Travelers Insurance Co. v. EMPLOYERS'LIABILITY ASSUR. CORP.
| Decision Date | 11 June 1965 |
| Docket Number | Civ. A. No. 16028. |
| Parties | The TRAVELERS INSURANCE COMPANY and The Travelers Indemnity Company, Plaintiffs, v. The EMPLOYERS' LIABILITY ASSURANCE CORPORATION, Ltd., Defendant. |
| Court | U.S. District Court — District of Maryland |
Mathias J. DeVito and Joseph H. Young, Baltimore, Md., for plaintiffs.
Thomas G. Andrew and Rollins, Smalkin, Weston & Andrew, Baltimore, Md., for defendant.
This diversity action has been instituted to recover plaintiffs' expenditure of sums in settlement of a suit for personal injuries against their named insured and the cost of carrying on that litigation. It raises questions of whether defendant insured plaintiffs' named insured and, if so, whether plaintiffs or defendant were the primary insurer.
Plaintiffs (Travelers) insured Hess, Inc. (Hess) under a comprehensive liability policy, while defendant (Employers) insured Stewart Petroleum Company (Stewart) under an automobile liability policy. Hess distributes petroleum products and owns and operates an oil truck loading facility in Baltimore City. Stewart was one of its customers, and employed Luther E. Yates (Yates).
On February 15, 1960 Yates brought a Stewart truck to the Hess facility for loading. The truck was divided into three separate tanks, each of which is filled by an opening in the top. Oil is pumped into the top through a spiller or spout. The flow of oil is controlled by a loading valve operated by a manual lever. The manual lever is activated by pulling an attached wire cord. On the crucial date, after filling the first of three tanks, Yates climbed on top of the Stewart truck for the purpose of starting to fill the second one. He put the spout into the second tank and started to pull the wire cord connected to the manual lever when the wire, which was defective, snapped, thus causing him to fall backwards off the truck and suffer serious personal injuries. The spiller, loading valve, manual lever and attached wire cord are all devices owned and maintained by Hess and furnished by Hess to Yates for use in filling the Stewart truck.
Yates sued Hess in a state court, alleging that his injuries were incurred in the process of loading the Stewart truck and proximately caused by the negligent maintenance of a defective wire handle on the premises owned by Hess. Although Travelers requested Employers to defend the suit, Employers declined to recognize Hess as an insured under its automobile policy and refused to defend. Travelers conducted the defense, keeping Employers advised of all proceedings, and ultimately concluded to settle the suit for $105,000.00, themselves paying Yates their policy limits of $100,000.00.
The facts recited are undisputed, and Travelers seeks partial summary judgment as to liability, leaving for trial only the question of its damages.
Travelers admits that Hess was its insured, but contends that Hess was also Employers' insured under the provisions of the automobile policy issued by Employers to Stewart, set forth in the margin.1 In essence, Travelers argues that Hess was engaged in a "use" of the truck within the meaning of the terms of the loading and unloading provision of the policy, by reason of the fact that Yates was injured while the truck was being loaded with oil at the Hess facility.
The scope which the Maryland courts would afford to an automobile policy providing coverage for injuries caused by accident and arising out of the use of certain vehicles where "use" is defined by the policy to include "the loading and unloading thereof" has been considered in this Court on two occasions, American Auto. Ins. Co. v. Master Bldg. Supply & Lbr. Co., 179 F.Supp. 699 (D.Md.1959), Employers' Liability Assur. Corp. v. Indemnity Ins. Co., 228 F.Supp. 896 (D.Md.1964). The decisions in those cases control the result here. In the last cited case the difference in the scope of coverage afforded by a policy of insurance for bodily injury...
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