Travelers Indem. Co. v. Transport Indem. Co.

• Decision Date: 13 May 1966
• Citation: 242 Cal.App.2d 227,51 Cal.Rptr. 724
• Court: California Court of Appeals Court of Appeals
• Parties: The TRAVELERS INDEMNITY COMPANY, a corporation, Plaintiff, Respondent and Appellant, v. TRANSPORT INDEMNITY COMPANY, Defendant and Appellant, Colonial Insurance Company, a corporation, Defendant and Respondent. Civ. 21912.

Page 724

51 Cal.Rptr. 724

242 Cal.App.2d 227

The TRAVELERS INDEMNITY COMPANY, a corporation, Plaintiff, Respondent and Appellant, v. TRANSPORT INDEMNITY COMPANY, Defendant and Appellant Colonial Insurance Company, a corporation, Defendant and Respondent.

Civ. 21912.

District Court of Appeal, First District Division 1, California.

May 13, 1966.

Weinmann, Rode, Burnhill & Moffitt, Oakland, Cyril Viadro, San Francisco, of counsel, for Travelers Indemnity Co.

Low, Ball & Norton, San Francisco, for Colonial Ins. Co.

Clark, Heafey & Martin, Oakland, for Transport Indemnity Co.

SULLIVAN, Presiding Justice

We are presented with two appeals ¹ in an action for declaratory relief brought to determine the respective rights and obligations of three insurance carriers in respect to a claim for damages for personal injuries.

The matter was submitted below upon an agreed statement of facts with attached exhibits containing copies of the pertinent insurance policies. This record discloses the following undisputed facts: On September 24, 1957 David O. Ross doing business as Ross Demolition Company was engaged in wrecking a building in Oakland. On or before said date Ross rented from Converse Trucking Service (Converse) a motor driven, self-propelled forklift truck to use in the demolition work. This forklift was used on terminal dock facilities and exclusively on private property and was not registered with the California Motor Vehicle Department.

On the above date David Ross engaged the services of Ralph Ross, a trucker, to haul steel beams from the site of the demolition work. At the time Jasper Payne, an employee of David Ross, was operating the forklift and lifting steel beams onto a truck owned by Ralph Ross. The latter was standing on the truck and directing the loading. This operation was conducted on private property. While it was in progress, Payne negligently operated the forklift, causing one or more of the steel beams to fall on the truck, striking Ralph Ross and knocking him to the ground, as a result of which he sustained personal injuries. On May 21, 1958 Ralph Ross commenced an action for damages for personal injuries, naming as defendants therein David Ross and Payne.

At the time of the above accident the following insurance policies were in full force and effect: (1) A comprehensive liability policy issued by Travelers to David Ross; (2) a commercial vehicle policy issued by Colonial to Ralph Ross covering the latter's truck; and (3) an occupational comprehensive liability and comprehensive automobile damage policy issued by Transport to Converse.

Colonial and Transport were notified of the accident and each of them was tendered by David Ross the defense of the above personal injury action, which tenders both rejected. Travelers, David Ross' carrier, thereafter undertook such defense and eventually compromised the action for.$19,000, incurring costs and attorneys' fees in the course thereof. ²

On February 13, 1962 Travelers commenced the instant action seeking a judgment declaring that the policies issued by Colonial and Transport covered the liability of David Ross and the latter's employee, Payne, to Ralph Ross and requiring said defendants to indemnify Travelers for the amounts paid by it for the settlement of the action and for attorneys' fees and costs. It was plaintiff's position that at the time of the accident David Ross and Payne were using both the truck (insured by Colonial) and the forklift (insured by Transport) with the permission of the insured named in the respective policies and that defendants' policies were primary while plaintiff's policy was merely excess.

The court made findings of fact based on the agreed statement of the parties and additional data in respect to the provisions of the policies submitted to it, concluding therefrom: that the liability of David Ross to Ralph Ross was covered by both Travelers' and Transport's policies but not by Colonial's policy; that Transport's policy afforded David Ross primary coverage to the extent of $15,000 and Travelers' policy excess coverage to the extent of $4,000; that the attorneys' fees and costs should be prorated between Travelers and Transport; that Travelers was entitled to judgment against Transport for $16,295.08 and costs; and that Travelers should recover nothing against Colonial. ³ Judgment was entered accordingly. These appeals followed.

Colonial's policy did not provide coverage against the loss.

The trial court's holding that Colonial was not liable under its policy rested on two bases: (1) That the policy excluded from coverage claims for bodily injury made by its named insured Ralph Ross and therefore precluded recovery by anyone standing in his shoes as subrogee; and (2) that notwithstanding the broad meaning of the term 'use' which has been held to include 'loading and unloading,' since the truck owned and operated by Ralph Ross as an independent contractor was not under the control of David Ross or any of his employees, David Ross and Payne were not 'using' the truck so as to become additional insureds under Colonial's policy in respect to damages sustained by Ralph Ross. ⁴ Challenging the validity of both of the above grounds, Travelers argues that Colonial's policy Did cover the liability of David Ross and Payne for the accident. Transport takes the qualified position that Colonial's policy provides coverage 'if the policy exclusion is not valid.'

We observe in passing that Colonial's policy contained no clause extending its coverage to persons using the truck with the permission of the named insured. Indeed under its 'exclusions' the policy did not apply under any of its coverages to loss arising while the truck was 'being driven or operated by any person other than the insured or his paid employee.' At the time of the accident section 415 subdivision (b)(2) of the Vehicle Code ⁵ (now § 16451) provided that an owner's policy of liability insurance 'Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of said assured, against loss from the liability imposed by law for damages arising out of ownership, maintenance, or use of such motor vehicle or motor vehicles * * *.' It is now well established 'that for an insurer to issue a policy of insurance which does not cover an accident which occurs when a person, other than the insured, is driving with the permission and consent of the insured is a violation of the public policy of this state as set forth in sections 402 and 415 of the Vehicle Code. * * * Inasmuch as sections 402 and 415 of the Vehicle Code set forth the public policy of this state such laws must be considered a part of every policy of liability insurance even though the policy itself does not specifically make such laws a part thereof.' (Wildman v. Government Employees' Ins. Co. (1957) 48 Cal.2d 31, 39--40, 307 P.2d 359; Interinsurance Exchange etc. v. Ohio Cas. Ins. Co. (1962) 58 Cal.2d 142, 150, 23 Cal.Rptr. 592, 373 P.2d 640; Bonfils v. Pacific Auto. Ins. Co. (1958) 165 Cal.App.2d 152, 156--158, 331 P.2d 766; American Auto. Ins. Co. v. Transport Indem. Co. (1962) 200 Cal.App.2d 543, 552, 19 Cal.Rptr. 558; Campidonica v. Transport Indemnity Co. (1963) 217 Cal.App.2d 403, 406, 31 Cal.Rptr. 735; Bohrn v. State Farm, etc., Ins. Co. (1964) 226 Cal.App.2d 497, 502, 38 Cal.Rptr. 77.) Any provision in a policy purporting to exclude certain classes of permissive users from coverage is contrary to this public policy and therefore void. (Interinsurance Exchange, etc. v. Ohio Cas. Ins. Co., supra; Bonfils v. Pacific Auto. Ins. Co., supra, 165 Cal.App.2d 152, 156, 331 P.2d 766; Bohrn v. State Farm, etc. Ins. Co., supra, 226 Cal.App.2d 497, 503, 38 Cal.Rptr. 77.) Under these authorities the foregoing exclusionary provision of the policy is void In any event, paragraph 28 of the 'General Conditions' of the policy provided: 'Terms of this policy which are in conflict with the statutes of the state wherein this policy is issued are hereby amended to conform to such statutes.' It is therefore concluded that Colonial's policy extended coverage to permissive users of the truck.

This conclusion opens the way to an inquiry as to whether the loading of the truck by David Ross' employee, Payne, constituted a 'use' of the truck within such extended coverage of Colonial's policy. It will be recalled that the trial court, as one of its two grounds for holding that the policy did not provide coverage, concluded that the loading operation was not a 'use' of the truck. (See fn. 4, ante.) Although we disagree with such conclusion, ⁶ we need not reach this question since we have concluded that the trial court's determination as to non-liability under the policy can be upheld on the other basis indicated by it.

Turning to this point, we first set forth the following pertinent provisions of Colonial's policy: 'INSURING AGREEMENTS To Indemnify the Insured named in Item I of the declarations and herein called the insured. COVERAGE A & B Against Loss from Liability Imposed by Law Upon the Insured arising or resulting from claims upon the insured for actual damages to persons accidentally receiving bodily injuries * * * by reason of the ownership, maintenance or use of any of the automobiles or motor vehicles as enumerated and described * * * if such claims are made on account of (1) COVERAGE A--Bodily Injury or Death suffered by any person or persons, Other than the insured or his employees, as the result of an accident occurring while this policy is in force; * * *' (Emphasis added.)

Did the italicized portion of the above provision effectively exclude from coverage under Colonial's policy a claim made by Ralph Ross, its named insured (Insured), as distinguished for example from a claim made by a third person? We believe it did. Section 415 subdivision (e) (now § 16454) as in effect at the time of the accident...