Aetna Ins. Co. v. Grady White Boats, Inc.
| Decision Date | 25 May 1983 |
| Docket Number | No. 82-685,82-685 |
| Citation | 432 So.2d 1082 |
| Parties | AETNA INSURANCE COMPANY, Plaintiff-Appellee, v. GRADY WHITE BOATS, INC., et al., Defendant-Appellant. |
| Court | Court of Appeal of Louisiana — District of US |
Haik, Haik & Minvielle, Edwin S. Patout, New Iberia, for plaintiff-appellant.
Voorhies & Labbe, Amos H. Davis, Allen, Gooch & Bourgeois, Arthur I. Robison, Hiatt, Fazzio & Kuehne, Anthony Fazzio, Lafayette, Gibbens & Blackwell, John Blackwell, New Iberia, Camp, Carmouche, Barsh, Hunter, Gray & Hoffman, Randy J. Fuerst, Lake Charles, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, for defendant-appellee.
Before DOMENGEAUX, FORET and CUTRER, JJ.
Aetna Insurance Company (plaintiff) brought this action to recover the sum of $9,000, which it paid to two of its insureds for the loss of a boat owned by them. One of the named defendants is Himel Marine, Inc. (Himel). Himel brought a third party demand against its comprehensive general liability insurer, United States Fidelity & Guaranty Company (USF & G). In response, USF & G filed a motion for summary judgment.
The trial court, after hearing USF & G's motion, rendered judgment in its favor, dismissing Himel's third party demand with prejudice.
Himel appeals and raises the following issues:
(1) Whether the trial court erred in finding no genuine issue of material fact with respect to the insurance coverage afforded Himel by USF & G; and,
(2) Whether the trial court erred in finding no genuine issue of material fact with respect to USF & G's duty to defend Himel.
FACTS
In its petition, plaintiff alleged that two of its insureds (Alvin J. Toups, Jr. and Steven Wright) were the owners of a vessel which sank in the Gulf of Mexico after striking an oil rig. On the day of the accident, plaintiff had in full force and effect a policy of insurance on the vessel. Pursuant to the terms of that policy, plaintiff paid its insureds $9,000. It then instituted this action alleging that it was legally and/or contractually subrogated to the rights of its insureds. Plaintiff's insureds had purchased the vessel from Himel, and it alleged that Himel had committed certain acts of negligence which were a cause-in-fact of the accident. Plaintiff also sought to assert a cause of action against Himel on the basis of strict liability.
Himel, after answering plaintiff's petition, filed a third party demand against USF & G in which it alleged that USF & G had issued it a contract of insurance providing coverage for completed operations hazard and product hazards. In addition, Himel alleged that the contract of insurance provides that USF & G shall have the right and duty to defend any suit brought against it, and that USF & G had refused to defend it against plaintiff's suit. USF & G then filed its motion for summary judgment alleging that no genuine issue of material fact existed and that it was entitled to judgment as a matter of law.
MOTION FOR SUMMARY JUDGMENT
Himel contends that the trial court erred in granting USF & G's motion for summary judgment because there exists a genuine issue as to certain material facts, i.e., the coverage afforded by USF & G to it under the terms of the policy.
"COVERAGE B-PROPERTY DAMAGE LIABILITY" found in the comprehensive general liability insurance provisions of the policy reads as follows:
(Underscoring indicates policy language emphasis by darker print.)
Completed operations hazard is defined as follows:
(2) when all operations to be performed by or on behalf of the Named Insured at the site of the operations have been completed, or
(3) when the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.
Operations which may require further service or maintenance work, or correction, repair or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed completed.
The completed operations hazard does not include bodily injury or property damage arising out of:
Products hazard is defined as follows:
" 'products hazard' includes bodily injury and property damage arising out of the Named Insured's products or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs away from premises owned by or rented to the Named Insured and after physical possession of such products has been relinquished to others;"
Exclusions (n) and (o) found in the comprehensive general liability insurance provisions read as follows:
"This insurance does not apply:
* * *
(n) to property damage to the Named Insured's products arising out of such products or any part of such products;
(o) to property damage to work performed by or on behalf of the Named Insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith ....".
(Underscoring indicates policy language emphasis by darker print.)
Finally, "Named Insured's products" is defined as follows:
" 'Named Insured's products' means goods or products manufactured, sold, handled or distributed by the Named Insured or by others trading under his name, including any container thereof (other than a vehicle), but 'Named Insured's products' shall not include a vending machine or any property other than such container, rented to or located for use of others but not sold;"
In its brief filed in this Court, USF & G states that it has never denied that the policy it issued Himel provides coverage for completed operations hazard and products hazard. However, it argues that there is a significant difference between the extension of coverage for damages arising out of operations or the named insured's products, as opposed to the exclusion of coverage for damage to the named insured's products.
In its oral reasons for judgment, the trial court noted this distinction and stated that:
"A reading of the exclusionary language in this liability policy makes it clear to me that damage to the product itself is excluded from coverage, the purpose of the policy being a multi-peril liability...
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