Maryland Casualty Co. v. Morrison

• Decision Date: 10 December 1945
• Docket Number: No. 3162.,3162.
• Citation: 151 F.2d 772
• Parties: MARYLAND CASUALTY CO. v. MORRISON et al.
• Court: U.S. Court of Appeals — Tenth Circuit

151 F.2d 772 (1945)

MARYLAND CASUALTY CO. v. MORRISON et al.

No. 3162.

Circuit Court of Appeals, Tenth Circuit.

November 5, 1945.

Rehearing Denied December 10, 1945.

Coleman Hayes, of Oklahoma City, Okl. (Ames, Monnet, Hayes & Brown, of Oklahoma City, Okl., on the brief), for appellant.

B. H. Carey, of Oklahoma City, Okl. (S. J. Clay, of Oklahoma City, Okl., J. A. Rinehart, of El Reno, Okl., Leslie D. Ringer, Miley, Hoffman, France & Johnson, and Cantrell, Carey & McCloud, all of Oklahoma City, Okl., R. H. Morgan, of Watonga, Okl., Rittenhouse, Webster, Hanson & Rittenhouse and William R. Herring, all of Oklahoma City, Okl., on the brief), for appellees.

Before BRATTON, HUXMAN, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

The appellant, Maryland Casualty Company, brought this suit for a declaration of its rights and liabilities under an automobile public liability insurance policy issued to one of the appellees, Ward Morrison, Jr., by the terms of which it agreed to pay all damages to persons or property "caused by accident and arising out of the ownership, maintenance or use of" certain designated vehicles, subject however to the provisions of an endorsement which provided: "It is agreed that such insurance as is afforded by the policy does not apply to accidents arising out of explosion of butane gas and other volatile gases."

In addition to the insured Morrison, and his employee Hudson, the complaint named as defendants third parties who are asserting claims against the insured and Hudson by reason of the alleged negligent operation of one of the vehicles covered by the policy, and other persons similarly situated have intervened. The complaint pleaded the policy and alleged that on March 31, 1944, one of the insured's trucks, while hauling a large quantity of butane and propane gas, caught fire and exploded, causing damage to persons and property; that certain named defendants have either sued or threatened to sue the insured for damages alleged to have been sustained by the negligent operation of the insured truck. It was alleged that according to the contention of insured, the complainant as insurer under the policy, was obligated to defend against the claims for damages, and to indemnify or pay any losses arising out of the negligent operation of the truck, but that since the claimed damages arose out of an explosion of butane gas, they are not within the coverage of the policy, the insurer is not liable therefor, and prays for a judgment declaring its nonliability under the policy. Issues were joined by answer of the insured and other defendants who were asserting claims for damages against the insured by reason of his alleged negligent operation of the truck. As thus cast, the issues under the agreed facts present an actual controversy between citizens of different states, involving far in excess of $3,000.

On a trial of the case, it was agreed that on March 31, 1944, a truck owned by Morrison, which had been recently loaded with butane and propane gas at a refinery near Oklahoma City, was being driven in a northerly direction in the 4300 Block of South Robinson Street by Hudson, as an employee of the insured. When the driver discovered that the truck was on fire, he left it to call the fire department. The truck rolled against the street curb, where it continued to burn violently, igniting and damaging a lumber yard and residence nearby. While the firemen were attempting to extinguish the flames and control the burning buildings, the truck exploded with great force and violence, throwing fire, burning liquid and parts of the tank and truck for considerable distance, causing injuries and damage to persons and property in the surrounding area. It was agreed that certain of the parties named as defendants and intervenors sustained bodily injuries and damages from the hostile fire prior to the explosion, while other defendants and intervenors sustained bodily injuries and damages from the flying particles of the tank and transport when the explosion occurred. On this record, the appellant concedes liability under its policy for all damages caused by the fire prior to the explosion, but denies liability for the asserted damages directly resulting from the explosion, on the theory that such damages arose out of the explosion of butane gas and was therefore specifically excepted from coverage of the policy. The sole and only question presented to the trial court, and by this appeal, is whether the asserted damages arose out of the explosion of butane gas within the meaning of the restrictive clause in the policy.

Based on the agreed facts, the trial court found that the "resultant explosion was proximately caused by, incidental to, and occurred during the course and progress of said precedent negligent and hostile fire." The court concluded that since the hostile fire preceded and proximately caused the explosion, the injuries and damage to persons and property directly resulting from the flying particles of the tank and truck after the explosion occurred did not "arise out of an explosion of butane gas" within the meaning and intendment of the restrictive rider. Accordingly, it held that the entire loss asserted was a "loss by fire" for which the policy afforded coverage.

The parties have not cited, nor has our search revealed, any case by an Oklahoma court or any other court, construing the same or similar provisions in a public liability insurance policy under comparable facts. The trial court's reasoning and conclusions are bottomed upon the philosophy of cases involving so-called explosion clauses in fire insurance policies, which provide insurance for loss or damage caused directly or indirectly from explosion, unless fire ensues, and...