Vance Trucking Co. v. Canal Insurance Co.
| Decision Date | 07 May 1968 |
| Docket Number | No. 10669.,10669. |
| Citation | 395 F.2d 391 |
| Parties | VANCE TRUCKING COMPANY, Inc, and Allstate Insurance Company, Appellants, v. CANAL INSURANCE COMPANY, Forrester Trucking Company, Inc., Herbert Francis Carson, Scott Carson, Susan Carson, David Carson, Christopher Carson, and Robert H. Carson, Administrator of the Estate of Annie Barbara C. Carson, Deceased, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
O. G. Calhoun, Jr., Greenville, S. C. (W. Francis Marion, Greenville, S. C., on brief), for appellants.
Wesley M. Walker, Greenville, S. C. (O. Doyle Martin and Leatherwood, Walker, Todd & Mann, Greenville, S. C., on brief), for appellees Canal Ins. Co. and Forrester Trucking Co., Inc.
C. T. Wyche, Greenville, S. C. (David L. Freeman and Wyche, Burgess, Freeman & Parham, Greenville, S. C., on brief), for appellees Carsons.
Before SOBELOFF, BOREMAN and J. SPENCER BELL,* Circuit Judges.
Different phases of this litigation have heretofore been in the federal courts. The case was here once before on a question not now involved in this appeal and was remanded to the district court for further proceedings.1 On remand the district court made necessary findings of fact and stated its conclusion that both Vance Trucking Company (Vance) and Forrester Trucking Company (Forrester), and their insurers, must defend in a tort action in the district court which precipitated this controversy.2 Since the district court there stated the facts in detail it is unnecessary to restate them fully here. However, a very short statement of undisputed facts is included herein in order to acquaint the reader with the general nature of the litigation.
At all times pertinent hereto Forrester was a licensed trucking company with an office and a terminal at Sumter, South Carolina, and was engaged primarily in hauling with its own motor vehicles certain commodities within South Carolina under authority of the South Carolina Public Service Commission. During slack seasons Forrester leased vehicles to Vance for use in interstate hauling, Vance being licensed to operate interstate under authority of the Interstate Commerce Commission. Vance had its main office at Henderson, North Carolina, and maintained a terminal and dispatcher at Lake City, South Carolina. Forrester was the named insured in a liability policy issued by Canal Insurance Company (Canal) with limits of $100/$300,000. Vance was the named insured in a liability policy issued by Allstate Insurance Company (Allstate) with limits of $500/$500,000.
During the summer of 1962 Vance and Forrester entered into a lease agreement whereby Forrester was to furnish tractor-trailer trucks and drivers to Vance for its use in hauling commodities for Vance's own customers. The leased vehicles operated primarily out of Vance's terminal at Lake City with drivers furnished by Forrester and who were approved by Vance according to the terms of the lease agreement.
Sammie Burgess, an uneducated Negro then fifty years old, was one of Forrester's drivers. On October 3, 1962, Vance's dispatcher in Lake City called Forrester's office and asked that a driver be sent to the terminal the following morning to transport a load of tobacco to Fairmont, North Carolina. Pursuant to this request Burgess, who had been driving the leased vehicles for Vance on other occasions, reported to the dispatcher, and picked up a loaded tractor-trailer unit which was already in Lake City. After delivering the cargo in Fairmont, Burgess returned to Lake City and was instructed by Vance's dispatcher to take the tractor and an empty trailer to Forrester at Sumter. On the way to Sumter the vehicle operated by Burgess was involved in an accident in which Mrs. Barbara Carson was killed and her husband and four children were injured.
Upon consideration of all the facts and circumstances the district court determined that, at the time of the accident, Burgess was then and there the agent and servant of both Vance and Forrester; that both Vance and Forrester were responsible for the acts of Burgess; and that Vance and Forrester, and their insurers, must defend in tort actions brought on behalf of the Carsons.3 The question of "proportionate pecuniary responsibility" had not been presented and the court rendered no decision with respect thereto at that stage of the proceedings. Since we conclude that the factual findings are supported by substantial evidence we cannot say that they are clearly erroneous. Permissible inferences and conclusions were drawn from the facts as found and we affirm that portion of the decision below as reported at 249 F.Supp. 33.
Subsequent to the initial determination with respect to the tort liability of Vance and Forrester the plaintiffs, Vance and Allstate, and the defendants, Forrester and Canal, moved that the order and judgment of the district court be supplemented, altered or amended by determining the questions of insurance coverage. Thereafter the district court held that Allstate was pecuniarily responsible for five-sixths of the amount of any judgments obtained by the Carsons growing out of the accident, and that Canal would be pecuniarily responsible for one-sixth of the amount of any such judgments. Vance Trucking Company v. Canal Insurance Company, 251 F.Supp. 93 (D.S.C.1966).
Assuming, arguendo, the correctness of the district court's determination that both Vance and Forrester were responsible for the acts of Burgess, Allstate contends that Canal's coverage is primary and protects Allstate's named insured (Vance), Canal's named insured (Forrester), and Burgess, the driver. Canal urges pro rata liability in asking for a determination of "proportionate" pecuniary responsibility of the parties. Both Allstate and Canal rely upon various policy provisions, inclusions and exclusions, in an effort to support their contentions.
The district court stated that a construction of the insurance policies was necessary and that the issue as to the liability coverage must be determined from the contractual intent and objective of the parties as expressed in their policies and applicable endorsements. The court concluded that by reason of the respective policy provisions neither policy covered Burgess at the time of the accident.
Allstate's endorsement 14-B provides that the policy does not apply to persons, their agents or employees, engaged in transporting property for Vance "unless the accident occurs while such automobile is being used exclusively in the business of the named insured." The "other insurance" clause in the Allstate policy provides that if the insured, Vance, had "other insurance against a loss covered by this policy the Company Allstate shall not be liable under the 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; provided, however, the insurance with respect to temporary substitute automobiles under Insuring Agreement IV or other automobiles under Insuring Agreement V shall be excess insurance over any other valid and collectible insurance." The district court found that the vehicle involved in the accident was not being used exclusively in the business of Vance, Allstate's named insured, and that neither Burgess nor Forrester was covered by the Allstate policy.
Canal's policy, in which Forrester is the named insured, contains an exclusion clause which provides that no coverage is extended to "any person, firm or organization using the described automobile pursuant to any lease, contract of hire, bailment, rental agreement, or any similar contract or agreement either written or oral, expressed or implied." This policy further provides that when the automobile described therein is being used pursuant to a lease "the insurance afforded the named insured Forrester shall be excess insurance over any other insurance." The court found that Burgess was operating the accident vehicle pursuant to the lease agreement and, consequently, neither Burgess nor Vance was covered by the Canal policy.
At 251 F.Supp. 93, 96, the court stated:
Following an extended discussion of "other insurance" policy provisions, the court continued:
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