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Universal Underwriters Insurance Co. v. American Family Insurance Group12/23/1998
Appeal from the Iowa District Court for Polk County, Jack D. Levin and Ray A. Fenton, Judges.
Appeal from judgment prorating payment of claims arising out of automobile accident between liability insurance carriers. REVERSED AND REMANDED.
The plaintiff, Universal Underwriters Insurance Company, sued American Family Insurance Company for indemnity or contribution for claims arising out of an automobile accident. The district court denied indemnity but ordered a fifty percent contribution by American Family to Universal's settlement with the third-party claimant. Universal appealed, claiming it is entitled to full indemnity or, in the alternative, a greater percentage of contribution from American Family. We agree that Universal is entitled to indemnification, so we do not address the contribution issue. We reverse and remand.
I. Facts.
The facts are undisputed. In 1992 Delmar E. Carr took his car to be repaired at the Shottenkirk, Inc. garage. Shottenkirk provided Carr with a "loaner" vehicle, a 1991 Geo Prizm, while Carr's vehicle was in the shop. While Carr was driving the Prizm, he collided with a vehicle owned and driven by Terry Bell. Carr was at fault in the collision.
Bell sued Carr, as the driver, and Shottenkirk, as the owner of the Prizm. Bell's allegation of liability against Shottenkirk was based solely on Iowa Code section 321.493 (1991), our owner's liability statute. Shottenkirk was insured by Universal Insurance Company. Universal settled with Bell for $50,000 in personal injury damages and approximately $2000 in property damage. Bell released both Shottenkirk and Carr. Universal sued Carr and American Family for indemnification or contribution.
Carr's American Family policy included this "other insurance" provision:
"If there is other auto liability insurance for a loss covered by this Part, we will pay our share according to this policy's proportion of the total of all liability limits. But, any insurance provided under this Part for a vehicle you do not own is excess over any other collectible auto liability insurance."
Under Universal's policy, Shottenkirk was the named insured. The policy also covered other insureds, which the policy defined as " ny other person or organization required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR [i.e. Shottenkirk's] permission." The key question, for purposes of this case, is whether Carr was "required by law to be an insured" within the meaning of this policy provision. Universal claims that Carr was not required by law to be an insured, and he was therefore not covered by the Universal policy issued to Shottenkirk. American Family contends that Carr was required by law to be an insured, and therefore, Universal cannot escape liability under its policy. The district court agreed with American Family's interpretation.
Shottenkirk, as owner of the vehicle, was liable under our owner's liability statute, which provides: "In all cases where damage is done by any motor vehicle by reason of negligence of the driver, and driven with the consent of the owner, the owner of the motor vehicle shall be liable for such damage." Iowa Code ยง 321.493. Ordinarily, if an owner of the vehicle is liable only vicariously by operation of law, such as under Iowa Code section 321.493, the owner may seek indemnity against the operator of the vehicle. See Daniels v. Hi-Way Truck Equip., Inc., 505 N.W.2d 485, 490 (Iowa 1993) (three grounds of indemnity recognized: express contracts, vicarious liability, and breach of independent duty of indemnitor); see also American Trust & Sav. Bank v. United States Fideli
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