U.S. Fidelity & Guaranty Co. v. Hartford Acc. & Indem. Co.

• Decision Date: 20 January 1969
• Citation: 165 S.E.2d 404,209 Va. 552
• Court: Virginia Supreme Court
• Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY et al. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY et al.

Page 404

165 S.E.2d 404

209 Va. 552

UNITED STATES FIDELITY AND GUARANTY COMPANY et al. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY et al.

Supreme Court of Appeals of Virginia.

Jan. 20, 1969.

W. F. Hazen, Richmond (Taylor, Hazen & Laster, Richmond, on brief), for appellants.

Edward A. Marks, Jr., Richmond (Sands, Anderson, Marks & Clarke, Richmond, on brief), for appellees.

Before EGGLESTON, C.J., and SNEAD, I'ANSON, CARRICO, GORDON and HARRISON, JJ.

HARRISON, Justice.

The controversy here is between two insurance companies and the issue involved is whether an accident which occurred on a highway construction job in Pittsylvania County near South Boston arose out of the 'use' of a truck owned by Thompson's Ready-Mix Incorporated and insured by Hartford Accident and Indemnity Company. The relevant facts are not in dispute.

In 1963, W. W. Warsing was the general contractor on the State Highway construction project which involved the building of an access road and a railroad overpass or trestle over this road. On October 14, 1963, the specific work being performed was the pouring of concrete slabs which would form the base for the new overhead trestle. The forms for these slabs were located some 25 feet above the ground level.

Warsing had a contract with Thompson by the terms of which Thompson agreed to deliver 'at the job site' an estimated 1000 cubic yards of transit-mixed concrete at a fixed unit price. Deliveries were made from Thompson's mixing plant to the job site by transit-mix trucks. These trucks are so constructed that reversing the rotation of the mixer drum caused the expulsion of the contents thereof from an opening in the rear of the drum. The concrete mix then falls into a 15-foot chute which is an integral part of the machine, the bottom portion of which can be swiveled from one side to the other.

Warsing was to supply the means for getting the concrete from the ready-mix trucks to the forms on the bridge. This was to be accomplished by a crane with a bucket attached thereto for conveyance of the concrete from the trucks to the bridge deck.

On the day of the accident, Warsing's crane was being operated by his employee, William S. Davis, and the general operation was under the supervision of Warsing's superintendent, Graham Evans Hayes. One of Thompson's trucks had made an uneventful delivery to the job site, unloaded and pulled away. The second Thompson truck was driven by Frank Woodruff Kelly. He backed his truck into position, added water to the concrete at the direction of Hayes, and proceeded to fill the first bucket. When the bucket was filled, Kelly reversed the rotation of the drum and swung the chute around to the side of the truck. Warsing's crane operator, Davis, then actuated the mechanism to lift the bucket of concrete. After the bucket had cleared the ground and was in the air, one of the cables which held the boom of the crane in an upright position suddenly broke, and the boom fell to the ground, striking and killing Kelly.

Hartford had in force a workmen's compensation insurance policy and also a 'Comprehensive General-Automobile Liability' policy covering Thompson. The United States Fidelity and Guaranty Company had in force a 'Comprehensive General-Automobile Liability' policy covering Warsing. The accident was reported to both companies.

Hartford notified U.S.F. & G. of its subrogation rights against Warsing under the Virginia Workmen's Compensation Act. U.S.F. & G. took the position that Warsing and Davis were additional insureds under Hartford's 'Comprehensive General-Automobile Liability' policy, issued to Thompson, and that any liability of Warsing and Davis to Kelly's estate would be covered under that policy.

In April 1964, Doris McGuire Link, Administratrix of the estate of Frank Woodruff Kelly, deceased, filed motion for judgment in the Circuit Court of Pittsylvania County against W. W. Warsing in the amount of $35,000 for the wrongful death of her decedent. The motion was referred to U.S.F. & G. by Warsing. U.S.F. & G. requested Hartford to assume the defense of Warsing in accordance with the position which it had taken previously that Warsing was an additional insured under the Hartford policy. Hartford refused to defend, and U.S.F. & G. thereupon referred the matter to its local counsel. Various proceedings were had in the wrongful death action. Suffice it to say that following extensive negotiations, this action was settled for $18,000. The settlement involved the subrogation rights of Hartford, the Workmen's Compensation carrier for Thompson, and was approved by the Circuit Court of Pittsylvania County and the Industrial Commission of Virginia. In addition to its loss payment of $18,000, U.S.F. & G. paid $1,258.64 legal expenses for the handling of the tort action.

During the pendency of the action in Pittsylvania County, U.S.F. & G. and Warsing filed a petition for declaratory judgment in the court below against Hartford, Thompson and the Administratrix of Kelly's estate, wherein the appellants sought a declaration that Hartford had the obligation to defend and indemnify Warsing with respect to the asserted cause of action for the wrongful death of Kelly. The trial court denied appellants declaratory relief, holding that the obligation to defend and indemnify Warsing in the wrongful death action was the responsibility of U.S.F. & G. under its liability policy to Warsing, and not that of Hartford under its policy to Thompson. We granted appellants a writ of error to this final judgment.

The dispositive question in the case is whether or not Warsing and his crane operator were 'using' the Thompson ready-mix concrete truck within the meaning of the 'loading and unloading' clause of the Hartford automobile-liability policy covering that truck. The policy contained the following provisions:

'1. Coverage A--Bodily Injury Liability--Automobile: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of any automobile.

'The unqualified word 'insured' includes the named insured and also includes * * * (2) under coverages A and C, any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured.

'Use of an automobile includes the loading and unloading thereof.'

Warsing claims coverage under the omnibus insured clause and the loading and unloading clause of the Hartford policy. U.S.F. & G. claims that, under the facts of this case, its liability insurance policy provided Warsing only excess and secondary coverage.

Hartford contends that the collapse of Warsing's crane, and the resultant injury to Kelly, did not arise out of any use of the Thompson truck, or out of the unloading of the truck within the meaning of the Hartford policy; that no causal relation existed between the use of the truck and an accident caused by an instrumentality under the sole operation and control of Warsing, and his employees; and that the remoteness from the Thompson truck of the negligence causing the accident precludes recovery under the Hartford policy.

There are a multitude of judicial decisions involving the precise question which is involved in this case. Unfortunately they present little in the way of consistency in determining 'loading and unloading' as those terms are used in automobile-liability insurance policies.

This court dealt with the question in London Guarantee and Accident Company v. White and Brothers, 188 Va. 195, 49 S.E.2d 254 (1948).

In that case the insured under an automobile-liability insurance policy was a coal dealer delivering coal to a customer in a dump truck. The coal was unloaded at the curb and shoveled into a manhole in the sidewalk. The truck involved had dumped a load of coal and left the premises. Two employees of the insured were shoveling the coal into the manhole when a pedestrian on the sidewalk was injured by stumbling on a lump of coal. The company having the liability coverage on the truck refused to defend a suit brought by the pedestrian against the insured owner of the vehicle. The insured thereupon settled the case and brought suit against its liability carrier and recovered. We affirmed on appeal. The insurance policy covered the 'loading and unloading' of the truck and contained the usual provisions for the defense of the insured. It was claimed that the pedestrian was injured while the coal was being 'unloaded' from the coal dealer's truck. With reference to the construction of the 'loading and unloading' clause of the policy there under review, we said:

'There are two theories in regard to liability under the 'loading and unloading' clause of the policy in judgment. One is called the 'coming to rest' doctrine. Under this doctrine 'unloading' is given a narrow construction and is held to extend only to the actual lifting of the article from the motor vehicle to a place of rest outside the vehicle, and the connection of the vehicle with the process of unloading has ceased.

'The other theory of liability is called the 'complete operation' doctrine. It gives to the 'loading and unloading' clause a broader construction and interprets it to cover, as respects unloading the entire process of transportation to the point where the goods are turned over to the party for whom intended at the agreed place of delivery.' 188 Va. 195 at p. 201, 49 S.E.2d 254 at p. 257.

Numerous cases were cited supporting the respective theories. Following a discussion of several cases holding that the unloading...