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FEDERAL INS. CO. v. MICHIGAN MUT. LIAB. CO.

April 27, 1959

FEDERAL INSURANCE COMPANY
v.
MICHIGAN MUTUAL LIABILITY COMPANY, J. Robert Bazley, Inc., Lamar P. Conrad, and S. & E. McCormick, Inc. NEWKIRK MINING COMPANY, Plaintiff, New Franklin Coal Mining Co. Inc., Intervenor v. MICHIGAN MUTUAL LIABILITY COMPANY



The opinion of the court was delivered by: DUSEN

The plaintiffs in these declaratory judgment actions and Lamar P. Conrad, as cross-claimant in Civil Action No. 24547, have filed Motions for Summary Judgment in order to secure a judicial determination that Policy No. 923761 *fn1" of defendant Michigan Mutual Liability Company (hereinafter called 'Michigan'), insuring S. & E. McCormick, Inc. (hereinafter called 'McCormick'), constitutes the primary coverage in any action or actions for personal injuries or property damages arising out of an accident on October 2, 1956, brought, or to be brought, against J. Robert Bazley, Inc., Lamar P. Conrad, and Newkirk Mining Company, thereby requiring Michigan to defend such actions. *fn2" These two actions result from Civil Actions instituted by Alex Witcjak in this court against J. Robert Bazley, Inc. (hereinafter called 'Bazley') ( Witcjak v. Allen, D.C., 22 F.R.D. 330), Lamar P. Conrad (Civil Action No. 24667), and Newkirk Mining Company (hereinafter called 'Newkirk'), et al. (Civil Action No. 24895), claiming damages for personal injuries allegedly resulting from the operation of a mobile crane in the possession of Bazley and controlled by Bazley's employee, Conrad, while replacing heavy rear wheels on an I-beam trailer owned and operated by McCormick. The I-Beam and operated by McCormick. The I-beam of McCormick, and in the custody and control of Witcjak and Casper (an employee of McCormick assigned to the vehicle as a 'helper')) had been used to transport the main portion of a dragline shovel from Montgomery County, Pa., to a strip-mining site near Tamaqua, Pa., and it was necessary to remove the rear wheels in order to unload the dragline shovel. The rough ground and a downward slope toward the rear of the truck *fn3" made it easier to use the Bazley crane to replace the rear wheels so that the I-beam trailer could return to McCormick's place of business in Philadelphia (N.T. 63, Trunfio). When it was suggested by a person (not a McCormick employee), acting as foreman at the site, that the crane be used for this purpose, all McCormick's employees at the site acquiesced and joined in aiding the replacement of the rear wheels. *fn4" However, the crane operated by Conrad came into 'contact or close proximity with' overhead power lines while the right rear wheels were being replaced, thereby causing the injuries to Witcjak. Thereafter, the right rear wheels, which were then almost in position, were replaced without the use of the crane, *fn5" and the I-beam trailer left the site en route to McCormick's place of business. It was part of Witcjak's job to see that the wheels were replaced properly. *fn6"

 A. 'Insuring Agreements

 'II Defense, Settlement, Supplementary Payments

 'With respect to such insurance as is afforded by this policy for bodily injury liability and for property damage liability, the company shall:

 '(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient;

 '(b) (1) * * *

 '(2) pay all expenses incurred by the company, all costs taxed against the insured in any such suit and all interest accruing after entry of judgment until the company has paid or tendered or deposited in court such part of such judgment as does not exceed the limit of the company's liability thereon;

 '(4) reimburse the insured for all reasonable expenses, other than loss of earnings, incurred at the company's request; and the amounts so incurred, except settlements of claims and suits, are payable by the company in addition to the applicable limit of liability of this policy.

 'III Definition of Insured

 '* * * the unqualified word 'insured' includes the named insured * * *, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured * * * or with the permission of (the named insured) * * *.' B. 'Declarations

 'Item 5. Occupation of the Named Insured Local and Long Haul Truckmen

 'Item 6. The purposes for which the automobile is to be used are:

 X Commercial

 '(a) * * *

 '(b) The term 'Commercial' is defined as use primarily in the business occupation of the named insured as stated in Item 5 including occasional use for personal, pleasure, family and other business purposes.

 '(c) Use of the automobile for the purpose stated includes the loading and unloading thereof.'

 Federal Insurance Company (hereinafter called 'Federal') issued its Comprehensive Liability Policy No. FL 5070792 insuring Bazley against bodily injury and property damage liability (Document No. 32). Article III of the Insuring Agreements of this Federal policy states:

 '* * * the unqualified word 'insured' includes * * * (2) any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission * * *.'

 Condition 3(b) defines 'automobile' as follows:


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