*1 COMPANY, DIAMOND BLUE COAL
Plaintiff-Appellant, HOLLAND-AMERICA INSURANCE
COMPANY, Lexington Insurance Com- pany, Basil Thomas Bird & John
panies American Re-Insurance
Company, Defendants-Appellees.
Supreme Tennessee,
at Knoxville. 7,May
The case was heard court on trial cross-motions for after affidavits, interrogatories, numerous quests production for admissions discovery depo- records had been filed and judge granted sitions taken. trial Blue motion and ordered a writ of Diamond’s inquiry recov- to determine the amount of ery. Judgment entitling was entered Blue $4,788,607.00. Diamond tо recover Hol- filed appeal land-America an and the Court decision, split in a reversed complaint court and dismissed the against Holland-America.
I Blue home in Diamond has its office underground Knoxville has extensive mining operations coal at several locations Arnett, Rhea, D. Dan D. Knox- Foster Kentucky. Kentucky in аc- mines are ville, Par- plaintiff-appellant; Speight & for tually operated by wholly subsidiary owned ker, Nashville, Combs, Wyatt, Tarrant & corporations. Blue Diamond and its sub- Louisville, Ky., of counsel. di- sidiaries have identical officers and Jr., Knoxville, Foster, E. Bruce Richard Company was the rectors. Scotia Coal Geddes, Chicago, Ill., Cole, John David J. subsidiary first formed Blue Diamond Greene, Bowling Ky., defendants-appel- for operates County, in the mine Lechter lees. Inc., a Kentucky. Blue Diamond subsidiary formed Blue second OPINION mond, mines. operates Leatherwood Although engineering some services DROWOTA, Justice. subsidiaries, supplied to the Blue Diamond question This involves a of insur- case mining operations di- conducts no active Plaintiff-Appellant, coverage. Blue rectly holding company. a but functions as Company, contends ques- During period in which the coverage policies at issue extend effect two tioned insurance were liability resulting to it common law for mine explosions at the resulted Scotia wrongful brought from death actions kin thirty The next of the death of miners. byit the survivors fifteen min- miners of fifteen of deceased explosion mine ers who were killed against Blue Diamond the United suit Defendants-Appel- Kentucky coal mine. Dis- for the Eastern States District Court lees, Company Insurance Holland-America wrongful trict of for death. al.,1 question argue et alleged plaintiffs coverage to Blue Diamond do not extend maintaining safety condi- negligent in working the deceased because mine. tions Company when the accident for Scotia Coal wrongful policy Blue Diamond defended Because the insurance occurred. by asserting a the in- death actions workmen’s purports to extend con- resulting compensation Blue Diamond from “shield.” for sureds “con- it was the only, contends tended that Holland-America miners and there- tractor” of the deceased Diamond is not covered. that Blue referred to as Holland-America. will hereinafter be 1. The Defendants-insurers immunity fore entitled to Ken- Holland-America refused to defend Blue tucky The Diamond suit or extend Workmen's because deceased miners District Court found that Blue Diamond of Scotia Coal and not Blue primary responsibility had the for mine Following Diamond. remand the Sixth mine, safety functions at the Scotia but Circuit, ap- Boggs case was settled grаnted Blue Diamond’s motion sum- *3 proximately 5.8 million Dia- dollars. Blue mary judgment concluding that Blue then against mond initiated this action Hol- mond was “contractor” under seeking coverage land-America under The Sixth Circuit of policies issue. at versed and held that Blue Diamond should not be either characterized as a “contrac- II Kentucky’s
tor” or Compensation Workmen’s Act. The Court under which Blue Diamond parent [corporation] concluded that “a purchased seeks in 1973 not immune from tort liability through McLennan, Marsh & an insurance subsidiary employees own, indepen- for its Atlanta, Georgia. broker Marsh & negligence.” dent acts v. layered McLennan group obtаined cover- (6th 655, 590 F.2d age subsidiary for Blue Diamond and its Cir.1979). specifically The Court “held Scotia Coal. Blue Diamond Inc. ‘employer’ Blue Diamond is not an was added to these in 1974 after its purposes Scotia’s miners for coverage pro- formation. The [Ken- amount of tucky Compensation] Workmen’s Act.” Id. vided each defendant insurer is shown at 663. following in the chart: underlying policy followed other period duly of this remain so Certificate qualified, following: in the manner was that of Holland-America. provision disputed policy provides: (a) any during period If at time
commencing at 12:01 AM on the 1st Day April, ending 1975 and at 12:01 EXCESS WORKMEN’S day April, any AM on the 1st COMPENSATION Employee in the immediate service оf premium charged, consideration Employer any person- sustain shall hereby in- Underwriters hereon (fatal non-fatal) injury al or accident demnify Employer, have who shall occupational engaged disease while accepted Compensation the Workmen’s Employer in the service of the work duly qualified Act and shаll have been forming part process of or in his busi- Self-Insurer under that Act in Employer ness and the shall liable be State(s) Paragraph set forth in 1 Section compensation make for such (b) during solely of this Certificate and shall under or virtue of Work- sarily in a
men’s Law determined former action be- and/or Employers’ Liability parties, Law that dеtermination is and/or tween the Occupa- Liability subsequent litiga- mon Law and/or upon them conclusive State(s) set tional Disease Law application tion.” 424. The of collat- Id. at (b) paragraph of this forth Section requires identity eral of issues and estoppel such in force at the time be identity privies. King v. or their injury is the Underwritеr sustained Brooks, supra; Shelley Gipson, 218 Employer indemnify the shall (1966). Tenn. The issue 400 S.W.2d extent hereinafter mentioned coverage for before this Court concerns Employer shall all sums for which common under the insurance law addition, will, in be so liable policies question Blue Diamond’s as hereinafter responsible for ‘Costs’ relationshiр to the Scotia defined and limited. defined Workmen’s Com- pensation Act. Resolution the issues the insur- insists Holland-America *4 present litigation requires interpreta- the policies by is limited by these ance afforded policies the language tion of the whereas in the immediate “Employees the words con- Boggs the court was faсed with the Therefore, Employer.” of the Blue service Kentucky struction the Workmen’s is because the de- Diamond not covered pensation regard relation- Act with employees of Scotia ceased ship corporation the em- parent the to in the immediate ser- and were killed while ployees subsidiary сorporation. of its They further as- corporation. vice of that in question that this was decided sert same Ill case, that Blue Diamond is Boggs
the estoppel relitigate collateral barred granting Blue the issue. We do not that judgment, summary mond’s motion litiga- question the involved this settles not the deceased miners were found that tion. rather, Diamond, that of Blue In his they employees of Scotia Coal. above, question in stated As opinion, the trial court stat- memorandum parent corpora- Boggs case was whether ed: liability is immune from common law tion own, individual independent determining acts of In whether an
as a result
its
many
factors
causing injury
employee
is an
of another
negligence
is
wholly-owned subsidiary corporation.
single
one
its
must
considered
no
be
that Blue Diamond
indicia
The Sixth Circuit held
Those
absolutely determinative.
min-
employer
not the
deceased
hired
was
most
referred
are: who
often
purposes
Work-
person
question
ers for
and who has
Consequently,
him;
pays
men’s
the em-
authority to fire
who
exposed to
law
common
him
his hours
ployee;
instructs
as to
who
rely
immunity
on
liability
duties;
pays
and could
his
who
and the details of
Security
action
virtue
Work-
from such
share of
employer’s
Social
present
Compensation Act.2
men’s
taxes;
his
tax and
withholds
income
ac-.
who
parties and the is-
involves different
tion
In this
to the revenue service.
remits it
similar,
sues, although
means
no
questions
all of the
case
answers to
identical.
Company.
i.e. Scotia Coal
the same
that this
However,
further found
the court
Brooks, 562 S.W.2d
King
controlling and
the various
that
was not
that
(Tenn.1978), this Court stated
“to
must be examined
policies
estoppel,
of cоllateral
“[ujnder the doctrine
coverage for
plaintiff has
actually
discover if this
and neces-
an issue has been
when
chapter shall be
(1983),
liability
this
provides
[T]he
Ky.Rev.Stat.Ann. §
342.690
liability of
place
of all other
exclusive and
part:
relevant
employee.
employer to the
such
its losses suffered” as a
the Sco- meaning.
result of
Parker v. Provident
& Ac
Life
mining
tia
(Tenn.
disaster.
cident Ins.
It is first noted that holding trial “court was in error in insured, insurance documents the term coverage extended each employer singular. insured assured or is in the Only for all the covered employees.” two in their even recognize might that there more than regard position With to Blue Diamond’s one Lexington policy insured. The extended it since provides cancellation clause that first they liability,” insure law “common (Blue Co.) named insured poli- held that “[t]he may cancel insurance for all named provide ap- cies the same on the limitation insured, the insuror cancel plication of common they law as to all insured notice to the first compensation, employer’s do on workmen’s named insured. The American Re-Insur- occupational is, disease. That Company policy provides if had employer insured to be the insured, there than is more one that will employee at the time of the fatal or non-fa- not increase limits for each acсident. injury.” tal clearly recognition, by This indicates insuror, more than one of the named IV might insured incur liability as result single aptly of a accident. As stated *5 paramount of rule construc point interest, Another of is the tion in insurance law is ascertain the to amendment endorsement made when the parties. intent of v. Palmer State Mining, Inc., Bluе Diamond was formed Co., Farm Mut. Auto Ins. S.W.2d 788 614 operation and took over of the Leather- (Tenn.1981); Interstate & Acc. wood The Ins. mines. named insured was Life Gammons, Tenn.App. 56 Co. amended to read: “Blue Diamond Coal (1966). S.W.2d 397 That intent is Co. to be and/or Blue Inc. policy derived from the four corners of the and/or Scotia Coal Co.” This and the giving рarts. to all effect Interstate throughout fact that the insurance docu- Life Gammons, supra. & Acc. Ins. Co. v. insured, ments the terms assured and However, policy ambiguous, where the is employer interchang- seem to be used parties may the intent of the be derived ably, to the indicates court an intention from policy. extrinsic evidеnce to outside against joint insure both and severable Co., Systems, Coble Inc. v. companies incurred those in- Gifford (Tenn.App.1981). S.W.2d 359. We disa sured.
gree finding Ap with the of the Court of peals ambigui that contain no opinion It is the of the court that the ty. impossible It is therefore to arrive at total effect in- insurance was to parties intent from the four demnify any the named insureds for policy. corners of the insurance limits, losses policy within various by personal about or “employer” We find the word any employees death of of those limiting in the phrase “employee used corporations. employer” immediate service of the to Appeals Thе ambiguous. with the ambiguity concurred The exists finding trial court’s that min ambiguous the deceased “from the state extrinsic cir ers were and Scotia Coal cumstance to which in the words of the refer,” In reversing Diamond. the trial thereby creating strument a latent Appeals the Court of no ambi ambiguity. Systems, found Coble Inc. v. Gifford guity in the the lan supra cоnstrued at 362. The guage according to ordinary together its usual and policy taken with extrinsic facts Cir.1965), (2d to than one Cir- lends itself more reasonable F.2d 946 Second parties. ques- inference of the intent cuit addressed this summary judgment tion and concluded parties infer that the It is to reasonable determining intent of proper was not corporations three intended to treat the parties policy an am- to an insurance with indemnified entity one insured lia- biguous provision. any employee of bility to the one of its hand, the other components. problem besetting On in de- three we The courts lies infer from the may reasonably use of the fining is or what is not “an issue whаt parties word intended said, it is material fact.” It has been only corporate to extend true, quite rigid magical for- that “no injured entity whose its mula offered to can be determine” existence, immediate service. (citation omitted.) This case presents us with a situation where V underly- evidentiary so-called facts—the stated, previously As this case was ing dispute; physical data —are not on summary judg determined motion for to be drawn but the inferences fact ment court. Rule of Tennessee disputed. from them [trial provides in pertinent Civil Procedure 56.03 from both had before it affidavits court] part “shall be ren evidentiary facts parties From .... pleadings, deposi dered forthwith if the an presented, so made [trial court] tions, interrogatories, answers ad inten- effort inferences of the to draw file, together missions on with the affida But, there [principals] tions of the .... vits, any, is no genuine if that there show support ample evidentiary facts to any fact and issue as to material either inference. judgment moving party entitled to a as a at Id. 951-52. law.” matter of this action setting insur- factual summary judgment, alleging no moved was, least, say the related genuine issue of material fact and relied on above, very complicated. As stated we plain meaning policies. of the insurance *6 as more inference could be drаwn than one However, we that it was error for believe parties from the intention this judge the trial to decide case on within read basis. is- Accordingly, factual a triable context. Adams, 627 134 In Prescott v. S.W.2d and the should presented sue was suit (Tenn.App.1981), Appeals the Court summary have decided on motions for been grant of motion versеd the trial court’s a judgment. stating: “although summary judgment for dispute, quoted been in Evco frequently the facts not have In case of (Tenn. proper interpre- Ross, dispute did as to the 20 Corporation exist S.W.2d Summary judgment 1975), of those facts. on the tation Harbison commented Justice where, although proper is not the basic as follows: use of parties good dispute, not in facts are was summary judgment procedure may disagree nevertheless about faith quick, inexpensive designed provide a from those facts.” inferences be drawn concluding cases, in whole means of also, Cantor, Hill v. 138-39. Id. at See is no as to there part, upon issues (E.D.Tenn.1965). Since have we F.R.D. disрute regarding facts. Where material provisions of the questioned found dispute to facts exist a there does give rise to more than by the deemed material which are inference, it follows one reasonable however, or where is uncer- there judgment improper. summary may be such whether there tainty as to duty of trial сourt dispute, In the case Insurance Soc. of Union for any motion clear. He is to overrule Canton, LTD Gluckin & v. William cases, summary (em- judgment in such added.)
phasis Id. at 24-25.
We find that this case proper is not a disposition case for on motions for summa- ry judgment. Accordingly, the Court of Appeals is reversed and this cause is re-
manded trial court for triаl on the issue of what the intended as to the scope policies.
COOPER, HARBISON, JJ„ BROCK and concur.
FONES, C.J., dissents.
FONES, Justice, Chief dissenting.
I respectfully dissent.
I majority opinion with the insofar as it concludes (1) the miners were not Diamond, employed by but were Sco- (2) tia Company; there was no ambi- guity in “any limitation to
employee in the immediate service of the
employer”; (3) cannot be interpreted treating the three named
insureds as extending one and to each
named coverage agаinst insured liability to employers. the other two my opinion require these conclusions the result reached the Court of Mercer, II, Joseph L. Disciplinary Coun- plaintiff’s dismissal of suit.
sel, Nashville, respondent-appellant. Gannon, Jr., Memphis, peti- Morris E. tioner-appellee.
OPINION GANNON, Jr.,
Morris E. DROWOTA, Justice. Petitioner-Appellee This case involvеs Morris E. Gannon’s petition practice for reinstatement to the BOARD OF PROFESSIONAL RESPON 9, pursuant law which was filed to Rule SIBILITY OF the SUPREME COURT 19, Section Supreme Rules of the Court. TENNESSEE, Respondent-Appel OF Disciplinary acting Counsel on behalf of lant. Responsibility the Board of Professional Supreme Court of Tennessee. appeal seeking filed this review 14, grant May petition. court’s decision to Gannon’s
This matter was before the Hearing July Committee on 16 and proof 1982. Gannon’s consisted of several