Cal-Farm Insurance Co. v. Zurich Insurance Co.

WHITE, J. pro tem.* Plaintiff appeals from an adverse judgment after trial by the court without a jury. The case was tried on an agreed statement of facts which was adopted by the court in its findings. It is the contention of appellant that the trial court erred in refusing to adopt appellant’s interpretation of its automobile liability policy.

The dispute here is between two insurance carriers, each of which asserts that the other was obligated as an insurer of Joseph Schneider in an action instituted against him by Grant Alvin Amen, arising out of certain loading operations in which Schneider and Amen were engaged.

[78]Prior to August 17, 1961, appellant had issued an automobile liability policy to S. M. Amen, Sr., S. M. Amen, Jr., and Grant Alvin Amen, covering a truck owned by them, by the terms of which it insured also other persons using the insureds’ vehicle with the consent and permission of the named insureds. Joseph Schneider was operating a self-propelled loading and unloading machine known as a forklift, when he accidentally caused bodily injury to Grant Alvin Amen while loading hay on said truck, with the consent and permission of the Amens.

Respondent had issued its comprehensive liability policy to Schneider, and when the injured Amen filed suit against Schneider, Schneider notified respondent and requested that respondent defend the action. Respondent tendered the defense of the action to appellant, claiming the accident was covered under appellant’s policy. Appellant undertook the defense, subject to a reservation of its right to deny coverage, and on or about April 8, 1963, settled the action by payment of $1,875. It is this sum, plus expenses of $500.95, which appellant seeks to recover.

The claim of appellant is founded entirely on that portion of its policy reading as follows: “This policy does not apply ... to bodily injury or property damage arising out of the operation of farm machinery or any self propelled loading or unloading machine. ’ ’

Appellant concedes that Schneider was an insured under its policy, and that the loading of the truck, except for the use of the forklift, was an event covered by the policy.

The trial court found that Schneider’s alleged liability arose out of the use of the truck incident to the loading and concluded that the exclusion clause did not apply to exclude coverage for liability arising out of such use of the truck. Inferentially, the court found that the use of the forklift was not a factor responsible for the injuries.