The opinion of the court was delivered by: Mercer, Chief Judge.
This cause arose on a complaint by plaintiff, Continental,
against defendant, American, for judgment in the amount of
$35,000, the demand representing amounts paid by the plaintiff
to satisfy
three judgments entered in the Circuit Court of Fulton County,
Illinois, and costs and attorney fees incurred by plaintiff in
defending the action in the latter court. The facts of the
case are set forth fully in an opinion by the court filed
February 7, 1958, 159 F. Supp. 311, and will herein be briefly
summarized only.
Defendant issued its policy of liability insurance to T.A.
Kirchner, said policy covering a certain 1949 International
Tractor and 1949 Fruehauf Semi-trailer owned by Kirchner.
Plaintiff is liability insurer of Southwest Freight Lines,
Inc., hereinafter referred to as Southwest, and as such its
policy of insurance was, at all pertinent times, in full force
and effect.
On April 8, 1952, said tractor-trailer was involved in a
collision in Fulton County, Illinois, with an automobile
driven by one Frank L. Moon. Said tractor-trailer was owned by
Kirchner and, on said date, was being operated and driven by
one Carl Page, an employee of Kirchner, in transporting
merchandise for Southwest pursuant to a single-trip lease by
Southwest of said vehicle. Moon and two passengers who had
been riding in his automobile, Lawson Shryack and Leslie
Cameron, filed suit in the Circuit Court of Fulton County,
Illinois, against Kirchner, Page and Southwest, for damages
for personal injuries sustained as a result of said collision.
Defendant was requested to defend said suit and refused.
Plaintiff defended and after trial judgments were entered in
favor of Moon, Shryack and Cameron in the aggregate amount of
$21,050. The judgments were paid and satisfied by the
plaintiff.
Thereafter plaintiff commenced this action against defendant
for the amount paid by it in satisfaction of the Fulton County
judgments, and the costs and attorney fees incurred in
defending the suit in Fulton County. Thereafter plaintiff and
defendant filed cross-motions for summary judgment. On
February 7, 1958, 159 F. Supp. 311, the court entered an
opinion and judgment order allowing plaintiff's motion for
summary judgment and denying defendant's cross-motion.
Upon the basis of the facts as summarized above, the court
concluded that the provisions of the single-trip lease
providing that Southwest should take control of the vehicle
and that Southwest should carry liability insurance covering
the trip were not sufficient to excuse Kirchner from liability
because of the circumstances existing at the time of the
accident involved in the Fulton County case; that Kirchner was
an independent contractor and had complete control of the
vehicle at the time of collision and therefore, was primarily
liable; that Southwest was liable upon the basis of its
ownership of the Interstate Commerce Commission Permit under
which the trip was being made and its consonant responsibility
to the public generally; and that the liability established by
the Fulton County judgments was the liability of both
plaintiff and defendant and was an equal one. The court
concluded, also, that "The insurance protection involved here
with both companies was primary coverage and in the opinion of
the Court a question of excess coverage need not be
considered." Accordingly, judgment in the amount of $10,525
with interest thereon from March 17, 1955 to date of judgment.
Thereafter on February 14, 1958 defendant filed its motion
to alter and amend the judgment in its favor, which motion is
now before the court. That motion is predicated upon two
contentions. One of these contentions, viz., that the court
misconstrued the law of agency in finding primary liability
against Kirchner is adequately considered in the February 7
opinion. The court sees no reason to disturb its prior
findings and conclusions in this respect.
I agree that the court did overlook the "other insurance"
provisions of the two policies and that, if the finding of
concurrent primary coverage be correct, defendant's contention
that apportionment of liability is necessary is correct.
Zurich General Accident & Liability Insurance Co. v. Clamor,
7 Cir., 124 F.2d 717. Upon consideration of those provisions
of the two policies, however, it appears that the overlooking
of such provision led to the erroneous conclusion that this is
a case of concurrent primary liability and that no question of
excess coverage is presented.
Condition 13 of plaintiff's policy and Condition 12 of
defendant's policy, to which the court's attention is directed
by this motion, provide, as follows, respectively:
"13. Other Insurance. 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
declarations bears to the total applicable limit
of liability of all valid and collectible
insurance against such loss; provided, however,
the insurance under this policy with respect to
loss arising out of the use of any non-owned
automobile shall be excess insurance over any
other valid and collectible insurance available
to the insured, either as an insured under a
policy applicable with respect to such automobile
or otherwise."
"12. Other Insurance. Coverages A and B If the
insured has any other insurance against a loss
covered by this policy the company shall not be
liable under the policy for a greater proportion
of such loss than the applicable limit of
liability stated in the declarations bears to the
total applicable limit of liability of all valid
and collectible insurance against such loss;
provided, however, the insurance with respect to
temporary substitute automobiles under Insuring
Agreement IV or other automobiles under Insuring
Agreement V shall be excess insurance over any
other valid and collectible insurance available
to the insured, either as an insured under a
policy applicable with respect to said
automobiles or otherwise."
In addition to the above Condition 13, plaintiff's policy of
insurance contains an "other insurance" endorsement in the
following language:
"It is agreed that such insurance as is
afforded by the policy for Bodily Injury
Liability, for Property Damage Liability and for
Medical Payments with respect to a loss arising
out of the use of a hired automobile shall not be
considered contributory, but shall be excess
insurance over any other valid and collectible
insurance available to the insured, either as an
insured under the policy applicable with respect
to such automobile or otherwise."
A "hired automobile" is defined in plaintiff's policy as "an
automobile used under contract in behalf of, or loaned to, the
named insured" provided such automobile is not ...