Opinion
No. 75-320
Decided December 18, 1975. Opinion modified and as modified petition for rehearing denied January 22, 1976. Certiorari granted March 15, 1976.
In action seeking a determination of insurance coverage for vehicular accident, a declaratory judgment was entered in favor of the defendants, and plaintiffs appealed.
Affirmed in Part, Reversed in Part.
1. INSURANCE — Automobiles — Liability Coverage — "Anyone Using" Automobile — Defined — Inherent Purpose of Vehicle — Driver of Tow Truck — Not "Using" — Towed Vehicle. Where driver of tow truck was in the process of towing a disabled vehicle when it was struck by another oncoming automobile, the condition of being disabled which necessitated the towing was foreign to the inherent purpose of the towed vehicle, and the asserted "user" of the vehicle was not utilizing it for his own purposes; thus the tow truck driver was not "using" the disabled vehicle within the meaning of that term in the insurance policy and so liability coverage of that policy did not extend to the tow truck driver.
2. Excess Clause — Use of Another Vehicle — Use By Named Insured — Exclusionary — Insurer's Primary Liability — Limitations Applicable — Towing Situation. Under an insurance policy issued to owner of disabled vehicle which provided for payment of claims up to specified limits, but which contained an "excess" clause, excluding all but excess coverage when the named insured was using another vehicle, the terms "use of another vehicle" contemplated that such use would be to the exclusion of the insured's own vehicle, and where the owner of a towing vehicle and the owner of a disabled vehicle were in their own respective vehicle at the time a collision occurred with a third vehicle, the owner of the towed vehicle was "using" both his vehicle and the towing vehicle; consequently, the insurer of each vehicle was primarily liable only for the claims of his own insured up to the stated limits, and the excess coverage provided by the policy issued to the owner of the towing vehicle is available to the owner of the towed vehicle.
Appeal from the District Court of the County of Washington, Honorable Waino Johnson, Judge.
DeMoulin, Anderson, Campbell Laugesen, Laird Campbell, for plaintiffs-appellants.
Walberg Pryor, W. Randolph Barnhart, for defendants-appellees.
Division I.
Plaintiffs appeal from a declaratory judgment entered in favor of defendants in an action seeking a determination of insurance coverage for a vehicular accident. We affirm in part and reverse in part.
Plaintiff Drum and defendant Miller were involved in an automobile accident with a third vehicle near Akron, Colorado. Prior to the collision, Miller's vehicle had become disabled and was parked by the side of the road. Miller returned to Akron and asked his friend Drum for assistance in towing the Miller pickup back to town. Drum agreed to tow Miller and drove his pickup to the point of the highway where Miller's vehicle had stalled. In order to return Miller's vehicle to Akron, it was necessary to reverse its direction. Accordingly, the rear of the Drum pickup was hooked to the front of the Miller pickup with a 12 foot tow chain belonging to Drum, and Drum attempted to negotiate a "U-turn" on the traveled portion of the highway. During this maneuver, Miller was steering his own pickup although it was without motive power. Drum was unable to complete the turn as his truck was going into the barrow pit on the far side of the road, and he therefore stopped his vehicle, leaving Miller's truck blocking part of the traveled portion of the highway. At this time, Miller observed a third vehicle approaching from the west. This vehicle, driven by Calvert, with passengers Hall and Varner, collided with the rear of the Miller pickup resulting in physical injuries to the occupants of that vehicle and property damage to the Calvert and Miller vehicles.
At the time of the accident, Drum was the named insured in a liability policy issued by plaintiff Colorado Farm Bureau Mutual Insurance Company (Farm Bureau); Miller was the named insured in a policy issued by defendant Dairyland Insurance Company (Dairyland). Both policies contained similar language. They each agreed to pay, on behalf of the "insured," all sums which the insured "shall become obligated to pay because of bodily injury . . . caused by accident and arising out of ownership, maintenance, or use of the automobile." (emphasis added) Each policy similarly declined and insured's "any person who is using the automobile." (emphasis added). Drum's policy with Farm Bureau contained personal liability limits of $50,000 per person and $100,000 per incident; Miller's coverage with Dairyland for personal injury was limited to $15,000 per person and $30,000 per incident. The "pro rata" clause in the Farm Bureau policy provided:
"If the insured has other insurance against a loss covered by this policy, the Company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declaration bears to the total amount of all valid and collectible insurance against such loss. . . ."
The "excess" clause in the Dairyland policy provided that coverage under its policy where an insured is using a non-owned vehicle:
"shall be excess insurance over any valid and collectible insurance against such loss." (emphasis added)
Drum filed suit against Dairyland as insurer of Miller alleging that he was "using" the Miller vehicle when he was towing it and that he therefore qualified as an "insured" under the definition provided in the Dairyland policy. Dairyland entered a general denial of the allegations and counterclaimed to the effect that Miller was using the Drum pickup and was therefore an "insured" under Drum's policy with Farm Bureau. Farm Bureau, as insurer of Drum, and Miller as Dairyland's insured were added as necessary additional parties to the action.
Following a trial to the court on the above stipulated facts, the court entered judgment granting defendants' counterclaim, finding that Miller as driver of the towed vehicle was using Drum's vehicle, but Drum, as driver of the towing vehicle, was not using Miller's vehicle. The court then held that Farm Bureau, as insurer of the towing vehicle, was primary insurer for both Drum and Miller on the liability resulting from the collision with the third vehicle; that Drum had no coverage under the Dairyland policy covering the towed vehicle; and, that Miller had only excess coverage under his own policy with Dairyland.
Subsequent to the trial court's determination of the case, Farm Bureau, having given notice to Dairyland, settled claims against Drum in the following amounts: $1,212.54 to passenger Hall; $50,000 to passenger Varnar; $10,000 to driver Calvert; and $172 to the City of Fort Morgan.
Plaintiffs on appeal do not challenge the finding that Miller, as owner of the towed vehicle, was using the towing vehicle that was insured by Farm Bureau. Rather they assert only that Drum, in the towing vehicle, was also using the towed vehicle that was insured by Dairyland. Thus, there is only one issue before us for resolution on this appeal. When one vehicle is towing another vehicle, is the driver of the towing vehicle "using" the towed vehicle so that he qualifies as an "insured" under the definition provided in the policy issued to the driver-owner of the towed vehicle? Specifically, was Drum "a person who [was] 'using' the [Miller] automobile" such that Dairyland, as issuer of the policy on the Miller vehicle, was obligated to pay all claims for which he became liable as a result of an accident caused by the towing procedure? Under the circumstances present here, we answer these questions in the negative.
We note that this appeal comes before us in an unusual posture. This is not a case of an insured undertaking to enforce his coverage under a policy issued to him by an insurance carrier, but rather an action between two insurance carriers where one insurer who paid a loss by reason of personal injury to a third person, is seeking, as subrogee, indemnity against the other insurer. Thus, the usual public policy considerations which require that an insurance policy must be strictly construed against the insurer and in favor of coverage are inapplicable. See generally Truck Insurance Exchange v. Webb, 256 Cal. App. 2d 140, 63 Cal. Rptr. 791; Moss v. Travelers Insurance Co., 9 Ohio Misc. 71, 221 N.E.2d 607.
While the particular issue before us is one of first impression in Colorado, we are not without guidance in construing the phrase "any person who is using the automobile."
Appellants cite the case of Berthrong v. Certified Indemnity Co., 31 Colo. App. 81, 497 P.2d 1273, as authority for the proposition that Colorado has liberally construed the word "use." In Berthrong, the first permittee, Ms. Frymire, was a passenger in an automobile proceeding to Colorado Springs. We held that:
"Where a named insured grants to another 'actual use' of his automobile, there is no violation of that permission where the permittee turns over the mechanical operation of the automobile to another, but remains in the car with full right and power of control over its use."
Our holding in Berthong, however, was limited to a determination of whether the actual use to which the vehicle was put was within the scope of the permission granted Frymire by the named insured and did not go to the issue of whether the vehicle was being "used."
Other Colorado cases have construed the word "use" as applied to automobile liability policies and are more persuasive here. In Mason v. Celina Mutual Insurance Co., 161 Colo. 442, 423 P.2d 24, the court determined that the phrase "arising out of the . . . use of the automobile" did not afford coverage to the guest of a named insured when he accidentally discharged a firearm, killing another passenger while seated in the insured's parked automobile. For purposes of its conclusion, the court assumed arguendo that the guest was "using" the vehicle and therefore came within the definition of an "insured" under the policy. It found, however, that there was no causal connection between the discharge of a firearm and the stopped vehicle since sitting in a parked car "is not the type of use contemplated by the policy in question where the injury would have to be one originating from the use of the vehicle as such." (emphasis added)
In a similar case involving the accidental discharge of a firearm, we applied the same rationale, denying coverage, since we did not regard "such an occurrence as 'arising out of the . . . use of the owned automobile,' as contemplated by the liability insurance contract." Employers Casualty Co. v. Azar, 28 Colo. App. 566, 479 P.2d 979, aff'd, 178 Colo. 58, 495 P.2d 554. In that opinion we further limited the definition of "use," as contemplated by an automobile liability policy, to exclude a "use which is foreign to a vehicle's inherent purpose but to which the vehicle might conceivably be put."
More recently, in Colorado Farm Bureau Mutual Insurance Co. v. Western American Insurance Co., 35 Colo. App. 380, 540 P.2d 1112, a declaratory judgment action to determine whether an accidental shooting during a hunting trip was covered by insured's automobile liability policy or his homeowner policy, we held that the automobile liability policy afforded coverage under a provision defining the use of the vehicle to include both "loading and unloading." (emphasis added) Finding that the accident would not have occurred but for the loading or unloading of the insured's vehicle which was in progress, at the time of the accident, we held that there was coverage even though the injured party was not on or in the insured vehicle. Significantly, however, the opinion states:
See Tital Construction Co. v. Nolf, 183 Colo. 188, 515 P.2d 1123, in which Colorado adopted the "complete operation doctrine" with relation to liability insurance coverage for "loading and unloading." See also Northwestern Engineering Co. v. Rooks, 166 Colo. 297, 443 P.2d 977.
"We do not address the question of whether the coverage for 'use' of the vehicle contained in the automobile policy would be broad enough to cover this accident absent the last clause thereof. Rather the case turns on interpretation of the more specific 'loading and unloading' language of the policy," (emphasis added)
To summarize, under Colorado law there is no case in point specifically defining "use" in a towing situation; however, Colorado takes a "cautious approach" generally in finding "use" sufficient to invoke coverage under an automobile liability policy. When one asserts that he was using a vehicle and therefore qualifies as an "insured," such use must clearly have been one that was contemplated by the policy in question, Mason, supra; one that was not foreign to the vehicle's inherent purpose, Azar, supra; and, that use would have to have been the "but for" cause of the injury. Western American, supra.
An additional test is suggested by the case of Esfeld Trucking, Inc. v. Metropolitan Insurance Co., 193 Kan. 7, 392 P.2d 107, which concerned an action similar to the instant case. Defendant Metropolitan carried coverage on all motor vehicles belonging to its insured Great Bend Pipe and Supply Company, Inc., (Great Bend). Esfeld Trucking, Inc. was performing services for Great Bend, pulling a trailer truck to a well site, employing a winch line connected to Esfeld's caterpillar tractor which was operated by an Esfeld employee. A geologist working at the site was injured when he was run over by the trailer truck. The geologist sued Esfeld seeking damages for personal injuries. Metropolitan refused to defend Esfeld. Esfeld's insurer, General Insurance, subsequently settled with the geologist and then sued Metropolitan for indemnity on the theory that Esfeld was an insured under the policy covering Great Bend since it was using the semi-trailer. The trial court allowed recovery against Metropolitan. On appeal this was found to be reversible error.
The Kansas Supreme Court saw no need to apply a liberal construction of the word "use" in an action between two insurance companies "who draw their own policies and should know the meaning of the words used in those policies as they are understood in the general field of insurance." Esfeld, supra. Relying on a discussion appearing in 91 C.J.S. Use, the court defined "using as employing for any purpose, for the attainment of some purpose or end, or to put to one's use or benefit. Finding as a fact that the Great Bend truck had already been unloaded at the time the accident occurred, the court further found that:
"Any benefit, service or enjoyment of the truck had been completed, and it was no longer covered under the policy of Metropolitan."
Accordingly, the court held that while the driver of the Great Bend truck was using the Esfeld tractor, the driver of the Esfeld tractor was not using the Great Bend truck and was not an insured under the Metropolitan policy.
While application of the "complete operation" doctrine as accepted in Colorado might have altered the result in this case, it has no effect on the "beneficial use" concept which was the basis of the opinion.
In a concurring opinion the concept that the term "use" includes some beneficial employment of the property in question was further amplified and a distinction between the words "use" and "operation" was drawn.
"The 'use' of an automobile by an individual involves its employment for some purpose of object of the user while its 'operation' by him involves his direction and control of its mechanism as its driver for the purpose of propelling it as a vehicle." (emphasis added)
We adopt the reasoning of the Esfeld court and hold that under that "common sense" test there is "use" of another vehicle only when it is employed for some purpose of the person asserting that he is a user.
[1] Applying the Colorado criteria and the Esfeld test to the circumstances of the present litigation, we conclude, that Drum as driver of the towing vehicle, was making no "use" of the towed Miller vehicle. Drum was propelling the Miller vehicle since his pickup provided the motive power which it lacked; however, Miller still retained control of its mechanism as a driver steering his vehicle. Also, it is obvious to us that the language of the Dairyland policy referring to "anyone using the automobile," did not contemplate this situation. Where the insured's automobile is disabled and as a result requires towing, that towing process is not a use of the disabled vehicle such that in the event of an accident occurring while the vehicles are in a towing-towed relationship, the driver of the towing vehicle would be an "insured" under the terms of the policy on the towed vehicle.
Furthermore, the status of "being towed" is foreign to a pickup's inherent purpose and design of providing transportation through self-propulsion, under its own power and control. It is uncontested that Drum's towing of the Miller vehicle was the "but for" cause of the resulting injuries, however, Drum cannot be said to have been employing the Miller vehicle for his own object or purpose; the towing arrangement was unquestionably for the sole benefit of Miller. There was no commercial benefit to Drum. His gesture was gratuitous. As the court below observed: "Had there been a cargo or something belonging to Drum [in Miller's pickup], it might have been a different situation. . . ."
Appellant cites several cases which it alleges are applicable to the facts in this case and which should control our decision. In each of the cases cited, however, the towing vehicle was employing the towed vehicle for a purpose of the party claiming to be a "user" under the liability policy of the towed vehicle, and thus these cases are inapposite. State Automobile Mutual Insurance Co. v. State Farm Mutual Automobile Insurance Co., 456 F.2d 238 (6th Cir.), (driver of towing vehicle towing his own jeep loaded with equipment to be used on a hunting trip); Hartford Accident Indemnity Co., Inc. v. Liberty Mutual Insurance Co., Inc., ___ Fla. ___, 277 So.2d 775, (tractor towing leased trailer for its business purposes); Insurance Co. of North America v. Royal Indemnity Co., 429 F.2d 1014 (6th Cir.), (tractor pulling trailer in order to deliver power line poles to its customers); Ryder Truck Rental, Inc. v. Schapiro Whitehouse, Inc., 259 Md. 354, 269 A.2d 826, (trailer being used for a commercial purpose of the operator of the tractor); American Fire Casualty Co. v. Allstate Insurance Co., 214 F.2d 523 (4th Cir.), (owner of automobile towing his own jeep for his own personal use); Moss, supra. (towed road widening machine was to be used in tower's road construction operation); and St. Paul Fire Marine Insurance Co. v. Hartford Accident Indemnity Co., 244 Cal. App. 2d 826, 53 Cal. Rptr. 650, (water truck assisting a mired sander in its insured operation, the performance of which was essential to the sand spraying function of the water truck).
Having determined that Drum derived no benefit from towing the Miller pickup, that the condition of being disabled which necessitates towing is foreign to the inherent purpose of a vehicle (although it is a use to which it might conceivably be put), and that being towed is not a use contemplated under the definition of "insured" in a liability insurance contract, we recognize as sound the trial court's finding that Drum, as driver of the towing vehicle, was not using the Miller vehicle. That finding is, in addition, consistent with the rule that a court may not give the word "use" a strained or unnatural meaning. Kraus v. Allstate Insurance Co., 258 F. Supp. 407 (D.C. Pa.) aff'd 379 F.2d 443. (3d Cir.) Similarly, we concur in the court's conclusion that under the applicable tests, Miller, the driver-owner of the towed vehicle, was using the Drum vehicle.
[2] We hold, however, that the court erred in construing the "excess" clause in the Dairyland policy issued to Miller, the owner of the disabled vehicle, to be applicable here, and that therefore Farm Bureau was primary insurer for both the driver of the towing vehicle and the towed vehicle.
The "excess" clause in the Dairyland policy excluded all but excess coverage from Dairyland when the named "insured" was using "another automobile" and as a result of that use "other coverage" was available for payment of claims against the insured. We believe that such a clause contemplated the use of "another vehicle" to the exclusion of the vehicle owned by the insured and covered by the liability policy. That is not the case here. Under the applicable tests Miller was "using" his own disabled pickup at the same time he was "using" the Drum pickup. Although the power unit of Miller's vehicle was inoperable, he was sitting in it, steering it, and it was providing him with a mode of transportation.
Since Miller and Drum were each using his own vehicle, each insured is primarily liable for claims made against his insured up to the limits stated in the declaration of the policy. See St. Paul Mercury Insurance Co. v. Underwriters at Lloyds of London, 365 F.2d 659 (10th Cir.); see also Annot. 69 A.L.R.2d 1122. Excess coverage is available to Miller under the Farm Bureau policy as a "user" of Drum's vehicle. Thus, in the instant case where all claims have been paid by Farm Bureau after providing appropriate notice to Dairyland, Dairyland must indemnify Farm Bureau for one-half of all amounts paid by Farm Bureau, but not to exceed Dairyland's policy limits.
Judgment affirmed in part, reversed in part, and cause remanded with directions to enter judgment for Farm Bureau in the appropriate amount.
JUDGE SMITH and JUDGE STERNBERG concur.