Sadikoff v. American Indemnity Co. , 35 Tenn. App. 1 ( 1950 )

McAMIS, J.

Manrice Sadikoff instituted this suit to recover an attorney fee incurred in successfully defending a tort action which, the hill alleges, defendant, under its public liability policy, had engaged to defend on his behalf. The question is whether the Chancellor correctly held that the injury for which complainant was sued in the tort action was covered by the policy. The Company appeals from a judgment for $1,350.00 insisting that it was warranted in refusing to defend because the injury out of which the suit arose falls within a policy exception hereinafter quoted. The assignments attack the reasoning as well as specific findings of the Chancellor but the ultimate and controlling question is whether the policy should be construed to cover the particular injury in question.

On October 30, 1947, the date of the policy, Sadikoff, doing business as O. & M. Service Station, operated a service station at 110 East 11th Street in Chattanooga. Oh the rear of the same lot he also operated a parking lot. The policy describes the insured’s business as ‘‘Gasoline Service Station” and obligates the insurer to pay insured’s legal liability to others resulting from bodily injuries or death: ‘£ Occurring within or upon the premises described in Item 2 of the Declarations, including the sidewalks or other ways immediately adjacent thereto used or occupied by the insured for the purpose described in Item 3 of the Declarations, excluding, however, accidents arising out of or in connection with Automobile Parking Lots, Repair Shops, Confectionery Stores, Lunch Rooms, Restaurants, Sales Agencies and similar operations.”

We have italicized the language relied upon as excepting the present case from liability! Another provision obligated the Company to investigate and defend actions brought against the insured.

While the policy was in force and effect, Mrs. Shoick, the plaintiff in the tort action, left her car in complainant’s parking lot above mentioned while she went to engage a room at a nearby hotel. Her intention was to leave her car overnight if she could obtain a room. After engaging a room but after the filling station had closed for the night, she returned to her car with a companion to remove some articles from it. While her companion was so engaged she went to the office of the filling station for the purpose of paying the parking fee so that she could leave the next morning before the filling station opened for the day. Finding the door locked she went to the rear window to see if anyone was in attendance and fell into an unlighted and unguarded grease pit sustaining injuries for which she sued complainant.

It will be remembered that, under the terms of the policy above quoted, indemnity was to be afforded for injuries occurring on the described premises while used or occupied by the insured for the purpose described under Item 3 which, in turn, described the business of insured as “Gasoline Service Station”. We think the purpose of the exception was to make clear that even though an injury should occur on the premises at 110 East 11th Street it would not be covered by the policy unless it arose out of the operation of the insured’s filling station business or, as expressed affirmatively in the exception, if the injury should result from an £ ‘ accident arising out of or in connection with Automobile Parking Lots”, etc. So, the question is: Did Mrs. Shoick’s injuries arise out of the operation of the filling station or of the parking lot? The question is to be resolved upon a construction and application of the term, “arising out of or in connection with”, and, as counsel agree, without the benefit of prior judicial construction of the clause or any similarly worded policy provision.

However, the term “arising out of” has been applied in at least one other field of legal liability.

In Hendrix v. Franklin’ State Bank, 154 Tenn. 287, 290 S. W. 30, a workmen’s compensation case, the term “arising out of employment” was construed as referring to the origin of the cause of injury. To the same effect is Mayor and Aldermen of Town of Tullahoma v. Ward, 173 Tenn. 91, 114 S. W. (2d) 804, 807, where the court again approved the Michigan definition: “An injury arises out of the employment when there is apparent to the rational mind, upon consideration of all the circumstances, a causal connection between the conditions under which the work is required to be performed and the resulting injury.”

By cognate reasoning we think an accidental injury arises out of and in connection with a business only if there is apparent to the rational mind a causal connection between the injury and the maintenance of the premises for the purposes of the business or some act incident to the operation of the business. It would not be a question of what caused the injured person to come upon the premises but a question of whether the act or condition causing the injury arose out of the maintenance of the premises or the prosecution of the business.

The cause of Mrs. Shoick’s fall was the maintenance of an unguarded and unlig’hted grease pit in connection with the business activities covered by the policy. It was not maintained in connection with the excepted operation of-the parking lot or on a part of the premises used for that purpose. It is true Mrs. Shoick would not have fallen into the pit if she had not parked in the parking lot. But the grease pit was not on the parking lot and, so far as appears, there was no occasion for a customer of the lot to go near the pit. The presence of Mrs. Shoick near the pit was the condition which made her fall possible — not the cause.

The insuring clause and the exception should not be considered separately but as parts of a whole, construing any ambiguities against the insurer to ascertain the intention of the parties as disclosed by the language used in the policy. Colley v. Pearl Assur. Co., 184 Tenn. 11, 195 S. W. (2d) 15.

"When so construed we think it is apparent that the intention of the parties was to afford protection to the insured where the injury arose out of or in connection with the business of operating a gasoline service station. The exception was designed to protect the Company from liability for injuries growing out of some act of the insured in connection with the excepted pursuits even though the act giving rise to suit may have occurred on the premises described in the policy.

The Chancellor based his decision upon the further ground that the Company was obligated to defend because the complaint in the tort action indicated a case covered by the policy. We do not find it necessary to decide the point in view of the above construction of the exception clause.

We find no error and the decree will be affirmed with costs.

Hale, J., and Brown, Sp. J., concur.