Atkins v. Hartford Acc. & Indem. Co.

• Decision Date: 20 July 1967
• Docket Number: Docket No. 1020,No. 1,1
• Citation: 151 N.W.2d 846,7 Mich.App. 414
• Parties: Samuel ATKINS, d/b/a Atkins Pharmacy, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, a foreign corporation, Defendant-Appellant
• Court: Court of Appeal of Michigan — District of US

Page 846

151 N.W.2d 846

7 Mich.App. 414

Samuel ATKINS, d/b/a Atkins Pharmacy, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, a foreign corporation, Defendant-Appellant.

Docket No. 1020.

Court of Appeals of Michigan, Division No. 1.

July 20, 1967.

Altero J. Alteri, Feikens, Dice, Sweeney & Sullivan, Detroit, for appellant.

George Stone, Detroit, for appellee.

Before LESINSKI, C.J., and BURNS and QUINN, JJ.

LESINSKI, Chief Judge.

A complaint was filed against plaintiff Samuel Atkins, doing business as Atkins Pharmacy, by Lester and Patricia Ann Farrar. The complaint charged the plaintiff with the negligent sale of pills composed of amobarbital, a habit forming drug, and subsequent mental and physical injuries to Patricia Ann Farrar as a result thereof.

Subsequently, the plaintiff filed a complaint against Hartford Accident & Indemnity Company alleging that an insurance policy, No. 35C694877, covering the year of October 15, 1962 to October 15, 1963, afforded it coverage for the defense of the Farrar suit. An answer was made, liability was denied by the insurer and a motion for summary judgment was then made by the insurer. The insurer contended that the plaintiff had purchased a comprehensive general liability policy with it but that the action brought by the Farrars was excluded by the products hazard provision of the policy. The term 'products hazard' as defined by the policy is as follows:

'(f) Products Hazard. The term 'products hazard' means

'(1) goods or products manufactured, sold, handled or distributed by the named insured or by others trading under his name, if the accident occurs after possession of such goods or products has been relinquished to others by the named insured or by others trading under his name and if such accident occurs away from premises owned, rented or controlled by the named insured or on premises for which the classification stated in provision (a) of the declaration excludes any part of the foregoing.'

The trial court denied the insurer's motion for summary judgment and held that the description of hazards exclusions were inapplicable. The court granted plaintiff's oral motion for a summary judgment based on the general liability provision of the policy which reads as follows:

'Coverage B--Bodily Injury Liability--Except Automobile:

'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person and caused by accident.'

This appeal is brought by the defendant contesting the action of the court below which denied the defendant's motion for summary judgment and granted a summary judgment in favor of plaintiff.

The defendant assigns as error the trial court's refusal to apply the products hazard exclusion in the insurance policy and the consequent denial of defendant's motion for summary judgment.

To dispose of this question, we must determine whether the event in the Farrar suit was an 'accident' within the general liability provision of the policy previously stated or within the products hazard exclusion.

In the suit brought by the Farrars against Samuel Atkins, they charged the plaintiff with the negligence sale of certain pills and the injuries that resulted therefrom.

In Brant v. Citizens Mutual Automobile Insurance Company (1966), 4 Mich.App. 596, 145 N.W.2d 410, this Court had before

it an analogous fact situation. The Court, in Brant, supra, in its discussion of negligence, relied on Bundy Tubing Company v. Royal Indemnity Company (C.C.A 6, 1962), 298 F.2d 151, 153. The discussion cited there is also appropriate here.

'The fact that the claims here involved breach of warranty or negligence did not remove them from the category of accident. * * * If the liability policy were construed so as to cover only accidents not involving breach of warranty or negligence, then no protection would be given to the insured. The insured would not need liability insurance which did not cover the only claims for which it could be held liable.'

In the present case the 'accident' was the negligent sale of the pills. The subsequent addiction of Patricia Farrar and the injuries she suffered were accidental. There was nothing inherently dangerous about the pills, if used with the proper instructions. Therefore, but for the negligent sale of the pills, the injury would not have occurred. The sale, although negligent, is within the ambit of the Bundy Case, supra, and was properly within the general liability clause of the insurance policy, as found by the trial judge. The policy covers injuries caused by 'accident' on the premises of the insured. The sale was 'accidental' and therefore covered by the general liability provision of the policy.

The second question presented on appeal is whether the trial court erred in entering judgment for the plaintiff based on its oral motion because other defenses not raised by the defendant remained...