Bill Brown Const. Co., Inc. v. Glens Falls Ins. Co.

• Decision Date: 07 October 1991
• Citation: 818 S.W.2d 1
• Court: Tennessee Supreme Court
• Parties: BILL BROWN CONSTRUCTION CO., INC., d/b/a Bill Brown Trucking, Plaintiff/Appellant, v. The GLENS FALLS INSURANCE COMPANY, Defendant/Appellee.

Page 1

818 S.W.2d 1

BILL BROWN CONSTRUCTION CO., INC., d/b/a Bill Brown

Trucking, Plaintiff/Appellant, v. The GLENS FALLS INSURANCE COMPANY, Defendant/Appellee.

Supreme Court of Tennessee,

at Knoxville.

Oct. 7, 1991.

N. Mark Kinsman, Chattanooga, for plaintiff/appellant.

Steven W. Keyt, Chattanooga, for defendant/appellee.

OPINION

ANDERSON, Justice.

The plaintiff appeals from a Court of Appeals judgment holding that a cargo insurance policy did not provide coverage for plaintiff's cargo loss, because the policy was unambiguous and because the principles of waiver and estoppel cannot be used to broaden the coverage so as to protect the insured against perils not insured against in the policy. We disagree with the Court of Appeals and therefore reverse.

FACTS

The plaintiff, Bill Brown Construction Company, Inc., d/b/a Bill Brown Trucking, specializes in the transportation of large cargos which, due to their length, width, heighth, size or weight, cannot be transported on conventional trailers. Before transporting such cargos, it is necessary to secure a permit from each state through which the cargo will be transported. In issuing such permits, the state designates the route to be traversed with each shipment, to be sure the shipments are transported with safety.

In 1986, Bill Brown, the co-owner of the plaintiff company, met with James Wofford, an agent for the defendant, Glens Falls Insurance Company, and asked him for a "full coverage policy" on the cargo transported in his business. Brown showed Wofford several photographs depicting plaintiff's tractor-trailer units loaded with the type of oversized cargo they typically haul. The pictures showed cargos which substantially exceeded the height of the tractor-trailer units on which they were loaded. Brown testified Wofford told him: "That's no problem, you've got full coverage." Brown's wife, Catherine, also testified full coverage was promised and that after the claim was denied, the plaintiff obtained full cargo coverage elsewhere at the same premium. Although this testimony is disputed in part, the jury credited Brown's version. As a result of this conversation, Wofford caused the defendant to issue to plaintiff a cargo insurance policy, which provided as follows:

A. COVERAGE

We will pay for "loss" to Covered Property from any of the Covered Causes of Loss.

1. Covered Property, as used in this Coverage Form, means property of others in transit under a tariff, bill of lading or shipping receipt....

....

3. Covered Causes of Loss

Covered Causes of Loss means "loss" caused by or resulting from the following causes for which you are legally liable as a motor carrier, or as an independent contractor under lease to a motor carrier while the goods are in your custody or control:

a. Fire, lightning or explosion;

b. Windstorm;

c. Collision of the conveyance with any other vehicle or object;

d. Overturn of the conveyance;

e. Collapse of bridge, wharf, dock, platform or culvert;

f. Stranding, sinking, burning, or collision of any regular ferry, including General Average and Salvage Charges;

g. Flood, meaning the rising of any natural body of water;

h. Theft, but excluding pilferage.

(Emphasis added.) This policy was renewed in June 1987 and was in force at all times relevant to this appeal.

In March 1988, the plaintiff was hauling a large "asphalt dryer" on a tractor-trailer from Chattanooga to Clarksville, Indiana, pursuant to a permit issued by the State of Tennessee. While transporting the oversized cargo over the designated route on Interstate 40 in the vicinity of Nashville, the top of the asphalt dryer struck the bottom of an overhead bridge. The asphalt dryer was knocked off the trailer on which it was being transported and was extensively damaged, but the tractor-trailer did not collide with the bridge and was not damaged.

The defendant denied coverage, asserting that its policy afforded coverage only if the cargo was damaged as a result of a collision involving the vehicle itself, as opposed to a collision involving only the cargo. The plaintiff filed this action, claiming that the defendant was precluded from denying coverage by waiver or estoppel or by ambiguity of the policy.

At trial, the court found, as a matter of law, that the policy as written was not ambiguous and did not provide coverage for the loss, but submitted the waiver and estoppel issue to the jury. The jury found for the plaintiff on the grounds that the defendant was estopped by the representations of its agent to deny coverage.

The Court of Appeals affirmed the trial court's judgment that the insurance policy language was unambiguous, but reversed on the waiver and estoppel issue, holding that those principles were not available to broaden the coverage of an insurance policy to insure against additional perils not insured in the written policy.

AMBIGUITY

The parties dispute the meaning of the term "conveyance" as used in the clause of the policy ensuring coverage for "collision of the conveyance with any other vehicle or object." The plaintiff argues that, when strapped onto its trailer, the cargo becomes part of the "conveyance," and that since "conveyance" is not defined in the policy, the term is ambiguous and should be construed to cover a collision between the cargo and the bridge, even where there is no contact between the tractor-trailer unit and the bridge.

The question presented is one upon which other jurisdictions have reached different conclusions under similar factual situations. A number of courts, asked to construe the term "collision of a vehicle," have held that this language must be given its ordinary meaning and have denied coverage unless the vehicle itself was involved in the collision. Cases denying recovery for damage to the cargo alone, based on limiting language in the policy, include: Trinity Universal Insurance Co. v. Robert P. Stapp, Inc., 278 Ala. 209, 177 So.2d 102 (1965), ("collision of the vehicle"); Wolverine Ins. Co. v. Jack Jordan, Inc., 213 Ga. 299, 99 S.E.2d 95 (1957), ("collision of the vehicle"); Mendelsohn v. Automobile Ins. Co., 290 Mass. 228, 195 N.E. 104 (1935), ("accidental collision of the motor truck with any other automobile, vehicle or object"); Barish-Sanders Motor Co. v. Fireman's Fund Ins. Co., 134 Neb. 188, 278 N.W. 374 (1938), ("collision of the vehicle"); Birmingham Fire Ins. Co. of Pa. v. Newsom Truck Lines, Inc., 390 S.W.2d 537 (Tex.Civ.App.1965), ("collision of the vehicle"); Hamilton Trucking Service v. Automobile Ins. Co., 39 Wash.2d 688, 237 P.2d 781 (1951), ("accidental collision of the motor truck or trailer with any other automobile, vehicle or object"). Most of the policies construed in these cases used the terms "vehicle" or "motor truck". In one case, the policy did refer to a "conveyance," but it did so in such a way as to make the meaning of the term abundantly clear to the court construing it. Old Colony Insurance Co. v. Anderson, 246 F.2d 102 (10th Cir.1957), ("collision of land conveyances while the insured property is being transported thereon.").

In other instances, courts have found the language of the policy, whether referring to "collision of the vehicle" or "collision of the conveyance," to be ambiguous. See, e.g., Garford Trucking, Inc., v. Alliance Ins. Co. of Philadelphia, 195 F.2d 381 (2nd Cir.1952), ("vehicle" and "conveyance" used interchangeably); Edgerton v. Minneapolis Fire & Marine Ins. Co., 142 Conn. 669, 116 A.2d 514 (1955), ("collision of the vehicle"); Brown Mfg. Co. v. Crouse, 251 Iowa 594, 102 N.W.2d 154 (1960), ("collision of the vehicle"); C & J Commercial Driveway, Inc., v. Fidelity & Guarantee Fire Corp., 258 Mich. 624, 242 N.W. 789 (1932), ("collision of the vehicle"); Gould Morris Electric Co. v. Atlantic Fire Ins. Co., 229 N.C. 518, 50 S.E.2d 295 (1948), ("collision of the conveyance"); Bucks County Const. Co. v. Alliance Ins. Co., 162 Pa.Super.Ct. 153, 56 A.2d 338 (1948), ("collision of the conveyance"); Continental Ins. Co. v. Griffin, 218 S.W.2d 350 (Tex.Civ.App.1949), ("collision of the conveyance"). In holding that recovery should be allowed, these courts tend to look to the intent of the parties, finding that despite what appears to be limiting language, the policies, when considered in their entirety and upon their face, are meant to insure the cargo against the hazards of the road while in transit. See, e.g., C & J Commercial Driveway, supra, 242 N.W. at 790. As one court in a recent case has noted:

Since it is evident that the purpose of the policy was to insure against loss or damage to the cargo, it is not offensive to its underlying intent to hold that the ambiguity must be construed to afford coverage for damage not only where it results from a collision involving the transporting vehicle, but also where that vehicle is itself not so involved. The liability to the insured is the same whether or not the truck collided with an object which in turn caused damage to its cargo.

Arrow Industrial Carriers, Inc. v. Continental Ins. Co., 232 N.J.Super. 324, 556 A.2d 1310, 1315 (1989).

In rejecting "ordinary meaning" analysis, the court in Arrow Industrial instead based its holding on a policy analysis. It noted that the context of disputed language, as well as the language itself, may create an ambiguity and that in resolving ambiguity, "[t]he court's responsibility is to give effect to the whole policy, not just one part of it." Id. To do otherwise, the court said, would be to overlook "the reality of the world in which the insurance policies were to have effect." Id. 556 A.2d at 1316.

The only Tennessee case involving a similar question turned on a dissimilar set of facts and offers little guidance here. In Inman v. Life & Casualty Ins. Co., 164 Tenn. 12, 45 S.W.2d 1073 (1932), an action was filed for death benefits under an accident policy providing benefits for injury or death resulting from "collision of or accident to the vehicle" in which the...