Before BIGGS, Chief Judge, and McLAUGHLIN and KALODNER, Circuit Judges.
Under Pennsylvania law, what is the meaning of the term "loading or unloading" of a vehicle as used in Comprehensive Automobile Liability and General Liability policies?
That is the issue presented by this appeal from the Order of the District Court for the Western District of Pennsylvania in a declaratory judgment action*fn1 seeking construction of the term "loading or unloading" as used in the policies above mentioned. The case is one in federal court by diversity of citizenship*fn2 and involves Pennsylvania law.
The agreed facts are detailed in the opinion of the Court below.*fn3 They may be summarized as follows:
In December, 1954, one Florence McClester sued Ben Kaufman, a beer distributor, in the Court of Common Pleas of Allegheny County, Pennsylvania, for injuries she suffered when Kaufman's employee negligently opened a cellar door set in a sidewalk in June, 1954. At the time of the accident Kaufman's beer truck was parked near the curb on Hoeveler Street, Pittsburgh, adjacent to the sidewalk cellar entrance to the basement of the Hoeveler Grill. A barrel of beer was removed from the truck by those in charge of it and placed upon the sidewalk between the curb and the sidewalk entrance to the Grill. The truck driver's helper then entered the basement of the Grill, by another entrance, unlocked the sidewalk cellar doors from the inside and was in the act of opening the doors when Mrs. McClester, a pedestrian, was struck by one of them and injured. The helper opened the cellar doors in order to deliver the barrel of beer inside the basement of the Grill.
While the McClester suit was pending in the State court, Kaufman, brought a declaratory judgment action in September, 1955 in the Western District of Pennsylvania against Liberty Mutual Insurance Company ("Liberty"), his general liability insurer, for construction and application to the accident involved of a clause excluding coverage for liability incurred while "loading or unloading" a vehicle. Later, Kaufman added as a party plaintiff Continental Casualty Company ("Continental"), an automobile liability insurer whose policy expressly covered "loading and unloading" a vehicle.
Agreeing that one of the two policies covered the accident to Mrs. McClester, Liberty and Continental stipulated Continental was to be held liable if the truck was being "unloaded" at the time of the accident; Liberty, if it was not.
The case came on for hearing and on December 19, 1956, the District Court held that the truck was being "unloaded" at the time of the accident and accordingly it was Continental's obligation to indemnify Kaufman. Appeal was taken from this decision and we reversed on the ground that the record did not disclose whether the claim against Kaufman was in excess of $3,000, the required jurisdictional amount in a diversity case, and remanded with direction to the District Court to dismiss unless further proceedings in that Court established the $3,000 jurisdictional requirement.*fn4
Subsequently hearing was held in the District Court on December 16, 1957, at which time it was established that in the interim Mrs. McClester's suit in the State court had been settled for $4,000 which had been loaned to Kaufman by Continental for the purpose. The District Court found the $4,000 settlement was "fair and reasonable" and accordingly the jurisdictional requirement was met in the declaratory judgment action. It further adhered to its original ruling that Mrs. McClester was injured while the truck was being "unloaded" and Continental is therefore liable.
In doing so the District Court relied on the decision of the Supreme Court of Pennsylvania in Wheeler v. London Guarantee & Accident Co., 1928, 292 Pa. 156, 140 a. 855, as declaring the Pennsylvania law with respect to what constitutes "unloading", and held it to be dispositive in the insant case. It limited application of a later decision by the Superior Court of Pennsylvania, an intermediate appellate court, in Ferry v. Protective Indemnity Company of New York, 1944, 155 Pa.Super. 266, 38 A.2d 493, 494, to a "loading" situation. Inferentially, the District Court indicated that the Pennsylvania courts have one rule with respect to "loading" and another with respect to "unloading".
Liberty agrees with the holding of the District Court that the Wheeler case supports its position and is dispositive here; Continental relies on the Ferry case as requiring a ruling in its favor and, distinguishing Wheeler on its facts, says it too supports its position.
In view of the foregoing it is necessary for us to ascertain just what the Wheeler and Ferry cases held with respect to the interesting question as to what, under Pennsylvania law, constitutes "loading" or "unloading" a vehicle.
Our analysis of the cases mentioned compels the conclusion that, in the language of Ferry, Pennsylvania construes liability under the "loading and unloading" clause to result only when there is a "connection between the accident and the use of the vehicle ...