Court Opinion

ID: 7820149
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:51:20.217171+00
Date Added: 2024-06-11T16:30:43.108861
License: Public Domain

George Rose Smith, Justice. In this dispute between two casualty insurance companies, the. narrow issue is whether an exclusion in the appellee’s policy deprived an unnamed insured of liability coverage for bodily injury sustained by an employee of the named insured. The decision turns upon the meaning of the word “insured” in the policy. This appeal is from a summary judgment holding that the unnamed insured was excluded from liability protection. We cannot agree with that interpretation of the policy. All the facts are stipulated, the parties having agreed that there is no factual question to be decided, the sole issue being the meaning of the exclusion just mentioned. Farm Mutual issued the policy to be interpreted, a policy of automobile liability insurance covering trucks owned by the named insured, Jim Dixon. The policy provided, in a paragraph entitled “Definition of Insured,” that “the unqualified word ‘insured’ means the named insured and, if the named insured is an individual, his spouse, and also any person while using the automobile . . . , provided the actual use of the automobile is by the named insured or spouse or with permission of either.” The pivotal exclusion provides that the coverage now involved does not apply to “bodily injury to any employee of the insured.” (Our italics.) The decision turns upon whether the reference to the insured is restricted to the named insured, Dixon. The facts are really not important. The insured vehicle, Dixon’s truck, had been driven by Dixon’s employee, W. D. Kissire, to Arkansas Kraft’s plant at Morrilton. Arkansas Kraft’s employee, T. C. Lee, admittedly with Dixon’s permission, was “using” the truck in the process of unloading it. In that process Dixon’s employee, Kissire, was injured. Farm Mutual denied liability, on the ground that the exclusion means that there was no coverage for bodily injury to an employee of Dixon, the named insured. Arkansas Kraft’s excess insurer, the appellant, contended that there was coverage for Arkansas Kraft, because Kissire was not its employee, so that Arkansas Kraft was protected against liability for Kissire’s injury. The appellant settled with Kissire and brought this suit against Farm Mutual for reimbursement. The decisions elsewhere are of scant assistance, for as an A.L.R. annotation points out: “On this question the courts appear to be in hopeless conflict, with some holding the exclusion inapplicable where the injured person was an employee of the named insured and an additional insured was the party seeking protection under the policy, and other courts taking a contrary position.” Annotation, 48 A.L.R. 3d 13, 25 (1973). Courts that apply the exclusion to injuries to the named insured’s employees often do so on the ground that the exclusion is apparently meant to apply to injuries already covered by the insured’s workmen’s compensation insurance, which is not the situation when an additional insured, such as Arkansas Kraft, is concerned. In aligning ourselves with those courts which hold that coverage is provided for an unnamed insured when the injured person is the named insured’s employee, we need not look beyond the basic rule that an insurance policy is to be construed strictly against the insurer. Here Farm Mutual’s policy flatly states in its definition that the unqualified word “insured” means not only the named insured but also any person using the vehicle with his permission. The pivotal exclusion uses the unqualified word “insured”; so Arkansas Kraft is presumably included. In drafting the policy Farm Mutual was certainly on notice, from conflicting judicial interpretations, that the limited reference was so ambiguous as to be open to contradictory interpretations. Elsewhere in the policy Farm Mutual referred to the “named insured” no fewer than 28 times, with the evident intention of excluding persons who would otherwise fall within its broad definition of “the insured.” It would have been so simple for the draftsman of the policy to use the phrase “named insured” a 29th time, had that been his intention, that we are unwilling to say that he accomplished the same result by his bare reference to “the insured.” Reversed and remanded for the entry of judgment in favor of the appellant. Holt and Roy, JJ., not participating. Hickman, J., and Special Justices George Howard and James C. Luker, dissent.