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Employers' Liability Assurance Corp. v. Enos Coal Corp.

March 15, 1972


Hastings, Senior Circuit Judge, Stevens and Sprecher, Circuit Judges.*fn1

Author: Hastings

HASTINGS, Senior Circuit Judge.

Employers' Liability Assurance Corporation, Limited brought this diversity action against its insured, Enos Coal Corporation, pursuant to Title 28 U.S.C.A. ยง 2201, for a declaratory judgment in a controversy concerning the rights and obligations of the parties under a coal mine liability policy issued by Employers to Enos. Employers sought a declaration that the insurance policy did not extend coverage to an accident which occurred June 7, 1968, involving a truck owned and operated by Enos and an automobile operated by a third party.

Under date of March 14, 1966, Employers issued the subject premises policy of liability insurance to Enos which contained the following disputed exclusion provision:

"This policy does not apply:

"(a) except with respect to operations performed by independent contractors, to the ownership, maintenance, operation, use, loading or unloading of (1) automobiles, if the accident occurs away from premises owned by, rented to or controlled by the named insured or the ways immediately adjoining such premises, * * *."

This case was submitted to the trial court for decision on an agreed stipulation of facts, the brief testimony of two witnesses and the submission of post trial briefs, without oral argument. The parties further agreed that the issues for determination were whether or not the accident of June 7, 1968 occurred on premises (1) owned by, (2) rented to or (3) controlled by Enos, or (4) on ways immediately adjoining the premises of Enos. Since it was stipulated and agreed at trial that Enos did not own the premises on which the accident occurred, that issue need not be considered further.

The trial court entered and filed ten findings of facts and stated thereon four conclusions of law, all favorable to Enos on the foregoing issues (2), (3) and (4). Judgment was entered that Employers was liable to Enos under the subject policy of insurance for the payment of all liability and costs assessed against Enos by reason of the automobile collision of June 7, 1968. Employers appealed. We affirm.

The material facts in this case are not in dispute. The trial court adopted and used an agreed map, marked "Exhibit D", which correctly shows the location of the physical facts relevant to the issues and referred to by the trial court in its findings. Accordingly, we attach a copy of this map as an exhibit to this opinion for purposes of identification. We shall refer to it as "the map."

The 750' roadway in dispute extends from circle "A" to circle "B" and there connects with and continues on from "B" as a private haulage road owned by Enos on its own strip mine coal property. The 750' roadway will be referred to as the "detour" roadway. Circle "A" marks the point where the accident occurred at the intersection of Indiana State Highway No. 61 and the detour roadway. That part of a county public road extending from circle "C" to "B" is the portion thereof legally closed to the public in 1937. Shown also are the railroad right-of-way, the location of the Deen and Hamm properties, as well as the Enos property.

In December, 1930, Patoka Coal Company (Patoka) sold and conveyed its lines of railroad and equipment pertaining thereto, now located on the railroad right-of-way in question, to Algers, Winslow and Western Railway Company (the railroad). Patoka subsequently was merged with and succeeded by Ayrshire Collieries Corporation. Ayrshire was succeeded by defendant Enos Coal Corporation. Enos is the present owner of the coal mine property and other rights as the successor in interest of its predecessors Patoka and Ayrshire.

In 1937, Patoka, with the consent of the railroad, extended multiple siding tracks on the railroad right-of-way across the county public road in the area of circle "B".

For reasons of public safety, Patoka in 1937 secured an order from the Pike County Commissioners abandoning and temporarily closing the county public road from circle "C" to "B", and further authorizing the temporary construction of the detour roadway. The authorization for the temporary closing and detour construction was for a period not to exceed three years. The closing of said highway and the construction and maintenance of the detour was to be at the sole expense of Patoka. The railroad leased to Patoka an easement on its right-of-way for the construction of the detour roadway. Pursuant thereto the county public road was closed from circle "C" to "B" and has continuously remained closed to the time of this litigation. Patoka constructed the detour roadway, at its own expense, which detour has remained open and in use at all times in issue.

The lease by the railroad to Patoka of the detour roadway in question was for a period of ten years at an annual rental of $1.00, the lessee to pay any taxes or other public assessments against the same, with the right to renew for an additional five years. It was further provided that in case of default in such payments, the amount due should become a debt subject to repayment upon demand by the railroad. The lease was never formally extended beyond its original term and only the rental for the first year was paid. The lessee has never paid any taxes or public assessments against the right-of-way. There is no showing that the railroad ever demanded any further rental payments or the payment of any taxes or assessments. The lessee has continued to use the right-of-way with the knowledge and implied consent of the railroad. The lessee has provided all maintenance of the detour roadway with the exception of infrequent minor repairs by the county. The detour roadway has been the only means of ingress and egress to the Hamm and Enos properties. Since 1937 the detour roadway has been available to the use of the public, but in fact the only use of the same by anyone was as a means of ingress and egress for members of the Hamm family and those engaged in the business of Enos and its predecessors in interest, and members of the public seeking to contact any of them. The only use of the Enos mining property, to which the detour roadway leads, was for the purpose of mining that part of its property not already stripped. Except for a period of about four years from the time Ayrshire ceased mining coal until Enos began mining, the lessee of the detour roadway exercised the same rights in the roadway in question as was originally granted in the 1937 lease. Further, the lessor and lessee during this period have continued ...

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