Travelers Insurance Co. v. General Casualty Co.
| Decision Date | 20 September 1960 |
| Docket Number | No. 2209.,2209. |
| Parties | TRAVELERS INSURANCE COMPANY, a corporation, Plaintiff, v. GENERAL CASUALTY COMPANY OF AMERICA, a corporation, Rex T. Coffin, dba Arimo Lumber and Coal, Harvey G. Rowe, Defendants. |
| Court | U.S. District Court — District of Idaho |
Merrill & Merrill, by Wesley F. Merrill, Pocatello, Idaho, for plaintiff.
Louis F. Racine, Jr., Pocatello, Idaho, for defendant General Casualty Co. of America.
R. Max Whittier, Pocatello, Idaho, for defendant Coffin.
Travelers Insurance Company (Travelers) has instituted this action to determine whether it or the General Casualty Company of America (General) has the duty to defend, and pay any judgment that may result from a negligence action now pending in the Fifth Judicial District Court of the State of Idaho, in and for the County of Bannock. Jurisdiction is properly based upon 28 U.S.C.A. § 1332.
The dispute in the state court arose out of alleged injuries to one Darrell McKenna, an employee of Patton & Linton, Inc., General's insured. McKenna's complaint alleges negligence on the part of Harvey G. Rowe and seeks also to hold his employer, Rex T. Coffin, liable under the doctrine of respondeat superior. It appears that McKenna was an operator of a transit-mix concrete truck for Patton & Linton, Inc. and that the accident occurred while Rowe was helping him unload some ready-mix concrete for some construction being done by Coffin. Rowe and Coffin, along with General, are also defendants in this action.
Upon being sued in the state court, Coffin made a demand on his insurer, Travelers, to defend. Travelers tendered the defense to General, but General refused to defend. It is Travelers' contention that General is the sole insurer of Rowe; that it also extends coverage to Coffin; and that its policy is "excess" insurance. General contends, among other things, that by virtue of the cross-employee clause in its policy, Rowe is excluded from coverage, or, at the very least, Travelers has a concurrent contributing liability with General.
In answering plaintiff's complaint here defendant Coffin also filed a cross-complaint demanding that Travelers defend and, in addition, praying for reasonable attorney fees for defending this action. Defendant Rowe did not answer and his default has been duly entered.
This controversy was submitted to the Court on a stipulation of the parties and their briefs. Having fully considered the same, this Court is of the opinion that the duty to defend the action in the state court rests on the insurer of the alleged tortfeasor Rowe and that his sole insurer is the General Casualty Company of America.
By his state court action McKenna seeks to hold Travelers' insured, Coffin, liable as the employer of the alleged negligent employee Rowe. If liability is established, then, according to the weight of authority, Coffin could recoup his losses from his negligent employee. Continental Cas. Co. v. Phoenix Const. Co., 1956, 46 Cal.2d 423, 296 P.2d 801, 57 A.L.R.2d 914; Pacific Employers Ins. Co. v. Hartford Acc. & Ind. Co., 9 Cir., 1955, 228 F.2d 365. While it appears that the Supreme Court of the State of Idaho has not had the opportunity to pass on the question, this Court believes that if this issue were presented the Supreme Court of Idaho would adopt the majority view and allow such recoupment. It follows that if the employer may so recoup his losses then his insurer may subrogate and collect from his employee or the employee's insurer. Pacific Employers Ins. Co. v. Hartford Acc. & Ind. Co., supra; Canadian Indemnity Co. v. United States F. & G. Co., 9 Cir. 1954, 213 F.2d 658; Travelers Insurance Co. v. American Fidelity & Cas. Co., D.C.Minn.1958, 164 F.Supp. 393. The reason for this rule is obvious. It prevents a multiplicity of suits and holds the insurer liable who by a circuity of actions would eventually be obligated to pay any judgment rendered against an employer resulting from the negligence of his employee. The conclusion is then inescapable that the insurer ultimately liable should be obligated to defend in the first instance.
The insurer ultimately liable here is General. The Court finds that Travelers' policy provides coverage for Coffin, but not for his employee Rowe. Rowe is neither the named insured nor does he come within the definition of insured...
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