Court Opinion

ID: 878704
Source: CourtListenerOpinion
Date Created: 2013-06-04 22:51:47.55845+00
Date Added: 2024-06-11T13:00:33.419725
License: Public Domain

No. 85-277
                  XN THE SUPREME COURT OF THE STATE OF MONTANA
                                               I985

TFAVELERS INSURANCE COMPANY,
                   Plaintiff and Respondent,
         -vs-
WESTERN 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 2 5 , 1985

         Wo; .:    .--J
Filed:

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                                                       73.

                                               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      i s 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