TRAVELERS INSURANCE COMPANY, Appellant, v. OHIO FARMERS INDEMNITY COMPANY, Appellee

United States Court of Appeals for the Sixth Circuit1958-12-23No. No. 13535

262 F.2d 132

Summary · law.co

Holding. The District Court's judgment was affirmed. Ohio Farmers Indemnity Company has no obligation to defend the action against Pillsbury because the employee injury exclusion in its policy to Bundy Bros. clearly excludes coverage for bodily injury to Bundy Bros.' employees, and this exclusion applies regardless of whether additional parties are included as insureds under the omnibus clause.

Travelers Insurance Company sought a declaratory judgment that Ohio Farmers Indemnity Company must defend and cover potential liability arising from an accident involving an employee of Bundy Bros. Milling Company. Willie Perry, an employee of Bundy Bros., was injured while assisting Pillsbury Mills employees, and he sued Pillsbury. Travelers, which insured Pillsbury, sought to shift this potential liability to Ohio Farmers, which insured Bundy Bros. The case turned on whether Ohio Farmers' policy covered injuries to employees of Bundy Bros. or anyone acting on behalf of Bundy Bros.

Ohio Farmers' policy contained a clear exclusion stating that coverage does not apply to bodily injury or death of any employee of the named insured (Bundy Bros.) while engaged in employment. The court found this exclusion unambiguous and enforceable as written. Because Willie Perry was an employee of Bundy Bros., the named insured under Ohio Farmers' policy, he fell squarely within the exclusion. The court rejected Travelers' argument that it could impose its own liability obligations on Ohio Farmers through the omnibus clause of Ohio Farmers' policy.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether an insurer must defend its policyholder's employer when the policyholder's employee is injured
Interpretation of employee injury exclusion clauses in liability insurance policies
Scope of the omnibus clause and whether it overrides explicit exclusions for employee injuries
Whether one insurer can impose its own liability obligations on another insurer through policy interpretation

Procedural posture

Travelers Insurance Company appealed the District Court's judgment that granted summary declaratory judgment in favor of Ohio Farmers Indemnity Company.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

PER CURIAM.

In this case plaintiff insurance company claims that defendant’s insurance policy covers an injury for which plaintiff may be liable under its general liability policy insuring Pillsbury Mills, Inc., for all sums which Pillsbury should become legally obligated to pay as damages because of bodily injury sustained by any person or caused by accident. An accident occurred when Willie Perry, an employee of Bundy Bros. Milling Company, assisted two of Pillsbury’s employees in unloading corn from Bundy’s truck into Pillsbury’s plant. Perry filed suit against Pillsbury and the two employees to recover for serious injuries on the ground that the accident was due to the alleged negligence of Pillsbury’s servants or to the negligent use by Pillsbury of defective machinery. Bundy Bros. Milling Company is covered by a policy of liability insurance issued by defendant and this action seeks a declaratory judgment holding that defendant is obligated to defend the action against Pillsbury and otherwise determining the obligations of plaintiff and defendant under their respective policies. The District Court entered judgment declaring defendant to be under no liability to defend the action against Pillsbury.

Defendant’s policy contained an exclusion clause which stated: “This Policy Does Not Apply:

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“(c) under Coverage A, to bodily injury to or sickness, disease or death of any employee of the Insured while engaged in the employment, other than domestic, of the Insured * * *»

The omnibus clause of defendants’ policy defines the term “Insured” to include the named insured, namely, Bundy Bros. Milling Company, the employer of the man injured, and any person or organization legally responsible for the use of a car with the permission of the named insured.

There is no ambiguity in the exclusion clause of defendant’s policy and no inconsistency is shown between this and other clauses of the instrument. It does not require construction. All that is required is enforcement according to the terms clearly expressed in the instrument. Pillsbury and its employees are not insured under defendant’s policy unless they are included as additional persons insured under the omnibus clause. Neither is plaintiff a party to defendant’s policy. Plaintiff is not entitled under defendant’s contract with Bundy Bros. Milling Company to have its possible liability under its own contract with Pillsbury imposed upon defendant. The true construction of defendant’s policy is that no employee of the named insured engaged in the named insured’s business can recover against anyone included as an additional insured. Birrenkott v. McManamay, 65 S.D. 581, 276 N.W. 725. In accord is Lumber Mutual Casualty Insurance Company of New York v. Stukes, 4 Cir., 164 F.2d 571, 573, opinion by Judge John J. Parker. Speaking for the court, Judge Parker said: “There can be no question that the purpose was to apply the exclusion to employees of an additional insured as well as to those of the named assured * *

It would serve no useful purpose to repeat the findings and conclusions stated by the District Court in a carefully drawn memorandum which discusses in detail the applicable authorities.

Upon the grounds stated and reasons given in its memorandum opinion, findings of fact and conclusions of law, the judgment of the District Court is affirmed.

. The parties will be denominated as in the court below.