Legal Security Life Insurance Co. v. Thomas

DIES, Chief Justice. The parties will be referred to in this opinion as they were in the trial court. Plaintiff’s husband, Paul Eugene Thomas, was run over accidentally by a pulpwood truck which resulted in his death. He was at that time putting out pulpwood for C. N. Bishop, admittedly as an independent contractor. Prior to the death of plaintiff’s husband, Mr. Bishop had purchased a “Franchise Accident Policy” with defendant which was in effect on the day of the accidental fatal injury to plaintiff’s husband. Subsequently, plaintiff brought suit as administratrix of the estate of her deceased husband and as natural guardian of their children against defendant alleging coverage under the policy. Trial was had to a jury resulting in a verdict and entry of judgment for plaintiff from which defendant perfects this appeal. Defendant’s first three points of error, in essence, contend there is no coverage of Paul Eugene Thomas under the policy. The insuring clause of the policy follows: “THE COMPANY HEREBY AGREES to pay benefits to the extent provided herein, and subject to the provisions, exclusions and limitations hereinafter set forth for losses resulting from accidental bodily injuries as herein defined, suffered by those persons actually in the employ of the Policyowner named above [C. N. Bishop] . . . .” Defendant contends the phrase “actually in the employ of” is tantamount to requiring Thomas to have been an “employee” in the master and servant sense and as defined in our Workmen’s Compensation Act (Art. 8309, § 1, Vernon’s Ann.Civ.St). Defendant also contends that since Paul Eugene Thomas was admittedly an independent contractor, his death was not covered under the policy in question. In the interpretation of insurance policies, certain guidelines have been laid down by our courts. It is the intention of the parties that is of primary importance. Houston Fire & Casualty Insurance Co. v. Parker, 341 S.W.2d 495, 498 (Tex.Civ.App., Amarillo, 1960, error ref. n. r. e.). See also authorities cited in 32 Tex.Jur.2d, Insurance, § 55 (1962). Contracts of insurance are strictly construed in favor of the insured. Trinity Universal Insurance Company v. Tubbs, 342 S.W.2d 209 (Tex.Civ.App., Amarillo, 1960, error ref. n. r. e.). The contract must be read in full and effect given to all its terms. Traders & [180] Gen. Ins. Co. v. American Fidelity & Cas. Co., 323 S.W.2d 81, 84 [Tex.Civ.App., Austin, 1959; 160 Tex. 554, 334 S.W.2d 772 (1960)]. It is assumed that the parties were actuated by good faith and that they intended to make a fair, reasonable and enforceable insurance agreement. State and County Mutual Fire Ins. Co. v. Kinner, 159 Tex. 290, 319 S.W.2d 297, 302 (1958); American Casualty & Life Co. v. Gueringer, 205 S.W.2d 423 (Tex.Civ.App., San Antonio, 1947, no writ). The following by Judge Garwood in Continental Cas. Co. v. Warren, 152 Tex. 164, 254 S.W.2d 762, 763 (1953), bears quoting: “But for the fact that insurance policies are governed by the special rule of construction, which is a familiar part of our jurisprudence, we might, indeed, hold either that the interpretation against liability of the insurer should prevail or that, the policy being ambiguous, there is a fact issue as to what was intended. Yet the rule, of course, applies, and under it the insurer may not escape liability merely because his or its interpretation should appear to us a more likely reflection of the intent of the parties than the interpretation urged by the insured. The latter has to be no more than one which is not itself unreasonable. Lloyds Casualty Insurer v. McCrary, 149 Tex. 172, 179, 229 S.W.2d 605, 609. A related or subsidiary rule is ‘that exceptions and words of limitation will be strictly construed against the insurer.’ Providence Washington Ins. Co. v. Proffitt, 150 Tex. 207, 239 S.W.2d 379, 381.” There is no express exclusion in this policy for independent contractors. “Both an ordinary workman or employee and an independent contractor are employed. The fundamental difference is in the character of the employment, in the contract by which one performs services for the benefit of the other.” Macario v. Bonifas-Gorman Lumber Co., 291 Mich. 292, 289 N.W. 164, 167 (1939). “This is true because one may be ‘employed’ without being a servant, as, for example, an independent contractor. Likewise an attorney is said to be ‘employed’ by his client, but no one would contend that the relationship created thereby is that of master and servant.” State ex rel. Maryland Casualty Co. v. Hughes, 164 S.W.2d 274, 277 (Mo.Sup.1942). The weakness of defendant’s argument here is that if its interpretation is accepted, no one — except possibly Mr. Bishop— would be covered under this policy, for the policy expressly excludes those employees covered by a workmen’s compensation policy. Mr. Bishop testified he had in effect at the time of Thomas’ death a policy of workmen’s compensation insurance. If Mr. Bishop qualified under Art. 8309, § la, V.A.C.S., he would also be excluded under defendant’s policy. Law is good sense and what is contrary to good sense is not good law. Burke v. State, 64 Misc. 558, 119 N.Y.S. 1089, 1099. The application attached to the policy called for “Laborers” under the column “Job Function or Title”. The number “4” under “Indiv. Class”, the number “15” under “No. of Indiv.”, and later entries showed the premium for these “Class 4” individuals was based on production estimates of 140 cords of pulpwood a week at so much per cord. The only other individual insured other than these fifteen “Class 4” individuals was “Dealer 1” (presumably Bishop). The computation of premium for Class 4 individuals on a per cord basis is the typical independent contractor method of pay and is a consideration given by our courts in workmen’s compensation cases. Goodnight v. Zurich Insurance Company, 416 S.W.2d 626 (Tex.Civ.App., Dallas, 1967, error ref. n. r. e.); Shannon v. Western Indemnity Co., 257 S.W. 522, 525 (Tex.Comm.App.1924). To us, this clearly shows intention to cover individuals such as Thomas. The definition given for [181] Class 4 individuals in the policy is “all other Individuals.” Because of the authorities cited and the facts we have set out, we do not find ambiguity in the policy and hold as a matter of law that this policy covered independent contractors and specifically Paul Eugene Thomas. This being so, the issues inquiring of the intentions of the parties were unnecessary and present no reversible error. Finding no reversible error in the other points of error, they are overruled. The judgment is affirmed.