Pacific Indemnity Co. v. Universal Underwriters Insurance

ROTH, P. J.

This is an appeal from a declaratory judgment determining the rights and obligations of respondents Pacific Indemnity Company (Pacific) and Glens Falls Insurance Company (Glens Falls) and appellant Universal Underwriters Insurance Company (Universal).

On February 28,1957, Burnett Oakry was loaned a courtesy ear by Hamlin W. Nerney Co. (Hamlin), an automobile sales and service agency, while his car was being repaired by Hamlin. Oakry was insured under an accident liability policy issued by Glens Falls. Hamlin was insured by Universal under a comprehensive liability policy which provided that it not only covered the named insured, Hamlin, but also any person driving an insured automobile with the permission of Hamlin, and any person legally liable for its use. An endorsement to this policy, however, amended the definition of “insured” contained in the originally issued policy so as to include thereunder only partners, employees, directors, and stockholders of Hamlin and persons having a financial interest in the business of Hamlin and members of the household of such designated persons and any person legally responsible for the use of an automobile owned by the insured and operated by such individual with the permission of the insured.

On the day Oakry obtained the use of the courtesy car, he was involved in an accident with a minor pedestrian. At the time of the accident Oakry was in the course of his employment for one Gladys R. Belzer who was insured by Pacific.

The Glens Falls policy and the Pacific policy each contained a clause which made their coverage excess, when the vehicle driven by the insured was nonowned.

In an action against Oakry, Belzer and Hamlin, the minor was awarded a judgment of $10,000 plus costs. In a retrial, the parents of the minor were awarded an additional $2,266.65 with costs as to Oakry and Belzer.

Glens Falls and Pacific each paid part of the total award. Universal paid nothing.

In this action the trial court held that Oakry and Belzer were each additional insureds under the Universal policy, and that Universal’s policy was primary and liable for the entire

[543]