Thompson v. ROADWAY EXPRESS INCORPORATED, Civ. A. No. 17457.

• Decision Date: 20 December 1959
• Docket Number: Civ. A. No. 17457.
• Citation: 179 F. Supp. 254
• Parties: Robert THOMPSON, Plaintiff, Michigan Mutual Liability Company, a Michigan corporation, Intervenor and Cross Defendant, v. ROADWAY EXPRESS INCORPORATED, a foreign corporation, Defendant and Cross Plaintiff.
• Court: U.S. District Court — Western District of Michigan

179 F. Supp. 254

Robert THOMPSON, Plaintiff Michigan Mutual Liability Company, a Michigan corporation, Intervenor and Cross Defendant, v. ROADWAY EXPRESS INCORPORATED, a foreign corporation, Defendant and Cross Plaintiff.

Civ. A. No. 17457.

United States District Court E. D. Michigan, S. D.

December 20, 1959.

George A. Jones, Detroit, Mich., for plaintiff.

Thomas J. Shelly, of Imesch, Worrell, Thomas & Zajac, Detroit, Mich., for Mich. Mut. as intervenor-plaintiff.

George H. Cary and Lawrence A. Bohall, of Cary, BeGole & Martin, Detroit, Mich., for Mich. Mut. as cross defendant.

G. Cameron Buchanan and John A. Kruse, of Alexander, Cholette, Buchanan, Perkins & Conklin, Detroit, Mich., for Roadway Express.

THORNTON, District Judge.

This is an action commenced November 19, 1957, in which plaintiff Thompson claimed damages for personal injury resulting from an accident which occurred on or about September 24, 1956. Jurisdiction inheres by virtue of diverse citizenship. The facts may be recited readily. Thompson was employed as a truck driver by Short Freight Lines. A truck¹ of Short Freight Lines carrying certain merchandise and driven by Thompson left the Short Freight Lines terminal and proceeded to the Roadway Express terminal, a distance of about a mile. The trip was made so that the merchandise on the Short Freight Lines' trailer could be transferred to Roadway Express for transportation by it to its destination outside the state. At the dock of Roadway a Roadway employee, Reuben, assisted plaintiff in unloading the truck. The last item was a large and heavy crate for the unloading of which Reuben obtained an electric fork-lift-truck which he drove onto the trailer. He and plaintiff proceeded to attempt to use this for unloading the large heavy crate—1100 pounds and 20 feet long, 7½ feet high, and 1 foot wide, approximately.² The efforts of the two men in this attempt proved unavailing so Reuben alighted from the truck with a remark to plaintiff to the effect that he was going to get a "chain" or a "roller".³ It was at this point that the crate began to "teeter"³ and that plaintiff attempted to get away from it, off the truck, but was unable to escape and was pinned by the crate as it fell on him. He was hospitalized for about two months and has been receiving treatments ever since. So much for a summary of what happened before suit was started. The sequence of events subsequent to the filing of suit is of less tragic import certainly, but just as certainly it is less orthodox in character. The answer that was filed by Roadway was prepared and filed December 10, 1957, on its behalf by its own personal attorneys whom we shall refer to as the Buchanan firm, since Mr. Buchanan signed the pleadings. On April 29, 1958, Mr. Buchanan took the deposition of plaintiff and subsequently filed it. On October 23, 1958, a substitution of attorneys was effected by which a firm we shall refer to as the Cary firm was substituted as attorneys for Roadway in the place and stead of the Buchanan firm. Although it does not appear of record, as of that date, it is well to here state the reason for this substitution. The Cary firm appeared on October 23, 1958, to defend Roadway in the capacity of representing the Michigan Mutual Liability Company which carried Short Freight's insurance, the particular policy involved being the subject matter of this controversy. The Cary firm, in taking over the defense of Roadway, was doing so on the theory that the omnibus coverage contained in Short Freight's Michigan Mutual policy extended protection to Roadway in this situation. It is not clear who was responsible for this theory, although it seems to have been Michigan Mutual. At any rate, the pleadings simply indicate a change from the Buchanan firm to the Cary firm as attorneys for Roadway on October 23, 1958, eleven months after suit was filed. On December 1, 1958, a stipulation and order for intervention was filed permitting intervention by an intervenor plaintiff. Said intervenor plaintiff filed its complaint on January 26, 1959, claiming its right to a share in any proceeds by virtue of being the carrier of Workmen's Compensation for Short Freight Lines and having therefore paid workmen's compensation to plaintiff. It so happens that the intervenor plaintiff is Michigan Mutual Liability Company, represented in its intervenor plaintiff status by another law firm, Imesch, Worrell, Thomas & Zajac. We are not here concerned with the intervenor aspect of this case except to comment on two points. First, the stipulation for intervention was signed by both sets of Roadway attorneys, the Cary firm and the Buchanan firm. This has significance that will be adverted to later in this opinion. An answer to intervenor plaintiff's complaint was filed by Roadway, by the Cary firm. The answer appears to be the routine, "admits", "denies", "leaves plaintiff to its proof", and asks "verdict of no cause of action." Less than two months after the filing of this answer (January 29, 1959, to March 6, 1959) the Cary firm filed a motion to withdraw as attorneys for defendant Roadway. The affidavit filed in support of the motion states that the theory upon which the Cary firm represented Roadway was based on a mistake, and that the policy in question issued by Michigan Mutual to Short Freight not only does not extend coverage to Roadway but specifically excludes such coverage. The exclusion provision of the policy provides that when a carrier such as Roadway "satisfies the security requirements of the Motor Carrier Law by some means other than automobile liability insurance, then the omnibus coverage provided in the policy of the Short Freight Lines, by Michigan Mutual Liability Company is excluded and does not extend coverage to Roadway Express, Inc."⁴ Another substitution of attorneys was then filed (April 27, 1959) with the Buchanan firm "back in" and the Cary firm "out". Roadway then filed a cross-complaint against Michigan Mutual, already in here as a party by virtue of its intervenor plaintiff status, claiming that Michigan Mutual rather than Roadway is liable to plaintiff, because of the omnibus coverage. It is the omnibus coverage which Michigan Mutual claims is excluded by the above quoted provision. The parties agree that Roadway complied with the Motor Carrier Law "by some means other than automobile liability insurance" which fact shall be adverted to later on in this opinion.

It appears that Roadway and Michigan Mutual were able to share a common view point in one other respect. Plaintiff Thompson agreed to accept the sum of $15,000 in full settlement of his claim in this lawsuit. An order to this effect was therefore entered by the Court on May 26, 1959, pursuant to a stipulation. A copy of said stipulation is attached to this opinion. It will be noted that it bears the signature of the Buchanan firm, as representing Roadway, and that according to it the question remaining for determination is that of liability as between Roadway and Michigan Mutual. The complaint against Michigan Mutual is actually 2-pronged and the parties, in their briefs and arguments, have so treated the issues. We may refer to one prong as the estoppel theory, and to the other as the policy theory. Roadway contends that the conduct of Michigan Mutual in assuming the defense and taking full charge on behalf of Roadway estops Michigan Mutual from denying liability and from arguing non-coverage by the omnibus coverage in its policy. In support of this estoppel theory it cites a line of cases to the effect that when an insurer undertakes defense of a case without a reservation of rights and enters upon said defense it is estopped to deny insurer liability. It may be noted, however, that generally those cases deal with situations where the insurance company failed to raise the issue of failure of compliance with certain conditions subsequent. We do not find them to be authority for the proposition that one can be estopped into a position of contractual liability where no contract ever existed or, more particularly, where...