Western Cas. & Sur. Co. v. National Union Fire Ins. Co., No. 80-1174

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: Before McWILLIAMS, BARRETT and DOYLE; McWILLIAMS
• Citation: 677 F.2d 789
• Parties: The WESTERN CASUALTY & SURETY COMPANY, Plaintiff-Appellant, v. NATIONAL UNION FIRE INSURANCE COMPANY, A Corporation, Defendant-Appellee.
• Docket Number: No. 80-1174
• Decision Date: 14 May 1982

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677 F.2d 789 The WESTERN CASUALTY & SURETY COMPANY, Plaintiff-Appellant,
v.
NATIONAL UNION FIRE INSURANCE COMPANY, A Corporation,
Defendant-Appellee. No. 80-1174. United States Court of Appeals,
Tenth Circuit. May 14, 1982.

Steven R. Smith, Wichita, Kan. (H. W. Fanning, Wichita, Kan., with him on the brief), of Kahrs, Nelson, Fanning, Hite & Kellogg, Wichita, Kan., for plaintiff-appellant.

Rex G. Beasley of Fleeson, Gooing, Coulson & Kitch, Wichita, Kan., for defendant-appellee.

Before McWILLIAMS, BARRETT and DOYLE, Circuit Judges.

McWILLIAMS, Circuit Judge.

This is a dispute between two insurance companies over policy coverage. Pursuant to the provisions of the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 (1976 & Supp. II 1978), Western Casualty & Surety Company (Western), a Kansas corporation, brought an action against National Union Fire Insurance Company (National), a Pennsylvania insurance company authorized to do business in Kansas. Western sought a

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declaratory judgment that a policy of garage liability insurance issued by National to Davis-Moore Oldsmobile, Inc., provided primary liability coverage to Jeanette M. Kirk, who was involved in a collision with a motorcyclist while driving a vehicle owned by Davis-Moore Oldsmobile, Inc. Western and National filed a stipulation of facts with the trial court, and thereafter each asked, in effect, for summary judgment in its favor. The case was submitted on written briefs for final determination, the parties waiving oral argument. The trial court entered judgment in favor of National, the defendant, and Western, the plaintiff, now appeals.

From the stipulation of facts we learn the following: Jeannette M. Kirk owned a 1976 AMC Pacer and, prior to the date of the accident, had entered into a contract for automobile liability insurance with Western. A copy of this policy was attached to the stipulation of facts. Ms. Kirk took her AMC Pacer to Davis-Moore Oldsmobile, Inc., a Wichita, Kansas, automobile dealer, for routine servicing. While the Pacer was in the care and custody of Davis-Moore, it was damaged by one of Davis-Moore's employees. Ms. Kirk was advised that her car had been damaged and that it could not be returned to her for several days. She initially declined an offer by Davis-Moore to furnish her a substitute car. However, when it became apparent that the repairs would not be completed as quickly as anticipated, Davis-Moore again offered Ms. Kirk the use of one of its cars, and Ms. Kirk accepted this offer. When Ms. Kirk picked up the car from Davis-Moore, she and an employee of Davis-Moore signed a document entitled "Car Rental Agreement." A copy of this agreement was also attached to the stipulation of facts. At all times here relevant, National had in effect a policy of garage liability insurance which had been issued to Davis-Moore Oldsmobile, Inc. A copy of that insurance policy was also attached to the stipulation of facts. As indicated, the next day after she took possession of the substitute car from Davis-Moore, Ms. Kirk, while driving the vehicle owned by Davis-Moore, was involved in a collision with a motorcyclist, who later sued her in a state court for personal injury and property damage.

Western concedes that, under the temporary substitute automobile provision of its policy, Ms. Kirk was an insured when the automobile she was driving collided with the motorcycle. Western contends, however, that, under the "Other Insurance" provisions of the policy, its insurance "with respect to temporary substitute automobiles ... shall be excess insurance over any other valid and collectible insurance." In this connection, Western argues that Ms. Kirk was also an insured of National's under the policy of garage liability insurance issued Davis-Moore by National, and that by virtue of the "Other Insurance" provision of its policy, Western is only the secondary insurer and National is the primary insurer.

National concedes that its policy with Davis-Moore does provide coverage for liability arising out of the use of any automobile owned by Davis-Moore "which was furnished for the use of any person." Notwithstanding, National asserts that Ms. Kirk is not an...