Summary
In Speier v. Ayling, 158 Pa. Super. 404, 45 A.2d 385 (1946), a case factually similar to this case, a liability policy contained a CCC exclusion which provided that, "This policy does not apply... to property owned by... [or] in charge of... the insured."
Summary of this case from Hertz Corp. v. SmithOpinion
October 25, 1945.
January 18, 1946.
Insurance — Automobile liability — Words and phrases — "In charge of" — Control of car — Named insured — Wife of insured — Excess insurance — Estoppel of insurer to deny liability — Defense of action — Agreement reserving rights.
1. Where an owner of an automobile permits another to drive the car and does not share in its control, although he is seated alongside of the driver, the latter is "in charge of" the car within the meaning of a policy of automobile liability insurance which excludes liability for damage to property "in charge of the insured".
2. Where a policy of automobile liability insurance provides that its coverage is available to "any person" using the car with the permission of the insured, the policy covers injury to the wife of the named insured, even though it provides that the extended insurance does not include coverage for bodily injury to any person who is a named insured.
3. Where such policy further excludes coverage for damage to property owned by the insured, the insurer is not liable for damage to the car while driven by another with the permission of the insured owner.
4. Where an automobile liability policy provides that its protection while the insured is using another's car shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to the automobile or otherwise, under such excess insurance clause the policy does not come into operation until after the other insurance is exhausted.
5. Where an insurer executes a reservation of rights or non-waiver agreement by which its insured under a policy of automobile liability insurance requests the insurer to defend and agrees that the defense shall be without prejudice to a disclaimer of liability, such insurer is not estopped, by defending the principal action against the insured, from denying liability in an attachment execution proceeding.
Before BALDRIGE, P.J., RHODES, RENO, DITHRICH, ROSS and ARNOLD, JJ. (HIRT, J., absent).
Appeals, Nos. 167-170 incl., Oct. T., 1945, from judgment of C.P. No. 2, Phila. Co., June T., 1942, No. 936, in case of Leon Speier et ux. v. Robert. Ayling et al. Appeals, Nos. 167 and 168, judgment reversed; appeals, Nos. 169 and 170, record remanded with directions.
Attachment execution proceeding. Before BLUETT, J., without a jury.
Findings and judgment for plaintiff and against garnishees. Garnishees, respectively, appealed.
George L. Cogan, with him Samuel S. Herman, for appellant.
George L. Cogan, with him Samuel S. Herman, for Penna. Threshermen and Farmers' Mutual Casualty Ins. Co., appellant.
Gerald A. Gleeson, for plaintiffs, appellees.
Argued October 25, 1945.
Leon Speier and his wife had final judgments on verdicts against Ayling: For the wife for personal injuries $600; for the husband for her expenses $150 and for the loss of her companionship (services) $150; and for Leon Speier $700 for damage to his automobile — a total of $1600. The jury's verdict established that the negligence of Ayling was the proximate cause of the injury and damages. Ayling at the time was driving Speier's automobile and Speier was seated by his side.
Upon these judgments each plaintiff issued an attachment execution against Allstate Insurance Company (Ayling's carrier), and similarly against Pennsylvania Threshermen and Farmers' Mutual Casualty Insurance Company (Leon Speier's carrier), each as garnishee. After interrogatories, answers and trial without a jury the court below entered judgments for the full amounts against both carriers, retaining control of any execution. Each insurance carrier appealed.
The questions involved require each carrier's liability first be determined as if no other carrier was concerned.
ALLSTATE LIABILITY. Allstate was carrier of Ayling, the driver and defendant in the original judgments. Its policy covered him while driving any automobile by paragraph 4. Allstate concedes liability on this phase of all items except the item of $700 damage to Leon Speier's automobile, which it denies under a clause reading: "EXCLUSIONS. This policy does not apply under liability — Coverage B. (property damage) . . . (f) to property owned by, . . . in charge of, . . . the insured."
"Coverage A — To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages . . . sustained by any person . . . caused by accident and arising out of the . . . use of the [an] automobile."
"Coverage B — To pay . . . [exactly as above] . . . for damages . . . to property . . . caused by accident and arising out of the use of the [an] automobile."
Was Ayling, the driver, "in charge of" the Speier automobile at the time it was damaged? Ayling was the permissive driver of Speier, who was seated beside the driver. While Speier could control who could drive it, the actual control of the vehicle was passed by him to Ayling, and Speier had no control of the driving of the vehicle at the time of the accident. In Rodgers v. Saxton, 305 Pa. 479, 158 A. 166, a wife owned the automobile and was seated beside her husband who was the driver. They were on their way to Atlantic City for a vacation. A collision occurred with a car driven by Saxton. Rodgers and his wife sued Saxton. The jury found that Saxton was negligent, and also that the negligence of Rodgers (driver of his wife's automobile) contributed, and returned a money verdict in favor of Mrs. Rodgers. The Supreme Court held, in an exhaustive opinion by Justice (now Chief Justice) MAXEY, (page 488) "The negligence of the driver of a vehicle can be imputed to a passenger therein only when the evidence justifies a finding of the passenger's right to a share in the control of that vehicle at the time of the negligence . . . whether the driver and the passenger were engaged at the time in a `joint enterprise' or not." In the opinion the court gave full weight to the fact that Mrs. Rodgers was the owner of the vehicle and was seated beside her husband, her permissive driver, but affirmed her judgment.
Speier and his wife and Ayling and his wife were on their way to California to attend a convention and they took turns at driving.
The judgments in the original action of Leon Speier and Matilda Speier, his wife, against Ayling are conclusive that "at the time of the negligence Speier did not share in the control of that vehicle." Were it otherwise the negligence of Ayling would be imputed to Speier, thus defeating the latter's recovery for car damage. Since Speier did not share in the control, Ayling was in sole control at the time of the negligence. Being in sole control by permission of the owner, the latter's automobile (property) was "in charge of" Ayling, the insured. Cf. Sky v. Keystone Mutual Casualty Co., 150 Pa. Super. 613, 29 A.2d 230. If Speier, the owner, had not been in the car surely it would be "in charge of" Ayling, the permissive driver. The situation does not change merely because the owner is present, for the only difference is as to the time when the permission was given. Therefore, the liability of Allstate if there were no other insurance, is for $900 of the items of the judgments.
THRESHERMEN LIABILITY. It was the insurance carrier of Leon Speier, the owner of the vehicle, and its policy provided that the coverage of the policy "is made available" to the insured's permissive driver (Ayling). Threshermen under Coverage A — Bodily Injury Liability — covenanted "To pay on behalf of the insured [by extension, Ayling] all sums which the insured [by extension, Ayling] shall become obligated to pay by reason of the liability imposed . . . by law for damages, including damages for care and loss of services, because of bodily injury . . . sustained by any person . . . caused by accident and arising out of the . . . use of the automobile." (Emphasis supplied.)
"4. EXTENDED COVERAGE. The insurance . . . [of] this policy is hereby made available . . . under the same conditions . . . to any . . . person using any automobile described . . . with the permission . . . of the insured." The Speier car was described in the policy.
The Exclusion Clause that the extended insurance "does not include coverage for (b) any person . . . with respect to bodily injury . . . who is a named insured," does not apply because the named insured is Leon Speier. The carrier could have excluded the wife of the named insured but did not. Instead, the coverage was of damages to "any person."
As to the item of $700 damage to Speier's car Threshermen is not liable. The policy provides, "3. Definition of `Insured.' The unqualified word `insured' as used in this policy shall mean the individual . . . named in the statements of this policy." That individual was Leon Speier. Under "Exclusions" it provides "This Policy Excludes Coverage For Any Liability Of The Assured 3. For damage to property owned [by] or in charge of . . . the insured." (Emphasis supplied.)
Threshermen contends that it is not liable because Allstate appeared and defended Ayling in the original trial and thereby was estopped from denying liability under Malley v. American Indemnity Company, 297 Pa. 216, 146 A. 571. This is not so because Allstate executed a reservation of rights or non-waiver agreement by which Ayling requested Allstate to defend and agreed that such defense was "without prejudice to the disclaimer of liability now asserted." Threshermen argue that Allstate could not amend its answers at trial to plead the non-waiver agreement because it was estopped from a new defense. The non-waiver agreement was not a defense to the attachment execution, but merely an answer to the contention that Allstate was estopped by defending the principal action. Neither the plaintiffs in the original action nor Threshermen (which denied all liability and refused to defend) were entitled to notice of the agreement and none suffered any deleterious change of position or prejudice. The amendment was properly allowed. No continuance was requested.
These agreements are valid: Laroche v. Farm Bureau Ins. Co., 335 Pa. 478, 7 A.2d 361.
The complete reasons for denying liability were in the preceding paragraph of the agreement.
Therefore, Threshermen's liability (if there were no other insurance) is for $900 of the items of the judgments.
ADDITIONAL INSURANCE. Each of the policies, standing alone, covers each of the items aggregating $900, and the remaining question is what effect the "other insurance clauses have. Each policy provides "if the insured has other insurance against a loss covered by this policy, the company shall not be liable . . . for a greater proportion . . . than the applicable limit of liability [expressed] stated . . . bears to the total applicable limit of liability of all valid and collectible insurance against such loss." The applicable limit of liability is the same in each. If this were all each insurer would be liable for half the loss.
But the Allstate policy under paragraph 15 (Other Insurance) provides (in addition to a provision similar to the Threshermen policy) "that the insurance under paragraph IV (use by Ayling of another's car) shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to the automobile or otherwise, against a loss covered under said Paragraph." The effectiveness of such excess insurance clause was settled in Grasberger v. Liebert Obert, Inc., 335 Pa. 491, 6 A.2d 925, holding that under such a clause the policy did not come into operation until after such other insurance was exhausted. The scope of the one policy was only as to the excess. The scope of the other was for the full liability pro rated with other collectible insurance. Ayling, when driving Speier's car was only insured by Allstate under paragraph IV. The principle of the Grasberger case does not depend upon any theory of "contingent coverage" or "primary insurer," but upon the clear words of the policy.
Threshermen were held solely liable in this case where Aetna was the other carrier. The opinion was dated June 13, 1939, with knowledge of this its own case. Threshermen issued the instant policy without an excess insurance clause on August 13, 1941.
In appeals Nos. 167 and 168 October Term, 1945 of Allstate Insurance Co., the assignments of error are sustained, the judgment is reversed at the cost of the appellee, and judgment is hereby entered in favor of Allstate Insurance Co., garnishee.
In appeals Nos. 169 and 170 October Term, 1945 of the Pennsylvania Threshermen and Farmers' Mutual Casualty Insurance Company, assignment of error No. 2 is sustained, all the other assignments of error are dismissed, the record remanded with directions to the court below to enter judgment in favor of the plaintiff and against the Pennsylvania Threshermen and Farmers' Mutual Casualty Insurance Company, garnishee, in accordance with this opinion, in the amount of $900, with interest thereon, and with costs including its instant appeals.