The court is here presented with a question of novel impression in this State concerning coverage, if any, afforded under an automobile insurance policy by reason of an accident involving a tow truck, which was towing an oil truck, and which tow truck was in a collision with a third vehicle.
The primary issue is whether the act of towing a vehicle is a "use" of the towed vehicle within the meaning of the policy insuring the towed vehicle, thereby making the operator of the tow truck an "insured" under the towed vehicle's policy. Corollary to this threshold determination is
the validity of an exclusionary clause which purports to exclude coverage for said accident.
The underlying facts are undisputed. On January 14, 1973 Richard A. Fisher was the operator of a tow truck owned by Polizzi Towing Corp. (Polizzi), which vehicle was insured by Hartford Accident & Indemnity Company (Hartford). Polizzi's tow truck was involved in an accident while towing an oil truck owned by Wellen Oil Co. (Wellen) and insured by Travelers Insurance Company (Travelers). As a result of the accident various claims and lawsuits for personal injuries and property damage were made and instituted against Polizzi and Fisher. Hartford demanded that Travelers agree that its policy also provided coverage for Polizzi and Fisher, which demand Travelers refused. A lawsuit against Polizzi and Fisher was tried on the issue of liability only, and resulted in a verdict against Polizzi and Fisher. Subsequently, Hartford which had alone defended the lawsuit, settled all claims for damages arising out of the accident. The parties have stipulated, for purposes of this action, that the Wellen vehicle neither contributed to, nor was involved in, the actual impact.
The instant action was commenced by Hartford against Travelers seeking a judgment declaring that at the time of the accident between Hartford's insured and the third vehicle, that Hartford's insured was also entitled to coverage under the Travelers policy insuring the Wellen vehicle. Travelers filed an answer contending that (1) neither Polizzi nor Fisher were insureds under the Travelers policy; (2) the settlements entered into by Hartford on behalf of Polizzi were made without Travelers consent, and (3) the settlements were unreasonable in amount. Hartford replied, contending that Travelers by its actions was either estopped or had waived its right to challenge the validity or reasonableness of the settlements. Hartford now moves for summary judgment solely on the issue of policy coverage under the Travelers policy.
We first consider whether the act of towing is a "use" of the towed vehicle within the meaning of the Travelers policy which states:
COMPREHENSIVE AUTOMOBILE LIABILITY INSURANCE COVERAGE PART
I. Coverage C -- Bodily Injury Liability
Coverage D -- Property Damage Liability
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
Coverage C. bodily injury or
Coverage D. property damage
to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use, including loading and unloading, of any automobile, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
Each of the following is an insured under this insurance to the extent set forth below:
(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual use thereof is within the scope of such permission * * *.
(d) Any other person or organization but only with respect to his or its liability because of acts or omissions of an ...