342 F.2d 972 (6th Cir. 1965), 15512, Welders Supply, Inc. v. American Emp. Ins. Co.

Docket Nº:15512, 15513.
Citation:342 F.2d 972
Party Name:WELDERS SUPPLY, INC., Plaintiff-Appellee, v. AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellant. WELDERS SUPPLY, INC., Plaintiff-Appellant, v. AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellee.
Case Date:February 12, 1965
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 972

342 F.2d 972 (6th Cir. 1965)

WELDERS SUPPLY, INC., Plaintiff-Appellee,

v.

AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellant.

WELDERS SUPPLY, INC., Plaintiff-Appellant,

v.

AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellee.

Nos. 15512, 15513.

United States Court of Appeals, Sixth Circuit.

February 12, 1965

Page 973

Edward D. Crocker, Cleveland, Ohio, Edward D. Crocker, Thomas V. Koykka, Charles R. Sharp, Arter, Hadden, Wykoff & Van Duzer, Cleveland, Ohio, on brief, for American Employers' Ins. Co.

Stuard Wegener, Covington, Ky., for Welders Supply, Inc.

Before CECIL and EDWARDS, Circuit Judges, and McCREE, District Judge.

EDWARDS, Circuit Judge.

This suit is a sequel to the destruction by explosion and fire of plaintiff-appellee, Welders Supply, Inc.'s, acetylene gas plant in Cleveland, Ohio, on December 14, 1960. The defendant-appellant, American Employers' Insurance Company, was one of eight insurance companies which had insured portions of the total risk represented by this operation. Defendant had issued plaintiff a 'Boiler and Machinery' policy limited to $100,000 per accident and limited to an 'accident' to insured objects which were enumerated. These objects were a motor, a generator, a compressor, piping and manifolds which constituted the machinery for manufacturing acetylene gas.

The policy defined 'accident' as follows:

'Definition of Accident. As respects any object which is designated and described in the schedule, 'accident' shall mean:

'1. a sudden and accidental breaking of the object, or any part thereof, into two or more separate parts, but not the breaking of any gasket, gland packing, shaft seal or diaphragm, nor the loosening of any assembled parts;'

It also contained exclusion clauses of which the following is pertinent to this appeal:

'EXCLUSIONS

'This policy does not apply: '(2) under coverage A to loss

'(a) from fire concomitant with or following an accident or from the use of water or other means to extinguish fire.

Page 974

'(b) from an accident caused directly or indirectly by fire or from the use of water or other means to extinguish fire,

'(c) from a combustion explosion outside the object concomitant with or following an accident, * * *.'

Undisputed facts show that at 8:30 on the morning in question two of plaintiff's employees had started up the acetylene plant and had just finished a 'second' charge on 40 acetylene tanks when an explosion occurred. The severity of this explosion is in dispute, but it is clear that it seriously injured one of the employees, blew one 12-foot wall completely out, and occasioned considerable damage to the other walls and to at least some of the machinery in the building.

Immediately after the explosion three other employees of plaintiff who were in the office area ran to the acetylene plant and effected the rescue of the injured man. Within a minute or two after all personnel had left the damaged premises, there was a second explosion which was followed by fire and a series of explosions which ultimately reduced the whole plant to ruins.

Two questions of substance are presented by this appeal. The first is: Was there evidence from which the jury could have found that the initial explosion occurred inside insured machinery?

The second is: Was there evidence to support the jury's determination that the initial explosion (if covered) did $40,953.70 damage to property covered by the policy?

The answers to these two questions we have searched for in an appellate record containing over 500 printed pages, and a good number of physical, photographic, and documentary exhibits.

This was obviously one of the best tried jury cases which this court has reviewed this year. By so saying we are, of course, implying an answer to the questions above because our ultimate conclusion is that both questions were the subject of vigorous factual controversy which ultimately was for the jury to determine.

The general rule in relation to such insurance controversies is that all factual disputes bearing on whether a loss is within the coverage of a policy of boiler insurance are for the jury to determine. Travelers' Indemnity Co. v Parkersburg Iron & Steel Co., 70 F.2d 63 (C.A. 4, 1934); Travelers Indemnity Co. v. B & B Ice & Coal Co., 248 Ky. 443, 58 S.W.2d 640 (1933).

And the rule of appellate review which in this diversity suit governs our consideration is stated thus:

'We are concerned merely with finding whether there is substantial evidence to support the verdict.' American Steel & Wire Co. v. Sieraski, 119 F.2d 709, 710 (C.A. 6, 1941). See also Dickerson v. Shepard Warner Elevator Co., 287 F.2d 255 (C.A. 6, 1961); Lovas v. General Motors Corp., 212 F.2d 805 (C.A. 6, 1954).

As to the first material appellate question, plaintiff's proofs tended to show that the source of the initial explosion was the 'dissociation' or decomposition of acetylene gas in the high pressure dryer and adjacent piping in the filling room. Plaintiff's theory is set out succinctly in the testimony of one of his expert...

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