St. Paul Fire & Marine Insurance v. Hartford Accident & Indemnity Co.

In this declaratory relief action plaintiff St. Paul Fire & Marine Insurance Company is a truck liability insurer which seeks to impose coverage on two other truck insurance carriers under the “loading and unloading” clauses of the others’ policies. The suit was submitted for decision on an agreed statement of facts supplemented by additional evidence. There is no factual dispute.

The array of parties to the accident, policyholding employers and insurance carriers is as follows: A. Teiehert & Son, Inc., a general contractor, The Fidelity and Casualty Company of New York, its insurer; Herbert D. Shaffer, injured driver of sand truck, Hess-Mace Trucking Co., his employer, Hartford Accident and Indemnity Company, its insurer; Doyle Walker, driver of water truck, Marion’s Trucking Co., his employer, St. Paul Fire & Marine Insurance Company, its insurer.

A. Teiehert & Son, Inc., was building a highway overpass, one end of which would extend crosswise from the crest of an earthen ramp structure paralleling the highway. The structure had a flat crest and an approach ramp at each end. A sand subbase had to be laid on the ramps. Teiehert entered into a subcontract with Hess-Mace Trucking Co. calling for trucks and drivers to haul sand and dump it on the ramps. Herbert D. Shaffer was a semitruck driver hauling a sand trailer for Hess-Mace. Teiehert also had contracted with Marion’s Trucking Co. to supply water trucks and drivers. After sand was dumped on the ramps, it was leveled by one of Teiehert’s graders. One of the Marion water trucks would then spray water on the sand to compact it. Doyle Walker, an employee of Marion, was driving one of Marion’s water trucks at the time of the accident. Both the sand truck and the water truck were used on the job with Teiehert’s permission.

On the day of the accident Teiehert was in the process of placing sand on the far ramp. The near ramp already had a layer of sand. When the sand trucks arrived they would drive up the near ramp, go across the crest and dump the sand on the far ramp. Most of the sand trucks would mire in the sand

Shaffer brought suit against Teichert and Marion’s Trucking Company. Marion’s Trucking requested that Fidelity (Teichert’s insurer) and Hartford (insurer of Hess-Maee) undertake its defense in the lawsuit, but these firms refused. St. Paul then undertook the defense of its own insured, Marion’s Trucking. Part way through the trial, St. Paul settled with Shaffer for $25,000. Shaffer’s action then continued against Teichert (who was defended by Fidelity), which won a defense verdict. This declaratory relief action was then brought to trial.

The insuring agreements of the Hartford and Fidelity policies had substantially the same language, in which the insurer undertook: “To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . . . sustained by any person, caused

It is not necessary to hinge the decision on the “loading and unloading” clause. Hartford’s policy covered accidents “arising out of the . . . use” of the sand truck. Hartford points to no special policy restriction confining this phrase. When employed in a public liability policy without restriction, words such as “use” or “using” have comprehensive scope. (Liberty Mutual Ins. Co. v. Steenberg Constr. Co., 225 F.2d 294 , 297; American Auto. Ins. Co. v. Transport Indem. Co., 200 Cal.App.2d 543 , 549 [ 19 Cal.Rptr. 558 ]; Columbia Southern Chemical Co. v. Manufacturers & Wholesalers Indem. Exchange, 190 Cal.App.2d 194 , 202 [ 11 Cal.Rptr. 762 ] ; see Note 89 A.L.R.2d 150 , 163-164.) They do not demand that the injury be proximately caused, in the strict legal sense, by the insured vehicle; they may apply though it is at rest. (Columbia Southern Chemical Corp. v. Manufacturers & Wholesalers Indem. Exchange, supra, 190 Cal.App.2d 194 .) California decisions to date have involved truck insurance “use” clauses only as expanded by the loading and unloading concept. (See Entz v. Fidelity & Casualty Co. of N.Y., 64 Cal.2d 379 [ 50 Cal.Rptr. 190 , 412 P.2d 382 ].) Court decisions on loading and unloading have developed several verbal aids or standards, some of which seem equally appropriate in fixing the scope of “use. ” A frequently cited decision points to the mission or function of the insured’s employees as a controlling element, stating also that truck “use” includes all activities involved in transporting and hauling which are necessary and proper in making delivery of the cargo. (American Auto. Ins. Co. v. American Fid. & Cas. Co., 106 Cal.App.2d 630 , 636 [ 235 P.2d 645 ], quoting from Pacific Auto. Ins. Co. v. Commercial Cas. Ins. Co., 108 Utah 500 [ 161 P.2d 423 , 160 A.L.R. 1251 .].) One authority expresses the same idea in somewhat different form, stating that “use” is not confined to motion on the highway but extends to any activity involved in utilization of the covered vehicle in the manner intended or contemplated by the insured. (12 Couch on Insurance 2d, § 45:325, p. 337.)

The United States Court of Appeals, Fourth Circuit, and an Ohio Court of Appeals have held that the use clause of a liability policy covering a stalled vehicle extended to the

The accident occurred in the course of the sand truck’s operation and did not involve the handling of its cargo. Thus the decision is more appropriately turned on the question of use, rather than the unloading clause. Whether the latter might extend coverage under the circumstances of this case, we do not decide. We do note that California espouses the broad “complete operations” concept of unloading, which covers all the operations required in any specific situation to accomplish complete delivery. (Entz v. Fidelity & Casualty Co. of N.Y., supra, 64 Cal.2d at pp. 383-384.)

Viewing Doyle Walker as a “user” of the sand truck and his employer, Marion’s Trucking Co., as a person legally responsible for that use, we next consider coverage under the

The parties’ stipulation of fact includes a declaration that both the sand truck and the water truck were used on the job with Teichert’s permission. The present question is outside the scope of that stipulation, which dealt with both vehicles’ normal use on the project, not the water truck’s deviant use as a towing mechanism.

The Teichert-Fidelity policy extended coverage to the policyholder’s “hired automobile,” defining the latter as one “used under contract in behalf of . . . the named insured. . . .” The sand truck, owned and supplied by an independent contractor, falls within the policy definition of a hired vehicle. (Continental Cas. Co. v. Zurich Ins. Co., 57 Cal.2d 27 , 32-33 [ 17 Cal.Rptr. 12 , 366 P.2d 455 ].) Coverage, then, depends upon the permission factor. On that point we turn to several criteria enumerated in Exchange Cas. & Surety Co. v. Scott, 56 Cal.2d 613 , 620-622 [ 15 Cal.Rptr. 897 , 364 P.2d 833 ] : scope of “permission” under automobile liability policies is measured by the relatively broad rules of construction prevailing in insurance law, not the narrower construction given the “driving with permission” provisions of Vehicle Code sections 17150-17157; permission under a policy’s omnibus clause includes implied as well as express permission; finally, the existence of permission at the time and place of the accident is a question of fact.

Since the trial court concluded that neither Walker nor Marion’s Trucking was using the sand truck, it had no occasion to find on this question of fact. It found neither for nor against the existence of permission by Teichert. This reviewing court has authority to make findings of fact in appropriate cases. (Code Civ. Proc., § 956a.) The present case is an appropriate one. The parties presented a stipulated set of facts and supplementary testimony in the trial court, fully recognizing that Teichert’s permission might be a pivotal factor in fixing coverage of the Fidelity and Casualty policy. Having fired all their ammunition at a recognized target, the parties can fairly be expected to abide the result without new courtroom opportunities. There is no conflict in the evidence and no dependence on witness credibility. As we view the

Teiehert’s subcontract with Hess-Mace, supplier of the sand trucks and their drivers, required the latter to furnish its own public liability insurance. Perhaps, since the prime contractor and the subcontractor had separate insurance policies, neither carrier may invoke against the other the rule of construction against the insurer. Even that rule permits no violence to policy language or disfigurement of facts. The Fidelity policy requires permission for the “actual use’’ being made of the vehicle. Teiehert consented to use of the tank truck to deliver water, not to tow the trucks of other subcontractors. Silent acquiescence of responsible Teiehert employees might suffice for implied permission. There was neither acquiescence in nor knowledge of the improvised arrangement. We find that Teiehert gave no permission for use of the sand truck by Walker and Marion's Trucking. As a result Walker and Marion’s Trucking were not additional insureds under the Fidelity policy.

The loss being simultaneously within the scope of the St. Paul and Hartford policies, the problem of primary, excess or prorata coverage occurs. The problem has not been briefed and the court’s attention not called to all potentially applicable policy clauses and endorsements. Possibly the companies will agree on the matter; if not, the problem may be debated in the trial court. The judgment in favor of Hartford Accident and Indemnity Company is reversed with directions to determine any necessary question of apportionment of the loss and to enter judgment for the plaintiff consistent with this opinion. The judgment in favor of The Fidelity and Casualty Company of New York is affirmed.

Eegan, J., concurred.

A petition for a rehearing was denied October 14, 1966, and the petition of respondent Hartford Accident & Indemnity Co. for a hearing by the Supreme Court was denied November 9,1966.