National Automobile & Casualty Insurance v. Industrial Accident Commission

Petitioner, insurance company, seeks to have annulled an award of respondent commission reforming and fixing liability as reformed, a workmen’s compensation insurance policy issued by it to Michael Lebedeff, an employer.

A. W. Schmidt and Lebedeff, in May, 1946, operated on a “50-50” basis, but in Schmidt's name, a taxicab business, under the name-Valley Taxi. Schmidt retired from the venture and Lebedeff became the sole owner.

Schmidt had previously obtained a workmen’s compensation insurance policy from petitioner which excluded employees who were relatives. In July, 1946, after the purchase of the business by Lebedeff, Ernest W. Schween, an agent for petitioner, approached Lebedeff on the subject of selling him a policy of workmen’s compensation insurance for the latter’s employees. Lebedeff advised Schween that his only employees were relatives, two brothers-in-law, one named Fred Guest, and a sister-in-law. Schween having stated that he would take care of the coverage, Lebedeff told him to write such a policy. About a week later, Lebedeff received a policy of workmen’s compensation insurance dated July 21,1946, issued by the petitioner. It contained a clause excluding…