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Citizens Insurance Company of America v. Chrysler Insurance Co.9/18/2001
UNPUBLISHED
In this dispute over insurance coverage and indemnity liability for a settlement amount in an underlying motor vehicle negligence action, plaintiff Citizens Insurance Company of America (Citizens) and defendants Four Seasons Radiator Service, Inc. (Four Seasons) and Four Seasons' employee, Stanley Spanke (Spanke) appeal by right from a judgment for defendant Chrysler Insurance Company (Chrysler) for $650,000 plus $24,360.94 in costs. Chrysler and its subrogor, intervening defendant Huntington Ford, Inc. (Huntington Ford), cross-appeal from the judgment, raising an issue regarding prejudgment interest. We affirm but reduce the monetary judgment by $40,000.
Factual Background
Chrysler insured Huntington Ford, an automobile dealership, and Citizens insured Four Seasons, an automobile repair facility, at the time of a two-vehicle motor vehicle accident in September 1995. One of the vehicles involved in the accident was a dump truck owned by Huntington Ford, which Four Seasons had serviced by installing an air conditioner. At the time of the accident, Four Seasons' employee, Spanke, was returning the dump truck to Huntington Ford after completion of the service work.
The occupants of the other vehicle involved in the accident filed a negligence action against Huntington Ford, Four Seasons, and Spanke (hereinafter "the underlying negligence case"). While the underlying negligence case was pending, Citizens filed the instant action for a declaratory judgment against Chrysler. Citizens alleged that Four Seasons was its named insured under a garage liability policy that provided coverage for non-owned autos in excess of other collectible insurance.
Citizens contended that Huntington Ford, the owner of the dump truck involved in the collision, was an insured under a policy issued by Chrysler, which provided personal injury benefits for bodily injury caused by an accident and resulting from the ownership, maintenance, or use of an owned auto. Citizens sought a declaration that Chrysler had a duty to defend, indemnify, and provide primary coverage for the damages in the underlying negligence case as the primary insurer.
Later, after the underlying negligence case was settled for $1,325,000, Chrysler and intervenor Huntington Ford filed a cross-claim against Four Seasons and Spanke and a counterclaim against Citizens. They alleged that Four Seasons and Spanke owed a duty to Huntington Ford "to conduct their operations under their contract in a safe, prudent, and reasonable manner so as not to impose liability upon Huntington Ford" and that the underlying negligence case arose out of the active and primary negligence of Four Seasons and Spanke. They sought contribution by way of a common law indemnity claim against Four Seasons and Spanke for the total settlement amount plus interest, costs, and defense expenses. They further alleged that Four Seasons and Spanke were not insureds under Chrysler's policy - and that Citizens, as opposed to Chrysler, was responsible for primary liability coverage - because at the time of the accident, Spanke was not engaged in Huntington Ford's "garage operations" as defined in the Chrysler policy.
Eventually, Chrysler and Huntington Ford moved for summary disposition, and Citizens also did so. The trial court granted summary disposition to Chrysler and Huntington Ford with respect to the common law indemnity claim against Spanke, ruling that Spanke's active negligence in the underlying negligence case and his approval of the settlement required that he indemnify Chrysler. The court further ruled that Chrysler, as the insurer of the owner of the dump truck, was the primary insurer for the acci
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