Buchanan v. Employers Mut. Liability Ins. Co. of Wis., 45105

Decision Date13 July 1968
Docket NumberNo. 45105,45105
Citation201 Kan. 666,443 P.2d 681
PartiesRobert BUCHANAN and Oren Buchanan and C. W. Roweth, Appellees, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Appellant.
CourtKansas Supreme Court

Syllabus by the Court

1. A policy of insurance, being prepared by the insurer, is to be given the construction most favorable to the insured in those instances where construction is permissible or interpretation is required.

2. An exclusionary clause written into a contract or policy of insurance by the insurer falls within the ambit of the foregoing rule, and the insurer has the burden of establishing facts which bring a case within the provisions of the exclusionary clause.

3. Exclusionary clauses are strictly construed against the insurer, and where there are any doubts, uncertainties or ambiguities arising out of the language employed in a clause of this nature they must be resolved in favor of the policy holder.

4. Where no complaint is made concerning instructions given by the trial court, and the instructions have not been reproduced in the record, it will be assumed on appeal that the jury was properly instructed as to the applicable law, as related to the facts in evidence.

5. The 'care, control and custody clause' frequently found in liability insurance policies is of a generally ambiguous character and must be applied to the facts of each individual case with common sense and practicality, and when the facts do not clearly show that an insured is exercising physical custody dominion, authority or control over the property at the time of its injury, in the sense of using such property for his own purposes, the issue of whether the property was in the care, custody and control of the insured becomes one for the jury's determination.

6. Under the provisions of Supreme Court Rule No. 6 (197 Kan. LXI) it is the responsibility of the respective parties to an appeal to designate those parts of the evidence they wish to have included in the record, and where no stenographic record has been made the appellant may prepare a statement of the evidence from the best means available.

7. Failure of an appealing party to include in the record evidence on a disputed point, leaves this court without means to judge the sufficiency of the evidence pertaining thereto.

8. Evidence from which a court can determine whether an insurer has refused without just cause to pay in accordance with its obligations under a policy of insurance, may be produced at the hearing on the merits and may coincide with the evience produced at such hearing.

9. The trial court itself is an expert in the area of attorneys' fees and can draw on and apply its own knowledge and expertise in evaluating their worth.

10. The reasonable value of attorneys' fees rests within the sound judicial discretion of the trial court and its determination will not be disturbed in the absence of an abuse of discretion.

11. Appellate courts, as well as trial courts, are experts concerning the reasonableness of attorneys' fees and in the interest of justice may fix such fees when in disagreement with the views of the trial court.

12. The record is examined in an action to recover damages for an insurance company's failure to pay a claim pursuant to the terms of its policy and for reasons appearing in the opinion, it is held: (1) The trial court did not err in submitting to the jury the issue of whether or not at the time of the accident the insured had the care, custody and control of the property damaged or was exercising physical control thereof; and (2) the trial court did not abuse its discretion in allowing an attorney's fee against the insurer.

John J. Alder, Kansas City, argued the cause, and H. S. Roberts, Kansas City, with him on brief for appellant.

John C. Risjord, Kansas City, Mo., argued the cause, and George W. Thomas, Kansas City, with him on brief for appellees.

FONTRON, Justice

This case involves a dispute over insurance coverage. The plaintiffs, who are construction contractors engaged in a joint venture, entered into an agreement with the Ace Construction Company to quarry and supply rock for a levee being built by Ace at the Oologah Reservoir project in Oklahoma, under contract with the government. After securing its subcontract with Ace, the prime contractor on the project, the plaintiffs took out a policy of insurance with the defendant, Employers Mutual Liability Insurance Company of Wisconsin, to protect themselves against liability for personal injury or property damage resulting from their fault or negligence.

During the course of construction, a dump truck used in hauling rock and owned by Gordon Ensley, the plaintiffs' subcontractor, was damaged in an accident which happened at the work site. The details of this unfortunate occurrence will be related shortly.

The defendant insurance company denied liability under the terms of its policy and refused to defend an action brought by Ensley for damages to his truck. Ensley recovered judgment in his lawsuit against the plaintiffs, who have since paid the judgment, and who now bring this action against Employers to recover damages for its refusal to pay for Ensley's damage. In this action the plaintiffs ask also for an allowance of attorneys' fees. Plaintiffs recovered judgment in the lower court for both damages and attorneys' fees, and the defendant has appealed. Throughout the opinion we shall refer to the appellant insurer as the defendant, or Employers, and to the appellees, the insured, as plaintiffs.

There is little dispute over the facts of the accident. The plaintiffs' contract with Ace called for them to quarry the rock and place it on an earth fill which ran across the reservoir. Since they owned no trucks, the plaintiffs subcontracted the hauling and delivery of the rock to Ensley, who owned the truck which was damaged. The contract with Ensley provided that Ensley furnish all labor and equipment necessary to transport the rock in connection with the construction of the project, and obligated Ensley to complete the work in accordance with the requirements of the plaintiffs. The contract contained this further provision:

'* * * It is also understood and agreed that, when necessary, loaded trucks may be let down the embankment by equipment furnished and maintained by the Contractor.'

As might be expected, the accident involved in this dispute occurred as one of Ensley's trucks was being let down the embankment by plaintiffs' caterpillar, or dozer, by means of a winch mounted thereon. To understand the circumstances under which the accident occurred, a brief description of this phase of Ensley's operation will prove helpful.

The caterpillar was stationed on a roadway, some 20 or 30 feet wide, running along the top of the levee. As each truck reached the roadway it would head directly into and facing the back end of the dozer, where the winch cable would be hooked to the front of the truck. Both tractor and truck would then back to the opposite edge of the road, and the truck, operated by Ensley's driver, would gradually start backward down the face of the levee, its speed being checked by the winch cable. This procedure is described as 'winching a truck down the levee.' In this process, the dozer is backed slightly over the edge of the roadway, so the operator can observe the truck as it backs down the levee. When the truck reached the point where the rocks were to be dumped, the driver would set his brakes, dump his load and then be 'winched back up.' If the driver did not position his truck where his load was to be dumped, he would be winched back up and he would then guide the truck in again.

On the day of the accident, after Ensley's truck was hooked onto the winch, its driver, Kenneth Brownrigg, put the truck in reverse and backed to and over the edge of the roadway, at which time the truck was taken out of gear and the winch line became taut. As the truck backed down the slope, the brakes failed on the treads of the dozer upon reaching the edge of the slope, and the dozer went out of control and down the face of the levee, causing the winch line to slacken and releasing the truck, which rolled to a stop against some rocks about 40 feet down the slope. After the truck came to a stop it was struck by the dozer and was damaged.

To understand the dispute between the parties to this appeal, we must now take a brief look at the policy. Under the heading of Insuring Agreements, Coverage D reads as follows:

'Coverage D-Property Damage Liability-Except Automobile. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'

This would seem clear enough to cover the damage done Ensley's truck by the plaintiffs' caterpillar. But here we encounter the omnipresent exclusions, of which there are seventeen in all. Thus the policy provideth and the policy taketh away. Under the tenth exclusionary clause, clause (j), it is provided that coverage under D does not apply to injury to or destruction of:

'(3) * * * property in the care, custody or control of the insured or property as to which the insured for any purpose is exercising physical control * * *'

Under this exclusionary clause, the defendant declares it is not liable for the damage done Ensley's truck by plaintiffs' dozer. Stripped to bare essentials and disregarding excess verbiage, it is the defendant's position that the facts shown by its assured, the plaintiffs, establish as a matter of law that they were exercising physical control of Ensley's truck at the time it was damaged. Hence, says the defendant insurer, the exclusionary clause prevails and the damage is not covered under the policy.

We have not heretofore been afforded the opportunity of construing an exclusionary clause of this character, although numerous other...

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