Caledonia Community Hospital v. St. Paul Fire & Marine Ins. Co.

Decision Date05 March 1976
Docket NumberNo. 45690,45690
Citation307 Minn. 352,239 N.W.2d 768
PartiesCALEDONIA COMMUNITY HOSPITAL, Formerly The Caledonia Community Hospital Association, et al., Respondents, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY et al., Appellants.
CourtMinnesota Supreme Court

Syllabus by the Court

A jury verdict that the collapse of a foundation wall caused by external lateral pressure from moisture-retentive soil is an 'explosion' within insurance coverage will not be interfered with where (1) insurers did not object to a trial court instruction omitting internal pressure as an essential element of the term 'explosion' and (2) the case was tried on the issue of whether the external pressure was active or static, on which issue the evidence is sufficient to sustain the jury verdict.

Dunlap, Keith, Collins, Towey & Finseth, Robert R. Dunlap and Richard W. Towey, Rochester, for appellants.

Grose, Von Holtum, Von Holtum, Sieben & Schmidt, Harry A. Sieben, Jr., and Jeffrey L. Flynn, Minneapolis, for respondents.

Heard before PETERSON, YETKA, and BREUNIG, JJ., and considered and decided by the court en banc.

ROBERT J. BREUNIG, Justice. *

Defendant insurers appeal from an order denying their alternative motion for judgment notwithstanding the verdict or for a new trial after a jury verdict finding that the collapse of the east wing of plaintiff hospital was caused by an 'explosion' within the policy coverage, even though the evidence was uncontroverted that the cause was external lateral pressure against the foundation of the north wall created by the moisture in the soil. Although we might not agree with the jury verdict, it was not unreasonable under the instruction given by the trial court. Since defendants do not object to that instruction, we affirm.

Defendants raise three issues. First, it is argued that the plaintiffs' loss is not covered because it is within an explicit 'water exclusion.' Second, assuming that exclusion inapplicable, defendants argue that the term 'explosion' is unambiguous and that the trial court erred by in effect allowing the jury to interpret the term. Third, assuming the issue to have been properly submitted to the jury, defendants argue that the evidence is insufficient to support the verdict.

The water exclusion upon which defendants rely provides as here pertinent:

'This Company shall not be liable for loss caused by, resulting from, contributed to or aggravated by any of the following--

'(c) water below the surface of the ground including that which exerts pressure on * * * foundations, walls * * * Unless loss by explosion as insured against hereunder ensues, and then this Company shall be liable for only such ensuing loss.' (Italics supplied.)

Of course, if the 'unless' clause applies here, the water exclusion is not determinative. Defendants argue that the clause is not applicable because the word 'ensues' connotes the occurrence of two separate events: (1) Loss directly caused by water pressure against the foundation, which occurred here and would be excluded, and (2) a subsequent or ensuing explosion causing further loss. However, we think the language equally susceptible to the interpretation that the explosion may ensue from the water pressure. The burden is upon defendants to prove that the exclusion applies. 13 Couch, Insurance 2d, § 48:139. Ambiguities are to be resolved against the insurer and in accordance with the reasonable expectations of the insured. 1 Couch, Insurance 2d, §§ 15.14, 15.16; Northwest Airlines, Inc. v. Globe Ind. Co., Minn., 225 N.W.2d 831, 837 (1975); Caspersen v. Webber, 298 Minn. 93, 98, 213 N.W.2d 327, 330 (1973).

Since defendants did not prove that the water exclusion applies, the trial turned on whether plaintiffs' loss was caused by an explosion. The insurance policy did not define the term 'explosion' except by enumerating several exclusions. Therefore, the function of the trial court was to define the term as a matter of law and submit to the jury the factual determination of whether under the definition given an explosion had occurred. Honeymead Products Co. v. Aetna Cas. & Surety Co., 275 Minn. 182, 194, 146...

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