Bertran v. Glens Falls Ins. Co.

• Decision Date: 29 August 1975
• Docket Number: No. 2--57018,2--57018
• Citation: 232 N.W.2d 527
• Parties: Charles BERTRAN, Appellee, v. GLENS FALLS INSURANCE COMPANY, Appellant.
• Court: Iowa Supreme Court

Page 527

232 N.W.2d 527

Charles BERTRAN, Appellee, v. GLENS FALLS INSURANCE COMPANY, Appellant.

No. 2--57018.

Supreme Court of Iowa.

Aug. 29, 1975.

Patterson, Lorentzen, Duffield, Timmons, Irish & Becker, Des Moines, for appellant.

Wunschel Law Firm, P.C., Carroll, for appellee.

Heard by MOORE, C.J., and REES, UHLENHOPP, REYNOLDSON and HARRIS, JJ.

REES, Justice.

This is an appeal by defendant Glens Falls Insurance Company, the insurer of one Robert Richey, an electrical contractor who operated under the trade name and style of Brower Electric, from a judgment and decree finding defendant insurer liable under an insurance contract issued to Richey. Trial court held there was coverage under the policy contract and held defendant liable thereunder. We reverse and remand.

On July 9, 1969 plaintiff Charles Bertran was operating a conveyor to elevate fertilizer at the plant maintained by his employer, Federal Chemical Company of Webster City, when he sustained a severe electrical shock. Bertran brought suit against Chantland Company, Inc., the manufacturer of the conveyor, and Robert Richey, who had been employed by plaintiff's employer to install the conveyor. Trial court in that case found Chantland not liable, but rendered judgment against Richey and in favor of Bertran in the amount of $15,000. An execution issued on the judgment was returned unsatisfied and Bertran then initiated the within action against Glens Falls Insurance Company, Richey's insurer. Richey filed a separate action against Glens Falls seeking indemnity on Bertran's unsatisfied judgment. The two actions were not consolidated. The fighting issue here is a dispute over the provisions of the insurance policy excluding coverage for losses sustained from 'completed operations'. The parties agree generally on the operative facts except as they bear on the construction to be given the term 'completed operations'.

The instant action was tried to the court, the company defending on the grounds plaintiff's injury arose from a 'completed operation', and therefore was not within the provisions and contemplation of the policy issued Richey. Trial court found otherwise and held defendant company liable for the amount of its policy, viz, $10,000.

While this appeal is taken from the judgment entered for Bertran in his action against the defendant insurance company, both parties to this appeal characterized the dispute as one involving the insured (Richey) and the insurer on the insurance contract. In any event, Bertran will obviously be directly affected by our resolution of the policy dispute.

The sole issue before us in this appeal is whether trial court erred in holding the 'completed operations' exclusion of defendant's policy issued Richey did not preclude Bertran's recovery or excuse the defendant company from liability as Richey's indemnitor.

I. The policy issued Richey by defendant company which was in effect when Bertran sustained injury provided general liability coverage for bodily injury and property damage occurring on the insured's premises and in connection with his 'operations in progress'. The policy contained several exclusions and expressly denied coverage for 'bodily injury or property damage included within the completed operations hazard * * *.' 'Completed operations hazard' was defined in the policy to include:

'bodily injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured. 'Operations' include materials, parts or equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:

'(1) when all operations to be performed by or on behalf of the named insured under the contract have been completed.

'(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.'

II. There is no suggestion in the evidence, nor is any question raised here, that the insured (Richey) misunderstood or considered ambiguous the policy definition of 'completed operations', or was under an impression the coverage he purchased extended to completed operations, nor any claim the policy itself did not fairly represent his agreement with the company. Cf. C & J Fertilizer, Inc. v. Allied Mutual Insurance Co., 227 N.W.2d 169 (Iowa 1975). The plaintiff (Bertran) does not in fact dispute in this appeal defendant company's contention completed operations coverage would have required a separate endorsement to the policy purchased by Richey, and appears to concede the coverage actually agreed upon encompassed only incomplete operations. In the absence of any claim the exclusionary language of the policy is ambiguous or requires interpretation, the familiar rule requiring construction of ambiguous insurance contracts to be favorable to the insured is inapplicable here. See Dublinske v. Pacific Fidelity Life Ins. Co., 230 N.W.2d 924 (Iowa, filed June 25, 1975); Brush v. Washington Nat. Ins. Co., 230 Iowa 872, 299 N.W. 403. The applicable rule is that which generally applies where no ambiguity exists in a written contract and requires simply that the intent of the parties be determined from what the contract says. Rule 344(f)(14), Rules of Civil Procedure; State Auto & Cas. Underwriters v. Hartford Acc. & Ind. Co., 166 N.W.2d 761, 764 (Iowa 1969).

The insurance contract in question does not provide for coverage to the insured for property damage or personal injury arising from completed operations. Neither the insurer nor plaintiff Bertran claims the contract fails to accurately reflect the coverage agreed upon. In light of these principles the question before the court in this appeal then is whether the insured's 'operation' in wiring the conveyor installed at the location where Bertran worked was 'completed' at the time he sustained injury. This question is essentially a factual one, to be resolved against the background of the policy provision defining 'completed operations', with deference accorded fact findings of the trial court.

III. The burden of proof in this case rested on the defendant company to prove the applicability of the policy exclusion which it raised as an affirmative defense to Bertran's claim. See Rules 344(f)(5) and 344(f)(6), R.C.P.; Lamar v. Iowa State Traveling Men's Ass'n, 216 Iowa 371, 249 N.W. 149; Rich v. Dyna Technology Inc., 204 N.W.2d 867, 871 (Iowa 1973). See generally, 21 Appleman, Insurance Law and Practice, § 12238 at page 182.

In claiming the insured's wiring operation was completed at the time Bertran sustained his injury, defendant Glens Falls relies on Bertran's testimony and that of its insured Richey. Bertran testified the conveyor was functioning normally on the day he was injured and had, to his knowledge, not nalfunctioned previously when put to its normal and intended use. Richey testified on direct examination that he had initially wired the conveyor in September 1967 and had returned to the site in September 1968 to replace a four-wire, four-prong outlet with a three-wire, three-prong outlet. This was apparently in answer to a service call to the plant operated by Bertran's employer. The installation of the three-wire, three-prong outlet was intended to be temporary due to the fact Richey did not have available the proper outlet to afford a ground. Richey testified the conveyor was 'in good shape' when he left after rewiring and replacing the outlet in September 1968 and the conveyor was then available for its normal and intended use. On cross examination Richey testified he had ordered a four-prong plug for the conveyor after installing the three-prong plug, and that the four-prong plug was in his possession on July 9, 1969, the date Bertran was injured. The manager of the plant where Bertran was injured testified Richey told him after replacing the four-prong plug with the three-prong plug in September 1968 that he was going to come back and install the proper four-prong plug. Richey testified he knew the three-prong plug should have been replaced but that he had forgotten about making the change at the time Bertran was injured.

IV. In support of the holding below, plaintiff Bertran relies entirely on the doctrine of issue preclusion, claiming trial court's finding in the prior case of Bertran v. Chantland and Richey that the insured's electrical wiring operation was incomplete at the time Bertran sustained injury was entitled to collateral estoppel effect in the instant action. In the case in which the judgment against Richey was rendered, the trial court found the change in wiring made by the insured in September 1968 was temporary and that Richey intended to order and later install a four-prong plug to complete the project. That not having been done on July 9, 1969, the date of plaintiff's injury, the court concluded the insured's operation was not completed when Bertran sustained his injury.

Trial court seemingly accorded the prior resolution of the 'completed operation' question collateral estoppel effect in the instant case, referring in support of its finding the company liable on the insurance contract only cases dealing with the related subjects of res judicata, collateral estoppel and issue preclusion. Glens Falls here argues trial court improperly...