APPEAL from the Circuit Court of Fayette County; the Hon.
DANIEL H. DAILEY, Judge, presiding.
MR. JUSTICE KARNS DELIVERED THE OPINION OF THE COURT:
Plaintiff, Industrial Fire & Casualty Insurance Company, appeals from a declaratory judgment in the Circuit Court of Fayette County. The plaintiff sought a determination of liability coverage under a farmowners-ranchowners insurance policy it had issued to the defendant, Dr. D.J. McDermith. The court found that the policy covered an accident involving vehicles and cattle that occurred adjacent to the farm of McDermith's son, Roger. The court found that the coverage extended to both Dr. McDermith and Roger, although the primary coverage for Roger was found to be the responsibility of defendant, Grinnell Mutual Reinsurance Company. The other defendants herein were parties in the lawsuit arising from the accident. The plaintiff has appealed the judgment determining that its policy's liability provisions cover the accident and that this coverage extends to both Dr. McDermith and Roger McDermith.
Plaintiff issued the policy to Dr. McDermith on September 15, 1972, for a term of 3 years. The policy provided both liability and casualty coverage. Dr. McDermith raised cattle on the premises listed in the policy. In September 1974, he deleted the casualty coverage on his cattle from his policy with plaintiff and replaced it with like coverage from Shelbyville Mutual Insurance Company. Dr. McDermith retained his liability coverage with plaintiff.
Roger McDermith purchased his farm in 1974. He obtained a policy of casualty and liability insurance covering the farm from Shelbyville Mutual, which was reinsured by defendant, Grinnell Mutual. Although Dr. McDermith cosigned a note to assist in his son's purchase of the farm, Dr. McDermith did not take title to the farm, and it was not listed as an insured premises in his policy with plaintiff.
Prior to moving to his own farm early in 1975, Roger McDermith kept cattle owned by him on his father's farm. Several of Roger's cows were bred to bulls owned by his father. They had agreed that they would each receive half of the calves at the time the calves were weaned.
Several calves remained unweaned when the cows and calves were moved to Roger's farm. He assumed possession and control of the animals. However, Dr. McDermith went to Roger's farm periodically to see that Roger was looking after the cattle properly. Dr. McDermith assisted his son with fencing and other work on Roger's farm.
On July 4, 1975, a vehicular collision occurred on a road adjacent to Roger's farm. In a lawsuit arising from this occurrence, it was alleged that a proximate cause of the collision was the presence on the highway of a cow and two calves from Roger McDermith's farm.
Roger and Dr. McDermith made claims for their casualty losses through Shelbyville Mutual. Roger received compensation for the cow and his interest in the calves killed in the collision. Dr. McDermith was compensated for his interest in the calves.
Plaintiff contends that Roger was not an "insured" within the meaning of that term as defined in the policy. The policy section in dispute provided as follows:
"When used in this policy the following definitions apply:
(3) Under Coverage G-Personal Liability and Coverage H Medical Payments to Others:
(a) with respect to animals or watercraft to which this insurance applies, owned by any Insured, any person or organization legally responsible therefor, except a person or organization using or having custody or possession of any such animal or watercraft in the course of his business or without permission of the owner * * *."
Under this provision, liability coverage is extended to a person who is legally responsible for animals to which the policy applies and which are owned by an insured. However, the person will not be covered if he has custody of the animals in ...