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AETNA CAS. & SUR. CO. v. OCEAN ACCIDENT & GUAR. CO

November 30, 1966

AETNA CASUALTY AND SURETY CO., Plaintiff,
v.
OCEAN ACCIDENT & GUARANTEE CORP., LTD., Defendant


Marsh, District Judge.


The opinion of the court was delivered by: MARSH

MARSH, District Judge

In this controversy between two insurance companies, Aetna Casualty and Surety Company (Aetna), plaintiff, seeks to recover from Ocean Accident & Guarantee Corporation, Ltd. (Ocean), defendant, pro rata reimbursement (75%) of a judgment in the sum of $35,000, with interest and costs, which Aetna paid to the Estate of Joseph Nalevanko as insurer of Latrobe Brewing Company (Latrobe). The Administrator of the Nalevanko Estate had been a successful claimant in a Survival Action brought against Latrobe. It was stipulated that the precise amount to be paid to Aetna by Ocean, if liable, is $27,527.70, with interest from August 13, 1963, the date on which Aetna paid the Nalevanko judgment. *fn1"

 Aetna contends that Ocean was also an insurer of Latrobe against the hazard involved in the Nalevanko accident, pursuant to Ocean's policy No. NA88948, and that Ocean is therefore obligated to reimburse Aetna in the stipulated amount. We agree.

 A jury trial was demanded by Ocean. Disputed issues of fact were resolved at pretrial conferences by stipulations. After a jury had been selected, counsel agreed, with the approval of the court, that the jury should be dismissed since all facts relevant to the question of insurance coverage had been established, and that the controversy was for the determination of the court as a matter of law. *fn2"

 The pertinent facts are as follows:

 In 1959 Latrobe contracted with Dill Construction Company (Dill), an independent contractor, to remove an ammonia system which was part of the cooling system in use in Latrobe's brewery and replace it with a new cooling system. The ammonia system consisted of pipes of various sizes, condensers in the shape of tanks for collecting ammonia gas, valves which performed various functions in the system, and ammonia gas in the pipes. The removal of the old ammonia system and replacement with a new system was an "operation" or a "structural alteration" in the Latrobe brewery.

 Joseph Nalevanko was Dill's foreman. On May 30, 1959, he was injured while engaged in removing the ammonia system, from which injuries he subsequently died. *fn3"

 This operation in which Nalevanko was engaged was being performed for Latrobe, the owner, by Dill, the independent contractor, under the general supervision of Latrobe, and the accident to Nalevanko occurred in the course of such operation.

 At the time Nalevanko was injured, he was an employee of Dill and was not working under the control of Latrobe, nor did Latrobe have the right to control him.

 On March 24, 1961, the Administrator of Nalevanko's Estate brought wrongful death and survival actions against Latrobe, Dill and Ocean at Civil Action No. 61-177 in this district court. Prior to trial, the Nalevanko actions against Dill and Ocean were dismissed. Subsequently, Dill was brought in as a third-party defendant by Latrobe. At the trial a directed verdict was entered in Dill's favor.

 Latrobe's defense of the Nalevanko suit was assumed by Aetna under its comprehensive liability insurance policy with Latrobe. (Plaintiff's Ex. 9.) The bodily injury limits of Aetna's policy were $100,000/$300,000.

 The jury found that Latrobe was responsible for Nalevanko's death and returned a verdict in the sum of $35,000 in favor of the Nalevanko Estate and against Latrobe, on which judgment was entered. The judgment, with interest, was paid by Aetna. *fn4"

 At the time of the accident, there was in effect a Manufacturers' and Contractors' Liability policy No. NA88948 issued by Ocean to Dill. Latrobe and Aetna were not aware that the provisions of the Ocean policy purported to cover Latrobe for an accident arising out of the contractor's operations until the fifth day of the Nalevanko trial. Aetna immediately demanded that Ocean defend the action (plaintiff's Ex. 5). Ocean refused. *fn5"

  Ocean also had issued a separate Workmen's Compensation policy providing coverage for Dill. Ocean admits it received timely notice of the injury to Nalevanko *fn6" and paid workmen's compensation to him on behalf of his employer, Dill. *fn7" Ocean also had notice of the suit brought by the Nalevanko Estate, it having been named as a party defendant along with Dill and served with the Complaint. In addition, its insured, Dill, was a third-party defendant throughout the trial. Notwithstanding, Ocean did not voluntarily offer to defend Latrobe. Aetna did not ...


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