No. 85-277 

XN THE SUPREME COURT OF THE STATE OF MONTANA 

I985 

TFAVELERS INSURANCE COMPANY, 

Plaintiff and Respondent, 

-vsWESTERN FIRE INSURANCE COMPANY, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yel-lowstone, 

The Honorable William J. Speare, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Anderson, Brown, Gerbase, Cebull & Jones; Rockwood 

Brown, Billings, Montana 

For Respondent : 

McNamer, Thompson & Cashmore; Charles R. Cashmore, 

Sillings, Montana 

Submitted on Briefs: Sept. 12, 1985 

Qecided: November 25, 1985 

Wo; .: .--J 

Filed: 

-4. </ & '"f -4 73. 

-*. .(. q.s-, -,, /f?& & 

Clerk 
Mr. Justice William E. Hunt, Sr., delivered. the Opinion of 

the Court. 

The Western Fire Insurance Company (Western) appeals an 

order of the Yellowstone County District Court denying 

Western's motion for summary judgment, and granting The 

Travelers Insurance Company's (Travelers) motion for summary 

jud4ment. 

We affirm. 

The facts of this case are not in dispute. On August 

13, 1976, Willard Jacobson was injured while installing an 

overhead garage door. Jacobson filed a complaint naming the 

manufacturer and seller of the door as defendants. His 

complaint asserted that the accident was caused by the 

negligent and defective design and construction of a spring 

apparatus in the door. The defendants filed a third party 

complaint against Harsco Company as manufacturer of a metal 

plate used in the spring apparatus. Seaport Manufacturing 

Company was the actual manufacturer of the metal plate which 

allegedly was defective and caused the injury. However , 

subsequent to the accident, but prior to the filing of the 

complaint, Harsco had acquired Seaport by merger. Therefore, 

Harsco was properly named as a defendant. Harsco was insured 

by Travelers. Prior to the merger, and at the time of 

Jacobson's injury, Seaport was insured by Western. Travelers 

settled the lawsuit with Jacobson, and then began the present 

action against Western seeking reimbursement of the money 

paid to Jacobson in settlement of the claim. 

Western does not argue the reasonableness of the 

settlement, and concedes that its policy covers the loss paid 

to Jacobson. The only issue raised by Western is whether the 
District Court erred in not apportioning the loss between the 

two insurance companies proportionate to their respective 

policy limits. 

Western cites Bill Atkin Volkswa.gon, Inc. v. McClafferty 

(Mont. 19841, 689 P.2d 123?, 41 St.Rep. 1981, for the 

proposition that the loss should be divided between the two 

companies. The Atkin case involved an automobile accident 

caused by the driver of a loaner car belonging to Atkin 

Volkswagon. We found that both the driver's own insurance 

policy and Atkin's policy covered the accident. Both 

policies contained an excess coverage clause, so both parties 

argued that the opposing party's policy provided primary 

coverage. We held that the loss should be apportioned 

between the two companies proportionate to their respective 

policy limits. While apportioning the loss was appropriate 

in that case, it is not appropriate in the present case. In 

Atkin, both insurance policies covered the same accident. In 

the present case, only Western's policy covered Jacobson's 

injury. 

The policies offered by Western and Travelers were both 

"occurrence" policies, meaning that coverage was d.etermined 

at the time the injury occurred. When Jacobson was injured, 

Western was the only company insuring Seaport, and the only 

company obligated to pay any claim arising from the accident. 

Section 35-1-806 (e) , MCA, provides that after a merger, 

a claim against the merged corporation can be directed 

against the surviving corporation. Therefore, Harsco was 

properly named as a defendant. However, that does not mean 

that Travelers, as Harsco's insurer, was obligated to pay the 

claim. As the District Court found in its order and 

memorandum, " [t] he liability of the insurance company for the 
injury was fixed at the time of the accident and at that 

time, the insurance company for the merged Seaport 

Corporation was available to take care of this claim." As 

authority, the District Court cited Aetna Life and Casualty 

v. United Pacific Reliance Insurance Companies (Utah 19781, 

The Aetna case is nearly identical to the present case. 

In Aetna, an individual was injured by a product made by 

Regina Grape Products Company. At that time Regina was 

insured by defendant, United Pacific. After the accident, 

Regina merged with Heublein, a company insured by plaintiff, 

Aetna. The injured party sued Heub1ei.n. Aetna settled with 

the injured. party and then sued United Pacific for 

indemnification. The trial court granted. Aetna's motion for 

summary judgment. In its opinion affirming the trial court's 

order, the Utah Supreme Court stated thzt: 

. . . inasmuch as the merger of corporations 

results in the transfer of liabilities of the 

merged corporation (Regina) and also all of its 

rights, the logical conclusion is that the 

surviving corporation (Heublein) simply stands in 

the same position as that occupied by the merged 

corporation (Regina) prior to the merger. 

Therefor, inasmuch as Heublein is to be held 

responsible for the liability of Regina, it is 

entitled to the protectj-on which Regina had (that 

is, its insurance with United Pacific) at the time 

of the accident, and that, as an asset of Regina, 

such coverage passed to Heublein as the surviving 

corporation. 

Aetna, 580 P.2d at 232. 

The reasoning and analysis of the Aetna opinion are 

equally appropriate in the present case. Section 

35-1-806(d), MCA, provides that all the rights and privileges 

of the merged corporation (Seaport) are passed to the 

surviving corporation (Harsco) . Among those rights are 

Seaport's rights under its insurance policy with Western. 
Because both policies were "occurrence'~olicies, liability 

was determined at the time the injury occurred. When 

Jacobson was in-jured., Western was the only company insuring 

Seaport and the only company liable for any claim arising out 

of that injury. After the merger, Harsco acquired all of 

Seaport's rights, including its rights of coverage under the 

insurance policy. Therefore, Western is obligated to 

indemnify Travelers for the cost of the Jacobson settlement. 

The order of the District Court is correct. 

Affirmed. 

We Concur: L+- 

Chief Justice