Travelers Ins. Co. v. General Acc., Fire & Life Assur. Corp.

• Decision Date: 26 May 1971
• Citation: 28 N.Y.2d 458,322 N.Y.S.2d 704,271 N.E.2d 542
• Parties: , 271 N.E.2d 542 TRAVELERS INSURANCE COMPANY et al., Respondents, v. GENERAL ACCIDENT, FIRE & LIFE ASSURANCE CORPORATION, LTD., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 704

322 N.Y.S.2d 704

28 N.Y.2d 458, 271 N.E.2d 542

TRAVELERS INSURANCE COMPANY et al., Respondents, v. GENERAL ACCIDENT, FIRE & LIFE ASSURANCE CORPORATION, LTD., Appellant.

Court of Appeals of New York.

May 26, 1971.

Bernard Meyerson, Brooklyn, and Thomas V. Kingham, New York City, for appellant.

Peggy Lee Braden, New York City, for respondents.

BREITEL, Judge.

The action is between the separate liability insurers of a tractor and trailer, used in combination, which while negligently driven caused personal injuries to a number of bus passengers in a collision with the bus. Plaintiff insurer for the tractor settled with the bus passengers and the issue is what portion of the settlement should be paid by the insurer for the trailer.

The parties submitted the case on agreed facts under CPLR 3222. The trial court rendered judgment requiring defendant insurer for the trailer to pay half the total settlement figure, namely, $22,488.08. The Appellate Division unanimously affirmed (34 A.D.2d 897, 311 N.Y.S.2d 265).

Conceding liability for contribution, the trailer insurer appeals, contending, however, that it should not be liable for more than one sixth of the settlement. It urges that its share should be proportionate to the respective policy limits for single claims. The tractor insurer argues that absent a specifically applicable policy provision the liability is joint and equal and, therefore, should be shared equally. In the alternative it argues that it should receive a two-sevenths contribution from the trailer insurer.

There should be a modification to limit the contribution of the trailer insurer to two sevenths of the settlement total, that being the ratio of the accident, rather than the individual claim, limit in the trailer policy to the sum of the accident limits in all the applicable insurance.

The tractor was owned by Jersey Truck Renters, Inc., and the trailer, a semitrailer, was owned by B & B Truck Renters. In 1959 each element was rented to Grand City (Grand City Container Corporation and its affiliate, Federal Carton Corporation). Driven as a unit by Grand City's employee, the combination collided with a bus in New York City. The tractor insurers investigated the claims of the bus passengers, settling and paying nine claims totaling $44,976.16, in a range from $300 to $20,000. The limits of the tractor insurance were $500,000 for each claim and $750,000 for a single accident. The trailer policy limits were $100,000 and $300,000. The trailer insurer stipulated that the settlements were reasonable and that it is obligated to share in their payment. The only dispute between the insurers, and the sole issue for judicial determination, is the apportionment.

The Vehicle and Traffic Law Consol.Laws, c. 71 imposes joint and several liability upon both the tractor owner and trailer owner for the negligent use or operation of the tractor-trailer combination ( § 388, subd. 1). The owner of each element is covered by his respective insurance policy against the total liability imposed by statute (Insurance Law, Consol.Laws, c. 28, § 167, subd. 2; Vehicle and Traffic Law, § 388, subd. 4).

Each of the insurers, under the provisions of its policy, excludes coverage for others than the named insured. Thus, each policy, except as to the named insured, denies coverage if the tractor or trailer is used with its complementary element, if owned or rented by the user, but without insurance from the issuer of the policy. Because of this provision, and despite the 'additional insured' clause in each of the policies which makes anyone operating the insured vehicle with consent of the named insured an additionally insured person, there is no concurrent insurance for the same risk. If there had been, the policy provision directing contribution proportionate to the respective limits of concurrent policies of insurance would be applicable. The 'other insurance' clause reads as follows: 'If the insured has other insurance against a loss covered by this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss'.

In an unusually thorough analysis, in a dispute as here between the insurers of a tractor and trailer, the late Mr. Justice Geller developed the reasoning why, as a result of the intermeshing of statutory mandated liabilities and the policy provisions, there is no concurrent or overlapping insurance of the same risk and why, therefore, the policy provision for proportionate contribution was not applicable (see Employers Liab. Co. v. Indemnity Ins. Co., 37 Misc.2d 421, esp. 424--426, 234 N.Y.S.2d 839, 843--845; accord, Hiscock v. Kuinlan, 62 Misc.2d 842, 845--847, 310 N.Y.S.2d 331, 334--334; cf. Mondelli v. Harison Hub, Bed & Spring Co., 10 Misc.2d 883, 886, 888, 172 N.Y.S.2d 931, 934, 936). Neither owner is insured under the other's policy. Nor does Grand City as the lessee of the combination qualify as an additional insured concurrently under each of the trailer and tractor policies. They are excluded from such status under each policy becuase of the conditions attached when tractor and trailer are used together and are not insured by the same insurer. Since the lessee is excluded, its employee, the driver, should also be excluded as an additional insured (but see General Mut. Ins. Co. v. Sun Ins. Co., 24 A.D.2d 135, 136, 264 N.Y.S.2d 716, 717). To hold otherwise deprives the exclusionary language in each policy of any practical meaning in the case of corporate lessees, which perforce act through employees.

On this analysis neither the statute (Vehicle and Traffic Law, § 388, subd. 1) nor the policies provide any canon for contribution. CPLR 1401 does not apply in the absence of a single judgment against joint tort-feasors, in which case, of course, there would be an equal sharing of liability. There is, to be sure, the well-settled equitable right to contribution, where there is concurrent insurance even in the absence of a policy provision for apportionment. Of course, and the...