No. 12353 INTHE SUPREME COURT OF THE STATE OF MONTANA 1973

TRANSkMERICA INSURANCE COMPANY a corporation, Plaintiff and Respondent,

GLACIER GENERAL ASSURANCE COMPANY et al., Defendants and Appellants.

Appeal from: District Court of the Fourth Judicial District, Honorable Jack L. Green, Judge presiding. Counsel of Record: For Appellants: Mulroney

# ,Delaney and Dalby

## ,Missoula

## ,Montana Stephen H. Dalby argued, Missoula, Montana For Respondent : Worden, Thane, Haines and Williams, Missoula, Montana Shelton C. Williams argued, Missoula, Montana

Submitted: December 

### 3, 1973 Decided: 

## 34 1974 Filed:

# 3B744 "?74Mr. JusticeWesley Castles delivered the Opinion of the Court.
This 

### isan appeal from a judgment for plaintiff entered by the district court, Missoula County, Honorable Jack L. Green presiding without a jury. The actionwas to establish liability for claimsjointly paid by plaintiff Transamerica Insurance Company and defendant Glacier General Assurance Company pending determination of their respective liabilities. This action arose out of an accident which occurred on August 

### 6, 1968, when a truck owned by Bob & Ray's Car and Truck Sales rented toTom Wickes and drivenby Robert Barbe, an employee of Wickes, collided with another vehicle causing two deaths. An actionwas commenced against Wickes, Barbe, and Bob & Ray's as a result of the accident. Transamerica, as insurance carrier for Wickes and Barbe, and Glacier, as insurance carrier for Bob & ~ay's, thought it mutually desirable to compromise thisaction for $50,000 with each insurance carrier contributing $25,000. A written reservation of rightswas entered intounder which each insurance company reserved the right tobring an action to determine 

### itsrespective rights as to the other carrier, subsequent to settlement. This action 

### is founded on that reservation of rights. The record indicates Robert Peterson was general agent for Glacier and as such was authorized towrite auto casualty and liability insurance. This authority extended to accepting applications and proposals for insurance on behalf of Glacier and to binding coverage on behalf of Glacier. Petersonwas also actively engaged inthe business of renting trucks under the name of Bob & Ray's Car and Truck Sales. The insurance agency and the vehicle rental business were conducted out of the same office and were a part of the same corporate entity. Bob & Ray's entered into an agreement whereby Glacier would insure the vehicles rented by them, with Petersonwriting the insurance.

### Under the terms of this policy a copy of the rental agreement and a premium of $1.50 per day for each day the vehiclewas rentedwas to be forwarded to Glacier. This policy extended coverage to the named insured,Bob & 

### ~ay's,and to anyone 

### using the insured vehiclewith the permission of the named insured. This provision goes on to expressly exclude coverage of anyone other than the named insuredwith respect to any accident arising

II 

### out of the operation of an automobile sales agency,repair shop, service station, storagegarage or public parking place". The rental agreement signed by Wickes and which the Glacier policy required to be forwarded to itwith the remittance provided inpart: "INSURANCE COVERAGE "Renter is liable for the first $100.00 Collision damage only. Any & 

### all liability will be carried and coveredby Bob & 

### Ray's Car & 

### Truck Sales unless otherwise stated below.

II

### There is no insuranceprovided on cargo by Bob & 

### ~ay's Car & 

### Truck Sales. This must be carried by Renter if desired." At the timeWickes rented the truck he asked if itwas covered by insurance and Petersonreplied that it was. WhileWickes had longbeen involved in the garage and auto storage business, on the date of the accident he no longer had any cars in storage;had disposed of his entire stock in trade;had had his business telephone disconnected;had discharged allhis regular employees;andwas no longer providing or offering to provide any services. He did have two employeeswhowere engaged solely in cleaningup the building preparatory to Wickes' scheduled final vacation of the premises onAugust 

### 7,1968. At the time of the accident the truckwas being used to transport some machinery, which had been used in the garage business and forwhich Wickes had no furtheruse, to ~ickes' son in Polson.On the date of the accident Transamerica had a blanket liabilitypolicy containing a garage liability clause issued to Wickes which by itsterms extended coverage tohis employee Barbe. The district court granted defendant's motion to dismiss Wickes and Barbe as plaintiffs on the ground they were not real parties ininterest. The district court subsequently entered findinsof fact that: Peterson and Bob & Ray's had contracted with Wickes to provide allliability insurance on the truck; the contract was binding upon Glacier; the contract inures also to the advantage of ~ickes' employee Barbe and to Transamerica; the contract was made by Peterson actingwithin the scope of his duties as an agent of Glacier and Glacier had knowledge of the language of the agreement; and, Wickes was not on the date of the accident engaged inthe garage business. The court also found Glacier was obligated toprovide a defense for and to indemnify Wickes and Barbe inconnection with the accident and owes to Transamerica $25,000, together with interest amounting to $4,620. Defendant Glacier raises essentially four issues on appeal: I) That Glacier was under no contractual obligation to indemnify Wickes and Barbe. 2) That if it should be found that Glacier does have
some obligation to indemnify, this obligation islimited to contributing a pro rata share of the total liability. 

### 3) That Transamerica has no claimant's status. 4) That the district court's findings of fact are clearly
erroneous. An additional issue inwhich Glacier claimed that 

### its coverage was, if anything, "excess" while ~ransamerica's was
11

primary" was formally abandoned during oral argument. Glacier's contention that itwas under no contractual obligation to indemnify Wickes and Barbe has two bases. First, Glacier claims that no contract was entered into and second, that if such a contract was entered into this accident is excluded by
a policy term excluding coverage of accidents arising out of a garage business.to Glacier's claim that itwas under tion to provide insurance coverage toWickes and Barbe, plaintiff Transamerica urges that the language of the rental agreement used by Glacier's agent Peterson with the knowledge of Glacier, and ~eterson's representations atthe time the truckwas rented are sufficient tocreate a contract of insurance binding on defendant Glacier. We agree with the district court's conclusion that a binding contract was entered into. It 

### isundisputed thatPeterson was a general agent of Glacier. The rule as tothe power of a general agent tobind the insurance company by whom he 

### is employed isclearly stated in43 Am Jur 2d, Insurance,,§ 204, which states: "No general rule can be satisfactorily evolved which willfitallcases other than that an insurance contract 

### isbinding upon the insurer if entered intoby an agent acting in such respect within his express, implied, or apparent authority 

# ** Jx*" This rule has long been the law of Montana. Baker v. Union Assurance Society of London, Ltd., 81Mont. 281, 264 P. 132. Peterson combined his activitiesas an insurance agent for Glacier with the vehicle rentalbusiness known as Bob & Ray's. The insurance agency was operated essentially as an adjunct to the rental and salesbusi.ness with almost allof ~eterson's activities as an insurance agent arising out of transactions of Bob & ~ay's Car and Truck Sales. The operation of the truck rentalbusiness of Bob & ~ay's
was covered by a policy issued by defendant Glacier. The terms of this policy required the use of a rental form which was tobe forwarded to Glacier. This form provided inpertinent part "Any & allliabilitywillbe carried & covered by Bob & ~ay's 

# *

# * *.'I While as a whole thiswording appears tobe unique, the word

IIcovered" has been considered in this context by a number of courts.In Mowles v. Boston Ins. Co., 226 Mass. 426, 115 N.E. 666, theword "cover" when used inthe context of insurance was held to



### -5-mean "insurance for a reasonable time under allthe circumstances". In Michigan Idaho Lumber Co. v. Northern Fire & Marine Ins. Co., 35 N.D. 244, 160

### N.W. 130 and Hurd v. Maine Mut. Fire Ins. Co., 139 Maine 103, 27 A.2d 918, a promise by a general agent tohold
a risk "covered" was held to obligate the agent's insurance company principal to protect against loss from the risk. In the Montana caseAustin v. New Brunswick Fire Ins. Co., 

### 111Mont. 192, 108 P.2d 1036, a statement by an insurance agent that an individual had "full coverage" was held to create an insurance contract binding on the insurance company. The effect of a promise that insurance would be "carried & covered" 

### is the
same as a promise to provide "full coverage", to "cover" a risk
or tohold a risk "covered". The clause clearly states the risk to be insured against by specifying "Any 

### 6: allliability". Accordingly, Peterson by the use of this term inthe rental agreement with the knowledge of Glacier, entered into a contract to insure against any liability that might result from the operation of the rented truck. As with any insurance agreement entered into by a general agent actingwithin the scope of his apparent or actual authority, this contract entered intoby Petersonwas binding
on his principal, Glacier. This conclusion isreinforced by the district court's finding that defendant Glacier had actual knowledge of the terms of the rental agreement. Since the foregoing indicates that Glacierwas obligated to insureWickes and Barbe, we note the uncontradicted testimony of Wickes isthat atthe time he rented the truck he inquired specifically
asto insurance and Peterson assured him that insurance coverage
was provided. This assurancewould alsobe sufficient tojustify
a finding that defendant Glacier was obligated to provide insurance. Austin, supra. Defendant Glacier also claims that even if an insurance contract was entered into, 

### itspolicy exclusion relating to acciII dents which arise inconnection with the operation of an automobilesales agency, repair shop, service station, storage garage or public parking place" eliminates itsliability in this situation. While therewas some dispute as towhether ornot Wickes was engaged inthe garage business atthe time of the accident, the district court found Wickes was not atthat time engaged inthe garage business. This finding is supported by the testimony of Wickes and Barbe that on the date in question therewere no longer any cars in storage, the entire stock intrade had been disposed of, and the garage business telephone had been disconnected, all of the regular employees had been discharged, and serviceswere
no longer being provided. This 

### is substantial credible evidence in support of the district court's finding thatWickes was no longer inthe garage business. 

### As stated inHellickson v. Barrett Mobile Home Transport, Inc

# ., Mont

# . , 507 P.2d 523, 30 St. Rep. 289, 291: "'Our duty inreviewing findings of fact in a civilaction triedby the district courtwithout a jury isconfined todeterminingwhether there issubstantial credible evidence to support them. f 11 Accordingly, since the district court found and that finding issupported by substantial credible evidence thatWickes
was no longer engaged ina garage business, we hold ~lacier's coverage 

### isnot excluded by the policy provision excluding coverage of garage business related accidents. Glacier's second issue on appeal 

### is the contention that 

### its liability, if any, 

### is limited tothemakifig of a pro rata contribution to settlement. To supports 

### itsposition Glacier relies on Glacier General Assurance Co. v. StateFarm Mutual Auto. Ins. Co., 150Mont. 452, 460, 

### 436 P.2d 533, where this Court stated:"Where, in the absence of the other policy there would be no problem as to the liabilityof either of one of the companies and the 'other insurance' clauses are the same, the liabilityismore rationallyprorated than arbitrarily laid atthe feet of one or the other. 11 The above quoted case involved two policies which differed only in that one policy covered the driverby name and the othercovered him only as a driver. In the instant case, the differences are fargreater. The rental agreement's insurance clause which created the contract of insurance provided specifically that "Any & allliabilitywillbe carried & covered". Further, the Glacier policy was entered into for the purpose of providing insurance coverage on the specific risks involved intheuse of the truck involved inthe accident. These differences provide a rationalbasis on which to assign defendant Glacier the duty of providing primary insurance coverage. We hold that a contract to provide "Any & all" liabilitycoverage with regard to a specific riskcreates an obligation to provide primary insurance of the risk. Therefore, Glacier was obligated to provide primary coverage and isnot entitled tocontribution of a pro rata share by the secondary insurer, Transamerica. The third issued raisedby Glacier 

### isan assertion that plaintiff Transamerica has no statusas a claimant inthis action. This claim iswithout merit. It iswell established thatwhen
an insurer pays allora portion of a loss on behalf of an insured, he issubrogated pro tanto towhatever rights the insured possessed. American Equitable Assurance Co. v. Newman, 132Mont. 63, 313 P.2d 1023; Caledonia Insurance Co. v. Northern Pacific Railway Co., 32 Mont. 46, 

### 79 P. 

### 544. Transamerica by contributing to the compromise settlement agreed toby the insurers made a payment on behalf of the insured. Hence, Transamerica has become subrogated to the rights of Wickes and Barbe. As the discussion of the preceding issues indicates, Glacierwas under an obligation toprovide insurance coverage forWickes and Barbe. Had Wickes and Barbe contributed instead of Transamerica, their right toassert a claimagainst Glacier isunquestionable. Plaintiff Transamerica being subrogated to that right, it is obvious that it does have a status to press
a claim against defendant Glacier. ~lacier's final issues 

### is the claim that the districtcourt's findings of fact are clearly erroneous. We have reviewed the entire

### record and find the district court's findingsamply supported by substantial credible evidence. As stated inHellickson, our review is limited to determiningwhether there is substantial credible evidence to support the district court's findings. If there is, as in this case, then the determination of the district courtwill not be disturbed. The decision of the district court is affirmed.



# / /'chief Justice

,' 

### stices.