of the case, the jury may determine the agency relationship of Plunkard with Snyder and also with Sechan and Myers. It may find that Plunkard was acting for any one or all of them. Under these circumstances then, is plaintiff presently entitled to a judgment relieving it of not only its responsibility to defend Plunkard, but one which relieves it of the primary responsibility for payment of any judgment rendered against Plunkard who operated the truck covered by plaintiff's policy? It seems to this court that the factual situation and the Pennsylvania decisions require that plaintiff make a defense in the state court of behalf of the persons sued. This being a diversity case the law of Pennsylvania controls.
Counsel for each of the parties cite Grasberger v. Liebert & Obert, Inc., Appellant, et al., 335 Pa. 461, 6 A.2d 925, 122 A.L.R. 1201. Defendants say the decision is controlling on the instant issues. Plaintiff cites the case but only as an illustration of the fact that the Pennsylvania Supreme Court recognizes the excess coverage principal. In the case cited, one Reitheimer leased a truck to Liebert & Obert, Inc., on a weekly basis together with a driver whom Reitheimer hired and paid. Plaintiff was hit and injured by the truck and brought suit against the lessee, Liebert & Obert, Inc., alone. Under state practice Reitheimer, the owner, was brought in as an additional defendant. The jury verdict was against the defendant and additional defendant, that is against both the owner and the lessee, as there was evidence of control by both. The owner's insurance carrier, that is Reitheimer's, paid the judgment in full and had it marked to its use, intending to collect contribution from the lessee's carrier. The court held that the verdict of the jury established that both the defendant and additional defendant were in joint control of the operator of the truck and in pari delicto. Ordinarily, said the court, in such a situation, the one who pays the judgment has the right of contribution from the other party guilty of the joint wrong. Admittedly, said the court, this would cover the liability of the defendant but the court pointed out the Threshermen's policy provision which contained the clause that in the event of coverage by other valid insurance against a claim otherwise covered by the policy 'no insurance under this policy shall be applicable to such claim'. There was then left for decision, the issue whether the lessee, Liebert & Obert, Inc., was covered by other valid insurance against a claim otherwise covered by the policy. This arose because the lessee had a policy with Aetna Company with a limit of liability for injuries to one person of $ 25,000 but which provided that in the event that there was other coverage than the Aetna policy was to be excess coverage over and above the valid and collectible insurance under a policy taken out by the owner or operator of the vehicle. In interpreting the two clauses the court said:
'* * * It is clear that this and the Threshermen policy cover different losses, or at least different parts of the same loss. They do not have identity of scope, the Aetna policy not coming into operation until defendant has exhausted the insurance to which it is entitled under the policy to Reitheimer. Therefore the clause in the latter policy which withholds protection to defendant if covered by other insurance is not applicable because up to the amount of the coverage of the policy, defendant is not covered by other insurance. Accordingly that clause does not nullify the insurance given to defendant by the terms of the policy. It follows that no part of the money paid to plaintiff by the Threshermen Company is recoverable by it from defendant, and that the latter's rule to have the judgment marked satisfied should have been made absolute. * * *'
Placing the parties in the instant case in the same position they occupied in the Grasberger case, it is to be noted that Snyder orally leased his truck to Sechan or perhaps even Myers, together with a driver. Snyder is covered by a fleet policy with plaintiff. He was paid by Sechan for the use of his vehicle and driver. Sechan, Myers' subcontractor, is in the same position as the defendant, Liebert & Obert, Inc., in the Grasberger case. The wording of the policy provisions are somewhat different but the result for all practical purposes is the same. For instance, in plaintiff's policy, if there is other collectible insurance then plaintiff claims that its coverage is excess. In the Reitheimer policy, in the event of other insurance, there was no coverage. Under the Grasberger case, not only Snyder but Sechan and perhaps Myers are entitled to protection under the policy issued to Snyder, that is Nationwide's policy. Plaintiff's policy is not excess, at least up to $ 100,000, the coverage for personal injury in this instance.
Plaintiff has cited many decisions holding to the contrary to the foregoing decision in the Grasberger case. Plaintiff points out that its policy provides that Snyder's truck was not covered, while leased or loaned to any person engaged in the business of transporting property and in the business of such person over a route, such person is authorized to serve by public authority. Plaintiff makes the point that the truck in question was solely on Sechan's business at the time of the accident as a hired vehicle. The difficulty with that argument is that the stipulation of facts does not support it. At the trial the jury may find that there was joint control the same as in the Grasberger case. If so, then the holding in the Grasberger case applies with greater force. It is difficult to perceive how the court, under the facts presented, can rule that Nationwide is only excess which is what the court would have to do to grant the relief prayed for by plaintiff. Under the Grasberger case, plaintiff's policy protects not only Plunkard, the driver, but Snyder, the owner, and Sechan, the lessee.
The Grasberger decision has been followed in Pennsylvania and elsewhere since it was announced. See Speier, et ux. v. Ayling et al., Appellants, 158 Pa.Super. 404, 45 A.2d 385. To that same effect is Citizens Mutual Automobile Insurance Company v. Liberty Mutual Insurance Company, 6 Cir., 273 F.2d 189, in which the Grasberger decision is cited as being representative of the majority view on the issue presented.
One further observation is perhaps appropriate. In its complaint plaintiff seeks a declaratory judgment. The decision sought by plaintiff is a judgment that the primary duty to defend and pay to the limit of its policy rests in the defendant, United States Fidelity and Guaranty Company, the insurer of Ralph Myers Contracting Company. Plaintiff says the secondary duty to defend and pay is required of the defendant Fidelity and Casualty Company as the insurer of Robert Sechan; and finally plaintiff asserts that the court should adjudicate that Nationwide under its 'excess insurance' provision has a duty to defend and pay after the limits of the other two policies are exhausted. As indicated, the court cannot grant the relief prayed for. It is felt, however, that the only appropriate judgment to be entered is one which requires plaintiff to defend the law suit pending in Butler County, Pa. One result of that law suit may very well be that none of the defendants will be held liable because of the lack of negligence on the part of the driver, Plunkard. The court recognizes that under federal practice a declaratory judgment should only be entered when such a judgment ends the whole controversy, but under the facts presented in the instant case, it is not possible to enter a final judgment ending the controversy. The effect of the instant holding simply is that plaintiff defend the parties sued. A jury verdict and final judgment thereon may or may not require plaintiff to pay the whole of the judgment.
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