Summary
holding that cars provided by the insured's employer for use during the insured's work as a full-time taxi driver were furnished for his regular use
Summary of this case from Volpe v. Prudential Property and Cas. Ins. Co.Opinion
No. 4053.
Decided January 2, 1952.
The limitation on a policy of liability insurance extending coverage to the operation of other automobiles by the insured "only if no other valid and collectible insurance is available to such named insured" is a valid provision (R.L., c. 122, s. 1 VII b). Where a policyholder having such insurance was involved in an accident while operating an automobile of his employer in the course of his employment and his employer carried the minimum required coverage on such vehicle, there was thus other valid and collectible insurance. In such case, payment by the latter company of the maximum policy limits to the injured third party operated to discharge the insured's liability pro tanto. Where the injured third party recovered a verdict which was in excess of the policy limits of such company which afforded the "other valid and collectible insurance" the excess may not be recovered from the other insurer which issued the extended coverage policy. In such case, where either of two automobiles were furnished for the regular use of the insured by his employer in the taxi business the exclusionary provision in the extended coverage policy "to any automobile . . . furnished for regular use to the named insured" was applicable.
PETITION, for a declaratory judgment. R.L., c. 370, s. 20. The Court (Sullivan, J.) transferred without ruling all questions of law raised by the following reserved case:
"Petition for declaratory judgment in which the petitioner seeks that the Merchants Mutual Casualty Company be ordered to pay a deficiency judgment.
"On November 27, 1947, the petitionee, Ervin M. Dudley, was employed by Betty D. Freeman and Charles D. Freeman who were engaged in the operation of a taxi business in Dover. The petitioner was injured as a result of an accident when he was struck by the Freeman taxi which was being operated by the petitionee Dudley. On March 2, 1949, a verdict was rendered for the petitioner against the Freemans and Dudley in the sum of $8,750. At the time of the accident the motor vehicle owned by the Freemans was insured under an automobile liability insurance policy issued by the American Employers Insurance Company with bodily injury liability in the sum of $5,000 for each person and $10,000 for each accident.
"On February 23, 1947, the Merchants Mutual Casualty Company issued to the petitionee Dudley an "Operator's Liability Policy" No. N333109, with limits of $5,000 for bodily injury liability to one person. On August 11, 1947, the Merchants Mutual Casualty Company issued endorsements stating that the operator's coverage was excluded and that this policy was converted to a standard automobile liability policy. The policy was in effect on the date of the accident in which the petitioner was involved.
"On May 4, 1949, the American Employers Insurance Company paid to the petitioner on the verdict a sum of $5,039.82 which the petitioner alleges to have been received in full release and discharge of the American Employers Insurance Company and pro tanto only in release and discharge of the Freemans. On the verdict of $8,750, $3,750 has not been paid and the petitioner seeks payment and satisfaction of the balance from the Merchants Mutual Casualty Company.
"The parties to this petition agree that Dudley was, on November 24, 1947, at the time of the accident in which the petitioner was injured, employed by the Freemans full time as a taxi driver. The Freemans used two motor vehicles in their taxi business, one a 1946 Chevrolet four-door sedan which Dudley was driving at the time of the accident and the other, a 1941 Chevrolet four-door sedan. The Freemans at that time employed Dudley and one other individual as taxi drivers. Charles D. Freeman also worked full time as a taxi driver. Dudley, in the course of his employment, operated both of the motor vehicles and was not limited to the use of either one of them. He did not operate the 1946 Chevrolet any more than he operated the other motor vehicle. The 1946 Chevrolet was driven in the course of business by Freeman, Dudley, and the other employee."
Reference to certain exhibits which are made a part of the reserved case appear in the opinion.
Hughes Burns and Donald R. Bryant (Mr. Bryant orally), for the petitioner.
Devine Millimet (Mr. Millimet orally), for the petitionee insurance company.
Ervin M. Dudley, filed no brief.
The endorsements to the insurance policies issued by the Merchants Mutual Casualty Company to the named insured, Dudley, extended coverage to the operation of any other automobiles by him subject to the following provision: "The insurance afforded by this paragraph applies only if no other valid and collectible insurance is available to such named insured, spouse, chauffeur or servant, either as an insured under a policy applicable with respect to the automobile or otherwise, against a loss covered hereunder." This limitation on the extended coverage is valid and expressly permitted by R.L., c. 122, s. 1 VII (b) which is stated in the following language: ". . . provided, however, the insurance afforded under this subparagraph (b) applies only if no other valid and collectible insurance is available to the insured." Cf. American Mut. c. Ins. Co. v. Company, 87 N.H. 374. Since Dudley was clearly operating the Freeman automobile with consent and within the scope of his employment, he was covered by the policy issued by American Employers Insurance Company. R.L., c. 122, s. 16 VI; Utica Mut. Ins. Co. v. Langevin, 87 N.H. 267. This was valid and collectible insurance for Dudley and his liability was satisfied pro tanto. Burke v. Burnham, 97 N.H. 203; anno. 126 A.L.R. 1199. There being other valid and collectible insurance the injured party cannot recover the excess of $3,750 under the rule laid down in American Employers Ins. Co. v. Insurance Co., 93 N.H. 101.
It is argued that this limitation on extended coverage cannot be relied upon in any event because of Phoenix Indemnity Co. v. Conwell, 94 N.H. 146. That case has no application to this situation because the Employer's policy furnished all the insurance required under the minimum limits of liability called for by the Financial Responsibility Act. R.L., c. 122, s. 1 VII; Farm Bureau Ins. Co. v. Martin, 97 N.H. 196.
The petitioner claims the Merchants' policy is liable to pay the $3,750 because of paragraph V of the insuring agreements. This paragraph extends coverage to Dudley, the named assured, "with respect to use of any other automobile by or in behalf of such named insured" and then provides in part that the insuring agreement does not apply "to any automobile . . . furnished for regular use to the named insured. . . ." Dudley was employed full time as a taxi driver and was one of three persons who operated two Chevrolets in the taxi business of his employer. While he was not limited to the use of either automobile and did not operate the one involved in the accident any more than he operated the other automobile, either automobile was furnished for regular use to Dudley within the meaning of the exclusion to the insuring agreement. Anno. 173 A.L.R. 901, 904.
Certain other provisions of the policies have been emphasized by the petitioner as an additional basis for coverage and by the insurance company as an additional basis for establishing no coverage in this case. The conclusions already reached as well as the decision in Am. Employers Ins. Co. v. Insurance Co., 93 N.H. 101, forecloses the former contentions and makes it unnecessary to consider the latter.
Judgment or the defendant.
All concurred.