State Farm Mutual Auto Ins. v. Baker

Frank Holt, Associate Justice. Appellant’s policyholder, James A. Everett, drove his automobile in such a manner as to strike the ladder upon which Jeff Baker,1 appellee, was working causing him to fall and he injured. Appellee, an employee of Everett’s, was working with two other employees on a house which was under construction by Everett as the general contractor. Appellee filed suit against his employer, Everett, and the trial court, sitting as a jury, awarded appellee judgment in the amount of $9,650.00. Appellant had issued its automobile insurance policy to Everett and his wife. Appellant had notice of the pendeucy of the action by appellee against .Everett and declined to defend disclaiming any responsibility to its insured under tbe terms of its policy. Upon being unable to collect bis judgment against Everett, tbe appellee filed tbe case at bar against appellant alleging it was obligated by the terms of its policy to pay tbe judgment rendered against Everett. Appellant denied any obligation under the terms of its policy to defend the' action or pay tbe judgment against Everett. Tbe appellant filed a motion for summary judgment contending tbat the pleadings, insurance policy, interrogatories answered by appellant and tbe deposition of appellee and tbe deposition and affidavit of bis son showed there was no genuine issue as to any material fact and as a matter of law appellant was entitled to a judgment. Tbe trial court denied appellant’s motion for summary judgment and,’ although appellee had not filed a motion for summary judgment, tbe court rendered judgment in favor of appellee in tbe amount of $9,800.00 and costs. For reversal of this judgment appellant’s sole point is tbat tbe ‘ ‘ trial court erred in failing to grant summary judgment for tbe appellant.” Appellant does not assign as error tbe action of the court in giving summary judgment to the appellee. It is appellant’s contention tbat there was no liability under tbe terms of the policy in question because of this exclusionary provision: “ This insurance does not apply under . . . (f) Coverage A, to bodily injury of any employee of tbe insured arising out of and in tbe course of the insured’s employment, ’ ’ It is undisputed tbat appellee was an employee of appellant’s insured at tbe time of tbe accident. Consequently tbe only question before tbe trial court and before us is whether appellee’s injury was one “arising out of and in tbe course of tbe insured’s employment.” This automobile insurance policy was issued to Everett and bis wife. The appellee and other employees regularly provided for their own transportation to the job site. It appears that Everett, the general contractor, drove his car to and from work and did not use it for business purposes. Further, on occasions he borrowed or used a truck to transport his tools. Everett backed into the ladder as he was leaving the construction site. The language used in the exclusionary clause applies to an employee’s injuries arising out of and in the course of “insured’s [Everett’s] employment”. The ambiguity of this curious language is obvious from the thrust of appellant’s argument. It is directed toward the contention that the injury of Baker, the appellee, arose, ‘ ‘ out of his employment”. To say the least, it is ambiguous. It is a familiar rule that where terms are ambiguous and fairly susceptible of different meanings, all doubts must be resolved against the insurer and in favor of the insured. Central Manufacturers Mut. Ins. Co. of Van Wert, Ohio v. Friedman, 213 Ark. 9, 209 S.W. 2d 102; State Farm Mutual Auto. Ins. Co. v. Pennington, 215 F. Supp. 784 (Ark. 1963); St. Paul Fire & Marine Ins. Co. v. Coleman, 204 F Supp. 713 and affirmed in 316 F. 2d 77 (Ark. 1963). Any ambiguity in an exclusionary clause likewise must be construed strictly against the insurer and liberally in favor of the insured. Phoenix Assur. Co. v. Loetscher, 215 Ark. 23, 219 S.W. 2d 629; American Standard Life Ins. Co. v. Meier, 220 Ark. 109, 246 S.W. 2d 128. Any intent to exclude coverage should be expressed in clear and unambibuous language and the burden is upon the insurance company to present facts that come within the exception. Milwaukee Ins. Co. v. Wade, 238 Ark. 565, 383 S.W. 2d 105. The rationale for the rule is well expressed in Travelers’ Protective Assn. of America v. Stephens, 185 Ark. 660, 49 S.W. 2d 364. There we said: “* * * It has been the settled policy of this court since the beginning of its construction of contracts of insurance to hold that the policy should be liberally construed so as not to defeat, without necessity, the claim for indemnity. The reason is that such policies are written on printed forms prepared by experts employed by the insuranee companies for that purpose, and the insured has no voice in the matter. Hence, it is fair and reasonable that, where there is ambiguity, or where the policy contains language susceptible of two constructions, that which will sustain the claim and cover the loss should be adopted. ’ ’ It follows, therefore, that the judgment of the trial court refusing to grant appellant’s motion for a summary judgment as a matter of law must be and is affirmed. Harris, C. J., dissents. Footnotes [1] The appellee, Jeff Baker, died during the pendency of this appeal. A motion was made and is hereby granted to revive this cause in the name of the administrator of the estate of Jeff Baker. For clarity in this opinion we continue to refer to Jeff Baker as the appellee.