*1 an making when landing, for a takeoff ground When or otherwise. highway, on a public landing emergency it air, on the whether ground as an used airplane, being an vehicle; imagine airplane and I cannot motor not a on land. a motor vehicle or used as either designed Plaintiff, v. Wisconsin Gas Com Neumann, Natural Indemnity pany others, Defendants: Heuser, Defend Defendant Appellant: Company, ant and Respondent.* Company, Insurance
Farmers Mutual Automobile Same, Defendant and Same, Defendants: Plaintiff, v. Same, Defendant and Respondent.* Appellant: 27, 1965.
April April * denied, costs, rehearing Motion for with 25, 1965. June *4 For the there was a brief appellant by Hippenmeyer & of Waukesha, and oral Reilly argument by Richard S. Hippenmeyer. Love, Davis & a brief there was
For the respondent T. Robert Waukesha, oral McGrow argument McGrow. this
Wilkie, issues are presented appeal: Two J. as a defendant under First, be named party can appellant statutes ? the direct-action for is liable in
Second, any degree assuming respondent does the insurance from explosion, damages resulting his ? cover policy Action Travelers.
Direct Against can be named Indemnity Company Appellant as a in this action if only “Hy-Hoe” properly party is a motor vehicle to the direct- excavation unit pursuant sec. 204.30 statutes, sec. 260.11 (4). action (1) no-action clause. the usual (b) contains Paragraph policy stated, the otherwise word “automobile” declares that unless mean “motor vehicle.” then is deemed to Subparagraph (3) “Hy-Hoe” category by eliminates declaring: shall be “The described deemed an equipment following or carried on an automobile as automobile while towed for while solely above defined purposes transportation locomotion, but if for not otherwise: solely being operated shovel, crane or ditch or any of the non-crawler type, power . . .” trench digger; premium
Respondent urges provisions the conclusion that the unit was “Hy-Hoe” support policy like the truck itself. A rider to a motor vehicle considered truck and describes the specifically excavating Premiums are extended four seven unit. coverages, Liability,” Lia- namely: “Bodily Injury “Property Damage A and “Collision.” bility,” typewritten “Comprehensive,” in a box labeled “Rate **.” only” appears notation “Truck asterisks indicate that rate is The double “Applicable
-d- such Fire, Comprehensive, Theft and Windstorm be coverages afforded may with to the respect automobile.” contends Respondent that the on the coverage truck is thus limited to the four named coverages while the “Hy-Hoe” is afforded under protection all seven categories. Appellant contends that the words “Truck only” indicate that designated coverage to the applies truck and only that there no is under coverage any for the category “Hy-Hoe.” The rider is ambiguous. Resolving ambiguities in favor of the insured, we believe that an entirely different construction reasonable, is most that the namely, “Collision” to the limited while both the truck truck and the “Hy-Hoe” covered the other are under three named categories. In event, however, this construction any does not mean that is deemed an automobile “Hy-Hoe” or motor vehicle under policy.
Even if the did not expressly provide vehicle, not a motor facts “Hy-Hoe” present would be controlled v. Smedley nonetheless Milwaukee Auto Ins. involved an Smedley Co.1 action for mobile personal a caused negligent operation hydraulic injuries mounted on a truck chassis. In which was crane discussing crane not the was the operation operation whether 260.11 within the meaning a motor vehicle sec. Stats., the court said: if the unit were driven on true undoubtedly being
“It is locomotion, it would be street for purposes a public In the record there are several vehicle. a motor considered unit. classi- Arbitrarily of this and a lithograph photographs reference truck or a without hydrocrane either as a it fying When does not solve problem. use particular of transporting for the purpose inis locomotion unit motor of a vehicle the essential crane, aspects takes on it the unit arrives at its However, after some purposes. 460, 107 (2d)W. N. 12 Wis. *6 and the crane is oper- ceases destination, the mobile aspect the unit. The test under immobile as an independent ated the is time of the accident unit at the is whether statutes controlled, a motor being- as used, operated managed, time At the of those words. in the ordinary meaning vehicle the crane was was stationary, the the unit of accident immobile stabilized, by outriggers. and rendered supported, vehicle. Plaintiff was then used as a motor The unit was not crane, the the not of the of operation injured by operation is within do not believe such use unit the truck. We con- management the the of meaning negligent operation, 2 260.11, as Stats.” motor vehicle used in sec. trol of a 3 Norton v. Huisman reached in A similar result was a rod which connected was injured by where the was plaintiff machine which turn to a sewer-cleaning self-powered to a truck chassis. attached Norton not are Smedley argues
Respondent in the instant case the truck positioned because applicable amended the Neumann in the street abutting property. But Smedley contains an this effect. allegation complaint and Norton both hold that the is in the where negligence are not they machines “motor operation independent the 260.11 vehicles” within sec. or sec. (1), meaning Stats., and direct action the 204.30 insurance against is not The fact that here the truck permitted. company on the street have been situated is not actually decisive may machine where the operation independent alleged is of the accident. Norton holds to implicitly cause this effect since in that case truck which the upon sewer-cleaning mounted was device was street. always parked To accident with the connect of the truck operation unit and “Hy-Hoe” thus to distinguished permit Travelers, direct action against asserted for the respondent Id. at 466. N. Wis. 116 W. that the first time on oral main could have been argument gas severed exerted when the truck back pressure moved and forth over filled-in trench to down the dirt. pack There is no to this effect in the com- specific allegation or in facts. Even if the plaints stipulated plaintiffs to amend their make permitted complaints allegation, if that indeed their of one alternative theory in which way occurred, accident such any negligence part Heuser not would be covered as hereinafter thus joinder discussed and Travelers would be unavailing. The crucial whether direct action question, against *7 not, is is or whether Travelers’ permitted covered policy of alleged negligence respondent.
Policy Coverage. At oral for counsel both sides argument indicated even if Travelers were not defendant proper party they desired to have the resolved on coverage question this appeal. Thus, in any prematurity resolving coverage question has been waived. an
Involved is ordinary comprehensive liability policy which covered Heuser became damages obligated pay the result of personal or injury (Coverage A) property caused an accident. damage (Coverage C) by Travelers’ “exclusions, was to be to the subject conditions and other and if terms” there was no in a entry insurance was be not to space, “afforded with premium to the each respect coverage opposite premium No space.” for charged premium “aggregate under Cov- products” A or C erage (bodily Coverage injury) (property damage— except automobile). Coverage “Products (Including Completed Operations)” expressly excluded schedule of the declarations. (d) was defined under hazard” paragraph The term “products including: “Conditions” as of (g) (2) occurs such operations the accident “operations, if occurs away abandoned and been or have insured; the named owned, rented or controlled by premises because be deemed incomplete shall not provided, operations or because further opera- or performed improperly tions defectively an provided agreement; bemay pursuant required to be not be deemed further, ‘operations’ shall following or pick-up of meaning paragraph: (a) within car, the mainte- a railroad from or onto (b) except delivery, insured, or in behalf of the owned used nance vehicles tools, equipment existence of uninstalled (c) for which materials (d) operations abandoned unused declarations stated division (a) the classification (Emphasis operations.” includes completed specifically added.) since the oc- contends that accident In essence appellant 18th, after the work had days sixteen curred November the express provi- been is excluded coverage completed, because the Conditions oper- sions paragraph (g) (2) there contends that been completed. Respondent ations had alternative theories: acci- under two (1) 2d or 3d (while injury dent on November occurred Heuser’s out *8 occurred on November 18th), grows to him at that earlier of attributable that occurred negligence and, at time, his not the time completed operations therefore, do not the exclusion provisions policy apply; the exclusion do not provision^ apply (2) products-hazard nor neither 3 since the paragraph (g) (1) (2) contemplates construction work Heuser. performed The raised here is one of first coverage question impression in this One of the relevant decisions in other state. juris- dictions is Connecticut case of Co. v. Smedley Employers Co.4 In Mut. Ins. that case the Liability insured operated 4 (2d) 510, 123 143 Atl. Conn. 755.
419 a warehouse and the release to a was sued when deliveryman of a caused the wrong product storage subsequently ruin of of cream. The a ice large quantity liability policy Ex- excluded for hazard. specifically products for additional in the case cept proviso present instant that the were not to be operations deemed when incomplete defectively in the performed, products-hazard definition identical to the definition in found virtually Travelers’ In on policy. any liability holding part insured delivering not cov- wrong product the court ered said: policy, both
“Although complaints alleged negligence in part releasing at its Smedley’s wrong product premises Haven, in New both further that no alleged to injury prop is, no accident to erty until the property —that —occurred was used at New London wrong product by Mohegan of ice cream. manufacture the took injury place long ended a had and at operations Smedley place away 5 from its premises.” “Since the in the actions complaints brought against showed on their face Smedley arose out of a that the accident property hazard,’ in defined the second
‘products definition, and that paragraph activities Smedley’s occurred, services had been at the time the accident the defendant was under no duty to defend on behalf 6 Smedley.”
In Brothers Electric Berger Motors v. New Amsterdam Co.7, a New York case Casualty relied on the Connecticut court in a contractor was he Smedley, sued when motors installed incubators two improperly subsequently (nearly months caused later) number of damage large turkey 517, page Id. 143 Conn. at 123 Atl. at 759. 6 Ibid. N. Y. N. E.
420 of which one policies, two insurance had The contractor
eggs. have after operations “occurring to accidents not did apply court, in ruling against or abandoned.” been completed said: coverage, all and removed its work the “When plaintiff farm from the Chillson and materials tools,
of its
equipment
had occurred.
23, 1940,
Nothing
no accident
on December
Not until
no
whatever.
There was
mishap
had happened.
occur,
accident
incubators did any
in the
eggs
placed
the accident
contends, that
assume, as the plaintiff
if we
and
effect
20, 1941,
the cause and
‘when
on February
did occur
accident,’
resulted
this accident
into a consummated
merged
of installation
the work
defective workmanship
we
to
yield
be so unless
This must
was completed.
not com-
that the work was
and hold
contention
plaintiff’s
defective; but
because
wiring
at that
time
pleted
clauses would
excluding
the language
so
construe
these clauses
and
By
them of all meaning
purpose.
deprive
liability
to limit the casualty company’s
intended
parties
and
work
to accidents occurring during
progress
after the work was
for accidents
occurring,
to exclude
If that
the result of defective workmanship.
as
completed,
used,
the insurer
be not the
meaning
plain language
for defective
remain liable indefinitely
workmanship
would
is
that defective work
never
until
theory
complete
upon
corrected. But this is a risk
the defect is discovered and
intended to exclude from the
which the
parties
these
and we cannot read
intended
policies
policy,
risks,
cover such
language
plain
unambigu-
8
ous.”
similar
cases
Other
involving
completed operation provi-
are in accord with
sions
disputed policy
Berger
Smedley.9
527,
page
(2d)
Id.
Sales & Inc. 266; (1954), 82 R. I. 110 Atl. Maryland Casualty Baker v. Co. 73 R. I. 56 Atl. 920; Fidelity Guaranty Butler v. United States & Co.
421 Mason,10 on Kendrick v. Heuser respondent Relying counters that and not the accident arose injury 18th, November the accident occurred on actually that weakened, 2d line November when the gas allegedly that if even 3 considered paragraph (2) accordingly (g) accident occurred before tortious applicable operations Kendrick does not stand for this completed. But decision court proposition. recognized “accident,” within the took when meaning policy, place occurred.11 This is with the explosion consistent general rule.12
The court concluded that there was
in Kendrick
because
The con-
ambiguity
policy provisions.
tractor had
main
gas
while
trenches
punctured
digging
a sewer
Sometime later an
system.
occurred
explosion
caused both
injuries
which
personal
property damage.
The contractor had a comprehensive
general
which did not
Products” or
apply
“Aggregate
“Products
Hazard” liabilities. The definition of “operations” under
348;
614,
(2d)
Tenn.
277
Foster Trailer Co. v.
S. W.
United States
Fidelity
181,
Guaranty
(1950),
&
Co.
190 Tenn.
228
(2d)
S. W.
107;
Indemnity
v.
Hutchinson Gas Co.
Phoenix
Co. (1939), 206
257,
847;
288
Pan
Ins.
Minn.
N. W.
American
Co. v. Cooper
102,
651;
(1957),
(2d)
Butane Co.
157 Tex.
300 S. W.
Hardware
Casualty
Bloomberg (1952),
550,
Mut.
Co. v.
72 Ohio L. Abs.
135
698;
(2d)
E.
Accident
(8th
N.
Standard
Ins. Co. v. Roberts
Cir.
794;
1942),
Sanitary
132
S.
(2d)
Specialties
Fed.
U.
Corp. v. Globe
Indemnity
774;
(7th
1953),
(2d)
Co.
Cir.
204 Fed.
Clauss v.
American Automobile and
1959),
Ins. Co.
Pa.
(D. C.
175 Fed.
Supp. 641.
10 (1958),
271,
(2d)
234
99
La.
So.
108.
11
295,
Id.
page
“The or handling manufactured, sold, in or a warranty goods products if the Insured, the Named ... handled distributed has posses- Insured relinquished accident occurs . . .” sion . *11 different, the the policy Although precise language the alternative same substantially case also contains present of “Products Hazard.” definition avoid to does liability, insurance company sought here, the of the under “Products operations portion unclear, the terms the Hazard” definition. policy Finding court decided that:
“ ‘The reference to the after the accident occurring opera- tions have been and abandoned at or away completed owned, rented or the means by controlled insured premises more than the accidents reason of nothing occurring by sell, to of goods, any handling products agreement been rent or deliver has goods completed goods ” 14 been have abandoned.’ and further that: are constrained to conclude that the
“We exclu- sion herein issued the defendant policy provisions to Mason herein for the are reason that Mason inapplicable no but handled was as a contractor products engaged solely and the exclusion of the no have provisions policy application construction work him. The was performed by Mason for acts issued fully against liability protect committed him his negligence during performance contract. The tort which was cause of the proximate Mason, supra, Kendrick v. page footnote at 115. at Id. sustained in damages fact and in plaintiff law com- mitted during performance construction contract. Both the accident and the injuries therefrom were resulting about not from the brought and sewer accepted but from system the direct result of the acts of negligence committed its construction. The during policy covering said accidents for which premiums then charged in full force effect; conclusion is inescapable the insurer is therefore liable in insured, solido with its Mason.” courts,
Other faced with similar facts and policy provi sions, have the rationale adopted illustrated in Kendrick.16
The two of similar interpretations are policy provisions Moreover, irreconcilable. the cases each supporting view cannot be on their readily distinguished facts. The Kendrick decision not only ignores express language definition under “operations” “Products Hazard” but also that whole renders definition of no effect when considering the activities as here of a construction contractor. The definition of the “operations” subject policy an contemplates insured who is engaged that are operations something than more think handling *12 We there is goods. nothing about the in ambiguous policy provisions Thus, respect. rationale not Smedley-Berger only appears be the view but the majority soundest. insurance contract covered injuries damages out of arising accidents that occurred before the of the operations exca- 15 Ibid. 1 6 King v. Mason 299, (1958), 117; 234 La. Clark v. (2d) So. 751, Hacker (1956), 806; 345 Mich. 76 N. W. (2d) McAllister v. Century Indemnity Co. Super. 289, 24 N. of Hartford J. 345; Reed Roller Bit Co. v. (2d) Atl. Ins. Employers Co. Pacific 1; (5th 1952), Nielson v. Cir. 198 Fed. (2d) Indemnity Travelers Co. 1959), (D. 648, C. Iowa Supp. 174 Fed. (8th affirmed Cir. 455; 1960), Royal Hercules Co. v. 277 Fed. Indemnity Co. (D. 1959), 746; Heyward C. N. Y. Supp. Fed. v. American Casualty Co. (D. 1955), C. S. C. Supp. 129 Fed. 3d; on November had been contractor
vating 18th, until November did not occur since this accident there no coverage. and had been completed operations be, from contract it must results limited as always Coverage, to cover this risk. did contract parties simply not reversed. Court.—Order By in C. (concurring part, dissenting part). Currie, J. IWhile concur in that of the court’s which part opinion holds that cannot be appellant Indemnity Company named as a defendant under our direct-action statutes party facts, under the instant I must dissent from that respectfully which holds there no under part opinion I would follow Kendrick appellant’s policy. precedent v. Mason 234 La. 99 So. 108. Here main, property gas company, gas actually set damaged by “Hy-Hoe” which excavating operations in motion the chain of causation later which resulted in the I cannot see how explosion. would products liability coverage be to this Here situation. applicable type product was the trench which was excavated and filled. later Nothing with to that after happened respect completion work to cause the explosion.
I am authorized to state that Mr. Fairchild Justice Mr. in this join opinion. Beilfuss Justice