Court Opinion

ID: 3708616
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:44:20.332283+00
Date Added: 2024-06-11T15:42:19.008357
License: Public Domain

I cannot agree with the conclusions of the majority of the court in affirming the judgment of the trial court.
The action is one seeking a declaratory judgment of the rights and duties and their relation to the parties under two insurance policies, one issued by the plaintiff, United States Fidelity  Guaranty Company, to Atlas Steel  Supply Company, the other issued to Ben Madvid by the defendant, Nationwide Mutual Insurance Company. The second amended petition of the plaintiff, in part, alleges that on or about November 20, 1954, it executed and delivered to the Atlas Steel  Supply Company a comprehensive general automobile liability policy of insurance, and that the defendant, Nationwide, issued a policy of insurance to Ben Madvid covering a truck used by him in his business. On September 24, 1955, Madvid claims to have been injured by the alleged negligence of an employee of the Atlas Steel  Supply Company then engaged in unloading scrap steel from Madvid's truck at the direction of his employers on the property of Atlas Steel  Supply Company. The plaintiff claims that it is the defendant's responsibility under the terms of its policy to assume the investigation and defense of the Atlas *Page 371 
Steel  Supply Company, the plaintiff's insured, arising out of the lawsuit filed by the defendant's insured, Ben Madvid, against the Atlas Steel  Supply Company.
The insurance contract between Ben Madvid and Nationwide Mutual Insurance Company provides in part:
"I Coverage F Bodily Injury Liability
"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.
"* * *
"III Definition of `Insured.'
"With respect to the insurance for bodily injury liability and for property damage liability the unqualified word `insured' includes the named insured and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission. The insurance with respect to any person or organization other than the named insured does not apply:
"(a) * * *
"(b) to any employee with respect to injury to or sickness, disease or death of another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance or use of the automobile in the business of such employer.
"IV * * *
"V * * *
"(a) * * *
"(b) * * *
"(c) Use of the automobile for the purposes stated includes the loading and unloading thereof."
The policy issued by United States Fidelity  Guaranty Company to the Atlas Steel  Supply Company was designated "Comprehensive General — Automobile Liability Policy." It provided, under the heading of "Insuring Agreements":
"I. Coverage A — Bodily Injury Liability. *Page 372 
"To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law, or assumed by him under contract as defined herein, for damages, including damages for care and loss of services, because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person or persons and caused by accident.
"Coverage B — Property Damage Liability — Automobile.
"To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of any automobile.
"Coverage C — Property Damage Liability — Except Automobile.
"To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law, or assumed by him under contract as defined herein, for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.
"II * * *
"III Definition of `Insured.'
"The unqualified word `insured' includes the named insured and also includes (1) under coverages A and C, any partner, executive officer, director or stockholder thereof while acting within the scope of his duties as such, except with respect to the ownership, maintenance or use of automobiles while away from premises owned, rented or controlled by the named insured or the ways immediately adjoining, and (2) under coverages A and B, any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured. The insurance with respect to any person or organization other than the named insured does not apply under division (2) of this insuring agreement: *Page 373 
"(a) to injury to or sickness, disease or death of any person who is a named insured;
"(b) * * *
"(c) * * *
"* * *"
And under the heading "Conditions" the policy reads as follows:
"1. * * *
"2. * * *
"3. Definitions
"(a) * * *
"(b) * * *
"(c) Purposes of Use. The term `pleasure and business' is defined as personal, pleasure, family and business use. The term `commercial' is defined as use principally in the business occupation of the named insured as stated in item 1, including occasional use for personal, pleasure, family and other business purposes. Use of an automobile includes the loading and unloading thereof.
"* * *
"13. Other Insurance.
"If the insured has other insurance against a loss covered by this policy the company shall not be liable under this 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 loss; provided, however, the insurance under this policy with respect to loss arising out of the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to such automobile or otherwise."
From the foregoing provisions of the policies of both the United States Fidelity  Guaranty Company and of Nationwide Mutual Insurance Company, it is made perfectly clear that both policies are specific in regard to the protection necessary to cover the claim of Ben Madvid. The reason for this is that the United States Fidelity  Guaranty Company's policy has included within its terms a provision (Coverage A — Bodily Injury Liability) of insurance protecting the Atlas Steel  Supply *Page 374 
Company against liability because of injury to any person caused by accident. This paragraph of Atlas's insurance is not general but is specific coverage, giving its insured full and complete protection against the claim made by Madvid, whether resulting from unloading a nonowned motor vehicle by its employees or not. The claim, that the coverage of Nationwide is specific as to the facts pleaded by Madvid in his action against Atlas Steel 
Supply Company and that they must, therefore, respond to and defend against the claim of Madvid (their insured) while the coverage of United States Fidelity  Guaranty is general and is available only when the coverage of Nationwide has been exhausted, is without any basis in fact or law, as shown by the undisputed provisions of the plaintiff's and defendant's policies of liability insurance and the pleaded facts of plaintiff's petition later herein set out.
The petition of the plaintiff seeks a declaratory judgment determining the obligations imposed by the policy of insurance covering Madvid and directing it to assume the investigation and defense against defendant's insured's (Madvid's) action seeking damages against plaintiff's insured because of the alleged negligence of the plaintiff's insured while unloading scrap steel on the property of plaintiff's insured. There is no request presented by the pleadings for a determination of the financial responsibility of either the plaintiff or defendant to pay or contribute to the amount of any judgment that may be entered against Atlas Steel  Supply Company should Madvid prevail in his action. The proper parties to entitle plaintiff to such a determination are not before the court.
The obligation imposed upon the United States Fidelity 
Guaranty Company by its policy of liability insurance to defend its insured against all claims seeking damages as a proximate result of accident due to the claimed negligence of its insured, as defined in its policy, is absolute and is not subject to any of the conditions contained in such policy claimed by the plaintiff to shift its obligation to pay damages (coming within the terms of its policy of insurance) when determined by law against its insured to another. The plaintiff's insured is, by the contract of insurance here in evidence, entitled to the services of the plaintiff in the defense of all actions filed against it no matter *Page 375 
how groundless. Neither the Atlas Steel  Supply Company nor Ben Madvid are parties to this action so that their rights under their respectaive insurance policies cannot be the subject of a judgment in this case, and no judgment should be entered depriving either of them of their rights for protection and services of their respective insurers.
It is true that the negligence of an employee of Atlas Steel Supply Company was alleged to have been committed while removing scrap steel from Ben Madvid's truck. It is further true that had the injury been to one other than Ben Madvid, he would have been protected if liability could be established against him. However, Atlas Steel  Supply Company cannot compel the defendant, under the policy provisions of the defendant's policy, to defend them against the defendant-insured's claim for damages.
In the case of Cain v. American Policyholders' Ins. Co.,120 Conn. 645, 183 A. 403, it is said:
"The effect which the plaintiff seeks to give to this policy is foreign to the object and common conception of the scope of public liability insurance which, as concerns the assured, is third party coverage, that is, insurance against the liability of the assured for injury which has been sustained by a third person by negligence in the operation of the automobile. * * * To accord to this policy the effect which the plaintiff claims would be to virtually insert into it another contract, distinct from public liability coverage within the scope of the policy and amounting to personal accident insurance against bodily injuries suffered by the assured. There is nothing to indicate any intention of either party to combine, in this policy, these two kinds of coverage. A public liability policy is not a policy of accident insurance indemnifying the assured against injuries suffered by himself in an accident. By its definite terms it insures against claims for damages for which he or others named in the policy might become liable."
It would indeed be unusual to enforce divided loyalties in the same contract. The contract was primarily to protect Ben Madvid and his partners against any legal obligation resulting from his negligence or from those whose negligence could be imputed to him and to protect him in all events by reason of the *Page 376 
negligent use of his truck. To paraphrase a sentence used by the Supreme Court in the case of State v. Wells, 134 Ohio St. 404, at page 410, 17 N.E.2d 658, a contract should never be interpreted as showing a purpose to be "a cloak for strategy or other device employed to defeat the plainest principles of justice." Ben Madvid never intended to buy protection for his adversary in an action in which he himself is plaintiff, and the word, "insured," as defined should not be expanded to include such duty under the insurance contract here in evidence.
In dealing with an action wherein the named insured was seeking to recover from his insurer under a liability policy, where he was injured by the negligent use of his automobile by one who was operating it with the insured's permission, the Court of Appeals of Georgia, in the case of Bailey v. MetropolitanCasualty Ins. Co., 89 Ga. App. 53, 54, 78 S.E.2d 626, 627, said:
"The fact that the policy describes an `insured' so as to include, in addition to the named insured, any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, does not render the above insuring clause ambiguous, or in any way modify it except by enlarging the term `insured.' Construed together, the provisions mean that the insurance company agrees to pay on behalf of the insured, whether it be the named insured or some other person operating the named insured's automobile with his permission, all sums which such insured shall become legally obligated to pay as damages to some other party. Under no possible construction could any insured, whether the named insured or another person, become legally obligated to pay himself damages for injuries to himself, resulting from his own operation of the named insured's automobile."
The case of Trinity Universal Ins. Co. v. General Accident,Fire  Life Assurance Corp., Ltd., 138 Ohio St. 488,35 N.E.2d 836, is cited as authority for the rule that where two policies of insurance are purchased by an assured in which the protection afforded by the terms of one policy is general and the other specific, as to a particular loss sustained by such assured, *Page 377 
the policy giving specific coverage as to the loss sustained would be required to respond in covering the loss within its full monetary limits before the other policy could be required to respond. That case is not in point in the present controversy because in that case the named insured in each policy was the same person, while in this case the named insured and the purchaser of each policy are different persons, and, in fact, each is an adversary against the other in the litigation about which plaintiff here seeks a declaratory judgment.
The rights of the parties under their respective policies must also be determined from the allegations of the pleadings in this case and such evidence as is presented to support the controverted questions of fact. In the plaintiff's second amended petition seeking a declaratory judgment, it is alleged:
"Plaintiff further states that on or about the 24th day of September, 1955, Ben Madvid was injured while unloading his truck on the premises of the Atlas Steel  Supply Company. Plaintiff further states that while unloading said truck, Ben Madvid was injured and that the full extent of the personal injuries received by him are described in a lawsuit instituted by him in the Court of Common Pleas of Cuyahoga County, Ohio, case No. 685,025. Plaintiff further refers to said petition and makes it a part hereof as though fully rewritten at length."
In the petition filed by Ben Madvid in case No. 685,025, in which he is the plaintiff and the Atlas Steel  Supply Company is the defendant, the plaintiff alleges:
"Plaintiff further says that on or about September 24, 1955, at approximately 11:30 a. m. the plaintiff was at the defendant's premises at Trumbull Avenue at the invitation and request of the defendant for the purpose of selling to the defendant certain scrap; that after the plaintiff drove his truck on said premises, he alighted from said truck and was standing in the vicinity thereof when the defendant operated an overhead crane with an electric magnet attachment for the purpose of unloading plaintiff's truck; suddenly, unexpectedly and without warning, the defendant picked up a piece of scrap from said truck with said magnet and carelessly and negligently swung said piece of scrap so as to strike the plaintiff, and the plaintiff thereby sustained *Page 378 
personal injury which will be more specifically hereinafter set forth."
After setting out plaintiff's claims of negligence, the petition then alleges:
"Plaintiff further says that the control, management and operation of said crane and electric magnet was exclusively in the hands of the defendant; that said injury to the plaintiff was an unusual and extraordinary occurrence which would not have occurred except for the negligence and carelessness of the defendant."
There is no attempt in the petition or the evidence to establish at what point Madvid completed his obligation under the sales agreement. If Madvid had completed his obligation by delivering the scrap iron on the premises of Atlas and it was the duty of the Atlas Steel  Supply Company to do the unloading which, under the facts, without allegations and proof to the contrary, would be the only reasonable conclusion, taking into account the material to be unloaded and the conduct of the parties, then the use of the truck would in no way be involved and the unloading operation and the unloading would be entirely the responsibility of Atlas. This is the state of the record, so that the only policy involved insuring the defense of Atlas against the claim of Madvid would be that of the plaintiff.
For the reasons, therefore:
(1) That the provisions of the plaintiff's policy do not relieve the plaintiff in any event from its promise to defend its insured in an action within the coverage of the policy no matter how groundless;
(2) That a contract of insurance should not be interpreted to completely change the character of its coverage and to attempt to enforce divided loyalties between the contracting parties; and,
(3) That without alleging facts sustained by at least some evidence showing that the alleged acts of negligence of Atlas resulted from a duty which Madvid owed in delivering the scrap, or in the use of his truck, and that such duty was specified in the terms of his contract of sale so that the act of delivery would come within the terms of the defendant's policy, the plaintiff *Page 379 
could not and did not make out a case for a declaratory judgment.
The terms of plaintiff's policy cannot enlarge or extend the coverage of defendant's policy.
Therefore, the judgment should be reversed and final judgment entered for the defendant.