Bickerton, Inc. v. American States Ins. Co.

Decision Date07 March 1995
Docket NumberNo. WD,WD
Citation898 S.W.2d 595
PartiesBICKERTON, INC., Appellant, v. AMERICAN STATES INSURANCE CO., Albrecht Art Museum, Respondents. 48422.
CourtMissouri Court of Appeals

Ronald M. Sokol, P.C., St. Joseph, for appellant.

Daniel T. Defeo, James P. Barton, Jr., Myerson, Monsees & Morrow, Kansas City, for respondent.

Before ULRICH, P.J., and KENNEDY and BERREY, JJ.

ULRICH, Presiding Judge.

Bickerton, Inc., sued American States Insurance Company (American States), in contract, alleging entitlement to recovery for water damage resulting to a building it owned pursuant to an insurance policy issued by American States to the Albrecht Art Museum (Museum). Bickerton, Inc., also sued Museum in tort, for allegedly causing the damage sustained to the building. The insurance policy was issued to Museum by American States during Museum's occupancy of the building as a requirement imposed by agreement between Bickerton and Museum. Bickerton appeals from the judgment entered in favor of American States following trial without a jury and from summary judgment entered in favor of Museum.

The judgment in favor of American States is affirmed. The summary judgment entered in favor of Museum is affirmed.

On December 30, 1989, the Townsend and Wall Building (Building), a multi-story building located in downtown St. Joseph, Missouri, suffered severe water damage due to breakage of a fire sprinkler pipe fitting on the fifth floor which went undetected for several hours, allowing water to course through the building and into the basement. Prior to the damages to the building being found, Bickerton, corporate owner of the building, was unaware of a defective sprinkler alarm system.

The sprinkler alarm system installed on the premises of the Building was a dry fire extinguisher system designed to utilize air pressure in the sprinkler lines to hold back water from entering the lines at the point water entered the building. An integral alarm system was to automatically dial the fire department; Andrew S. Glaze, who wholly owned Bickerton; the alarm company; and others in the event air pressure in the system dropped below a set level.

Unknown to Bickerton, at the time of the loss, a portion of the telephone wire was missing above the entry door to the display window immediately east of the dialer box. The absence of the missing portion of telephone wire prevented the alarm device from alerting designated persons through the telephone system of a defective sprinkler system. When tested by the alarm company when the system was installed and after the casualty, the alarm device functioned normally. If the alarm had worked as intended, messages would have been sent early enough to allow someone time to respond and turn off the water prior to its entry into the system.

In early 1989, the building stood empty, was self-insured, and was being actively offered for sale. The building was kept locked; and a building maintainer, Kenneth Arn, was employed by Bickerton to make regular inspections of the Building. Mr. Arn made routine written reports of his inspections. The only others entering the building were prospective purchasers, who were given escorted tours; alarm company workers; sprinkler company workers; roofers; and Mr. Arn's family, who seasonally watched fireworks from the roof.

Museum is a non-profit art museum located in St. Joseph. Each year its primary fund raiser is the Pot-of-Gold Auction, which is a gala dinner followed by an auction of donated items and services. In January 1989, Andrew S. Glaze, President and sole stockholder of Bickerton, was approached by Mr. Robert Thedinger, the event chairman, on behalf of the Museum with a request that the Museum be allowed to use the Building as the location for the fund raiser on May 6, 1989. Use of the building was to be donated to Museum free of any charges or rent and would be extensively redecorated in order to get the Building ready for the event. After this meeting, Mr. Glaze discussed the use of the building with his attorney who prepared a proposed Building Use Agreement that was submitted to Museum.

On or about January 31, 1989, Mr. Glaze spoke to Bill McMurray, an agent for the insurance agency representing the Museum, and advised him to bind liability coverage on the Building. Mr. McMurray bound $500,000 in commercial general liability coverage on the Museum's policy through American States Insurance Company as of February 1, 1989.

Cliff Kirwan and Paul Chambers were in charge of designing, constructing, and placing decorations advertising the auction in the window on the north side of the building. They began this work in late February or early March 1989, although the signed Building Use Agreement provided for occupancy and use of the building beginning March 1, 1989, through May 20, 1989, with insurance coverage to begin March 1, 1989, as well. The alarm dialer box and the telephone line were located in the display window, which was on the north side of the building immediately to the east of the main door to the building. The decorating was completed around the second week of March 1989. Neither Mr. Kirwin nor Mr. Chambers nor anyone who assisted them in decorating the window was given a key to the building. Only the alarm serviceman and the building custodian were known to have been in the window during the time the museum occupied the building except for persons affiliated with the museum.

On February 16, 1989, Mr. Thedinger, chairman of the auction; Buzz Burnham, the Museum's agent; and insurance agents met to discuss fire insurance on the building during the Museum's tenancy. Mr. Thedinger agreed to "a fire legal liability basis," which was a cheaper way to insure the building against fire than to insure with an "all-risk" insurance.

After the auction, Mr. Kirwan and Mr. Chambers removed most of the decorations from the window. After the May 20 occupancy termination date, items belonging to the Museum were still in the building.

After the Museum vacated the building, on or before May 20, 1989, the building remained vacant until Bickerton allowed the Harris Addition Neighborhood Association to use the ground floor for an Apple Pie Festival. A Building Use Agreement dated August 30, 1989, was prepared for that use, which provided for occupancy for a few days. The windows were decorated for the "Apple Pie St. Joseph Style" event with items such as an old-fashioned table, benches and chairs which gave the appearance of a kitchen setting. Posters were also placed in the display area. The agreement with the neighborhood group did not contain an insurance requirement regarding fire or sprinkler coverage.

After discovery of the casualty on or about December 30, 1989, Mr. Glaze contacted the alarm company to determine why the alarm message was not received by him or the fire department. Mr. Hanke from the alarm company and Mr. Arn tested the alarm system, which was found to be working properly. They discovered that the telephone wire connecting telephone service to the alarm dialer was missing. This wire had been installed on each side of the sliding door entrance to the display window. Both the telephone wire and the dialer box were painted the distinctive red color used by Mr. Kirwan and Mr. Chambers. Furthermore, a paint track in the distinctive color which had formed under the wire when the wall was painted was found to extend into the space which had been occupied by the missing wire. Painted areas of the wall disclosed where cable staples had been removed where the missing wire had been located. After a new section of wire was spliced to replace the missing segment, the system functioned properly.

After Mr. Glaze, in behalf of Bickerton, made a formal claim, American States surveyed the damage to the building and gathered information concerning the extent and cost of the damage and the value of the building. On May 18, 1990, the insurance carrier denied the claim on the premise that the Museum was not responsible for causing the damage to the Building. As a result of that denial, Bickerton filed suit against the Museum and American States.

American States claimed there was no coverage for the Building under the policy as endorsed and also that the policy endorsements were cancelled by Museum effective May 20, 1989. The insurer also asserted that Bickerton was not covered, even if the certificates of insurance provided Bickerton by American States indicated coverage of insurance extended to January 20, 1990, because Museum's tenancy of the building had expired and the building had been vacant for more than sixty days.

During the pendency of the action, American States filed several Motions for Summary Judgment. American States also moved for severance. The trial court ordered severance. Bickerton filed a cross-motion for Summary Judgment. The trial court took the motions with the trial of the count against American States in order to hear all of the evidence.

The trial was bifurcated with the judge to make the initial determination of coverage without a jury. The court found the policy was unambiguous and that it did not extend coverage to the casualty due to the cancellation of the policy on May 20, 1989. The trial court also sustained the Museum's motion for summary judgment finding that Bickerton produced no evidence that the Museum caused the casualty.

The trial court determined that summary judgment in favor of Museum and the judgment in favor of American States were final for purposes of appeal. From these judgments, Bickerton appeals.

The judgments of the trial court are affirmed.

I

As point one on appeal, Bickerton alleges error in the granting of summary judgment to Museum.

When reviewing summary judgments appellate courts view the record in the light most favorable to the party against whom...

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