Loading Or Unloading A Vehicle

Insurance attorneys need to be able to read and interpret insurance policies in light of how the courts in Texas interpret the policies.
A 1970, Texas Supreme Court case styled, Commercial Standard Insurance Company v. American General Insurance Company is worth reading.
American brought this suit against Commercial and Berry Contracting, Inc., and its employees, Eugene J. Adams and J. W. Rosson, seeking a judgment declaring that its automobile liability policy (issued to Harris Concrete Co.) did not provide coverage to Berry and its employees against claims asserted against them by employees of the general contractor, Fuller Construction Company.
For all practical purposes, this is a controversy between the two insurance companies, involving the interpretation and applicability of standard provisions in American General Insurance Company’s automobile liability policy, concerning the loading and unloading clause, the omnibus clause with reference to additional insureds, the employee exclusion clause, and the severability of interests clause.
The following facts are undisputed: Fuller, the general contractor, employed Harris to deliver concrete, ‘F.O.B. Jobsite.’ American had issued an automobile liability policy to Harris. Fuller secured the services of Berry, who furnished the crane and two operators, Adams and Rosson, for the purpose of transporting the concrete from the transit mix truck, over the sidewalk fence down to the basement and into the forms. In the operation, concrete was poured from the truck into a bucket which was suspended from the cables on the crane. The bucket attached to the cables on the crane was filled by an employee of Fuller, not by a Harris employee. It was then lifted into the air by Adams and Rosson, Berry employees, and instructions and signals as to where it would be deposited were given by another Fuller employee.
At this point, Cain, Castillo, and Saenz, who were Fuller employees, positioned and emptied the bucket into the forms. The accident happened after several of such deliveries, but before the Harris truck had been completely unloaded. While Cain, Castillo and Saenz were positioning the bucket for release of the concrete into the forms, the turnbuckles on the cable supporting the jib extension on the crane became unscrewed to a point where the threads became stripped, allowing the jib to fall, dropping the concrete bucket on Cain, Castillo and Saenz, injuring them.
Commercial’s liability policy covered only the owner of the crane (Berry) under the doctrine of Respondeat superior. This policy did not cover Berry’s employees, Adams or Rosson. Fuller had at the time of the accident a policy of workmen’s compensation insurance under which Cain, Castillo, and Saenz received various sums of money and benefits.
Thereafter, the three Fuller employees, and their compensation insurance carrier asserted claims for their damages against Berry, Adams and Rosson, and Castillo instituted suit against Berry. Demand was made by Berry, Adams and Rosson upon American to assume liability under the policy issued to Harris and to defend or settle these claims. American declined. Commercial effected settlement with all of these claimants. In this proceeding, by way of a cross action, Commercial sought recovery of the amounts of the various settlements together with attorneys’ fees and expenses from American.
The court had to first determine whether Berry (crane owner) and Adams and Rosson (his employees and crane operators) were insureds under American’s policy. They are insureds if they were in fact ‘using’ the Harris cement truck at the time the accident occurred. It was stipulated that if the injuries arose during loading or unloading of the concrete truck within the terms of the loading and unloading provision of American’s policy, then Fuller, the general contractor, was also an insured (omnibus) under American’s policy.
American’s policy, issued to Harris, contained these provisions:
‘III Definition of Insured * * *. With respect to the insurance for bodily injury liability * * * the unqualified word ‘insured’ includes the named insured * * * and also includes Any person while using the automobile and and person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured * * * or with the permission of (the named insured).’
With reference to the requirement that the person claiming coverage by ‘using’ the automobile, the policy also provides in Paragraph IV(e):
‘(3) Use of the automobile for the purposes stated includes the loading and Unloading thereof.’
That the contract between Harris and Fuller provided for delivery F.O.B. jobsite does not alter the law applicable to this case. The pertinent inquiry is not whether the contract had been completed but whether the unloading operation under the terms of American’s policy had been completed. It is clear, and the facts are undisputed, that only a part of the load had been discharged at the time of the accident; the ‘unloading’ had not been completed. Stated another way: but for the unloading of this truck, the accident would not have occurred.
This court held that the injuries of the three employees of the general contractor arose out of the use (unloading) of the Harris cement truck by Berry’s employees, and therefore Berry and his employees, Adams and Rosson, were omnibus insureds under American’s automobile policy.