Indemnity Insurance v. American Automobile Insurance

YORK, P. J. By the instant action, plaintiff Indemnity Insurance Company of North America, hereinafter referred to as Indemnity, seeks contribution from defendant American Automobile Insurance Company, hereinafter referred to as American, on account of settlement of a loss made by Indemnity pursuant to liability insurance policies issued by [522]Indemnity and American to Simmons Tank Service, Incorporated, hereinafter called Simmons.

The policy of American indemnified Simmons for losses incurred through the ownership, maintenance or use of motor vehicles; the policy of Indemnity insured Simmons against liability imposed by law upon him for bodily injuries or death “caused by accidents”; said policy excluding “ownership, maintenance or use of . . . automobiles or trailers,” except “to the use of special auxiliary equipment while . . . in actual use on any work site.”

The limits of liability were fixed in both policies at $100,000 for each person injured, and $200,000 for each accident.

The complaint alleges that on October 17, 1941, while both policies were in effect, Simmons was engaged in cleaning a large oil storage tank in Ventura, and was using “certain tools, equipment, appliances, motors and automobile trucks”; that the trucks were covered by American’s policy, and the tools, equipment, appliances and motors were covered by Indemnity’s policy; that during the progress of the work the said oil storage tank exploded, fatally injuring one Bertes M. Miller; that on March 17, 1942, the heirs of decedent Miller brought suit against Simmons for recovery óf damages for his death, caused by the alleged negligence of Simmons.

While the Miller case was on trial, counsel for plaintiffs therein offered to settle the litigation, give a full release and dismiss the action with prejudice in consideration of the sum of $20,000. It is further alleged' in the complaint that after said offer of settlement was made, to wit: on November 19, 1942, Indemnity and American “entered into a written contract and agreement” whereby it was agreed that Simmons was the insured of both companies under their respective policies; that a difference of opinion then existed between Indemnity and American as to which of the policies covered the accident, or whether it was covered by both; that a trial of the Miller action was then in progress and that counsel for both companies were defending said action “with a full reservation of rights of their respective companies . . . without waiving any provisions of either of said policies and without admitting that either of said policies covered the accident”; that an offer of settlement had been made in the sum of $20,000; that Indemnity “proposed to pay said sum of $20,000.00, or a lesser sum if possible, in settlement of