Welders Supply, Inc. v. AMERICAN EMPLOYERS'INSURANCE CO.

• Decision Date: 12 February 1965
• Docket Number: No. 15512,15513.,15512
• Citation: 342 F.2d 972
• Parties: WELDERS SUPPLY, INC., Plaintiff-Appellee, v. AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellant. WELDERS SUPPLY, INC., Plaintiff-Appellant, v. AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

342 F.2d 972 (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.

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.

"(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 witnesses, Robert E. Hess:

"Q. (By Mr. Wegener) Now, from all your observations of the plant as you saw it on the 15th day of December, 1960, were you able to form an opinion as to what caused this explosion or this loss?

* * * * * *

"A. Yes.

"Q. What was your opinion based on?

"A. Well, on the plant conditions, including this drier, pipelines, compressor.

"Q. Tell the jury what your opinion was as to the cause of the destruction of the manufacturing system.

* * * * * * "A. Well, I believe that the thing was caused by an explosion or dissociation of acetylene within the high pressure drier.

"Q. When dissociation takes place within the high pressure drier, will you tell the jury what normally occurs in the dissociation as a result thereof?

"A. Well, there is a great increase in temperature, which we covered in a previous question, too, a little, in that the molecule of acetylene breaks down into solid carbon, carbon black or soot; and the hydrogen is greatly expanded by the heat released from those molecules, so that the pressure runs up to tremendous heights. In my opinion, there seems to be no way to measure that at the moment of an explosion of that size. As I said, too, before, it usually results in the rupture of the containing vessel or pipeline, in the nature of an explosion, it happens within.

"Q. What kind of reaction does dissociation resulting in explosion normally result thereafter? Is there a chain of events normally set off by dissociation at a given point of acetylene gas?

"A. Well, it can lead — of course, the first or initial dissociation leads to what might be termed a chain reaction in that it\'s likely to follow the acetylene stream in one or both directions from the initial point; so that it\'s a continuing series of dissociations and explosions, all of them so closely connected, in my opinion, anyhow, as to be simultaneous. In other words, one continuous explosion, even though it is a chain reaction."

Mr. Hess' observations of the scene were part of the background of his opinion.

"Q. (By Mr. Wegener) Would you tell the jury what the condition was of the manifold lines in the filling room, as you observed them on the 15th day of December?

"A. Well, two of the lines were ruptured or split open.

* * * * * *

"Q. Did you observe the area of the building insofar as the northwest corner of the filling room?

"A. Yes.

"Q. What did you see there?

"A. Well, that\'s the area where this drier was located. I think this is a part of it on the table there, at the moment. That had been torn up in the condition that you see — at least, a section of it. The rest of it was widely scattered probably.

"Q. Did you observe any carbon black in this filling room on that date?

"A. Oh, yes.

"Q. What would be the source, if you know, of the carbon black located in the filling room?

"A. Well, undoubtedly from acetylene gas.

"Q. From what results of acetylene gas?

"A. Well, the combustion of acetylene, under certain circumstances, will release some carbon black because it\'s insufficiently supplied with oxygen. Of course, in the case of an explosion, it\'s apt to be heavier and more in evidence because there is no oxygen present to support the combustion of it following —

* * * * * *

"Q. Did you make an observation on the 15th insofar as Plaintiff\'s Exhibit No. 63?

"A. That\'s the one you just were looking at.

"Q. That is the large piece there on the table.

"A. Yes, I did.

"Q. Can you state what that piece is?

"A. Well, it\'s the top end of this so-called high pressure drier or dehydrator hydrator or dehumidifier, various names.

"Q. Is that the part located in the northwest corner of the filling room?

"A. Yes.

"Q. What were your observations pertaining to the high pressure drier?

"A. Well, that it had been ruptured or fragmented by explosive force."

Mr. Hess' qualifications are challenged by defendant-appellant, but it appears that he had worked a lifetime in the gas industry, much of it directly associated with acetylene gas production in high supervisory capacities. He also had helped install the machinery at the Welders Supply plant, and had the advantage of being called to the scene of the explosion on the day it occurred. We feel that the Trial Judge was correct in leaving the testimony given above to the consideration of the jury.

Defendant's theory of the initial explosion is effectively set forth by his eminently qualified expert, Dr. Bernard Lewis:

"Q. (By Mr. Crocker) Will you tell the ladies and gentlemen of the jury what your opinion is?

"A. My opinion is that the initial explosion took place in the acetylene filling room, in the room itself, and not within the pipe system of the filling equipment; as it could not have taken place inside of the manifold pipes or the drier, but my opinion is that the initial explosion occurred in the free space of the room itself.

"Q. Would you explain to the members of the jury why you have that opinion?

"A. In the

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