' is nowhere specifically defined in defendant's policy its meaning is thereby rendered ambiguous and under well established rules of construction the term should be accorded a meaning favorable to plaintiff.

It is true, as plaintiff urges, that if the language of the policy is, without violence, susceptible of two interpretations, that one which will sustain its claim and cover the loss will be adopted over that construction which will defeat recovery. Language in a policy which is unclear and ambiguous is to be strictly construed against the insurer. Eckard v. World Insurance Co., 250 Iowa 782, 787, 96 N.W.2d 454, 456; Youngwirth v. State Farm Mut. Auto. Ins., 258 Iowa 974, 978, 140 N.W.2d 881, 883; Goodsell v. State Automobile and Casualty Under., Iowa., 153 N.W.2d 458, 461; General Casualty Company of Wisconsin v. Hines, Iowa, 156 N.W.2d 118, 122.

We likewise agree the well settled rule is that in the construction of insurance contracts the intention of the parties should control. Indianola Club v. Fireman's Ins. Co., 250 Iowa 1, 4, 92 N.W.2d 402, 404; Wenthe v. Hospital Service, Inc., 251 Iowa 765, 768, 100 N.W.2d 903, 905; Baldwin v. Equitable Life Assur. Soc., 252 Iowa 639, 645, 108 N.W.2d 66, 70.

We have often said the rules for resolving ambiguous policies do not come into play unless it can be fairly said there is a real ambiguity in the terms of the policy. Mallinger v. State Farm Mut. Auto. Ins. Co., 253 Iowa 222, 226, 111 N.W.2d 647, 649; Randolph v. Fireman's Fund Ins. Co., 255 Iowa 943, 945, 124 N.W.2d 528, 529; Wilson v. State Farm Mut. Auto. Ins. Co., 256 Iowa 844, 847, 128 N.W.2d 218, 220.

A strained or unreasonable construction of the language used, where there is no real ambiguity, should not be indulged in. Jones v. Continental Cas. Co., 189 Iowa 678, 682, 179 N.W. 203, 204, 18 A.L.R. 1329. The language may not be forced in order to create ambiguity or to render uncertain that which is plain. Diehl v. American Life Ins. Co., 204 Iowa 706, 710, 213 N.W. 753, 754, 53 A.L.R. 1528. And it is well settled that if there is no ambiguity in the contract there is no right or duty on the part of the court to write a new contract of insurance between the parties. Wilson v. Equitable Life Ins. Co., 220 Iowa 321, 324, 262 N.W. 525, 527.

The provisions in the policy issued by defendant must be read in connection with the policy as a whole and in light of the declarations attached to or made a part thereof. Aeroline Flight Service v. Insurance Co., 257 Iowa 409, 415, 133 N.W.2d 80, 84.

In recognizing propositions we deem so well established that authorities need not be cited in support of them we adopted Rule 344(f), 14, Rules of Civil Procedure, which provides: 'In the construction of written contracts, the cardinal principle is that the...