Brammer v. Allied Mut. Ins. Co., 54132

• Citation: 182 N.W.2d 169
• Decision Date: 15 December 1970
• Docket Number: No. 54132,54132
• Parties: Frances Whitesell BRAMMER, Roland E. Whitesell, Dennis Brammer and Art W. Brammer, Appellees, v. ALLIED MUTUAL INSURANCE COMPANY, Appellant, Franklin County, State of Iowa, Intervenor-Appellee.
• Court: United States State Supreme Court of Iowa

Page 169

182 N.W.2d 169

Frances Whitesell BRAMMER, Roland E. Whitesell, Dennis Brammer and Art W. Brammer, Appellees, v. ALLIED MUTUAL INSURANCE COMPANY, Appellant Franklin County, State of Iowa, Intervenor-Appellee.

No. 54132.

Supreme Court of Iowa.

Dec. 15, 1970.

Larson & Carr, Charles City, and Archerd & Draheim, Clarion, for appellant.

Laird, Burington, Bovard & Heiny, Mason City, Lee B. Blum, County Atty., and Hobson, Cady & Drew, Hampton, for appellees.

BECKER, Justice.

Plaintiffs' petition for declaratory judgment seeks construction of a liability insurance policy between defendant Allied Mutual Insurance Company, a sinsurer, and Franklin County, Iowa, as insured. After action was commenced against the insurer, Franklin County intervened taking a position adverse to both parties. Over defendant-insurer's objections the matter was submitted to a jury which returned a verdict for plaintiffs. Defendant-insurer appeals. We affirm.

The motivation for this action is not determinative but should be noted in light of rule 265, Rules of Civil Procedure. This rule allows the court to refuse to render a declaratory judgment or decree where it would not terminate the uncertainty or controversy giving use to the proceedings. The insurance policy in question grants insured the right to determine whether governmental immunity shall be raised or waived as a defense to the action plaintiffs assert against insured county. plaintiffs allege the county has refused to waive governmental immunity and will continue to do so unless it is adjudicated that the insurance policy in question affords coverage to it. Hence plaintiffs' and intervenor's need for a declaratory judgment. After the county intervened defendant conceded this type action is proper.

The accident in question occurred as an aftermath of a severe rainstorm in Franklin County on the afternoon and evening of June 8, 1967. The storm caused several washouts including a portion of the county road at the end of a bridge located near Hampton, Iowa. The washout was discovered the next day. a snow fence was immediately placed across part of the road at an intersection about eight-tenths of a mile south of the washout. A 'road closed' and an oil-pot flare was also placed at this location. Like action was taken north of the washout. The fence was so constructed as to allow traffic to go around the end of the barricade and proceed down the road. Plaintiffs Dennis Brammer, as driver, and Frances Brammer, as passenger, were injured when their car struck the washout in question. The accident occurred June 12, 1967, three days after the barricade was erected. Except for erecting the barricade nothing more had been done because of other washouts in the county. The ultimate question of the liability of Franklin County is not now involved. The only question presented is whether the policy in question affords liability coverage to Franklin County under the foregoing facts.

The crucial endorsement in the policy reads: "In consideration of the premium charged, it is understood and agreed that Coverages B and D, Bodily Injury and Property Damage Liability--Except Automobile, of the policy to which this endorsement is attached do not apply to accidents caused by or arising out of any condition existing in the highways or roads, or bridges or culverts except accidents resulting while maintenance or repair operations are being performed by the Named Insured or Independent Contractors."

Both sides affirmatively plead the foregoing provision and claim it is conclusive in their favor as a matter of law. Plaintiffs claim to be within the exception to the exception; i.e. they were injured in an accident 'caused by or arising out of a highway condition while maintenance or repair operations were being performed'. Defendants claim the accident arose out of a condition existing in the highway and no repair or maintenance had commenced on the highway at the time of the accident.

In contesting the jury verdict favorable to plaintiffs, defendant assigns the following errors:

1. A jury should not have been used in this declaratory judgment action because the gist of the action is equitable in nature and a jury would not otherwise be available to plaintiffs.

2. The matter of interpretation of the contract should have been taken from the jury and decided by the court in favor of defendant.

3. The burden of proof was erroneously placed on defendant.

4. An instruction defining defendant's burden as to who performed the repair work was erroneous.

I. The legal or equitable nature of a declaratory judgment procedure is to be determined by the pleadings, the relief sought and the nature of the case. It it is tried below without objection as at law or in equity, we treat it here as it was treated in the trial court. Bjork v. Dairyland Insurance Co., (Iowa 1970) 174 N.W.2d 379, 382. Ordinarily actions on contract are treated as actions at law unless specific equitable issues are involved. Ayres v. Nopoulos, (1927) 204 Iowa 881, 216 N.W. 258. We treat all actions that are not equitable in nature as ordinary actions. Section 611.3, et seq., Code, 1966. Here the issues tendered are basically legal in nature. Therefore the court properly preserved plaintiffs' right to a jury trial.

The right to a jury trial may neither be abridged nor extended by use of declaratory judgments as a remedy. Rule 268, R.C.P. The basis of plaintiffs' action as legal rather than equitable in nature is illustrated by cases cited in Division II, ante.

II. Defendant contends the case should have been taken from the jury and decided adversely to plaintiffs as a matter of law. Construction, i.e., the legal effect of a contract, is a matter of law to be decided by the court. Interpretation, i.e., the meaning to be given to the words, is a question of fact which may properly be submitted to the jury. Boyer v. Iowa High School Athletic Assn., (1967) 260 Iowa 1061, 152 N.W.2d 293, 298; 3 Corbin on Contracts, §§ 534, 554. If the evidence is so clear that a reasonable man could reach but one conclusion the question should be determined by the court as a matter of law. But if the evidence is disputed or if different conclusions may be drawn from the evidence, the question of interpretation is one of fact for the jury. General Casualty Co. v. Hines, (1968) 261 Iowa 783, 156 N.W.2d 118, 122, 123.

In Morris Plan Leasing Co. v. Bingham Feed & Grain Co., (1966) 259 Iowa 404, 143 N.W.2d 404, 412, we said:

'Ambiguity may be said to appear when, after the application of pertinent rules of interpretation to the face of the instrument, a genuine uncertainty results as to which one of two or more meanings is the proper one. Hubbard v. Marsh, 241 Iowa 163, 165, 40 N.W.2d 488, 490; Pedersen v. Bring, 254 Iowa 288, 294, 117 N.W.2d 509, 513. By 'interpretation of language' we determine what ideas that language induced in other persons. 3 Corbin on Contracts, § 534.'

In Kubin v. Reineck, (1952) 93 Ohio App. 320, 113 N.E.2d 914, 917, the Court of Appeals of Ohio, Huron County, said:

'* * *, if there is no ambiguity of terms and no dispute as to the meaning of a written instrument, it is exclusively the duty of the court to construe such instrument and to determine the effect of its provisions as a matter of law. If, however, the terms of the instrument are ambiguous and indefinite and there is conflicting evidence as to the meaning thereof a question presents itself requiring submission. * * *.' This may also be true where there is no conflicting extrinsic evidence as to the facts surrounding the marking of the contract but there is conflicting evidence as to the facts to which the contract must be applied. Cf. Eckard v. World Insurance Co., 250 Iowa 782, 785, 786, 96 N.W.2d 454, (1959); Youngwirth v. State Farm Mut. Ins. Co., 258 Iowa 974, 140 N.W.2d 881, 884, 885, (1966); Meyer v. Fidelity and Casualty Co., 96 Iowa 378, 65 N.W. 328; Poweshiek County Bk. v. Nationwide Mut. Ins. Co., 261 Iowa 844, 156 N.W.2d 671 (1968).

Both sides offered evidence to aid in the interpretation of the words maintenance and repair as the meaning of the words applied to the factual situation that actually developed. Plaintiffs claim the words encompass a situation where the road was washed out, partially barricaded and waiting for actual work to start. They argue that the road was in the process of receiving maintenance and repair work as soon as the barricade, flare and sign were put in place. Defendant argues repair and maintenance refer to actual work in progress, or at least to something far more than is shown here.

Plaintiff produced the testimony of persons in the road repair and contracting business from which the jury could find barricading and posting is included in, and is a part of, road repair and maintenance work. Defendant countered with evidence from which the jury could conclude the barricade, flare and sign were merely to warn the public of danger until actual repair and maintenance work could begin; in this case, because of the extensive damage, about two weeks later.

The court instructed the jury on the meaning of the words repair and maintenance and left it to them to decide whether this fact situation fell within the meaning given. ¹ Under our cases and the evidence presented to the court the decision to submit the question to the jury was proper.

III. The next complaint concerns the court's action placing the burden of proof on defendant. As stated, all of the operative facts in the case were admitted in the pleading or the subject of undisputed testimony with which defendant did not take issue. The controversy centered around the inferences to be drawn and the interpretation to be given to the insurance contract under the admitted facts in the case.

The court determined as a matter of law that there was a general liability policy which would afford protection to Franklin County unless; (1) the exclusion as to injuries...