Full opinion text
DELEHANT, Senior District Judge. It is in order, preliminarily to identify the insurance corporation parties litigant, and their respective insureds; and to disclose, at least in a general and summarized way, the setting out of which the suit arose, whose determination in the trial court is presently under review. Thus, one may the better understand what alone is now directly before the court; for it is rooted in antecedent and presently terminated litigation in a state court, and, more remotely, in the historical framework of that earlier controversy. From time to time, October 7, 1963 will be mentioned herein, after the manner of a time critical to this litigation. On that date the misadventure occurred which underlies this suit, as well as all antecedent litigation relevant hereto, infra. Then, and for some time theretofore, one Harry Linch, as lessee, operated at 7201 Grandview Avenue, Arvada, Colorado, an oil and gasoline service station, characterized as a “Standard Service Station.” The main building wherein he operated such station had been erected at an earlier date by one Victor C. Ries under a contractual agreement by him with Cook Bros. Oil Co., pursuant to plans therefor provided or approved by Standard Oil Company and The American Oil Company. But, as lessee, Harry Linch was at the critical time in the public and active management of the business of the service station. As a feature of such business, and from time to time therein, he purchased and acquired petroleum products for resale to his customers, and probably for incidental other purposes, from Petroleum Products Company, which, out of deference to counsel herein and to the trial court from which this case has come to this court, infra, and for the sake of brevity, is later herein ordinarily referred to as “Petco.” In the operation of his business, supra, Harry Linch, under the name and style of “Harry Linch Standard Service, 7201 Grandview, Arvada, Colorado,” procured and had in operation from April 25, 1963 to April 25, 1964 (thus, inclusive of October 7, 1963) a garage liability policy of insurance issued to him, as “insured,” by Fireman’s Fund Insurance Company, a corporation, hereinafter referred to either as “Fund” or “The Fund”, but generally as “Fireman’s Fund,” whose home office was in San Francisco, California, as insurer. A copy of such policy of insurance is attached to the AGREED STATEMENT OF FACTS duly executed and filed in the United States District Court for the District of Colorado in Case No. 66-C-90, Civil therein, out of which these appeals directly arise, infra, and constitutes a part of the record herein. In and by that policy, its coverage is defined clearly and adequately, but at a length rather too great to warrant its complete duplication or extended restatement herein. Continental Casualty Company, an Illinois corporation, herein generally referred to as “Continental,” under date of October 17, 1962, issued, effective from 12:01 standard time, October 1, 1962 until cancelled, its COMPREHENSIVE AUTOMOBILE LIABILITY POLICY NO. CCA 2659167, as insurer, to and in favor of THE PERMIAN CORPORATION AND/OR ANY OF ITS AFFILIATES AND SUBSIDIARIES, the latter explicitly including PETROLEUM TRANSPORT COMPANY (i. e. PETCO), as insureds. A copy of that policy is also attached to the AGREED STATEMENT OF FACTS in Case No. 66-C-90 in the United States District Court for the District of Colorado, infra. That policy included, among other coverage, the following insuring and conditioning language: “INSURING AGREEMENTS 1. Coverage A — Bodily Injury Liability To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness, or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of any automobile. Coverage B — Property Damage Liability To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of any automobile. ****** “III Definition of Insured The unqualified word ‘insured’ includes the named insured and also includes any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured. * * * ###### “4. Purposes of Use Defined ****** (c) Use of an automobile includes the loading and unloading thereof.” Attention is also directed to the language applicable to coverage, and the limitation thereof, in (a) the AGREED STATEMENT OF FACTS, and (b) the MEMORANDUM OPINION AND ORDER, both Infra. On or shortly before October 7, 1963, Harry Linch, doing business as Harry Linch Standard Service, 7201 Grand-view, Arvada, Colorado, in the course of his business purchased and ordered from PETCO approximately 6000 gallons of liquid gasoline for transportation to, and delivery at, such service station by Petco on October 7, 1963. Petco was then, and for some years theretofore had been engaged in the business, among other things, of transporting and delivering to service stations petroleum products, including gasoline, and had theretofore made like transportation and delivery to the station just identified, though in quantities smaller than 6,000 gallons. At that station deliveries of such gasoline were usually made through its unloading and introduction by an employee of the seller thereof into underground storage tanks in the Linch station premises, and south of the service station building, from which tanks the fluid was thereafter, and as its use was required, removed by the station’s gasoline pumps. Those underground tanks were equipped, as a part thereof, with a venting system, concerning which see the AGREED STATEMENT OF FACTS, infra. At the time of, and during the interval of, the delivery by Petco to Harry Linch of such gasoline, one Chris Eugene Glunz, an employee of McBride Lighting Company, and acting in that capacity, was lawfully at the Linch station, and was engaged therein in the cleaning of lighting fixtures located in such premises. Thus present and engaged, he then considered it to be necessary for him to use, and he did use, the station’s restroom facilities. Such use of the restroom facilities, at least partially concurred, in point of time, with the arrival at the station, and the unloading operations in respect, of the Petco truck and its gasoline cargo content. While engaged in his utilization of the station’s restroom facilities, and being present personally in the restroom, Mr. Glunz ignited a match for the purpose of lighting a cigarette. An explosion and subsequent fire ensued, in consequence whereof, Glunz sustained physical injuries, vide infra. After the foregoing explosion and fire, and prior to May 3, 1965, Chris Eugene Glunz, as plaintiff, filed in the District Court of Jefferson County, Colorado, a civil action against Harry Linch, Cook Bros. Oil Co., a Colorado corporation, The American Oil Company, a Maryland corporation, authorized to do and doing business in Colorado, Standard Oil Company, an Indiana corporation, authorized to do and doing business in Colorado, and Petroleum Transport Company, a Colorado corporation, being Civil Action No. 20151 in the District Court in and for the County of Jefferson, State of Colorado. Therein, Harry Linch was sued as the actual operator of the service station; Cook Bros. Oil Co. was sued as the alleged owner, on October 7, 1963, and as an entity which, on said date maintained and asserted an interest (beyond the exact knowledge of Mr. Glunz), of and in the real estate on which the service station was and is located, together with the Standard Service Station itself, its pumps, tanks, pipes, vents, and other facilities and equipment; The American Oil Company, in the capacity of the alleged corporate parent of Standard Oil Company, and Standard Oil Company, in the capacity of a corporate entity thus erected by the American Oil Company, were sued together, as corporations thus connected, which were allegedly engaged in the business of manufacturing, refining, distributing and selling petroleum products, including, but not limited to, gasoline, motor oils, greases and related by-products, in the course whereof, The American Oil Company distributed and sold its manufactured products within the State of Colorado, by and through Standard Oil Company, a division of The American Oil Company, and it was charged that such gasoline, motor oils and related petroleum products, so manufactured, were sold and offered for sale in the manner and form set out in the complaint in such suit at the Standard Service Station so operated by Harry Linch at 7201 Grand-view, Arvada, Colorado, in furtherance of an arrangement generally asserted but without exact definition, in the complaint. In that action, Chris Eugene Glunz, therefore, appears to have undertaken to obtain a judgment for the entire amount of his alleged injuries and damages, said in the complaint to have been $100,000.00, together with interest and costs of suit, as against all of the several defendants, and each of them, and thus to impose the liability for such injuries upon each such defendant on the basis of his or its alleged articulation into, and participation in, the business so operated by Harry Linch. The record before this court contains copies of the answers to that complaint of Chris Eugene Glunz, tendered separately by Harry Linch and by Petco, as defendants to such action, Briefly recalled, the answer in that case of Harry Linch (in the so-called sec-on(j defense thereof, wherein expressly ^is general answer to the complaint was made) admitted the corporate existence 0f Cook Bros. Oil Co., and its ownership 0f; ancj possession and assertion of an interest in, the foregoing Standard Service station in Arvada, the real estate whereon ^ was joeated, and its pumps, tanks, pipes, vents and other equipment; the corporate origin in separate other states, and the Colorado domestication and engagement in business in Colorado, of each of The American Oil Company and standard Oil Company; their intercorporate relationship, supra, and their engagement in the manufacture, refining, distribution and sale in Colorado of petroleum products; the initial erection on the service station site by The American Oil Company, pursuant to plans prepared and devised by it, of the Standard Service Station located thereon, and the sale thereafter at such station by The American Oil Company, through Standard Oil Company, of their petroleum products, thereby retaining and exercising a control over such premises, which admission, however, is expressly made with the reservation of a denial by the pleader that such acts were performed by The American Oil Company and Standard Oil Company “pursuant to and in accordance with a valid and effective lease or supplemental agreement;” that Petco was and is a Colorado corporation authorized to do business in Colorado, and “on October 7, 1963 and at all times thereafter in such complaint complained of, was engaged, among other activities, in transporting, hauling, delivering and unloading, in its transport trucks the products of the defendants, The American Oil Company and Standard Oil Company, upon the order, direction and mandate of the defendants, Cook Bros. Oil Co. and/or Harry Linch, into the storage tanks and other facilities situate on 'the Standard Service Station hereinabove described,” to which admission, however, a reservation or exception was asserted by the pleader’s explicit denial that any of the products of the defendant, The American Oil Company and Standard Oil Company were transported, hauled, delivered, or unloaded at this defendant’s (i. e. Harry Linch’s) order, direction or mandate, into the storage tanks or other facilities situate on the Standard Service Station described in the complaint, which emphasized denial, in the light of the admission to which it was subjoined may, not inappropriately, be regarded as somewhat obscure in respect of its precise thrust; the personal residence in Colorado, and the Colorado citizenship of Chris Eugene Glunz, and his presence on October 7, 1963, and at all times pertinent to the then suit, on the premises of the above described Standard Service Station, as a business invitee of all of the defendants in said suit except Petco, though with the knowledge of Petco, to which admission, however, Harry Linch expressly interposed a qualifying denial that Chris Eugene Glunz “was a business invitee of” Harry Linch “on October 7, 1963 or at any other time pertinent hereto.” And in such second defense to the complaint, the defendant Harry Linch, in his answer denied generally all averments of the complaint of Mr. Glunz not therein specifically answered. In such answer’s second defense, Harry Linch also made a generalized admission of paragraphs 12,14 and 19 of the Glunz complaint “except as otherwise alleged herein.” But those three paragraphs of the complaint are merely the incorporation by reference into as many separately stated and numbered causes of action in the complaint, of GENERAL ALLEGATIONS of the complaint set forth preliminary to, and, through such incorporation effecting economy of verbiage, in the statement of what the pleader in Mr. Glunz’ complaint appears to have conceived as separate bases whereon to rest his single demand for damages, finally set out in a prayer common to all such causes of action. In Harry Linch’s answer, he also, (a) by way of a first defense, alleged that the complaint failed to state a claim against the defendant, Harry Linch, “upon which relief can be granted to the plaintiff herein;” (b) by way of a third defense, alleged that if the plaintiff were injured in any of the manners stated in the complaint, such injuries, if any, were the direct and proximate result of the sole or contributory negligence of the plaintiff; (c) by way of a fourth defense, alleged that if the plaintiff were injured in any of the manners stated in the complaint, such injuries, if any, were the direct or proximate result of an unavoidable accident or Act of God; and (d) by way of a fifth defense, alleged that if the plaintiff were injured in any of the manners stated in the complaint, such injuries, if any, were the direct or proximate result of plaintiff voluntarily assuming a risk of which he had full knowledge and appreciation. At this point it is mentioned that, after the institution of Civil Action No. 20151, in the District Court of Jefferson County, Colorado, by the plaintiff therein, Chris Eugene Glunz, against the defendants thereto already identified herein, Victor G. Ries, the contractor who, as a building contractor, erected the Standard Service Station building was brought into the action as an additional, or third party, defendant at the behest, and upon the initiative, of the defendant therein, Harry Linch. It may be added, however, that, upon the record before this court, no issue or controversy in respect of Victor G. Ries as a party litigant hereto, appears to have been tendered and preserved for the present consideration or determination of this court. The separate answer in the case of Chris Eugene Glunz, plaintiff, vs. Harry Linch, et al, being CIVIL ACTION NO. 20151, in the District Court in and for the County of Jefferson, State of Colorado, filed by Petroleum Transport Company, i. e. Petco, as a defendant therein, was and is brief. That circumstance is measurably, though not entirely, attributable to the circumstance that, of the four separate and numbered alleged causes of action in the complaint of the plaintiff, Chris Eugene Glunz, only one, namely, the THIRD, is explicitly directed against that defendant. It is, of course, readily recognized that, in the GENERAL ALLEGATIONS, in eleven consecutively numbered paragraphs, wherewith the separate and numbered alleged causes of action of the complaint were and are premised, the plaintiff had made many allegations identifying and describing the several defendants to that suit, and attributing to one or more of them either historical information or conduct, asserted to have relevance to the case, In that behalf, the following observations are separately made touching each of those general allegations, excepting that numbered 6. In item 1 of the general allegations, the plaintiff, Glunz, alleged the corporate status, domicile and business of the defendant Cook Bros. Oil Co., by way of relating that defendant to the operation of the Standard Service Station herein mentioned, and to the occurrence of October 7, 1963. In item 2 of the general allegations, the plaintiff, Glunz set out the corporate domicile and Colorado domestication, and the right to transact business in Colorado, of each of the two corporate defendants identified as The American Oil Company and Standard Oil Company, and their corporate relationship each to the other, as already mentioned herein; and that item was and is followed by item 3 wherein were alleged the engagement of those two corporations in the business of manufacturing, refining, distributing and selling petroleum products (The American Oil Company, in such distribution and sale within the state of Colorado allegedly acting by and through Standard Oil ComPan^> and tbe sale of such Products allegedly being carried on, among other PIaces’ at such Standard Service Station), In item 4 of the Seneral allegations, the Plaintiff, Glunz, asserted that, m accomance witb a lease agreement dated February 9, 1962 and recorded at an iden ified Pa^ of the records of the Clerk and Recorder of Jefferson County, Colorado- tbe defendant, The American Oil Company, according to plans and specifications by ü Prepared, devised, arranged adoPted and approved, erected and built the Standard Service Station already mentioned herein, and thereafter and until 0ctober 7> 1963> offered for sale and sold at such Standard Service Station Pr°ducts, by and through Standar 0il Company, and “by virtue thereof, remained in ful1 Possession and control of sadd and Parcels of land, the S an - ard Service Station thereon erected and its facilities, and continued to have under its exclusive control, management, operation, maintenance and possession all of the buildings, tanks, pumps, lines, pipes, vents and other devices and equipment therein situate, all in accordance with the terms and provisions of the lease agreement hereinabove described, as supplemented, amended, extended, complemented and continued by virtue of a certain agreement in writing referred to, and incorporated in, and made a part of such lease but not otherwise published, recorded, circulated or disclosed.” In item 5 of the general allegations, the plaintiff Glunz alleged that at all pertinent times, and, particularly, on October 7, 1963, Harry Linch was in the actual custody of the premises, the Standard Service Station and the equipment and facilities therein and thereto attached as the operator thereof, pursuant to and in accordance with a license, permission or authority from the defendants, The American Oil Company, Standard Oil Company, and Cook Bros. Oil Co., and, for and on their behalf, did sell and offer for sale to the general public the products manufactured, refined, sold and distributed as hereinbefore referred to. In Item 7 of the general allegations, the plaintiff Glunz alleged that at all pertinent times he was, and at the time of his complaint remained and was, a resident and citizen (sic) of the city of Englewood, Colorado, and was on October 7, 1963, and at all other pertinent times, a business invitee of all of the defendants, save and except the defendant Petroleum Transport Co., upon the premises and its facilities hereinabove described, but whose presence upon said premises was known to the defendant Petroleum Transport Co. In item 8 of the general allegations, the plaintiff Glunz alleged “that at or about two o’clock P.M. on October 7, 1963 he entered the Standard Service Station, and, with the consent and approval of all of the defendants, began to use the restroom therein kept and maintained for the use and accommodation of the defendants’ customers and business invitees, when, suddenly, unexpectedly, and without warning, an explosion and subsequent fire occurred therein as the direct and proximate result of which he suffered the many serious, permanent and disabling injuries hereinafter detailed;” that the explosion and subsequent fire, and the injuries of which the plaintiff now complains were the direct and proximate result of the wrongful, unlawful, negligent, careless and reckless acts and actions of the defendants and each of them, acting separately and in concert with each other. In item 9 of the general allegations, the plaintiff Glunz alleged in detail his claimed injuries and the particulars thereof. In item 10 of the general allegations, the plaintiff Glunz, in general terms, alleged his subjection in consequence of such injuries to expenses for medicine, medical items, hospitalization, physicians’ and surgeons’ fees, nurses’ hire, drugs and the like for treatment and attempted cure, to his great financial damage and loss, and averred, on information and belief, that some of his injuries were and are permanent, and had prevented, and would thereafter prevent, him from attending to his usual and daily occupation. And in item 11 of the general allegations, the plaintiff alleged that by reason of his alleged injuries he had been damaged in the sum of one hundred thousand ($100,-000.00) dollars. In item 6 (at this point herein adverted to out of its numerical sequence in the complaint) of the general allegations of the complaint of the plaintiff Glunz, he made in a single sentence the following allegations against the defendant in that suit, Petroleum Transport, Co. i. e. Petco: “That the defendant, Petroleum Transport Co., at all times pertinent hereto, was and is a Colorado corporation, organized and existing under and by virtue of the laws of the State of Colorado to do business within the state under the name and style of ‘Petco,’ with its principal place of business at 1700 Broadway in the city and county of Denver, State of Colorado, and which, on October 7, 1963, and at all times hereinafter complained of, was engaged in the transporting, hauling, delivering and unloading, in its transport trucks, the products of the defendants, The American Oil Company and Standard Oil Company, upon the order, direction and mandate of the defendants, Cook Bros. Oil Co., and/or Harry Linch into the storage tanks and other facilities situate on the Standard Service Station hereinbefore described.” Briefly reflected, the answer of Petco to the complaint of the plaintiff Glunz, in Civil Action No. 20151 in the District Court in and for the County of Jefferson, State of Colorado, duly filed in that action, (1) as to paragraphs 1, 2, 3, 4, 5, 7, 8, 9, 10 and 11, supra, of the general allegations in the complaint of the plaintiff Glunz therein, disclaimed Petco’s possession of knowledge or information sufficient to form a belief as to their truth, and, therefore, denied the allegations of those paragraphs; (2) admitted the allegation of paragraph (6) of such general allegations, as quoted supra; (3) as to the first, second and fourth causes of action set out in the complaint in said action in the state court of Colorado filed therein in by its plaintiff Glunz, none of which counts undertook to state a cause of action against Petco, initially and correctly declared its position that each of said first, second and fourth counts failed to state a claim for relief against Petco; and, thereafter, asserted that “if it could be considered that they do in anywise state a claim for relief against this defendant,” i. e. Petco, “this defendant denies every allegation thereof and incorporates herein and adopts by reference his (sic) affirmative defenses to the plaintiff’s third cause of action as though set forth herein word by word,” (vide infra); made Petco’s answer to the third cause of action of the complaint in said Civil Action No. 20151 wherein, through paragraphs 17 and 18 of that complaint, the claim of its plaintiff Glunz against Petco, and its attempted articulation into the causation of the explosion and subsequent fire, had been asserted. It is here observed that in asserting in his complaint his claim for damages against Petco — and Petco only — Glunz in paragraphs numbered 17 and 18 of his complaint had alleged in this language that: “17. The allegations and averments made and contained in paragraphs 1 through 11, inclusive, hereinbefore set forth, are hereby adopted to the same intent and purpose as if again restated and realleged. “18. That, at or about 1:30 p. m., on October 7, 1963, this defendant” (elsewhere clearly disclosed as meaning Petco) “upon the order of and under the direction, supervision and instruction of the other defendants, negligently, carelessly, recklessly and wrongfully began the unloading, emptying, discharging and transferring of large volumes of gasoline, to-wit: six thousand (6,000) gallons from its transport trucks into the leaky, faulty, unlawful, defective, broken, deteriorated, worn and inadequate installations, storage tanks, mains, lines, vents and other conduits situate at the above-described Standard Service Station; that said unloading, emptying, discharging and transferring continued, uninterruptedly, until 2 p. m. on said date, and, as the direct result thereof, large quantities of gas and gasoline vapors were permitted to escape, which combined with large quantities of gas and gas vapors then being permitted to escape from the facilities of the station and accumulate, collect and gather in and about the premises, the station and the rest room therein contained.” Responding to that third cause of action of the complaint in the state court of the plaintiff Glunz, therein, the defendant, Petco, in that civil action, as to the quoted paragraphs 17 and 18 of the complaint therein, pleaded in this language: “1. In answer to paragraph 17 of the plaintiff’s third cause of action,” (sic) “the defendant incorporates herein and adopts by reference his” (sic) “answers to the allegations and averments made and contained in paragraphs 1 through 11, inclusive, of the plaintiff's general allegations, as though set forth herein word by word.” “2. In answer to Paragraph 18 of the plaintiff’s third cause of action, the defendant” (sic) “denies the same.” Here it is noted in passing that the pleader’s allusions in the most recently quoted language to paragraphs 17 and 18 “of the plaintiff’s third cause of action” is inexact. They are not paragraphs 17 and 18 “of the plaintiff’s third cause of action,” but are, rather, those numbered two paragraphs of the entire complaint of the plaintiff Glunz therein, and they are the only numbered paragraphs contained in that complaint’s special reference to his third cause of action. Finally, in its answer in that Civil Action No. 20151 in the state court, Petco, as a defendant to that action alleged: first, “that the plaintiff’s complaint failed to state a claim upon which relief can be granted secondly, “that the injuries and damages sustained by the plaintiff” i. e. Chris Eugene Glunz, “if any, were incurred as a result of the plaintiff’s own sole or contributory negligence thirdly, that such injuries and damages, if any, “were incurred as a result of the negligence of some person or persons other than” Petco, when Petco “had no control or right of control and for whom” Petco “had no responsibility for the action of such person or persons fourthly, that such injuries and damages, if any, “were incurred as a result of the negligence of the plaintiff,” Glunz, “concurring with the negligence of some person or persons other than” Petco “the plaintiff and other unknown person or persons over whom” Petco “had no right, duty, or obligation to control, and which negligence proximately caused the injuries and damages of the plaintiff,” Glunz; fifthly, that such injuries and damages, if any, “were incurred as a result of any” (sic) “unavoidable accident;” and sixthly, that such injuries and damages, if any “were incurred as a result of the plaintiff’s unreasonable assumption of risk of harm and injury when he knew or should have known of the condition which existed on the premises where he allegedly sustained his injury or injuries and his unreasonable and reckless failure to heed such conditions.” Finally, Petco, as an answering defendant in Civil Action No. 20151 in the state court concluded its answer to the complaint of the plaintiff therein, Glunz, with a prayer for judgment in behalf of Petco and against the plaintiff Glunz, and for its costs and for general equitable relief. It is readily apparent that the foregoing extended gleaning from the pleadings in Civil Action No. 20151 in the state court is limited to the contents of the complaint therein of the plaintiff, Chris Eugene Glunz, on the one hand, and, on the other hand, of the separate answers of the defendants therein, (a) Harry Linch, and (b) Petco. The record before this court does not, and need not, disclose, from the files and record in that earlier state court litigation, or otherwise, information from which a comprehensive and complete reflection of its pleadings might be assembled. For the ensuing litigation in the United States District Court for the District of Colorado, out of which the appeal and cross-appeal to this court now considered have directly and entirely arisen, is rooted in the issues made upon the complaint and the separate answers of the defendants Harry Linch and Petco in the earlier state court litigation, and the submission and determination in that court of those issues. That submission and determination, so far as they appear to possess present pertinence, will now be adverted to briefly. Such abbreviation has been rendered both possible and appropriate by the course in the United States District Court of the litigation arising out of the state court suit, but subsequently initiated and conducted in the United State District Court for the District of Colorado. The record before this court on this appeal, and cross appeal, discloses clearly that in the state court action of Glunz v. Linch et al. supra, the defense of the defendant, Harry Linch, was undertaken and presented in the state court by his insurer, Fireman’s Fund; and that in such state court action, the defense of the defendant, Petco, was undertaken and presented in the state court by its insurer, Continental. On May 3, 1965, and after the institution by Chris Eugene Glunz of his action in the state court against Harry Linch and others, supra, and acting on the basis of information touching the existence and supposed coverage of Continental's policy of insurance in favor of Petco (among other beneficiaries) supra, Harry Linch, acting by and through his attorney, Kenneth C. Groves (representing Harry Linch under employment by his insurer, Fireman’s Fund), by a written letter addressed and transmitted to the Claims Manager in Denver, Colorado, of Continental, advised Continental of the existence of the claim of Glunz and,’ upon the asserted premise that in the circumstance, Harry Linch was entitled to coverage, primary in character, as an additional insured under Continental’s policy in favor of Petco, made demand upon Continental to assume the defense of Harry Linch in the state court action, and to pay any judgment rendered against Harry Linch, and costs, attorney’s fees, and all other litigation expenses. As of May 6, 1965 (in the asserted absence of the Claims Manager of Continental) response was made to that communication by one William G. Kemme, Claim Supervisor of Continental, declining the request made in behalf of Harry Linch. On the following day, May 7, 1965, the said Kenneth C. Groves addressed an acknowledgment and reply to William G. Kemme, claim supervisor of Continental, warning him and, through him Continental, that the rejection in-behalf of Continental of the request theretofore made of it (immediately, supra) was not accepted, and of the imminence of suit against Continental for protection of Harry Linch. On May 13, 1965, the claim manager of Continental, by letter to Kenneth C. Groves, explicitly confirmed Continental’s earlier denial of liability so made in its behalf by William G. Kemme. (This court observes the allegation of paragraph 19 of the complaint in the United States District Court for the District of Colorado identifying May 17, 1965 as the date of the rejection of Kenneth C. Groves’ letter of May 7, 1965. That disparity in date is regarded as immaterial.) Thereupon, Fireman’s Fund proceeded with the defense of Harry Linch in the state court case. Trial was had of that case in the District Court of Jefferson County, Colorado. While the limited references, in the record of this court upon these appeals, to the course of the trial in the state court, are inadequate to support an informed and categorical declaration here touching the disposition in the state court of the issues in the state court (a) as between the plaintiff therein, Glunz, and each of the several defendants thereto, or (b) as between any of the several defendants thereto, it is made satisfactorily to appear that in that state court action, (1) a directed verdict of dismissal of the claim of the plaintiff Glunz therein against the defendant, Standard Oil Company of Indiana, therein was ordered and entered; (2) a directed verdict of dismissal of the claim of the plaintiff Glunz therein against the defendant, Petroleum Transport Company, i. e. Petco, was ordered and entered; (3) after the trial had proceeded to a point where all of the testimony had been taken, the defendant, Harry Linch, permitted a judgment to be entered against him in the sum of $5,000.00, which judgment was entered therein on January 13, 1966 against him by virtue of his stipulation and agreement; (4) on January 14, 1966, such judgment was paid in full and satisfied. Such payment of the judgment, inclusive of costs in the action was actually made by Fireman’s Fund in behalf of Harry Linch. Fireman’s Fund, in addition to $5,000.00 (the amount of said judgment) incurred obligation for $6,946.57 for court costs and attorney’s fees for services rendered in that case; (5) Certificate of Satisfaction was entered in said state court on February 8, 1966. Before the entry of such judgment, counsel for Continental at Denver, Colorado, were, by counsel for Fireman’s Fund, advised of the course thus far of the litigation in the state court, including the then contemplated entry of judgment for $5,000.00 against Harry Linch, and given opportunity to object thereto, or otherwise participate therein (see more detailed reflection in the AGREED STATEMENT OF FACTS, infra), which tender was rejected. Promptly thereafter, in behalf of Harry Linch, and particularly of Fireman’s Fund, and on January 14, 1966, Kenneth C. Groves, as attorney for said Linch and Fireman’s Fund, addressed and transmitted to Wesley H. Doan, Esq., Denver, Colorado, counsel herein for Continental, a letter and therein, inter alia, advised him briefly of the course of the antecedent litigation, demanded that Continental pay the judgment and “ancillary costs” within the execution period of ten days, and signified the intention of Fireman’s Fund, unless such payments were made, to institute suit on account thereof against Continental. That requested payment was not made. The action in the United States District Court for the District of Colorado, being case numbered 66-C-90 Civil, ensued, the complaint therein having been filed during February, 1966. The instant appellate proceeding involves an appeal and a cross-appeal taken from the judgment made and given in such ease numbered 66-C-90 Civil. The issues in that case, as made by the pleadings in it, are next disclosed. Fireman’s Fund Insurance Company, as plaintiff, and Continental Casualty Company, as defendant, were and are the only parties to that case, and, on appeal, are the only parties to this appellate proceeding. In its complaint in the case just mentioned, Fireman’s Fund alleged the existence of a controversy in amount exceeding $10,000.00 exclusive of interest and costs; the existence of Fireman’s Fund as a California corporation, and its authorization to do, and actual doing of, business in Colorado, at all times pertinent to the suit; and the existence of Continental as an Illinois corporation, and its authorization to do, and actual doing of, business in Colorado at all times pertinent to the suit. It is next alleged therein that, prior to October 7, 1963 (thereafter in such complaint generally referred to as “date of accident”) Continental issued a policy of insurance to Petco, in such complaint identified as a Colorado corporation known as Petroleum Transport Company, which policy was in full force and effect on the date of accident; and averred, on information and belief, that such policy of insurance provided, inter alia, (a) that Continental, as insurer, agreed with Petco, its assured, in consideration of the payment of premiums and in reliance upon the statement in the decíaration, and subject to the limits of liability, conditions, exclusions and other terms of said policy, that the insurer would pay on behalf of the insured, all sums which the insured became obligated to pay as damages because of bodily injury, sickness or disease, including death resulting therefrom, sustained by any person, and caused by any accident arising out of the ownership, maintenance or use of an automobile, as the term automobile is therein defined; and the insurer further agreed to defend any suit against the insured seeking damages on account thereof; (b) that the unqualified word, “insured,” included the named insured, and also included any person while using the automobile, and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with its permission; and (c) that the use of an automobile included the loading and unload-mg thereof. In its complaint just mentioned, Fireman’s Fund further alleged that (d) on the date of accident Petco was the lessee of a tractor-trailer, which, at the time of said accident, was being operated by its agent, servant and employee, and within the regular course of his employment; (e) that on the date of accident, Petco hauled, through its agent, servant and employee, certain petroleum products, to-wit, approximately 6,000 gallons of liquid gasoline, American Oil Company brand, premium and regular, to a Standard Service Station located at 7201 Grandview Ave., Arvada, Colorado, then being leased and operated under the sole and exclusive control of Harry Linch; (f) that at the time of the accident, Chris Eugene Glunz was then and there present on the premises of the Standard Service Station located at 7201 Grand-view Ave., Arvada, Colorado, for the purpose of performing certain business services for Harry Linch; (g) that, just prior to the time of the accident, Petco, through its agent, servant and employee, and at the direction of, and with the permission of, Harry Linch, commenced to unload the liquid gasoline thus mentioned and described into the underground storage tanks located on said premises. jn j^s complaint so mentioned, Fireman>g Fund then alleged, (h) that durjng the' course of said unloading operation, and as a result thereof, a quantity of gasoline fumes or vapors was created, -which fumes or vapors entered the servjce station building where Chris Eugene Glunz was then present; (i) that, during the continuance of such unload-operation, such fumes or vapors, were ignited, and an explosion occurred from which Chris Eugene Glunz sustained certain personal injuries as a result thereof; and (j) that the tractor-trailer thus described was scheduled or otherwise designated in, and covered hy¡ the policy of insurance described in paragraph 3 (sic) of the complaint, (which a]lusion to paragraph 3, is by this court believed to be a pleader’s mistake in the light of the actual deseription of the policy in paragraph 4, rather than paragraph 3, of the complaint), fn its complaint so mentioned, Fireman’s Fund proceeded to allege (k) that some time before May 3, 1965, Chris Eugene Glunz commenced in the District Court in and for Jefferson County, Colorado, Civil Action No. 20151 to recover the sum of $100,000.00 in damages allegedly resulting from his personal injuries above referred to, from and against, among others, Harry Linch; (i) that Harry Linch undertook the defense of such action through Fireman’s Fund which, as theretofore in such eomplaint averred, had issued its policy of general liability insurance to Harry Linch, which was in effect on the date 0f accident; (m) that some time before May 3, 1965, Harry Linch, through Fireman's Fund, discovered that Continental had in full force and effect its policy of insurance to Petco, hereinbefore referred to, and that the coverage provided thereunder was primary in connection with the suit in the District Court in and for Jefferson County, Colorado, brought by Chris Eugene Glunz as plaintiff, and against Harry Linch and others as defendants, supra; that as a result thereof, on May 3, 1965 a letter was sent to Continental (a copy whereof is set out at length as an exhibit to, and incorporated by reference into, Fireman’s Fund’s complaint) which, in substance, stated that Harry Linch was entitled to protection as an insured under the policy issued to Petco by Continental, and demanding that Continental assume the defense of Harry Linch, or, alternatively, pay any judgment rendered against him, including court costs, and all other costs, expenses and attorney’s fees incurred as a result of, and in the defense of, said action; (n) that said demand was rejected on May 6, 1965 by Continental without reason or explanation; (o) that on May 7, 1965 Continental was again sent a letter (a copy whereof is set out at length as an exhibit to, and incorporated by reference into Fireman’s Fund’s complaint) whereby Continental was advised of the necessary action to enforce the terms and coverages contained in said policy, which would be timely instituted if the requested assumption of Harry Linch’s defense were not made, and whereby Continental was further advised that Fireman’s Fund looked to Continental for full indemnification for any judgment rendered against Harry Linch, and all costs expended in the defense of such suit, including attorney’s fees; (p) that the tender of defense, last hereinbefore described, was, by Continental, again refused on May 17, 1965; (q) that, as a result of Continental’s refusal, Harry Linch, through Fireman’s Fund, was required to continue the defense of Harry Linch against the suit of Chris Eugene Glunz, including the trial of that action; (r) that the trial of such action resulted in judgment against Harry Linch in the amount of $5,000.00, which judgment was satisfied by Harry Linch through Fireman’s Fund, and copies of such satisfaction and of certification were attached as exhibits to, and by reference made a part of the complaint of Fireman’s Fund; and that, by the terms of its policy of insurance in favor of Harry Linch, Fireman’s Fund was and is subrogated to Harry Linch’s rights against Continental; and (s) that, before the entry of said judgment, agents and attorneys for Continental were advised of the progress of the trial, and given an opportunity to object to any action taken by Harry Linch through Fireman’s Fund, and, further, to take any action on its own behalf which it deemed necessary or prudent; that Continental, through its agents and attorneys, made no objection and took no action with respect to the judgment which was subsequently rendered; that, in a letter dated January 14, 1966, of which a copy is attached to and made a part of the complaint of Fireman’s Fund, said Fireman’s Fund extended to Continental a period of time equivalent to the statutory stay of execution within which to pay such judgment to Chris Eugene Glunz, but there was no response to such letter, and Continental failed to satisfy such judgment as therein requested by Fireman's Fund; (t) that, as a result of Continental’s failure, neglect and refusal to assume and meet its obligations under the terms and provisions of its policy, and to assume and accept full responsibility for. the defense of Harry Linch in the action against him brought in the state court by Chris Eugene Glunz, Fireman’s Fund has incurred special damages itemized as follows: Miscellaneous itemized expenses incident to the litigation and the preparation for, and conduct of the trial inclusive of court costs and reporting services, aggregating $ 546.57 Lynch & Groves, attorneys’ fee 6,400.00 Judgment (supra) 5,000.00 TOTAL $11,946.57 And in a concluding averment in its complaint, Fireman’s Fund, obviously repetitively, but probably by way of summary, asserted that Harry Lineh had coverage under the policy of Continental on the date of accident; that Continental’s refusal and neglect to assume and meet its obligation thereunder has breached its contract, to the damage of Fireman’s Fund, which was and is subrogated to the rights of Harry Linch in the. amount of $11,946.57. Finally, in its complaint, the plaintiff Fireman’s Fund, prayed for judgment against the defendant Continental “in the amount of $11,946.57, plus costs of this action, and interest from the date of filing hereof.” (Which, obscurely stamped in the present record of that complaint, appears to be February 10, 1966, but may be February 18, 1966.) In the foregoing summary of Fireman’s Fund’s complaint, this court has undertaken to reflect the substance only of the allegations of such complaint, and thereby, with a fair measure of accuracy, to abbreviate. So doing, it has attempted to preserve the sequence in which the subject matter of the complaint is set out therein. Moreover, it has separated items of allegation by the intrusion of parenthesized letters of the alphabet rather than by the use of numerals for that purpose in the manner of the complaint. To that complaint of the plaintiff Fireman’s Fund, and apparently on February 28, 1966, the defendant Continental filed its answer which is now summarized. First, by the categorical admission of the allegations of the complaint’s paragraphs numbered 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 18 and 19, Continental, in its answer admits such complaint’s assertion (1) the presence of a controversy exceeding the sum of $10,000.00 exclusive of interest and costs; (2) the alleged corporate domicile in California and authorization to do, and doing of, business in Colorado, of Fireman’s Fund; (3) the alleged corporate domicile in Illinois and authorization to do, and doing of, business in Colorado, of Continental; (4) Continental’s issuance theretofore and before October 7, 1963, the “date of accident” of a policy of insurance to a Colorado corporation, known as Petroleum Transport Corporation, thereafter in the complaint identified as “Petco,” which policy was in force on the date of accident; (5) that the policy of insurance last mentioned provided, inter alia, that Continental, as insurer, agreed with Petco, as insured, in consideration of the payment of premiums and in reliance upon the statement in the declaration and subject to the limits of liability, conditions, exclusions and other terms of said policy, that the insurer would pay on behalf of the insured, all sums which the insured became obligated to pay as damages because of bodily injury, sickness or disease, including death resulting therefrom, sustained by any person and caused by any accident arising out of the ownership, maintenance or use of an automobile, as the term automobile is therein defined; and the insurer further agreed to defend any suit against the insured seeking damages on account thereof; (6) that said policy of insurance further provided that the unqualified word, “insured,” included the named insured and also included any person while using the automobile, and any person or organization legally responsible for the use thereof, provided the actual use of the automobile was and is by the named insured or with his permission; (7) that said policy of insurance further provides that the use of an automobile includes the loading and unloading thereof; (8) that on the date of the accident Petco was the lessee of a tractor-trailer which was, at the time of said accident, being operated by its agent, servant and employee, and within the regular course of his employment; (9) that, on the date of the accident, Petco hauled, through its agent, servant and employee, certain petroleum products, to-wit, approximately 6,000 gallons of liquid gasoline, American Oil Company brand, premium and regular, to a Standard Service Station located at 7201 Grandview Ave., Arvada, Colorado, then and at that time being leased and operated under the sole and exclusive control of Harry Linch; (10) that, at the time of the accident, Chris Eugene Glunz was then and there present on the premises of Standard Service Station, 7201 Grandview Ave., Arvada, Colorado, for the purpose of performing certain business services for said Harry Linch; (11) that, just before the time of the accident, Petco, through its agent, servant and employee, and at the direction, and with the permission of Harry Linch, commenced to unload the liquid gasoline theretofore hauled to such Standard Service Station, supra, into the underground storage tanks located on said premises; (13) that the tractor-trailer herein described was scheduled, or otherwise designated in or covered by the policy of insurance, so issued by Continental to Petroleum Transport Company, herein referred to as Petco, which was in full force and effect on the date of the accident; (14) that, some time prior to May 3, 1965, the said Chris Eugene Glunz commenced an action in the District Court in and for the county of Jefferson, State of Colorado, entitled Civil Action No. 20151 to recover the sum of $100,000.00 in damages allegedly resulting from the personal injuries referred to above, from and against, among others, Harry Linch; (15) that the said Harry Linch undertook the defense of said action through Fireman’s Fund, plaintiff herein, Fireman’s Fund having issued its policy of general liability insurance to the said Harry Linch, and which policy was in effect on the date of the accident; (18) that, on May 7, 1965 — and subsequent to the transmittal of a letter of similar general import sent to Continental on May 3, 1965, whose demand had been rejected by Continental on May 6, 1965 (vide infra) — Continental was again sent a letter of which a copy is attached to and made a part of Fireman’s Fund’s complaint in Case numbered 66-C-90 in the United States District Court for the District of Colorado, wherein Continental was advised of the necessary action to enforce the terms and coverage contained in its policy' of insurance to Petco, which would be instituted at the proper time if assumption of Harry Linch’s defense were not made by Continental; in the alternative whereto Continental was further advised that Fireman’s Fund looked to Continental for full indemnification for any judgment rendered against Harry Linch, and all costs expended in the defense of such suit, including attorney’s fees; and (19) that the tender of defense described in the last preceding clause hereof was “again” refused by Continental on May 17, 1965. The allegations in the complaint of Fireman’s Fund, the plaintiff, thus identified in the last preceding, and extended, paragraph hereof are, therefore, to be considered as admitted in their entirety by Continental in its answer to that complaint. Secondly, by Continental’s express denial in its answer of the allegations of paragraphs 12, 17, 20 and 24 of the plaintiff, Fireman’s Fund’s complaint, Continental is to be understood as denying (12) that, during the course of the unloading operation on the date of the accident, a quantity of gasoline fumes or vapors was created, which fumes or vapors entered the service station building, where said Chris Eugene Glunz was then present; further, and during the continuance of said unloading operation, said fumes or vapors were ignited, and an explosion occurred from which the said Chris Eugene Glunz, sustained certain personal injuries as a result thereof; (17) that the demand upon Continental by letter of Kenneth C. Groves, bearing date May 3, 1965, of which letter a copy is attached to, and made a part of, such complaint, which letter stated in substance that Harry Linch was entitled to protection under the policy issued to Petco by Continental, and demanded that Continental assume the defense of Harry Linch, or, alternatively, pay any judgment rendered against Harry Linch, including court costs and all other costs, expenses and attorney’s fees, incurred as a result of, and in defense of the action, was rejected by Continental on May 16, 1965 without reason or explanation (emphasis added); (20) that Harry Linch, through Fireman’s Fund, as a result of Continental's refusal, supra, was required to continue the defense of the suit heretofore described, including the trial of said action; and (24) that Harry Linch had coverage under the policy of Continental on the date of the accident, and Continental’s refusal and neglect to meet and assume its obligation thereunder breached its contract to the damage in the amount of $11,946.57 of Fireman’s Fund, which is subrogated to the rights of Harry Linch. In further and final direct pleading in its answer to the remaining averments of the complaint of Fireman’s Fund against it, Continental (answering paragraph 16 of the complaint) admitted that Harry Linch, through Fireman’s Fund acquired some knowledge of the policy of insurance issued by Continental to Petco, denied that such coverage as was provided by that policy was primary in connection with the suit against Harry Linch, mentioned in the complaint, and admitted the receipt of the letter of Kenneth C. Groves to the Claims Manager of Continental, bearing date May 3, 1965; (answering paragraph 21 of the complaint of Fireman’s Fund), Continental admitted — though it ought probably to be said that it alleged — that by reason of the voluntary actions of the attorney representing Harry Linch and Fireman’s Fund in the state court action, supra, a judgment was entered against Harry Linch in the amount of $5,000.00, which was satisfied, but as to the remaining allegations of Fireman’s Fund in Civil Action No. 66-C-90 touching that judgment, to the effect that, by the terms of Fireman’s Fund’s policy in favor of Harry Linch, Fireman’s Fund is subrogated to his rights against Continental, for want of information adequate to support an opinion with respect thereto, Continental denied such allegation or allegations. Further answering paragraph 22 of such complaint, Continental admitted that its agents and attorneys were advised of the progress of the trial of the Glunz suit in the state court, but denied that they were given an opportunity to object to any action taken by Harry Linch, through Fireman’s Fund; and admitted that Continental, through its agents and attorneys, took no action relative to the judgment therein, and that a period of time equivalent to the expiration of the statutory stay of execution was given to Continental to pay that judgment directly to Glunz, and admitted- that it did not satisfy the judgment. And, for asserted want of information adequate to form a belief as to the truth of the allegations in paragraph 23 of the complaint of Fireman’s Fund touching the items and amounts of its several alleged elements of special damages, and the aggregate sum thereof, Continental, in its answer, denied such allegation or allegations in its or their entirety. Finally, by way of affirmative defenses to Fireman’s Fund’s complaint against Continental, Continental alleged the following positions: 1. That Fireman’s Fund’s complaint failed to state a claim against Continental on which relief can be granted; 2. That Fireman’s Fund voluntarily made payment of a judgment which it voluntarily agreed to allow to be entered against Harry Linch, and has the status of a volunteer paying another’s debt, and was and is, therefore, es-topped from asserting any claim therefor against Continental; 3. That Fireman’s Fund was and is, by its own laches, estopped from asserting any claim against Continental ; 4. That Fireman’s Fund’s insurance policy is primary to any insurance policy of Continental, and Continental owed no duty or legal obligation to Fireman’s Fund or Harry Linch to assume the defense of Harry Linch, or to pay any cost incurred by him, or on his behalf, or any judgment incurred by him; 5. That Fireman’s Fund failed to mitigate its damages by the negotiation of a settlement of the claim of Glunz against Harry Linch, when reasonable opportunities to do so were available; 6. That any injury or damages incurred by Fireman’s Fund in consequence of its contractual obligation to Harry Linch arose, not out of the loading or unloading of the vehicle insured by Continental referred to in Fireman’s Fund’s complaint, but rather as a result of causes other than the unloading of said truck, and, in fact, were incurred as a result of the negligent operation, maintenance, and use of the building exclusively operated and controlled by Harry Linch, and/or his negligence concurring with the negligence of a person, or of persons, other than Continental, which negligence did not arise as a result of the loading or unloading of the truck insured by Continental; 7. That Continental owed no duty to Harry Linch or to Fireman’s Fund under the policy of insurance referred to in Fireman’s Fund’s complaint in that the proximate cause of the injuries and damages sustained by Chris Eugene Glunz referred to in Fireman’s Fund’s complaint, was due to the defective construction, design, maintenance, and use of the building operated and controlled by Harry Linch; 8. That in Civil Action No. 20151 in the District Court of Jefferson County, Colorado, wherein Chris Eugene Glunz was the plaintiff and Petroleum Transport Company, i. e. Petco, was a defendant, and Harry Linch was a defendant and third-party plaintiff (vide supra) a judicial determination was made that Petco was not negligent and was not legally responsible to respond in damages to Chris Eugene Glunz, and that said injuries and damages did not arise as a result of the unloading of the truck insured by Continental under the policy of insurance referred to in Fireman’s Fund’s complaint, and said judicial determination constitutes res judicata as to the claim of Fireman’s Fund against Continental that the damages set forth in its complaint by Fireman’s Fund were incurred as a result of the unloading of said truck, and operated and operates as a bar to Fireman’s Fund’s right of recovery therefor; 9. That Harry Linch was not using the truck, insured by Continental at the time of the alleged accident of Chris Eugene Glunz, and that the said Harry Linch was not entitled to any coverage as an additional insured under Continental’s policy of insurance, and that, as Fireman’s Fund’s right to recovery