Court Opinion

ID: 9844404
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:02:20.52895+00
Date Added: 2024-06-11T09:15:34.475571
License: Public Domain

SULLIVAN, J.
I dissent.
The majority essentially hold that the liability for the injuries to Nance, the truck driver, and for the costs of defense in resisting his claim should be prorated as follows: one-sixth to Transport, the insurer of Willig, the common carrier, and five-sixths to Argonaut, the insurer of Steelform, the construction company. To reach this result, the majority conclude that the so-called P.U.C. endorsement to the Transport policy has no effect upon its “excess coverage” or “other insurance” clause. Since the policies of both Argonaut and Transport have effective “other insurance” clauses proration is required. I must respectfully disagree with these views.
The nub of the problem is, of course, the continued vitality of Transport’s “other insurance” clause notwithstanding the P.U.C. endorsement. Willig, the insured, was required to have such an endorsement on its policy *510in order to obtain from the Public Utilities Commission (P.U.C.) a permit to operate as a highway common carrier and petroleum irregular route carrier. (Pub. Util. Code, §§ 3631, 1062; P.U.C. General Order No. 100B.) Thus P.U.C. Endorsement No. Ill attached to the Transport policy increased the coverage to the required minimum of $100,000 for bodily injury or death “resulting from the operation, maintenance, or use of motor vehicles for which a certificate of public convenience and necessity or permit is required or has been issued to the insured by the Public Utilities Commission of the State of California, regardless of whether such motor vehicles are specifically described in the policy or not.” (Italics added.) So far as is pertinent to the present discussion, the endorsement also stated, “Within the limits of liability hereinafter provided it is further understood and agreed that no condition, provision, stipulation, or limitation contained in the policy, or any other endorsement thereon or violation thereof, or of this endorsement, by the insured, shall relieve [Transport] from liability hereunder or from the payment of any such final judgment, irrespective of the financial responsibility or lack thereof or insolvency or bankruptcy of the insured. However, all terms, conditions, and limitations in the policy to which this endorsement is attached are to remain in full force and effect as binding between the insured and [Transport] . . . .” (Italics added.)
Argonaut’s crucial contention on appeal is that under the P.U.C. endorsement Transport became the primary insurer up to $100,000. The majority have rejected this contention because they can find nothing in General Order No. 100B or elsewhere to indicate that the coverage required by the P.U.C. is primary over equally applicable insurance or that the P.U.C. ever intended so to dictate. On the contrary, declare the majority, the real purpose behind the P.U.C.’s order is the protection of the public from financially irresponsible common carriers which would not be enhanced by imposing primary coverage on one insurance policy over another.
This rationale is all beside the point. To say that the P.U.C.’s objective was to protect the public by providing for adequate coverage does not shed any light at all on the question whether the required coverage is “primary” or “excess.” To argue that nothing indicates that the P.U.C. intended “to dictate” which of several applicable policies should be designated primary is utterly without significance. The P.U.C.’s province is regulation of common carriers, not of insurance companies. It is of no concern to the P.U.C. if its regulatory mission affects conflicting coverages among insurers. In most controversies over “other insurance” clauses the embattled parties are not subject to the jurisdiction of the P.U.C. at all. There is simply no reason to expect that the P.U.C. would have had occasion to consider regulations for this problem; the fact that the majority *511have failed to discern any intention on the P.U.C.’s part to do so is meaningless.
Our task, then, is to interpret the Transport policy together with its P.U.C. endorsement as a contractual whole. (Civ. Code, § 1641; Rest., Contracts, § 235(c).) Our inquiry must be directed to the legal effect of the required endorsement on the provisions of the original policy with which the P.U.C. had no concern. This is a problem of construction of contracts, for even though the endorsement was required by law, such instrument should be interpreted as a contract, not as a statute. (Ruffino v. Queen Insurance Co. (1934) 138 Cal.App. 528, 537-538 [33 P.2d 26, 883].) I agree with the majority that on the present record the construction of the policy and its endorsement is a question of law. (U.S. Leasing Corp. v. DuPont (1968) 69 Cal.2d 275, 284 [70 Cal.Rptr. 393, 444 P.2d 65].) But, in determining such questions of law, we must focus on the words used in the endorsement and thus reach a conclusion as to its legal effect. (See Rest., Contracts, § 230.)
Generally, an endorsement affects only the policy provisions relevant to the reason for the endorsement. (Westphalen v. Bankers Indemnity Co. (9th Cir. 1943) 134 F.2d 745, 747.) “[Nevertheless if there is conflict in meaning between an endorsement and the body of the policy, the endorsement controls.” (Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 431 [296 P.2d 801, 57 A.L.R.2d 914].) As pointed out above, the P.U.C. endorsement attached here specifically provides that “no condition, provision, stipulation, or limitation contained in the policy, or any other endorsement thereon . . . shall relieve [Transport] from liability hereunder . . . .” The “excess” clause in the standard agreement is clearly a “condition” or “provision” which might, in the absence of the endorsement, relieve Transport from liability. The above language of the endorsement is plain and forthright. It speaks in broad, unconditional and absolute terms: “no- condition [or] provision ... in the policy . . . shall relieve [Transport] from liability . . . .” (Italics added.) The endorsement thus has the effect of superseding and nullifying the “excess” clause which might otherwise relieve Transport from liability. By so doing, it transformed the coverage into “primary” coverage. Transport of course was fully aware that such an endorsement was required to be affixed to any automobile policy of Willig as a condition to the issuance of a P.U.C. permit and therefore must be presumed to have assented to the sweeping effect of its language.
The majority voice a twofold complaint about such an interpretation of the endorsement. First they state that it “would have the effect of saddling the trucker with primary liability in all cases simply because the trucking *512industry is more highly regulated than the business of the user or shipper.” (Majority opn., ante, p. 506.) The plaint answers itself. I suggest that is precisely the point. It is fully consistent with the purposes of regulating common carriers to insist they bear a greater financial responsibility than the user or the shipper because inherent in their business is a greater risk of negligence. Second, the majority argue that “[ejxcept for its use of the highways there is nothing so unique about a truck that should in logic require this extra responsibility where the incident which is the focal point of liability is unrelated to' the use of the highways.” (Id.) The majority shut their eyes fi> realities. There is something very unique about Willig’s truck. It is the truck of a common carrier. And it is unrealistic to say that it no longer has the characteristics of a common carrier vehicle when it is stopped for the purpose of picking up or delivering its freight. This is of the very essence of the activities of a common carrier. Indeed, such a carrier has greater opportunity to cause injuries than does a private vehicle.
In other words, the majority seems to be of the view that we should refrain from finding that Transport’s policy was primary because Willig’s truck was only tangentially involved in the accident causing Nance’s injuries. To take this view is to ignore the ample precedent of this court and of the Courts of Appeal. There is in the eyes of the law nothing tangential about the involvement of Willig’s truck or the coverage of the policy purchased by Willig from Transport. It is beyond dispute that the policy is just as operative under the facts before us as it would have been if Steel-form’s employee, as a permissive user, had caused the injuries by negligently backing the truck into the loading dock. The policy covers loading and unloading of the trucks as well as their operation upon the highways. (See International Business Machines Corp. v. Truck Ins. Exch. (1970) 2 Cal.3d 1026, 1029 [89 Cal.Rptr. 615, 474 P.2d 431]; Continental Cas. Co. v. Zurich Ins. Co. (1961) 57 Cal.2d 27, 33 [17 Cal.Rptr. 12, 366 P.2d 455].) Steelform’s employee was a permissive user of the truck, even while merely participating in its unloading, and such use brings the policy fully into operation. (See Veh. Code, § 16451; Wildman v. Government Employees’ Ins. Co. (1957) 48 Cal.2d 31, 39-40 [307 P.2d 359].) Once the policy applies to the incident, the operation of the endorsement makes it primary coverage.
It is not our province to vary the terms of insurance contracts in accord with our view of P.U.C. policy goals, but rather to interpret the terms of the contracts as written in compliance with P.U.C. orders.
I would reverse the judgment and remand the cause to the trial court *513with directions to enter judgment in accordance with the views expressed in this opinion.
Wright, C. J., and Peters, J., concurred.