B & R Farm Services, Inc. v. Farm Bureau Mut. Ins. Co., 1085S408

• Decision Date: 15 October 1985
• Docket Number: No. 1085S408,1085S408
• Citation: 483 N.E.2d 1076
• Parties: B & R FARM SERVICES, INC. and Edward Chosnek, as Trustee in Bankruptcy For B & R Farm Services, Inc., Appellants (Plaintiffs below), v. FARM BUREAU MUTUAL INSURANCE COMPANY, Appellee (Defendant below).
• Court: Indiana Supreme Court

Page 1076

483 N.E.2d 1076

B & R FARM SERVICES, INC. and Edward Chosnek, as Trustee in Bankruptcy For B & R Farm Services, Inc. Appellants (Plaintiffs below), v. FARM BUREAU MUTUAL INSURANCE COMPANY, Appellee (Defendant below).

No. 1085S408.

Supreme Court of Indiana.

Oct. 15, 1985.

Morris L. Klapper, Klapper & Isaac, Indianapolis, for appellants.

James W. Treacy, Treacy Cohen & Grossman, Indianapolis, Stephen L. Huddleston, Huddleston & Combs, Franklin, for appellee.

SHEPARD, Justice.

Appellants B & R Farm Services, Inc., (B & R) and Edward Chosnek, trustee in bankruptcy for B & R, sued Farm Bureau Mutual Insurance Company (Farm Bureau) on a contract of insurance. The trial court granted summary judgment for the defendant and denied a motion for partial summary judgment filed by plaintiffs. The Court of Appeals, 476 N.E.2d 538, affirmed the decision of the trial court, and appellants filed a Petition to Transfer.

We grant the Petition and reverse.

B & R has been engaged in manufacturing, selling, and applying liquid fertilizer products. On May 3, 1980, some of this product was accidentally released from a storage tank on B & R's premises and flushed into Big Creek in White County, Indiana. The Indiana Department of Natural Resources filed a claim against B & R for the value of fish killed in the creek as a result of the spill. The Department acted pursuant to Ind.Code Sec. 14-2-6-7, which provides that a person who negligently discharges any substance into waters of the state such that animals are killed "shall be responsible for such kill and the director of the department of natural resources shall recover in the name of the state damages from such person." The statute further authorizes the filing of civil actions to collect damages if that is necessary.

B & R sought reimbursement for this penalty, which totaled $40,778.43, under two policies issued by Farm Bureau, one a general liability policy and one an umbrella policy. Farm Bureau advised its insured that neither policy covered this loss and denied the claim. On December 21, 1982, B & R filed suit against Farm Bureau, alleging breach of contract and fraud. In its Petition to Transfer, B & R asserts that the trial court and the Court of Appeals erred in finding that a products hazard exclusion to the general liability insurance policy precluded coverage under this set of facts.

The products hazard provision of the policy in question excluded:

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 the premises owned by or rented to the named insured and after physical possession of such products has been relinquished to others.

In order to render summary judgment, the trial court must find that there is no genuine issue of material fact. Where the case turns on a written document, the court must also find that the provisions of the document are unambiguous. Interstate Auction v. Central National Insurance Group (1983), Ind.App., 448 N.E.2d 1094. In this instance, the court was faced with counter motions for summary judgment in which both parties asserted that the policy was unambiguous. Appellee correctly points out in its brief that construction of a contract under such a situation is a judicial function.

We find that the policy provisions do not exclude as a matter of law the claim filed by B & R. The provisions exclude claims arising from the placement of defective goods into...