Transport Insurance Co. v. Standard Oil Co. of Texas

• Decision Date: 22 June 1960
• Docket Number: No. A-7389,A-7389
• Citation: 337 S.W.2d 284,161 Tex. 93
• Parties: TRANSPORT INSURANCE COMPANY, Petitioner, v. STANDARD OIL COMPANY OF TEXAS, Respondent.
• Court: Texas Supreme Court

Page 284

337 S.W.2d 284

161 Tex. 93

TRANSPORT INSURANCE COMPANY, Petitioner, v. STANDARD OIL COMPANY OF TEXAS, Respondent.

No. A-7389.

Supreme Court of Texas.

June 22, 1960.

Rehearing Denied July 27, 1960.

Leachman, Gardere, Akin & Porter, Dallas, for petitioner.

Kemp, Smith, Brown, Goggin & White, William Duncan, El Paso, for respondent.

SMITH, Justice.

This suit in its inception was one for a declaratory judgment filed by the respondent, Standard Oil Company of Texas, against the petitioner, Transport Insurance Company, and Lawrence W. Annis, Jr. Annis was later dismissed from the suit. For convenience, the petitioner will hereinafter be referred to as 'Transport' and the respondent as 'Standard'. Standard sought a declaration by the court that Transport was obligated to defend a previous suit brought by Annis against Standard. In that prior suit Annis sued Standard for personal injuries alleged to have been sustained because of the negligence of Standard. The accident occurred in April 1957. At that time, Annis was employed as a driver for The Transport Company of Texas, hereinafter referred to as 'employer'. On April 11, 1957, Annis went upon the premises of Standard with a 1956 Diamond T tractor, propelling a large four-compartment tank trailer, for the purpose of receiving a load of Diesel fuel. Briefly, it was alleged that Annis drove the truck to the loading rack, and, while the fourth compartment was being filled with fuel, an explosion was caused or occurred which blew or expanded itself though the opening of the compartment injuring Annis.

At the time of the accident, Transport had in force a comprehensive general automobile policy covering the 'employer' as its named assured. Standard alleged in its petition that Transport agreed to 'defend any suit and to pay on behalf of the insured all sums which the insured should become legally obligated to pay as damages because of bodily injury arising out of the use of said truck, and agreed that the use of said truck includes the loading and unloading thereof. Further, by said policy Defendant Insurance Company agreed that any person using said vehicle with permission of The Transport Company of Texas was an insured, and, on the occasion in question, Plaintiff Standard was using said vehicle, by its agents and employees, in loading same, with permission of The Transport Company of Texas, so that Plaintiff Standard was an insured within the meaning of the policy and was entitled to its benefits of said policy in defense of the suit brought by Defendant Annis.' Transport refused to accept liability on the ground that its policy expressly excluded coverage of a claim by an employee (Annis) of the insured employer.

Standard and Transport each filed a motion for summary judgment based on the petition in the Annis suit, the Transport policy on the truck, and the Fireman's Fund Indemnity policy on Standard. These motions for summary judgment were heard together by the trial court without a jury. By agreement of the parties, the petition in the Annis suit and the two above mentioned policies were considered by the court in passing on such motions.

Standard's motion for summary judgment presented the contention that the petition and the terms of each of the policies, together with the affidavit of H. S. Armstrong, which was attached to the motion, show that there was no genuine issue as to any material fact and that Standard was entitled to a summary judgment, because:

(1) the loading of the truck belonging to Transport employer in the manner described in Annis' petition constituted a permissive use of said truck by Standard, and that under the terms of Transport's policy, use of an automobile includes the loading and unloading thereof.

(2) Annis was an employee of Transport employer, but was 'not an employee of the additional insured Standard Oil Company of Texas,' and because, the 'Transport Insurance Company policy specifically providing that 'the term insured is used severally and not collectively', so that the suit by said Annis is not a suit by 'an employee of the insured (Standard Oil) arising out of and in the course of his, employment by the insured (Standard Oil),' and is not an obligation for which the insured (Standard Oil) or any carrier as (its) insurer may be held liable under any workmen's compensation * * * law * * * or under any similar law.'

(3) the truck was being loaded and was not being serviced at a service station, and 'Standard Oil Company of Texas was not operating a 'service station' in any sense of the term, on the occasion in question', and

(4) Standard had no other insurance against the loss alleged in the suit by Annis, because 'the truck in question was nonowned as to it and its policy with Fireman's Fund Insurance Company provides that the coverage of the Fireman's Fund policy would be excess coverage as to nonowned vehicles.'

It was for these specifically alleged reasons that Standard claimed that Transport was obligated to defend the Annis suit and was obligated to pay on behalf of Standard all sums which Standard should become legally obligated to pay as damages in the Annis suit to the extent of the limits of liability of said policy.

Transport alleged several grounds for summary judgment. However, the only ground pertinent to our decision is the one that its policy specifically excluded any obligation for which the insured or any carrier as its insurer may be held liable under any workmen's compensation law, and also excluded coverage for bodily injury to any employee of the insured arising out of and in the course of his employment by the insured.

The trial court rendered judgment overruling Standard's motion for summary judgment and sustained Transport's motion. The decretal recitations cantained in the judgment are as follows:

'* * * that the motion of Plaintiff Standard * * * for a summary judgment in its favor be and the same is hereby overruled, and that the motion of defendant Transport * * * for a summary judgment in its favor be and the same is hereby sustained, and that judgment be and is hereby rendered that plaintiff take nothing by its suit against the defendants * * *, and it is hereby Declared that Standard * * * is not an additional insured under the policy of insurance issued by Transport * * * to Transport Company of Texas insofar as the claim asserted by Lawrence W. Annis, Jr., against Standard * * * is concerned; that defendant Transport * * * is not obligated to defend said suit * * * or to pay on behalf of Standard * * * any sums which Standard * * * may become legally obligated to pay as damages to said * * * Annis, * * *, or to pay any investigation or legal expenses incurred in connection with said Cause No. * * * All because of exclusions (f) and (g) of the policy issued by Transport * * * to the Transport Company of Texas.' (Emphasis ours.)

Obviously, the trial court's action in sustaining Transport's motion for summary judgment was based solely on its interpretation of the exclusionary clauses, supra. Standard's single point on appeal to the Court of Civil Appeals was that the trial court erred in 'holding Standard Oil Company not an additional insured under Transport's policy because of the 'employee exclusion' in said policy, where Standard as a permissive user in loading to truck at the time of the accident, was an additional insured under the policy, and Annis was not an employee of the insured against whom the claim was made (Standard).' (324 S.W.2d 332.) Standard in its brief stated that the precise question presented by such point was 'whether the 'employee exclusion' in a standarized automobile liability policy prevents a coverage where the claimant is an employee of the named insured, but is not an employee of the additional insured (Standard) against whom the claim is brought.' Standard's position on this question was and is that since Standard was an insured under Transport's policy, and there was no employer-employee relationship between Standard and Annis, the (f) and (g) exclusionary clauses do not apply as to Standard.

The Court of Civil Appeals in its judgment of reversal and rendition for Standard held that Standard, as an 'omnibus insured' was entitled to be protected by the automobile liability insurance policy of Transport issued to Transport Company of Texas, and that the exclusion clauses (f) and (g) applied only to an employee of the insured against whom the claim was made, and hence did not exclude Standard from coverage of a claim against it by an employee of the named insured. 324 S.W.2d 331.

Transport contends that its policy issued to the Transport Company of Texas (employer of Annis) is plain and unambiguous and admits of but one construction. Transport's position is that there is no coverage if Annis was an employee of any one of the insureds. It bases its contention primarily on the definition of the word 'insured', ¹ and exclusion clauses (f) ² and (g) ³ as contained in the policy. Transport takes the position that there is no coverage since its is admitted that Annis was an employee of Transport Company of Texas.

Standard contends that the 'severability of interests' clause ⁴ contained in Transport's policy, which provides that the term 'the insured' is used severally and not collectively, means there are several insureds, and when the policy excludes an employee of 'the insured', it means the insured against whom the claim is made. Standard reasons that Annis made his claim against Standard, and Standard was 'the insured' in question, but Annis was not an employee of Standard, therefore, there is coverage. Transport contends that if the position of Standard is sustained such action would in effect amount to a remaking of the contract for the parties and add the words 'against whom the claim is made' thereby limiting the unqualified word 'insured'; that if in the writing in paragraphs (f) and (g) it had been the intention to eliminate as...