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District Court of Appeal, Third District, California.

ST. PAUL FIRE & MARINE INSURANCE COMPANY et al., Plaintiffs and Appellants, v. HARTFORD ACCIDENT & INDEMNITY COMPANY et al., Defendants and Respondents.

Civ. 11076.

Decided: May 13, 1966

Fitzwilliam, Memering, Stumbos & DeMers, by T. D. Bolling, Jr., Sacramento, for appellant. Johnson, Davies & Greve, by Claire Greve, Sacramento, for respondent Hartford Accident & Indemnity Co. McGregor, Bullen, Saldine & Erich, by George W. Bullen, Sacramento, for respondent Fidelity & Cas. Co.

In this declaratory relief action the plaintiff is a truck liability insurer which seeks to impose coverage on two other truck insurance carriers under the ‘loading and unloading’ clauses of the others' policies. The suit was submitted for decision on an agreed statement of facts supplemented by additional evidence. There is no factual dispute.

The array of parties to the accident, policyholding employers and insurance carriers is as follows:

A. Teichert & Son, Inc., a general contractor The Fidelity and Casualty Company of New York, its insurer

Herbert D. Shaffer, injured driver of sand truck Hess-Mace Trucking Co., his employer Hartford Accident and Indemnity Company, its insurer

Doyle Walker, driver of water truck Marion's Trucking Co., his employer St. Paul Fire and Marine Insurance Company, its insurer

A. Teichert & Son, Inc., was building a highway overpass, one end of which would extend crosswise from the crest of a pair of ramps paralleling the highway. Sand had to be laid on these ramps. Teichert entered into a subcontract with Hess-Mace Trucking Co. calling for trucks and drivers to haul sand and dump it on these ramps. Herbert D. Shaffer was a semi-truck driver hauling a sand trailer for Hess-Mace. Teichert also had contracted with Marion's Trucking Co. to supply water trucks and drivers. After sand was dumped on the ramps, it was leveled by one of Teichert's graders. One of the Marion water trucks would then spray water on the sand to compact it. Doyle Walker, an employee of Marion, was driving one of Marion's water trucks at the time of the accident. Both the sand truck and the water truck were used on the job with Teichert's permission.

On the day of the accident Teichert was in the process of placing sand on the far ramp. The near ramp already had a layer of sand. When the sand trucks arrived they would drive up the near ramp, go across the crest and dump the sand on the far ramp. Most of the sand trucks would mire in the sand on their way up the near ramp and would be towed up the ramp by Teichert's grader. Then they were driven across the crest to dump their loads. Teichert had a foreman at the ramp to direct these towing operations. Shaffer arrived with a loaded truck and started up the near ramp. About halfway up his truck became mired. At that point the truck was about 300 feet from the unloading area. The grader was not at the scene. One of Marion's water trucks, driven by Doyle Walker, was at the top of the ramp facing the sand truck. Shaffer signaled for a tow. Walker drove the water truck part way down the ramp and stopped when its front was approximately two feet from the front of the sand truck. The drivers planned that the two trucks would be chained together, following which Walker would put the water truck into reverse and attempt to tow the sand truck up the ramp. Shaffer attached a chain between the two trucks. He then mounted his truck and attempted to drive forward while Walker attempted to tow in reverse gear. The sand truck remained mired. As a prelude to disconnecting the chain between the two trucks, Walker moved the water truck forward to slacken the chain. Shaffer went between the two trucks and disconnected the chain from the sand truck. Walker put his truck into reverse in order to back away. When he took his foot off the brake of the water truck in order to accelerate, the water truck rolled forward, catching Shaffer between the bumpers and causing injuries.

Shaffer brought suit against Teichert and Marion's Trucking Company. Marion's Trucking requested that Fidelity (Teichert's insurer) and Hartford (insurer of Hess-Mace) undertake its defense in the lawsuit, but these firms refused. St. Paul then undertook the defense of its own insured, Marion4's Trucking. Part way through the trial, St. Paul settled with Shaffer for $25,000. Shaffer's action then continued against Teichert (who was defended by Fidelity), which won a defense verdict. This declaratory relief action was then brought to trial.

The insuring agreements of the Hartford and Fidelity policies had substantially the same language, in which the insurer undertook: ‘To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * sustained by any person, caused by accident and arising out of the ownership, maintenance or use of any automobile.’ (Emphasis added.)

Both policies contained the usual omnibus clause, which defined ‘insured’ to include: ‘* * * 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 * * *.’ Both policies defined ‘hired automobile’ to include an automobile used under contract on behalf of the policyholder. Both policies defined the term ‘use’ to include ‘loading and unloading.’

St. Paul contended in the trial court, as it does on appeal, that Doyle Walker and Marion's Trucking were helping to unload the sand truck; that Shaffer's injury arose out of this unloading; thus that Walker and Marion's Trucking Company became additional insureds under the Hartford policy covering the sand truck; also, that Marion's Trucking became an additional insured, as owner of a hired vehicle, under the omnibus clause of the policy which Fidelity had issued to Teichert. The trial court granted defendants' motion for judgment pursuant to Code of Civil Procedure, section 631.8.1 It found that Walker and Marion's Trucking were not ‘using’ the sand truck; thus that neither of the defendant companies's policies covered Walker and Marion' Trucking Company.

The defendant companies seek to confine appellate review to an inquiry into substantiality of the evidence to support the finding of nonuse. They rely on Greening v. General Air-Conditioning Corp., 233 Cal.App.2d 545, 43 Cal.Rptr. 662, holding that trial court findings incidental to a judgment granted under section 631.8 are entitled to the same respect on appeal as any other findings. The argument misses the mark. The appeal involves issues of law, that is, questions of interpretation of automobile liability policies as applied to undisputed facts. (Estate of Helfman, 193 Cal.App.2d 652, 654, 14 Cal.Rptr. 482; see 12 Couch on Insurance 2d, § 45:330, p. 340.) A comparable case is Colby v. Liberty Mutual Ins. Co., 220 Cal.App.2d 38, 33 Cal.Rptr. 538, in which the appellate court went so far as to direct amendment of purported findings of fact which did nothing more than define the scope of coverage under the loading and unloading clauses of a liability policy.

It is not necessary to hinge the decision on the ‘loading and unloading’ clause. Hartford's policy covered accidents ‘arising out of the * * * use’ of the sand truck. Hartford points to no special policy restriction confining this phrase. When employed in a public liability policy without restriction, words such as ‘use’ or ‘using’ have comprehensive scope. (Liberty Mutual Ins. Co. v. Steenberg-Constr. Co., 8 Cir., 225 F.2d 294, 297; American Auto. Ins. Co. v. Transport Indem. Co., 200 Cal.App.2d 543, 549, 19 Cal.Rptr. 558; Columbia Southern Chemical Corp. v. Manufacturers & Wholesalers Indem. Exch., 190 Cal.App.2d 194, 202, 11 Cal.Rptr. 762; see Note 89 A.L.R.2d 150, 163–164.) They do not demand that the injury be proximately caused, in the strict legal sense, by the insured vehicle; they may apply though it is ar rest. (Columbia Southern Chemical Corp. v. Manufacturers & Wholesalers Indem. Exch., supra, 190 Cal.App.2d 194, 11 Cal.Rptr. 762.) California decisions to date have involved vehicle insurance use clauses only as expanded by the loading and unloading concept. (See Entz v. Fidelity & Casualty Co. of New York, 64 A.C. 393, 50 Cal.Rptr. 190, 412 P.2d 382.) Cases dealing with loading and unloading have developed several verbal aids or standards, some of which seem equally appropriate in fixing the scope of ‘use.’ A frequently cited decision points to the mission or function of the insured's employees as a controlling element, stating also that truck ‘use’ includes all activities involved in transporting and hauling which are necessary and proper in making delivery of the cargo. (American Auto. Ins. Co. v. American Fid. & Cas. Co., 106 Cal.App.2d 630, 636, 235 P.2d 645, quoting from Pacific Auto. Ins. Co. v. Commercial Cas. Ins. Co., 108 Utah 500, 161 P.2d 423, 160 A.L.R. 1251.].) One authority expresses the same idea in somewhat different form, stating that ‘use’ is not confined to motion on the highway but extends to any activity involved in utilization of the covered vehicle in the manner intended or contemplated by the insured. (12 Couch on Insurance 2d, § 45:325, p. 337.)

The United States Court of Appeals, Fourth Circuit, and an Iowa Court of Appeals have held that the use clause of a liability policy covering a stalled vehicle extended to the owner or operator of a vehicle engaged in towing it. (American Fire & Cas. Co. v. Allstate Ins. Co., 214 F.2d 523; Hall v. United States Fidelity and Guaranty Co., 107 Ohio App., 155 N.E.2d 462.) The Supreme Court of Kansas, two members dissenting, has held to the contrary. (Esfeld Trucking, Inc. v. Metropolitan Ins. Co., 193 Kan. 7, 392 P.2d 107.) The position of the federal and Ohio courts, as well as the Kansas dissenters, is more consistent with the policy expressed in California decisions, which usually favor a broad application of ‘use’ coverage. (See Entz v. Fidelity & Casualty Co. of New York, supra, 64 A.C. at pp. 396–398, 50 Cal.Rptr. 190, 412 P.2d 382.) At the point of the accident the sand truck had been interrupted in a journey of the very kind for which the policyholder had purchased liability insurance. It had arrived at the consignee's premises, though not yet at the physical point of actual delivery. Inability to travel up the ramp under its own power was a standard characteristic of the journey. Although the water trucks were not ordinarily employed for towing, Walker's towing attempt was regarded by the people on the job as a routine cooperative activity. In attempting the tow, the driver of the water truck was assisting the sand truck on its insured journey. Though the attempt was unsuccessful, it had not yet broken off at the moment of the accident, for both vehicles were in a spatial relationship resulting from the towing attempt. We conclude that Walker, the water truck driver, was ‘using’ the sand truck at the time of the accident; that the injury arose out of that use; that Marion's Trucking Company, Walker's employer, was a ‘person or organization legally responsible’ for that use within the contemplation of the omnibus clause, hence entitled to coverage as an additional insured under the Hartford policy.

The accident occurred in the course of the sand truck's operation and did not involve the handling of its cargo. Thus the decision is more appropriately turned on the question of use, rather than on the unloading clause. Whether the latter might extend coverage under the circumstances of this case, we do not decide. We do note that California espouses the broad ‘complete operations' concept of unloading, which covers all the operations required in any specific situation to accomplish complete delivery. (Entz v. Fidelity & Casualty Co. of New York, supra, 64 A.C. at pp. 397–398, 50 Cal.Rptr. 190, 412 P.2d 382.)

Teichert's insurer, Fidelity and Casualty, is in a different position. Teichert's liability policy covered vehicles hired under contract. Plaintiff St. Paul would classify the Hell-Mace sand truck as a vehicle hired by Teichert and ‘used’ with Teichert's permission by Walker, who was attempting to tow it. Coverage by the Fidelity and Casualty policy is excluded by the proviso in the omnibus clause: ‘* * * provided the actual use of the automobile is by the named insured or with his permission * * *.’ This was not a case where Teichert, the policyholder, rented or leased non-owned vehicles to be operated by its own employees. Teichert's subcontract with Hess-Mace required the latter to operate as well as furnish the trucks. An express provision of the subcontract required Hess-Mace to furnish its own public liability insurance. Thus coverage by Teichert's liability policy was not within the parties' contemplation. Except as extended to cover activities incidental to use, ‘actual use’ of the sand truck was not by Teichert, the named insured, but by Marion's Trucking, the independent contractor who supplied a unified service consisting of truck, driver and liability insurance. Further, though the towing was under Teichert's general auspices, Walker's ‘use’ of the sand truck was not with the permission of Teichert (whose contract gave it no power to grant or withhold permission) but of Shaffer, the driver for Hess-Mace (who did have that power). The governing rule is stated in Didlake v. Standard Ins. Co., 10 Cir., 195 F.2d 247, 252, 33 A.L.R.2d 941–947: ‘* * where an automobile liability insurance policy is issued to one person and where the ownership, possession and control of the automobile are in another, the latter is not covered by the omnibus clause. The rationale of such decisions is that the words ‘consent’ or ‘permission’ as used in the omnibus clause connote the power to withhold as well as grant, and since the named insured in the policy could not withhold from the owner in possession and control of the automobile the right to use it, it could not be said that the use by the latter was with the permission and consent of the person to whom the policy was issued.' (Citing Whitney v. Employers' Indemnity Co., 200 Iowa 25, 202 N.W. 236, 41 A.L.R. 495; Fagg v. Massachusetts Bonding & Ins. Co., 142 Or. 358, 19 P.2d 413; Giroud v. New Jersey Mfrs. Casualty Ins. Co., 106 N.J.L. 238, 148 A. 790; Fertig v. General Acc. Fire & Life Assur. Corp., 171 Misc. 921, 13 N.Y.S.2d 872, and Keystone Automobile Club Casualty Co. v. Fazio, Pa.Com.Pl., 4 Chest. 203.) (See also 12 Couch on Insurance 2d, § 45:373, p. 379; cf. Norris v. Pacific Indem. Co., 39 Cal.2d 420, 425–426, 247 P.2d 1.)

The loss being simultaneously within the scope of the St. Paul and Hartford policies, the problem of primary, excess, or prorata coverage occurs. The point has not been briefed and the court's attention not called to all potentially applicable policy clauses and endorsements. Possibly the two companies will agree on the matter; if not, the point may be debated in the trial court. The judgment in favor of Hartford Accident and Indemnity Company is reversed with directions to determine any necessary question of apportionment of the loss and to enter judgment for the plaintiff consistent with this opinion. The judgment in favor of The Fidelity and Casualty Company of New York is affirmed.


1.  Code of Civil Procedure, section 631.8 provides in part: ‘After a party has completed his presentation of evidence in a trial by the court, the other party, without waiving his right to offer evidence in support of his defense or in rebuttal in the event the motion is not granted, may move for a judgment. The court as trier of the facts shall weigh the evidence and may render a judgment in favor of the moving party, in which case the court shall make findings * * *.’

FRIEDMAN, Justice.

REGAN, J., and BRAY, J., assigned, concur.

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