Court Opinion

ID: 9547031
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:40:28.743784+00
Date Added: 2024-06-11T15:17:13.284566
License: Public Domain

Mr. Justice HARNSBERGER
(dissenting).
As the result of an accident involving an automobile driven by Arnold, plaintiff’s deceased, and a Ford automobile driven by Chapman, defendant’s deceased, plaintiff was given judgment against defendant for $31,884.85. The Ford automobile driven by Chapman had been loaned to Chapman’s employer, Platte Valley Paint & Glass. Company, Inc., for Chapman’s use, while a Mercury automobile, theretofore used by Chapman and also owned by Meyers Lease & Rental Company, and leased to Platte-Valley Paint & Glass Company, Inc., was: being repaired.
Upon execution, The Fidelity and Casualty Company of New York, United States Fidelity and Guaranty Company and Farmers Insurance Group (Farmers Insurance Exchange) were summoned as garnishees.
Both the Fidelity and Casualty Company and the United States Fidelity and Guaranty Company denied possessing any money or effects belonging to the defendant, but the Farmers Insurance Exchange answered' admitting there was in effect its policy issued to Platte Valley Paint & Glass Company, Inc., covering a certain Mercury Station Wagon owned by Meyers Lease & Rental Company, and which was leased to-Platte Valley Paint & Glass Company, Inc.;. that the “policy afforded public liability coverage for each person injured under the-terms of said policy in the amount of $100,-000.00 [which coverage appears as item A of ‘Declarations’ attached to the policy]' and covering property damage for any one-accident under the terms of said policy up. to the amount of $20,000.00 [which coverage appears as item B of ‘Declarations’ attached to the policy]”; stated the car driven by Chapman was loaned to “said • Glen> W. Chapman and/or Platte Valley Paint & Glass Company as a substitute vehicle-pending the repairing of the subject initial vehicle”; and that the insurance contract contained a paragraph number 17, entitled'. *761■“Other Insurance — Coverages A, B, E, F, -G and H”, which the garnishee quoted as follows:
“A. (public liability) and B (property damage)
“ * * * The Exchange shall not be liable for a greater proportion of any loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of all collectible insurance against such loss.
“With respect to a substitute or non-■owned automobile, coverages A, B, E, and F shall be excess insurance over any other collectible insurance of any hind available to the insured. * * * ”
The answer of Farmers Insurance Exchange also stated it was advised there was in effect a policy of insurance covering the vehicle being driven by Chapman at the time of the accident, issued by the Fidelity and Casualty Company, and that there was also in effect a policy of insurance issued by United States Fidelity and Guaranty Company to Meyers Lease & Rental Company covering lease operations and leased vehicles of that company.
A hearing on the answers of the garnishees was had, at which plaintiff moved for an order determining the garnishees to be jointly and severally liable for the full amount of plaintiff’s judgment and requiring the garnishees to jointly and severally pay the amount thereof into court.
Following a hearing upon that motion, the court made certain findings among which were: That the Ford accident vehicle driven by Chapman was a stand-by or replacement vehicle for a Mercury Commuter Station Wagon, owned by Meyers Lease & Rental Company, and the accident vehicle was leased to Platte Valley Paint & Glass Company, Inc., for use of Chapman as its salesman and agent while the Mercury was being repaired; that Chapman, as the permissive user of the accident vehicle, was covered by the Fidelity and Casualty Company’s policy issued to Platte Valley Paint & Glass Company, Inc., but that the coverage under condition 14 zvas limited to excess over any other valid and collectible insurance; that the Farmers Insurance Exchange policy was the primary coverage because it was written pursuant to the lease agreement between Meyers Lease & Rental Company and Platte Valley Paint & Glass Company, Inc., wherein the owner as part of the cost of hire agreed to furnish liability and property damage insurance with limits of $100,000 to $300,000; that a condition of the Fidelity and Casualty Company’s policy limited its insurance on hired automobiles insured on a cost of hire basis; that the condition 14 so limiting Fidelity and Casualty Company’s insurance operated from the inception of the rental agreement; that the substituted vehicle provision in the Farmers Insurance Exchange policy never became operative, as there was no other collectible insurance of any kind available to the insured under the Fidelity and Casualty Company policy except in excess of the $100,000 and $300,000 figure set forth for the primary coverage carried by the Farmers Insurance Exchange. The effect of those findings was that the Fidelity and Casualty Company’s policy provided no other collectible insurance available for the satisfaction of the judgment, as that judgment did not exceed either the $100,000 or the $300,000 limitation. Similarly the court further found there was no liability of the United States Fidelity and Guaranty Company as its policy also failed to cover the involved vehicle.
Thereupon the court ordered Farmers Insurance Exchange to pay into court $31,-884.85, together with accrued interest at the rate of seven per cent per annum from the date of plaintiff’s judgment, and discharged both the Fidelity and Casualty Company and the United States Fidelity and Guaranty Company from liability.
The Farmers Insurance Exchange has appealed from that order and from a further order denying a motion to amend the order. However, we understand the appellant does not contest the dismissal of the United States Fidelity and Guaranty Com*762pany, as appellant’s brief says it “specifically raises the question of the release of Fidelity and Casualty Company from any liability in the premises and putting the sole responsibility for this loss upon Farmers Insurance Exchange.”
The Farmers Insurance Exchange, on April 13, 1961, paid into court in partial satisfaction of the judgment and in tender to the plaintiff, $19,821.20, as two-thirds of the award for wrongful death of Arnold, plus interest thereon from May 17, 1960, the date of such judgment to the date of the payment amounting to $1,248.75, and $465.-15, as two-sevenths of the award for the property damage suffered by the automobile driven by Arnold, plus interest thereon for a like period, amounting to $29.85, and the full award of costs, amounting to $525.04, or a total tender of $22,089.95.
It is the contention of appellant that the untendered balance of the judgment for property damage and personal liability is properly chargeable to the Fidelity and Casualty Company under a proper interpretation of the policies issued by the Farmers Insurance Exchange and that issued by the Fidelity and Casualty Company.
The appellant agrees Chapman was a permissive user of the vehicle involved in the accident, under the policy of Farmers Insurance Exchange, and that the insured Mercury Station Wagon which was replaced by the Ford involved in the accident was not owned by, but was leased to, the deceased’s employer by Meyers Lease & Rental Company.
The appellant quotes from the Farmers Insurance Exchange policy the following provisions as binding the Farmers Insurance Exchange under “Part I, Coverages A and B — Liability Insurance”:
“(A) * * * To pay all damages which the insured becomes legally obliged to pay because of:
“(A) bodily injury to any person, and/or
“(B) damage to property, arising out of the ownership, maintenance or use of an automobile as hereinafter defined, * *
Appellant also indicates the pertinence of other provisions of the Farmers Insurance Exchange policy by quoting paragraph (2) of “Definition of ‘Named Insured’ and ‘Insured’ under Part I” and Condition 17:
“(2) the unqualified word ‘insured’ includes (a) the named insured and his relatives, and (b) with respect to the described automobile, or a newly acquired automobile, any other person or organization legally responsible for its use, provided the actual use of the automobile is by the named insured or with his permission, * *
“(17) Other Insurance — Coverages A, B, E, F, G and H
“Under Coverages A, B, E and F, the Exchange shall not be liable for a greater proportion of any loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of all collectible insurance against such loss.
“With respect to a substitute or non-owned automobile, Coverages A, B, E and F shall be excess insurance over any other collectible insurance of any kind available to the insured. Under Coverage H, the insurance with respect to a substitute or non-owned automobile shall be excess insurance over any other collectible automobile medical payments insurance. Under Coverage G, the insurance shall be excess over any other collectible automobile medical payments insurance available to an insured under any other policy.”
The Coverages A, B, E, F, G and H, referred to in the above excerpts from the Farmers Insurance Exchange policy, do not specify the amount or limit of the money coverage, but in the insured’s application for membership and insurance to the Farmers Insurance Exchange, and in an instrument titled “Declarations,” both of *763which are attached to the policy, those amounts appear as follows:
“A — Bodily Injury Liability $100,000 each person $300,000 each occurrence
B — Property Damage Liability $ 20,000 each occurrence
G & H — Medical Payments $ 1,000 each person
E — Comprehensive (including Pire & Theft) Actual Cash Value
F — Collision or Upset Actual Cash Value Less $50 Deductible”
The only source from which the effective ■date of the Farmers Insurance Exchange policy may be determined is from the date of May 24, 1958, appearing in the application attached to and presumably made a part of the policy. Inasmuch as Endorsement 115-A, hereinafter set forth, bears the same date, it is concluded the endorsement was made coincident with the issuance of the policy.
Appellant also calls to attention the policy of insurance issued by the Fidelity and Casualty Company to Platte Valley Paint & Glass Company, Inc. This policy was issued as of December 1, 1958, and appellant attaches importance to the Fidelity and Casualty Company’s agreement set forth .under the heading “Insuring Agreements,” Paragraph I, as follows:
‘‘Coverage A — 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 and caused by accident.
“Coverage B — Property Damage Liability — Automobile
“To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as 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.”
Appellant also says it is necessary to consider the following provisions of the Fidelity and Casualty Company’s policy:

"III Definition of Insured

“The unqualified word ‘insured’ includes the named insured and also includes (1) * * * 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 by the named insured or with his permission, 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. * * *” (Emphasis of appellant.)

“14. 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 such loss; provided, however, the insurance under this policy with respect to loss arising out of the maintenance or use of any hired automobile insured on a cost of hire basis or the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance.”
Appellee points out appellant entirely overlooks Endorsement 115-A to the Farmers Insurance Exchange policy, termed by appellee as “a rider,” the pertinent parts of which are as follows :
“OWNERSHIP VESTED IN OTHER THAN NAMED INSURED
“IT IS AGREED THAT SUCH INSURANCE AS IS AFFORDED BY THIS POLICY SHALL APPLY TO THE NAMED INSURED AND SPOUSE TO THE SAME EXTENT *764AS IF EITHER WERE THE OWNER OF THE DESCRIBED AUTOMOBILE, WHILE IT IS REGISTERED IN THE NAME OF MEYERS LEASE AND RENT COMPANY, SCOTTSBLUFF, NEBRASKA AND IS IN THE CUSTODY OF THE NAMED INSURED, OR IS BEING USED BY OTHERS WITH THE PERMISSION OF THE NAMED INSURED.
“IT IS FURTHER AGREED THAT SUCH INSURANCE AS IS AFFORDED BY THIS POLICY FOR COVERAGES E AND F (COMPREHENSIVE CAR DAMAGE, AND COLLISION) SHALL APPLY ONLY TO SUCH LOSS FOR WHICH THE NAMED INSURED MAY BE HELD LEGALLY LIABLE AS CUSTODIAN OR BAILEE FOR HIRE OF THE DESCRIBED AUTOMOBILE SUBJECT TO THE DEDUCTIBLE SUM, IF ANY, STATED IN THE DECLARATIONS.”
Our understanding of appellee’s position respecting this rider, or endorsement, is that notwithstanding the vehicle involved in the accident was not owned by Platte Valley Paint & Glass Company, Inc., the coverage afforded the insured Chapman was the same as though the vehicle was owned by Chapman, inasmuch as it was being driven by the Paint & Glass Company’s employee Chapman with that Company’s permission. And appellee claims this endorsement overcomes and vitiates paragraph 17 of the Farmers Insurance Exchange policy which would otherwise seemingly limit Farmers Insurance Exchange’s liability to excesses above other recoverable insurance. Appellee reasons that because the Chapman-driven automobile was a vehicle not owned by the insured Platte Valley Paint & Glass Company, Inc., under the facts and terms of the Farmers Insurance Exchange policy, the 115-A Endorsement, and not paragraph 17 of the Farmers Insurance Exchange policy, governs, and, therefore, the Farmers Insurance Exchange is primarily liable and the Fidelity and Casualty Company is liable only for excess amounts of which there are none.
Appellee also insists the Farmers Insurance Exchange is in some way estopped, or at least adversely bound, by a statement in a letter written by its counsel to the Fidelity and Casualty Company, advising the Farmers Insurance Exchange had undertaken the defense of its insured and saying that “primary liability is carried by Farmers Insurance Group on the vehicle involved in this accident.” However, the letter also states it was not known “just what liability is involved insofar as your [Fidelity and' Casualty Company’s] assured is concerned.”' The appellant, in argument, explained that at the time the letter was written its author had not seen the Fidelity and Casualty Company policy. Under these circumstances, no importance is attached to appellant’s statement in its letter relating to primary liability.
In furtherance of its position, appellant says that both policies provide excess insurance, and, therefore, the “excess” is-carried pro rata to the exposure involved. This is said to accord with a general rule that where several policies insuring the same property contain pro rata clauses, each insuror is liable for its proportionate amount, citing and quoting from Celina Mutual Casualty Co. of Ohio v. Citizens Casualty Co. of New York, 194 Md. 236, 71 A.2d 20, 21 A.L.R.2d 605, and New Amsterdam Casualty Co. v. Hartford Accident & Indemnity Co., D.C.Ky, 18 F.Supp. 707, affirmed, C.C.A.Ky., 108 F.2d 653. We find nothing in the Celina case which supports appellant’s position under the facts of this-case. The most that is gleaned from that decision is that where each policy has a pro rata clause, the contract of each in-suror is to pay its proportionate part of the-loss suffered by its insured. However, neither the opinion, nor the facts involved in the cited case, deal with the situation with which we are confronted. Here, as will later be pointed out, there is a special pro*765vision in the contract of the Fidelity and Casualty Company which is applicable under the facts before us and which injects an additional element which must be given consideration.
The New Amsterdam case is even farther afield, because it was there held that the contesting insurance companies were not co-insurors and hence the appealing company was not entitled to apportionment. In fact the court said the appellant was liable for the entire amount of liability in dispute.
The appellee considers the New Amsterdam decision hinged upon its policies having been issued before the Hartford policy, saying in its brief:
“ * * * The Court held that Condition A of the Hartford policy was rendered void, due to the fact that the New Amsterdam Casualty Company had issued its policies prior to the issuance of that of the Hartford Compa-j-jy ⅜ ⅜ ⅜
Counsel misapprehends the court’s holding. The opinion in the New Amsterdam case reported in 108 F.2d 656 noted there was no coverage under the Hartford policy because the involved vehicle was being operated by “one who had rented it from the named assured,” and, therefore, the vehicle was expressly excluded from coverage by the policy’s own provisions relating to coverage of others than the named insured. The decision did not turn upon the question of priority of time of effective coverage under the policies in question, but upon the exclusion of coverage under the terms of the Hartford policy. Thus the court merely held the vehicle was not covered by Hartford’s insurance and consequently the New Amsterdam Casualty Company was solely liable for the loss in that case. In this respect, however, the New Amsterdam case is in parallel with the case we consider here, for in both instances there is an exclusionary provision which absolves from liability.
Employers Liability Assur. Corp. of London, England v. Pacific Emp. Ins. Co., 102 Cal.App.2d 188, 227 P.2d 53, cited by appellant, is valueless, as its facts are so different from those presented here, inasmuch as that case only concerned apportionment of excess liability where a third party had accepted primary liability.
Other cases cited by appellant or in the opinion are decisions where each of the policies of the insuring companies contains the same or substantially similar excess insurance clauses. However, they are unaffected by any such rider, endorsement, or condition as we must consider here. In consequence, the holdings in the cases cited that each of the insurors shall be liable in proportion to the amount of the limit of coverage under their respective policies because they contain the same or substantially similar excess insurance clauses are not helpful.
Appellant quotes paragraph “(17) Other Insurance — Coverages A, B, E, F, G and H,” of Farmers Insurance Exchange policy, emphasizing the word “substitute” appearing in the first sentence of the second paragraph of that section. This indicates that appellant finds special significance in the-fact that the Chapman-driven vehicle was-substituted for the insured Mercury automobile while the latter was being repaired. Also, in oral argument, appellant’s insistence that the automobile driven by Chapman was a substituted vehicle further stressed the importance appellant attached' to that provision. But appellee properly points out that appellant overlooks the significance of the 115-A Endorsement of the-Farmers Insurance Exchange policy. There is no question but that the accident car was-substituted for or replaced the insured Mercury, but it was also a non-owned automobile and as such it was subject to the-endorsement provision of 115-A which expressly afforded the same coverage to that non-owned car as if it had been owned by the named insured Platte Valley Paint & Glass Company, Inc. But Endorsement 115-A did not place any excess liability limitation upon it.
While it has been deemed proper to closely examine all provisions and endorsements-of the policies of both insurance companies,. *766the decision in this case must be found solely from the provisions and endorsements of the Fidelity and Casualty Company’s policy. No liability can be imposed upon the Fidelity and Casualty Company by virtue of any provision or endorsement of the Farmers Insurance Exchange policy. This appeal merely seeks contribution from the Fidelity and Casualty Company on the strength of provisions and endorsement in the contract between the Farmers Insurance Exchange and the insured — not by reason of a contract of insurance between the Fidelity and Casualty Company and the insured. Neither was there any contract of any kind whatsoever between the Farmers Insurance Exchange and the Fidelity and Casualty Company respecting the obligation of either to each other or to the insured. Under such circumstances it must be solely from the Fidelity and Casualty Company’s own policy that its liability, if any, is to be found. Condition “14. Other Insurance” of the Fidelity and Casualty Company’s policy expressly eliminates from the policy’s coverage all but excess insurance for a loss arising out of the use of a hired automobile which is insured on a cost of hire basis. The involved Ford automobile was such a vehicle insured on a cost of hire basis and the lease rental agreement expressly stated that the lessor agreed to provide for its lessee “Public liability insurance with limits of $100,000 for each individual and $300,000 for each accident,” thus making the covered vehicle a hired automobile insured on a cost of hire basis. This is undisputed. The involved automobile being thus expressly excluded by Condition 14 from coverage under the Fidelity and Casualty Company’s policy, it cannot properly be made liable for payment of any part of the judgment in Chapman’s favor.
The decision in this case, imposing a liability not provided by the contract between the parties, is most disturbing, as it further portends a departure from previous judicial practice, of scrupulously avoiding infringement upon rights and prerogatives. In the Fair Trade cases, Bulova Watch Co. v. Zale Jewelry Co. of Cheyenne, Wyo., 371 P.2d 409, lately decided by this court, the legislative attempt to impose contractual obligations ttpon persons not parties to a contract was by a unanimous court declared to be unconstitutional. Yet in Wambeke v. Hopkin, Wyo., 372 P.2d 470, decided a short time later, a majority of this court saw fit to write into a legislative statute an exception not present in the legislative act. Now, by decision of two members of this court, there is being written into the contract of private parties, i. e., Platte Valley Paint & Glass Company, Inc., and Fidelity and Casualty Company, an obligation on the part of one of the contractees for which even the other party to the contract does not contend. The reasoning relied upon to accomplish that result, although subtly expressed, is neither persuasive nor sufficiently impressive to warrant overriding adherence to old legal principles.
The findings of the learned trial court were sound and justified and should be upheld. Therefore, this dissent.