Allied Mutual Casualty Company v. Askerud
| Citation | 94 N.W.2d 534,254 Minn. 156 |
| Decision Date | 09 January 1959 |
| Docket Number | No. 37533,37533 |
| Parties | ALLIED MUTUAL CASUALTY COMPANY, Respondent, v. Haakon ASKERUD and Harry Askerud, Appellants. |
| Court | Supreme Court of Minnesota (US) |
Syllabus by the Court
1. In resolving doubts as to the meaning to be given the terms of an insurance contract, the court will note the purpose for seeking insurance and will avoid an interpretation which will forfeit rights which the insured may have believed he was securing but which, because of the failure of the insurer to use clear language, are cast in doubt.
2. The provision in a general liability policy covering specified premises which exempts from liability injury to persons 'engaged in the employment of the insured' refers to persons employed to do certain work pursuant to a contract for hire and not to a member of the family of the insured who voluntarily and gratuitously assists the insured in some activity on the premises.
3. A provision in a comprehensive personal liability policy relating to risks in connection with certain premises of the insured, which contains the exclusionary clause that it does not apply to risks growing out of 'any business pursuits of an insured,' contemplates exemption of liability for a type of activity in which persons are regularly engaged for the purpose of livelihood or for gain, such as a trade, profession, or occupation, and does not apply to afterhour endeavors of the insured which are unrelated to a commercial enterprise.
4. Where there is a conflict between printed clauses in an insurance policy and typewritten provisions inserted at the time the policy is issued, any ambiguity resulting therefrom is resolved against the insurer unless the conflict can be removed by giving to each clause a different but a reasonable meaning in harmony with the policy as a whole.
5. If the written and printed portions of a policy cannot be reconciled by any reasonable construction, the former will control.
6. A policy of insurance, like any other contract, is to be so construed as to give effect to the intention of the parties as it appears from the entire instrument.
Philip Richardson, Kenneth K. McMillan, Austin, for appellants.
Hugh V. Plunkett, Plunkett & Plunkett, Austin, for respondent.
This is an action by an insurer for an injunction and a declaratory judgment as to its duties and liabilities under two insurance policies in respect to a personal injury suit which is now pending against the insured.
A summary of the facts as they appear in the record shows that Harry Askerud, the insured, and LaVerne Turvold, a close friend, had an oral understanding that they would combine their efforts in so far as labor was concerned to construct a house on property which the insured owned adjacent to his home near Austin, Minnesota. Both men were employed full-time at the George A. Hormel Company plant in Austin and planned to work on the house in their spare time. The construction was financed by the insured and his wife by mortgaging the property. The insured and Turvold intended that when the house was completed Turvold would purchase it providing he could obtain the necessary financing, in which event he would pay the insured the value of the lot, all costs incurred in the construction, and a reasonable sum for the value of the insured's labor.
There is evidence that in the event Turvold could not obtain financing the insured planned to sell his own home and move into the new one; it does not appear that there ever was any intention to sell the home on the open market. In carrying on the project, the insured and Turvold employed various persons from time to time for wages, although they did most of the work themselves. The insured purchased the two insurance policies in question on May 4, 1955, from an agent of plaintiff who had his desk in the office of the building and loan association which financed the construction.
On October 22, 1955, Haakon Askerud, the father of the insured, was injured by the collapse of the scaffolding on which he was standing while assisting in shingling the roof of the new house. The father resided in Rochester, Minnesota, approximately 40 miles from Austin. Some years before he had lost his right arm below the elbow in a combine accident. From the evidence it appears that he occasionally visited his son in Austin, and on three or four occasions assisted his son on varying tasks. He did not come to Austin on any prearrangement to work or at any agreed times, nor was he ever paid for his labors. The plaintiff company by this action seeks a declaration of its duties and liabilities growing out of the injuries sustained by the insured's father.
The trial court concluded that the accident was not covered by either policy and that, therefore, the insurer was not obligated to defend the personal injury action. It entered judgment accordingly, and this appeal is taken from that judgment. Such further facts as may be necessary to an understanding of the issues will be discussed in connection with our examination of various provisions of the policies.
The 'General Liability Policy,' by a typewritten insertion, described the business of the insured as 'Building his own Private Residence.' The policy contained the following insurance agreement:
The hazards defined in the policy are described in this language: Under the declarations of the policy the 'operations' appear to be more particularly described by a typewritten insertion as:
'Carpentry in the construction of detached private residences for occupancy by one or two families, including installation of interior trim, builders' finish, cabinet work and the construction of private garages in connection with such structures.'
1. The plaintiff company denies liability on the ground that the construction of a dwelling does not fall within the division of hazards as contemplated by the insuring agreements. In discussing the provisions with reference to 'Premises--Operations,' plaintiff company argues that the risk is not insured, because (a) the house was being built for resale at a profit and (b) the insured was engaged in a joint venture with his neighbor, LaVerne Turvold, and it asserts:
'* * * The voluntary expansion of these operations by the insured without seeking endorsement by the plaintiff, or even notifying the plaintiff, cannot operate to extend coverage to such expanded operations.'
It should be kept in mind that the record establishes that this policy was purchased in the insurance department of the building and loan association which financed the building of the home. The agent was fully aware that the plaintiff was seeking insurance for liability, not upon premises on which he was living but upon premises on which a building was under construction. The insured told the agent that he wanted 'full coverage on the house' and that he wanted 'a complete all around coverage.' In expressing the nature of the insured's business, the policy describes it as 'Building his own Private Residence,' and in the classification of the risk set forth in the declarations the 'Premises--Operations' definitely refer to the 'construction of detached private residences.'
It appears satisfactorily from the record that the insurance company was aware of the fact that the insured 'wanted liability coverage on anything that was going on on the project.' It further appears that the typewritten clauses inserted in the policy are descriptive of the nature of the premises and recognize that the risks insured are those inherent in the construction of a building. Accordingly, it cannot be fairly said that the...
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