Appeal from judgment of Court of Common Pleas, No. 3 of Philadelphia County, Dec. T., 1965, No. 4116, in case of Pennsylvania Manufacturers' Association Insurance Company v. Aetna Casualty and Surety Insurance Company.
T. E. Byrne, Jr., with him Robert K. Wood, Michael E. Quinlan, and Krusen, Evans and Byrne, for appellant.
Joseph H. Foster, with him White and Williams, for appellee.
Bell, C. J., Musmanno, Jones, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Cohen took no part in the consideration or decision of this case.
The instant appeal presents a dispute between two insurance companies over the interpretation of the word "insured" in the employee exclusion of the Standard Automobile Insurance Policy. The appeal is from the grant of plaintiff's motion for judgment on the pleadings.
The facts are as follows: Plaintiff-appellee, Pennsylvania Manufacturers' Association Insurance Company (PMA), issued a standard automobile bodily injury liability policy to Harry B. Niehaus, Jr. (Niehaus), as well as a separate workmen's compensation policy. Defendant-appellant, Aetna Casualty and Surety Insurance Company (Aetna) insured Delaware Valley Wool Scouring Company (Delaware) for comprehensive bodily injury liability. Aetna's policy with Delaware provided that if the insured (Delaware) had other insurance against a loss covered by the policy, the Delaware policy should be excess insurance where the loss arises out of the use of any non-owned automobile. Since the PMA policy, if Delaware is insured under it, is sufficient to cover the claim, which does arise out of the use of a non-owned automobile, the question becomes whether Delaware is insured under the PMA policy.
The accident occurred on September 23, 1963, at which time Clyde A. Skinner (Skinner), a driver of a Niehaus truck, was injured. He had driven the truck to Delaware's premises, where a Delaware employee, Arthur C. Scott, in the course of his employment, negligently operated a Delaware-owned fork-lift in unloading the Niehaus truck, and thereby injured Skinner.
Skinner instituted suit against Delaware in the Court of Common Pleas of Philadelphia County. By agreement, PMA undertook the defense, and settled prior to trial for $37,500. The agreement between PMA and Aetna provided that the defense was assumed on condition that the two companies would submit the question of liability to the court as one of law.
Both Aetna and PMA agreed that Delaware became PMA's insured under the PMA policy's "omnibus clause". That clause provided insurance for bodily injury "arising out of the . . . use of the automobile." The unloading of the Niehaus truck was an insured use of the truck.
The question for this court is limited to whether the employee exclusion clause of the PMA policy excludes liability to an employee of Niehaus, the named insured, in an action against Delaware, the omnibus-insured. Exclusion (d) provides that the policy does not apply: ". . . to bodily injury . . . of any employee of the insured. . ." (Emphasis added). The dispute centers upon the meaning of "insured". Appellee, PMA, contends that the exclusion applies, pointing to the definition of insured in the policy: "III. Definition of Insured: (a) With respect to the insurance for bodily injury liability . . . the unqualified word 'insured' includes the named insured."
Aetna, on the other hand claims that "insured" in the employee exclusion must be confined to mean the particular insured claiming coverage, here Delaware. Since Skinner is not an employee of Delaware, the exclusionary clause ...