C & H Plumbing & Heating, Inc. v. Employers Mut. Cas. Co., 210
Decision Date | 15 February 1972 |
Docket Number | No. 210,210 |
Parties | C & H PLUMBING AND HEATING, INC. v. EMPLOYERS MUTUAL CASUALTY COMPANY. |
Court | Maryland Court of Appeals |
James K. Foley, Silver Spring, for appellant.
John J. Pyne, Bethesda, for appellee.
Argued before HAMMOND, C. J., and BARNES, SINGLEY, SMITH and DIGGES, JJ.
In this case an insured, appellant, C & H Plumbing and Heating, Inc. (C & H), complains because a trial judge determined that a 'loss by infidelity of an * * * employee' within the meaning of an insurance policy took place when property of C & H was taken while off duty by persons who worked for C & H. We shall affirm.
We review this case bearing in mind the rules summarized for the Court by Judge Singley in Gov't Employees Insur. Co. v. DeJames, 256 Md. 717, 261 A.2d 747 (1970):
Moreover, we have no right to relieve one of the parties from disadvantageous terms by process of interpretation nor may we make a new contract under guise of construction. Offutt v. Liberty Mut. Ins. Co., 251 Md. 262, 270, 247 A.2d 272 (1968).
Appellee, Employers Mutual Casualty Company (Employers Mutual), issued a policy to C & H known as an 'Installation Risk Policy.' Perils insured against were 'all risks of direct physical loss or to the insured property from any external cause except as (t)hereinafter excluded.' The clause giving rise to the difficulty here read:
'3. THIS POLICY DOES NOT INSURE AGAINST:
(a) Loss caused by infidelity of an officer or employee of the insured whether such person is acting alone or in collusion with others or by infidelity of persons to whom the insured property is entrusted.'
There is no dispute as to the actual facts. The dispute is as to the law applicable to those facts.
By prearrangement on the afternoon of June 24, 1969, three individuals who had worked for C & H from 7:15 a. m. to 4:00 p. m. on that date waited 'back in the woods where (they) could see the house' (a farm house in a fenced-in compound where C & H had materials and equipment). They waited '(b)ehind a bunch of bushes' at a point about 75 feet from the compound. After the president of the corporation left, they 'went in the back of the house.' One of the number procured a ladder and broke out a second story window. Entrance was then effected and the individuals removed copper wire, copper parts, and tubing said to have had a value in excess of $10,000. Claim was presented and was denied by Employers Mutual on the ground that the loss was 'caused by the insured's employees.'
C & H relies heavily upon the case of Century Indemnity Company v. Schmick, 351 Mich. 622, 88 N.W.2d 622 (1958). The policy in that instance provided that the insurance company would not be liable for loss caused by 'any dishonest, fraudulent or criminal act of the Insured or of any * * * employee * * * of the Assured, whether acting alone or in collusion with others.' A person who worked for the insured entered his place of business between 1:30 a. m. and 6:30 a. m. and took out cash and securities amounting to more than $1,200. The court said:
It is noted that in the course of its opinion the court made reference to the Michigan rule 'that a policy of insurance couched in language chosen by the insurer must be given the construction of which it is susceptible most favorable to the insured.' We have already quoted Gov't Employees Insur. stating that Maryland has not adopted that rule.
A somewhat similar case, citing Century Indemnity, is Sehon, Stevenson & Co. v. Buckeye Union Insurance Co., 298 F.Supp. 1168 (S.D.W.Va.1969). The employee exclusion there had added to it the words 'while working or otherwise.' Entry had been effected under circumstances similar to those in this case and in Century Indemnity. The court was of the opinion that the words 'or otherwise' rendered the insurance company not liable.
Richards on the Law of Insurance § 298 (5th ed. Freedman 1952) states:
'Courts in construing and applying provisions of policies excepting from coverage loss or damage caused by the dishonesty of employees have respected the express language and denied liability on the part of the insurer.' Id. at 987.
In support of that proposition the author cites Hunter v. Pearl Assur. Company, 292 Mich. 543, 291 N.W. 58 (1940), and Hoffman Bros. v. Commercial Union Assur. Co., 221 App.Div. 167, 222 N.Y.S. 641 (1927), aff'd 248 N.Y. 578, 162 N.E. 531. In Hunter the court held that 'theft' as used in a clause excluding theft by employees included larceny by conversion. In Hoffman a public porter was engaged to carry sample cases for the insured officer who was traveling seeking orders. It was held that the porter came 'within the class comprised by the words 'employee, servant, or messenger."
On the general subject see the annotation 'Construction and Application of Provision of Insurance Policy Excepting from Coverage Loss or Damage Caused by Dishonesty of Employee', 12 A.L.R.2d 236 (1950).
On the subject of ambiguity 1 Couch on Insurance 2d (1959) states:
' § 15:83.-Test in determining existence of ambiguity.
We see no ambiguity in this policy. It is a question of determining the intention of the parties.
In American Casualty Co. of Reading, Penn. v. Wypior, 365 F.2d 164 (7th Cir. 1966) the court commented on 'employee,' stating:
'The word 'employee' appears in the law in many different contexts and thus does not lend itself to any inflexible definition. The definitions of an 'employee' for purposes of workmen's compensation statutes and collective bargaining agreements, for example, do not determine the meaning of 'employee' as used in a policy of insurance. When the word ...
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