C. A. Fielland, Inc. v. Fidelity & Cas. Co. of New York

• Decision Date: 08 May 1974
• Docket Number: No. 72--806,72--806
• Citation: 297 So.2d 122
• Parties: C.A. FIELLAND, INC., a Florida corporation, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, a New York corporation, Appellee.
• Court: Florida District Court of Appeals

Page 122

297 So.2d 122

C.A. FIELLAND, INC., a Florida corporation, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, a New York corporation, Appellee.

No. 72--806.

District Court of Appeal of Florida, Second District.

May 8, 1974.

Rehearing Denied June 17, 1974.

John R. Bush of Macfarlane, Ferguson, Allison & Kelly, Tampa, for appellant.

W. Donald Cox of Fowler, White, Gillen, Humkey, Kinney & Boggs, Tampa, for appellee.

GRIMES, Judge.

C. A. Fielland, Inc. (Fielland) and Paul Smith Construction Company (Smith) constructed a ten-story office building in the City of Tampa known as the Marine Bank Building for its owner, 315 Madison Corp. (315 Madison). Several years after construction, the brick veneer wall of the building began to fall and collapse. As a result 315 Madison was paid $171,000 by its insurer, the Continental Insurance Company (Continental), under a Special Multi-peril policy providing property and liability coverage. Thereafter, Continental sued Fielland and Smith and three architects in a subrogation action for the amount which Continental had paid 315 Madison. Fielland called on its insurer, Fidelity and Casualty Company of New York (F & C) to defend under a Comprehensive-General Automobile Liability policy, which included completed operations coverage, and to pay all damages awarded against Fielland. Following its denial of coverage and refusal to defend, F & C was sued by Fielland in a third-party action.

Continental's suit against Fielland, Smith and the three architects resulted in a jury verdict of $125,000 in favor of Continental against Fielland and Smith. Of this verdict Fielland and Smith each paid $57,500. The balance was paid by the architects despite their exoneration.

The claim of Fielland against F & C was heard by the trial court without a jury upon stipulation of the parties. After the taking of testimony, the trial judge entered final judgment for Fielland against F & C in the sum of $15,750. The award included $20,250, less $10,000 deductible, plus $5,500 for attorneys' fees incurred in the third-party action. Attorneys' fees for the defense of the main action were denied to Fielland. Both Fielland and F & C filed timely appeals from this judgment.

The F & C policy contained the following provisions material here:

INSURING AGREEMENTS

Coverage C--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.

EXCLUSIONS

This policy does not apply:

(j) under coverage C, To injury to or destruction of . . . (4) any goods, products or containers thereof manufactured, sold, handled or distributed or premises alienated by the named insured, or Work completed by or for the named insured, out of which the accident arises;

(emphasis supplied)

There were essentially five elements of damage included within the $171,000 subrogation claim. These were:

(1) the cost of demolition of the damaged wall;

(2) the rentals paid to an adjacent parking lot owner during demolition so as to pre-empt his parking lot and avoid the danger of falling debris (3) the cost of reconstructing the wall;

(4) the rental of the parking lot during reconstruction; and

(5) the cost of waterproofing the building.

F & C contended that these damages were excluded from the policy under exclusion (j) because they were the result of injury or destruction to work completed by Fielland, the named insured. The trial judge accepted the theory of F & C's argument in that he held that there was no coverage under the policy for damage to the building itself. However, he said that Fielland would be protected under the policy to the extent that the defect in the wall resulted in damage to the person or property of others. He concluded that under the facts of the case, Fielland was entitled to recover any damages it sustained from the wall having fallen or threatening to fall on the parking lot and ruled that the measure of such damages was the cost of demolishing the wall and the rental of the parking lot during demolition.

The judge correctly held that coverage under the F & C policy did not include damage to the building itself because Fielland built the building. Other courts have construed language similar to that of exclusion (j) in the same manner. Vobill Homes, Inc. v. Hartford Accident and Indem. Co., La.App.1965, 179 So.2d 496; Liberty Building Company v. Royal Indem. Company, 1960, 177 Cal.App.2d 583, 2 Cal.Rptr. 329. A contrary holding would have the effect of converting the policy into a performance bond rather than liability insurance. The case cited by Fielland in support of coverage are distinguishable. ¹

Fielland asserts that even if the judge were correct in limiting its recovery to the cost of demolishing the wall and the parking lot rental during demolition, the judge erred in limiting the amount of the recovery to the gross sum of $20,250.

In the primary action Continental introduced evidence that the cost of demolition was $21,060 and the fees paid for the rental of the adjacent parking lot during demolition totalled $23,024. Thus, Fielland contends that even under the judge's theory of the case, it should have been entitled to a recovery of the entire $44,084.40 from F & C since this sum was not in excess of the $57,500 paid by Fielland on the judgment. On the other hand, F & C points out that while the total amount of the subrogation claim was $171,000, the jury awarded only $125,000. Therefore, it cannot be determined with certainty that any part of the claims for the cost of demolition or the parking lot rental during demolition were within the $125,000 judgment entered against Fielland. The parties stipulated that in ruling on the cross-claim, the judge could consider not only the testimony presented at the hearing on the cross-claim but also the evidence presented during the trial of the primary claim. Under the circumstances, there is no way to tell how the gross amount of the third-party judgment came to be set at $20,750. ² In his capacity as the trier of facts, the judge performed the same function as the jury. Since that sum was within the legal boundaries prescribed by the evidence before him, we cannot say that he erred.

In its cross-appeal, F & C first contends that there was no coverage whatsoever because the building was built by a joint venture and the policy was issued only to C. A. Fielland. Yet, the policy reflects that it was issued to Fielland as a contractor and the liability imposed upon Fielland was because of work done in that capacity. Perhaps the best answer to this contention is that a joint venture is not a separate legal entity. Therefore, absent specific language in the policy to the contrary, Fielland was covered in connection with the construction of the building even though he happened to become involved in this particular construction as a joint venturer along with another party. See W. B. Johnston Grain Company v. Self (Okl.1959), 344 P.2d 653; Insurance Company of North America v. Department of Industry, Labor and Human Relations (1970), 45 Wis.2d 361, 173 N.W.2d 192; Cf. ...