Aid Ins. Services, Inc. v. Geiger, 9754
| Decision Date | 26 June 1980 |
| Docket Number | No. 9754,9754 |
| Parties | AID INSURANCE SERVICES, INC., Plaintiff and Appellant, v. Mel GEIGER, d/b/a Mel's Concrete Construction, Defendant and Appellee. Civ. |
| Court | North Dakota Supreme Court |
Anderson, Tossett & Dobrovolny, Minot, for plaintiff and appellant; argued by A. R. Tossett, Minot.
Kenner, Halvorson & Sturdevant, Minot, for defendant and appellee; argued by Harris P. Kenner, Minot.
This is an appeal from a summary judgment granted by the Ward County District Court, Northwest Judicial District, in favor of the defendant. We affirm.
This case arose out of a declaratory judgment action instituted by the plaintiff, Aid Insurance Services, Inc. (Aid Insurance), against the defendant, Mel Geiger (Geiger), doing business as Mel's Concrete Construction in Minot, North Dakota. The purpose of the action was to determine whether or not a comprehensive general liability insurance policy issued by Aid Insurance to Geiger afforded coverage for a property damage award obtained against Geiger in a prior lawsuit.
The facts are not in dispute. The record reveals that on January 30, 1978, Cloverdale Foods Company of Mandan, North Dakota, and Northstar Steel, Inc. of Minot entered into a contract for the construction of a large warehouse on Cloverdale's land, commonly referred to as the "Cloverdale Project". Northstar Steel subcontracted all concrete work on the project to Geiger, which included driveways, footings, walls, flooring, and foundations. Suffice it to say that a contract dispute arose over construction delays, faulty workmanship, and alleged defects in the building, and Cloverdale commenced a lawsuit against Northstar Steel and Geiger by the filing and service of a summons and complaint on March 30, 1979. Judgment was entered against the named defendants on October 18, 1979, in the amount of $143,019.96. By way of indemnity on its cross-claim, Northstar Steel obtained judgment against Geiger in the amount of $32,560.70 plus costs and disbursements in the amount of $1,350.95.
The trial court in the underlying breach of contract action found in its memorandum opinion that:
In connection with his concrete construction business, Geiger had procured a comprehensive general liability insurance policy from Aid Insurance which he sought to recover under. It is undisputed that the policy was in full force and effect throughout the duration of the "Cloverdale Project" and the ensuing litigation.
The insuring clause of the comprehensive general liability policy provides:
Coverage A. bodily injury or
Coverage B. property damage
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
"Exclusions
This insurance does not apply:
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality of the named insured's products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner ; (Emphasis added.)
(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 ; (Emphasis added.)
The policy defines "property damage" as:
"(1) physical injury to or destruction of tangible property, which occurs during the policy period, including loss of use thereof at any time resulting therefrom; or (2) loss of use of tangible property, which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period;"
After considering the pleadings and relevant case law, the district court determined in its memorandum opinion of December 10, 1979, that exclusions "(a) and (o) read together, are subject to more than one reasonable interpretation, one of which would allow for coverage as to Defendant's (Geiger's) claim." The district court determined that Aid Insurance was obligated under the insurance contract to pay the judgment of $33,911.65 plus interest at the legal rate, from October 3, 1979, in the amount of $401.29. The total judgment award thereby amounted to $34,312.94.
Summary judgment was entered on December 14, 1979. Aid Insurance has appealed to this court from that judgment.
The purpose of summary judgment is to allow for the prompt disposition of a case on the merits, without a trial, when there is no dispute as to the salient facts or when only a question of law is involved. Rule 56, N.D.R.Civ.P.; Pioneer State Bank v. Johnsrud, 284 N.W.2d 292 (N.D.1979). An insurance policy is a contract and the construction of a written contract to determine its legal effect is a question of law for the court to resolve. Stetson v. Blue Cross of North Dakota, 261 N.W.2d 894 (N.D.1978). Therefore, summary judgment was the proper method of disposition in the instant case. See Balsam v. Buehner, 278 N.W.2d 425 (N.D.1979). This court will independently examine and construe the pertinent provisions contained within the insurance policy issued by Aid Insurance to Geiger to determine whether or not the district court's construction of the relevant exclusionary provisions was in error.
As previously indicated, the basic comprehensive general liability policy at issue contains the following exclusion under Coverage B, Property Damage Liability, in subparagraph (o):
Geiger has conceded, for the sake of argument, that this provision, standing alone, would exclude coverage for the liability asserted by Northstar Steel against Geiger as a result of faulty workmanship performed on the Cloverdale Project. However, also as previously indicated, the insurance policy contains an exclusion in subparagraph (a) which Geiger contends provides coverage and which reads:
Aid Insurance contends that the comprehensive general liability insurance policy issued to Geiger does not provide coverage for the loss sustained, and further argues that exclusion (a) neither...
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