Transport Indemnity Company, a California Corporation v. Liberty Mutual Insurance Company, a Massachusetts Corporation

Transport Indemnity Company (Transport) appeals from a declaratory judgment holding it liable to defend and indemnify certain parties against claims arising out of an automobile accident. Finding that the district court correctly interpreted the relevant insurance contracts in the light of controlling state law, we affirm.

I.

Transport brought this action for declaratory relief pursuant to 28 U.S.C. §§ 2201 , 2202 to determine the duties of Transport and Liberty Mutual Insurance .Company (Liberty) to defend and indemnify certain parties against claims arising out of a June 5, 1974 automobile accident. Jurisdiction is based on diversity of citizenship.

A vehicle operated by Simons or Rice was involved in a collision with a vehicle operat ed by Hill. Hill and Rice were killed. Si-mons was a high-level employee of both SWF Plywood (SWF) and Carolina Pacific Plywood, Inc. (Carolina Pacific), and Rice was the Executive Vice President and Chief Operations Officer of both companies. Carolina Pacific was the registered owner of the vehicle involved, and the vehicle was assigned to Rice. As part of an interim arrangement between SWF and Carolina Pacific, in anticipation of a planned…