U.S. Steel Corp. v. Transport Indem. Co.

• Decision Date: 12 April 1966
• Citation: 50 Cal.Rptr. 576,241 Cal.App.2d 461
• Court: California Court of Appeals Court of Appeals
• Parties: UNITED STATES STEEL CORPORATION, Plaintiff and Appellant, v. TRANSPORT INDEMNITY COMPANY, Defendant and Respondent. TRANSPORT INDEMNITY COMPANY, Cross-Complainant and Respondent, v. UNITED STATES STEEL CORPORATION and Insurance Company of North America, Cross-Defendants and Appellants. Civ. 11082.

Page 576

50 Cal.Rptr. 576

241 Cal.App.2d 461

UNITED STATES STEEL CORPORATION, Plaintiff and Appellant, v. TRANSPORT INDEMNITY COMPANY, Defendant and Respondent.

TRANSPORT INDEMNITY COMPANY, Cross-Complainant and Respondent, v. UNITED STATES STEEL CORPORATION and Insurance Company of North America, Cross-Defendants and Appellants.

Civ. 11082.

District Court of Appeal, Third District,

California.

April 12, 1966.

Rehearing Denied May 11, 1966.

Rich, Fuidge, Dawson, Marsh, Tweedy & Morris, by Charles C. Dawson, Jr., Marysville, for appellant.

Kroloff, Brown, Belcher & Smart, Stockton, and William B. Boone, Santa Rosa, for respondent.

BRAY, Justice (assigned).

Plaintiff United States Steel Corporation (hereinafter referred to as Steel) appeals from a judgment in favor of defendant Transport Indemnity Company (hereinafter referred to as Transport) on plaintiff's complaint, and together with cross-defendant Insurance Company of North America (hereinafter referred to as INA), from a judgment in favor of Transport on the latter's cross-complaint.

QUESTIONS PRESENTED

1. Was Steel an 'additional insured' under the Transport policy?

2. Was Steel 'using' the Bigge truck within the meaning of the Transport policy?

3. Was Steel expressly excluded from that policy?

4. Is Transport's policy excess over INA?

RECORD

Steel brought this action in declaratory relief against Transport to secure a declaration that a Transport policy issued to Bigge Drayage Company, a corporation, covered Steel as an additional insured. Transport in turn by cross-complaint against Steel and INA sought a declaration that INA was the sole insurer covering Steel and that, in any event, Transport's policy was excess insurance over the INA policy. INA admitted coverage except as to $100,000 and claimed that any liability over that amount should be prorated between the two policies. The trial court found that Steel was not covered by the Transport policy. Both INA (which by the court's judgment became sole insurer of Steel) and Steel appealed.

FACTS

The appeal is on the clerk's transcript containing an agreed statement and the insurance policies. Hence, the facts are not in dispute.

The controversy arises out of an accident in which one Stokes, an employee of Bigge Drayage Company acting within the scope of his employment, was injured when the Bigge truck which he was driving went off the road. The truck had been sent to American Bridge Co., a subsidiary of Steel, to pick up steel girders and to deliver them to a job site in the Feather River Canyon. Steel loaded the truck and Stokes was driving to his destination when he was injured. He sued Steel for his injuries, claiming that Steel improperly placed the load on the truck, causing it to shift, in turn causing the truck to go out of control, whereby he was injured. ¹

At the time of the accident the Transport policy covered Bigge and the truck. Prior to the accident Transport furnished Steel a certificate of insurance showing that Transport, together with Security Mutual, whose policy was included in that of Transport, had issued to Bigge automobile coverage in an overall amount of $10,000,000.

INA's policy insured Steel under a policy for $1,100,000. It contained a provision requiring Steel to pay the first $100,000 of any loss.

Under the terms of the Transport policy the sole insured named in the policy is Bigge. The policy provides that it will pay on behalf of the 'insured' all damages and costs on judgments as a result of bodily injuries to persons 'caused by' ownership, maintenance or use of owned or nonowned automobiles. Automobile is defined as a land motor vehicle. The word 'insured' is defined in the policy to mean 'the named insured,' any other person, firm or organization to whom protection has been extended under the policy, and executive officers and directors.

The policy provides that it shall comply with motor vehicle financial responsibility laws and applicable state and federal regulations. As Bigge is a public utility carrier, there is attached to the policy the standard form of endorsement required by the Public Utilities Commission. This provides that the company agrees to pay 'any final jugdment rendered against The insured for bodily injury to or death of any person, or loss of or damage to property of others (excluding injury to or death of the insured's employees * * , resulting from the operation, maintenance, or use of motor vehicles * * *.' (Emphasis added.)

There were certain exclusions to the policy which will hereinafter be discussed. The first question to be determined is:

1. Is Steel an 'additional insured'?

Steel is not a named insured, nor did the policy contain an omnibus clause--a clause insuring all persons using the truck with the permission of the named insured. However, section 415 of the Vehicle Code, now superseded by section 16451, provided, in effect, that an owner's policy of liability insurance shall insure the named insured and any other person using any insured automobile with the express or implied permission of the assured. In Wildman v. Government Employees' Insurance Co. (1957) 48 Cal.2d 31, 39, 307 P.2d 359, 364, it was held 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 * * *.'

In Campidonico v. Transport Indemnity Co. (1963) 217 Cal.App.2d 403, 31 Cal.Rptr. 735, there was a situation similar to that in the case at bench. There, Bridge, a truck driver acting in the scope of his employment with Miles & Sons Trucking Service, took his employer's truck which was insured by the defendant Transport Company to Permanente Cement to have it loaded with cement. Campidonico, an employee of Permanente, was loading the truck when a heavy metal object fell on Bridge's head, caused by Campidonico's alleged negligence. Bridge sued the latter and Permanente for the injuries sustained. Miles & Sons was the named insured in the Transport policy and there was no provision for any other insured. However, the court held (p. 406, 31 Cal.Rptr. p. 737) that section 16451 of the Vehicle Code, supra, a part of the Financial Responsibility Law, 'must be considered a part of every policy of liability insurance even though the policy itself does not specifically so provide' and that therefore Campidonico and Permanente, being permissive users of the Miles & Sons' truck, were additional insureds under the policy.

In view of the provisions of section 16451 of the Vehicle Code and the rule announced in Wildman and Campidonico, supra, it must be deemed that Steel was covered by Transport's policy, if at the time of the accident Steel was Using Bigge's truck.

2. Was Steel 'using' the Bigge truck?

Steel contends that because it loaded the truck and its girders so loaded were being transported on it, it must be held that Steel was 'using' the truck when the accident occurred.

Transport's policy did not expressly cover loading and unloading. In other jurisdictions there is a split of authority upon the question of whether an insurance policy which provides coverage to persons 'using' an automobile but does not expressly include 'loading and unloading' includes liability for injuries caused in the loading and unloading process. (See 12 Couch on Insurance 2d, sec. 45:64, p. 153, et seq.) However, in California it has been uniformly held that in the loading Or unloading of a truck the negligent party is 'using' the truck even though the policy does not expressly include (loading or unloading' and is an additional insured under the policy. (General Pump Service, Inc. v. Travelers Ins. Co (1965) 238 A.C.A. 85, 92, 47 Cal.Rptr. 533; Industrial Indemnity Co. v. General Ins. Co. (1962) 210 Cal.App.2d 352, 357, 26 Cal.Rptr. 568; Campidonico v. Transport Indemnity Co., supra, 217 Cal.App.2d 403, 31 Cal.Rptr. 735; Continental Cas. Co. v. Zurich Ins. Co. (1961) 57 Cal.2d 27, 33, 17 Cal.Rptr. 12, 366 P.2d 455.)

Thus, the question to be determined in the case at bench is whether Stokes' injury was the result of 'the use,' Including the loading, of the truck within the meaning of those terms in Transport's policy. In determining this question it is important to note the extent of liberality with which the courts have construed the terms 'use' or 'using' in automobile liability insurance policies.

In General Pump Service Co., Inc. v. Travelers Ins. Co., supra, the court held that the insured truck was being 'used' by the owner of another truck which was loading a pump motor on the insured truck by means of an 'A' frame installed on the other truck. The owner of a crane unloading concrete pipe from an insured truck was held in Industrial Indemnity Co. v. General Ins. Co., supra, 210 Cal.App.2d at page 357, 26 Cal.Rptr. 568, to be 'using' the truck within the liability policy covering the truck.

Transport contends that section 16451 of the Vehicle Code, which provided at the time of the accident that an owner's policy of liability insurance shall 'Insure the person named therein and Any other person * * * using any described motor vehicle with the express or implied permission of said assured' and which has been held 'as matter of law, covers permissive users' (see Interinsurance Exchange of Automobile Club of Southern California v. Ohio Cas. Ins. Co. (1962), 58 Cal.2d 142, 23 Cal.Rptr. 592, 373 P.2d 640), applies only to permissive users who are driving the insured vehicle and not to other users of the vehicle. There is no such restriction in the statute.

Demonstrating further the liberality of the courts in construing the word 'use' in automobile liability insurance policies is National Indemnity Co. v. Ewing (1964) 235 Md. 145, 200 A.2d 680. National insured one Ewing's Oldsmobile. The policy provided coverage for liability for damages for bodily injury 'arising out of' the...