Occidental Fire and Casualty Company of North Carolina (Occidental) brought this declaratory judgment action in federal court on the basis of diversity jurisdiction to determine its duty to defend and indemnify Joseph L. Brocious for an accident that occurred on August 15, 1983 when the tractor-trailer that Brocious was operating struck and killed Christopher S. Gonazalez, a 15-year old, while he was riding his bicycle.*fn1
The tractor-trailer was the subject of a conditional sales agreement between Brocious, the buyer, and William B. Tobias, the seller, dated August 25, 1982.*fn2 This agreement provided that Tobias "agrees to sell and convey to [Brocious] who . . . agrees to purchase" the tractor-trailer subject to certain conditions. one of the specified conditions was that Tobias would retain the title until the full purchase price of $14,000, payable in monthly installments of $500 each, had been paid. Another was that Brocious was responsible for all maintenance and insurance for the tractor-trailer. The agreement did not expressly provide which party would retain possession during the pay out, but no one disputes that, in fact, Brocious had possession of the vehicle during that period.
Pursuant to his obligations under the agreement and under the Pennsylvania No-Fault Motor Vehicle Insurance Act mandating omnibus liability insurance coverage, 40 Pa.Cons.Stat.Ann. § 1009.104(a)(Purdon Supp. 1975) (repealed 1984), Brocious contacted an insurance broker. Brocious provided the broker with complete and accurate information as to the conditional sales agreement. After a series of intermediate steps through another broker and then to Occidental's agent and home office, Occidental issued a policy covering the tractor-trailer which listed Tobias, the title owner, as the named insured, and named Brocious in the section identifying all possible drivers.
Following discovery, Occidental moved for summary judgment on the ground, inter alia, that Brocious was not a "person insured" under the omnibus clause of the policy.*fn3 That clause covers any other person using an "owned automobile . . . with the permission of the named insured . . . ." Occidental maintained in the district court, as it does here, that as a result of the sales agreement, Brocious, not Tobias, "owned" the tractor-trailer and therefore Brocious was not driving a vehicle "owned" by the named insured with the named insured's permission.
The district court denied Occidental's motion, holding that Brocious was insured under the policy and that Occidental was obligated to indemnify and defend Brocious on the claim made against him by Gonzalez' estate. After the court subsequently determined the respective obligations of Occidental and another insurer who intervened, to be discussed infra, both insurers appealed.
In arguing that Brocious was not an insured under the terms of its policy, Occidental maintains that Brocious, not Tobias, was the owner of the tractor-trailer. It is undisputed, however, that the certificate of title and registration of the vehicle with the appropriate Pennsylvania authorities were in the name of Tobias. Albeit not conclusive, this is some indicia of ownership, see Semple v. State Farm Mutual Automobile Insurance Co., 215 F. Supp. 645, 647 (E.D. Pa. 1963).
The Pennsylvania Vehicle code defines "owner" as:
A person, other than a lienholder, having the property right in or title to a vehicle. The term includes a person entitled to the use and possession of a vehicle subject to a security interest in another person, but ...