The opinion of the court was delivered by: DIAMOND
Plaintiffs, Preston Trucking Company, Inc. ("Preston") and Protective Insurance Company, Inc. ("Protective"), brought this action for declaratory judgment against the defendant Carolina Casualty Insurance Company ("Carolina") seeking a judgment declaring:
(a) that a policy of insurance issued by Carolina to one Franklin E. Safrit ("Safrit") afforded primary insurance coverage for a certain accident which occurred in Tioga County, Pennsylvania, on December 16, 1981; and,
(b) that a so-called indemnity contract between Protective and Preston either was not applicable or was excess insurance coverage for that accident; and,
(c) that Carolina be directed to reimburse Preston and Protective for all sums paid by or on behalf of Preston in satisfaction of all claims arising out of that accident and for all costs and legal fees incurred in the investigation, negotiation and settlement of said claims.
The parties have submitted the case to the court on the following agreed finding of fact, which the court adopts:
2. At all times material hereto, defendant, Carolina Casualty Insurance Company, Inc., maintained in full force and effect a policy of automobile liability insurance which named Franklin E. Safrit as the named insured. An authentic copy of that policy of insurance is incorporated into plaintiffs' complaint.
3. At all times material hereto, the Safrit rig was being operated by Safrit under a certain lease agreement between him as lessor and plaintiff Preston as lessee. An authentic copy that lease agreement is attached to the parties' agreed to findings of fact as Exhibit "A".
4. Preston is a duly authorized motor carrier.
5. On December 16, 1981, while operating the Safrit rig, Safrit was involved in a motor vehicle accident in Tioga County, Pennsylvania. The accident caused the deaths of four people and personal injuries to two others.
6. Plaintiffs, Preston and Protective, Inc., and defendant, Carolina, have agreed that any settlement totalling less than $ 400,000.00 for all of the claims arising out of the above accident would be fair and reasonable, and they also agreed that the execution of release documents in satisfaction of those claims would in no way alter or affect the rights, duties, and obligations of plaintiffs and defendant as to those claims. The parties agreed that an authentic copy of a telex evidencing said agreement was attached to the agreed to facts as Exhibit "B".
7. Plaintiffs have, in accordance with the agreement reached with Carolina, settled all claims resulting out of the above accident for a total amount of less than $ 400,000.00.
8. All of the injuries and deaths arising out of the above accident resulted from the sole negligence of Safrit.
9. In addition to the above agreed facts adopted by the Court, the Court finds as a fact that the documents attached to the plaintiffs' complaint as Exhibit "B" consisting of a document bearing a designation "No. X-424" and one bearing a designation "No. X-420" and the attachments to each are authentic copies of documents which the court finds as a fact were policies of insurance issued by plaintiff Protective to "Frontier Trucking Division Preston Trucking Co., Inc." (No. X-424) and to "Preston Trucking Co./Preston Trucking Co., Inc." (No. X-420).
Based on the allegations of paras. 1-4 of the plaintiffs' complaint, which have been admitted by the defendant, the court further finds as facts:
10. That Preston is a citizen of the state of Maryland, and not of Florida.
11. That Protective is a citizen of the state of Indiana, and not of Florida.
12. That Carolina is a citizen of the state of Florida, and not of Maryland or Indiana.
13. That the amount in controversy, exclusive of interest and costs, exceeds the sum of $ 10,000.00.
At the time of the accident, Safrit was that driver, and he was then and there under the lease agreement acting within the course and scope of his employment by Preston. The deaths and injuries which arose out of the accident resulted solely from Safrit's negligence. (Finding 8). Under those facts, of course, both Safrit and Preston would be liable for the damages resulting from the accident. Safrit directly, because his negligence caused the injuries and deaths, and Preston, derivatively, under the doctrine of respondeat superior, because at the time of the accident Safrit was Preston's employee acting within the course and scope of his employment.
The parties do not dispute any of the foregoing. Neither do they really dispute that the basic policies of insurance issued by Protective to Preston/Frontier as named insureds or the basic policy of insurance issued by Carolina to Safrit as a named insured provided primary insurance coverage for the damages arising out of the accident to their respective named insureds.
Beyond this point, however, the parties part company. Plaintiffs contend that Preston is an insured under the Carolina policy issued to Safrit as the named insured and that Safrit is not an insured under the policies issued by Protective to Preston/Frontier. Therefore, plaintiffs argue, the Carolina policy provided primary insurance for the accident and, at best, the Protective policies only provided excess insurance, which did not come into effect because the Carolina policy limits of coverage were sufficient to satisfy the settlements arrived at by plaintiffs with the accident claimants.
In addition, plaintiffs contend that since Preston's liability stems from the sole negligence of its employee, Safrit, plaintiffs are entitled to indemnity from Safrit and Carolina must respond under the policy which it issued to Safrit which contracted to pay on his behalf "all sums which [he] shall become legally obligated to pay as damages . . .", (Exhibit A to Plaintiffs' Complaint, Finding 2), as a result of occurrences such as the December 16, 1981, accident.
Defendant denies any liability to respond with primary insurance coverage for the December 16, 1981, accident. It contends that its insurance coverage was at best excess insurance because of a so-called Truckmen's Endorsement which was attached to its basic policy and that this excess insurance never came into effect because the coverage limits of plaintiffs' policies were adequate to satisfy the settlements made by plaintiffs. In addition, it argues that it is not liable to respond in indemnity under the complaint in this case because this issue was not raised in plaintiffs' complaint and by the time that it was raised in their briefs the statute of limitations had run. In any event, defendant argues, it would be liable only to indemnify plaintiff - Preston and not plaintiff - Protective and since Preston paid only its $ 25,000 deductible, that is the maximum for which the defendant could be liable.
For the reasons which follow, we hold that the Protective policies provided primary liability insurance coverage and that the Carolina policy provided, at most, only excess liability insurance coverage for the damages arising out of the December 16, 1981, accident and that defendant is not liable to reimburse or indemnify either of the plaintiffs either as a primary insurer, which was directly liable to provide coverage for the third-party ...