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MILLER & BUSHONG, INC. v. TRAVELERS INS. CO.

June 29, 1964

MILLER AND BUSHONG, INC. and Graybill and Bushong, Inc., Plaintiffs,
v.
The TRAVELERS INSURANCE COMPANY, Defendant



The opinion of the court was delivered by: FOLLMER

Miller and Bushong, Inc., and Graybill and Bushong, Inc., brought an action for a declaratory judgment (28 U.S.C. § 2201 et seq.) construing the provisions of a policy of insurance and determining the respective rights of the parties.

Willis B. Gochenauer instituted an action in the Court of Common Pleas of Lancaster County, Pennsylvania, against Miller and Bushong, Inc., and Graybill and Bushong, Inc., for damages for injuries which he sustained on the premises of Graybill and Bushong, Inc., while unloading a truckload of corn. Gochenauer at the time and place involved was an employee of Frank Wingert.

 At the time of the accident defendant, The Travelers Insurance Company, had in effect an automobile liability insurance policy in which Frank Wingert was the named beneficiary. Plaintiffs claim that they are additional insureds under the aforesaid liability policy of defendant and that defendant, Travelers, had refused to defend plaintiffs, Miller and Bushong, Inc. and Graybill and Bushong, Inc., in the action in Lancaster County by Willis B. Gochenauer or pay any judgment which might arise therein.

 Travelers' policy in which Wingert was the named insured carried, inter alia, the following provisions:

 'Exclusions

 'This policy does not apply:

 '(d) under Coverage A, to bodily injury to or sickness, disease or death of any employee of the insured arising out of and in the course of (1) domestic employment by the insured, if benefits therefor are in whole or in part either payable or required to be provided under any workmen's compensation law, or (2) other employment by the insured; '(e) under Coverage A, to any obligation for which the insured or any carrier as his insurer may be held liable under any workmen's compensation, unemployment compensation or disability benefits law, or under any similar law;'

 The policy further provides:

 'III. Definition of Insured. The unqualified word 'insured' includes the named insured and also includes, under divisions 1 and 2 of the Definition of Hazards, 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 his permission, and under division 3 of the Definition of Hazards, any executive officer of the named insured. * * *'

 Defendant contends that the word 'insured' as defined in the policy means the named insured (Wingert) and also any person while using the insured vehicle or liable for the use thereof (Gochenauer); that applying that definition to the above 'Exclusions', Gochenauer, being an employee of the named insured and having been injured in the course of his employment, the said 'Exclusions' apply to exclude coverage for any person claiming protection against a claim for injuries of Gochenauer, or any liability arising thereunder.

 Plaintiffs contend that for the exclusions to apply the injured person must be an employee of the person seeking coverage as an insured. They argue that the reason behind the exclusion is to deny coverage in situations where workmen's compensation benefits are applicable; that the purpose of the exclusion is to prevent duplicate coverage since the hazard of employee suits is one which an employer is protected against under his workmen's compensation policy; that an employee injured in the course of his employment may assert a cause of action against an allegedly responsible third person; that there is no reason to deny coverage to this third person because the policy protecting him is in the name of the injured person's employer.

 The question here involved may fairly be stated as follows:

 'Assuming Miller and Bushong, Inc. and Graybill and Bushong, Inc. otherwise would be insureds under the Defendant's automobile liability insurance policy, do the 'Exclusions' set forth in the Defendant's policy of insurance preclude the coverage ...


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