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Providence Washington Ins. Co. v. Valley Forge Ins. Co.2/26/1996
STRANKMAN, P. J.
An insurance company sued other insurance companies to recover contribution on the settlement of third party claims. The third parties had been injured when their rental van's tire blew out, overturning the van on the freeway, and they claimed that the van's owner negligently maintained and rented the van. The van was registered to a sole proprietorship rental agency and had received regular maintenance at service stations owned by the same sole proprietor. Plaintiff insurance company defended the sole proprietor under a business automobile liability policy issued in his rental agency's trade name, and then sued other insurers for contribution. Defendants denied coverage under commercial general liability and garage operations policies issued to the proprietor, doing business as the service stations. On defendants' motion for summary judgment, the trial court found that the underlying bodily injuries arose out of the rental van's use and were therefore excluded from coverage by policy exclusions of damages arising out of the use of autos, or rented autos, owned by the insured. The trial court rejected plaintiff's argument that the van's owner was the rental car agency and the insured the service station enterprise, finding instead that the van was owned by the insured, the individual proprietor. We affirm the judgment.
I. FACTS
In November 1988, nine Nigerian musicians were traveling in a rented van to a Southern California engagement when a tire exploded, sending the van out of control. The van overturned on the freeway, injuring the driver and passengers. Personal injury lawsuits were filed the next year upon claims that the van's owner negligently maintained and rented the van. At least one of the lawsuits charged that the owner knew the tire had been leaking air and inadequately patched the problem with "stop leak." An investigating police officer said the tire blowout was caused by low air pressure heating and detaching the tread, and the officer found evidence of an emergency sealant like "stop leak" inside the tire.
The van was owned by sole proprietor Paul Hifai, doing business as A-1 Rent-A-Car, an agency which operated 95 vehicles. Hifai also individually owned two gasoline service stations, doing business as Tennyson Mobil Service. The A-1 Rent-A-Car vehicles were routinely serviced by the Mobil stations, and the rental van was serviced at one of those stations just days before the freeway accident.
Appellant Providence Washington Insurance Company (Providence) had issued business automobile and rental excess liability insurance policies to Hifai, under his trade name A-1 Rent-A-Car. The business auto policy covered bodily injury caused by an accident resulting from automobile ownership, maintenance or use. Providence defended Hifai in the underlying personal injury actions and settled them in 1992, at a cost of almost $1.2 million. Hifai had tendered the underlying actions to other insurers as well, but they had denied coverage.
Providence then instituted this action in 1993, seeking contribution from Hifai's other insurers. Respondent Valley Forge Insurance Company (Valley Forge) had issued a commercial general liability policy to Hifai, doing business as Tennyson Mobil Service. Respondent Transportation Insurance Company (Transportation) had issued a garage operations policy to Hifai, doing business as Tennyson Mobil Service. Valley Forge's policy generally covers bodily injury caused by an accident and Transportation's policy has the same general coverage, if the injury results from "garage operations." But respondents' policies limit coverage for an insured's "owned-autos." The Valley Forge policy excludes
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