Canal Ins. Co. v. Insurance Co. of North America

• Decision Date: 07 April 1993
• Docket Number: No. 23863,23863
• Citation: 431 S.E.2d 577,315 S.C. 1
• Court: South Carolina Supreme Court
• Parties: CANAL INSURANCE COMPANY, Appellant, v. The INSURANCE COMPANY OF NORTH AMERICA, M & R Packing Company of Walterboro, Inc., and James L. Murdaugh, a/k/a Jimmy Murdaugh, d/b/a Jimmy's Welding, Respondents. . Heard

Page 577

431 S.E.2d 577

315 S.C. 1

CANAL INSURANCE COMPANY, Appellant, v. The INSURANCE COMPANY OF NORTH AMERICA, M & R Packing Company of Walterboro, Inc., and James L Murdaugh, a/k/a Jimmy Murdaugh, d/b/a Jimmy's Welding, Respondents.

No. 23863.

Supreme Court of South Carolina.

Heard April 7, 1993.

Decided June 1, 1993.

Joseph S. Brockington, of Wise & Cole, P.A., Charleston, for appellant.

Stephen P. Groves, of Young, Clement, Rivers & Tisdale; and Stephen F. DeAntonio, Charleston, for respondents The Insurance Co. of North America and M & R Packing Co. of Walterboro, Inc.

Lee R. Moody, of Moody & Smoak, Walterboro, for respondent James L. Murdaugh, a/k/a Jimmy Murdaugh d/b/a Jimmy's Welding.

MOORE, Justice.

This is a declaratory judgment action to determine coverage under an automobile insurance policy for damage to a building caused by a truck crane. The trial judge found coverage. We reverse.

FACTS

Appellant (Canal) issued an automobile insurance policy to respondent Murdaugh, the owner and operator of the truck crane. Respondent Insurance Company of North America has a subrogation interest.

The truck crane is a single unit which uses the same power source to drive the truck and activate the crane. To use the

                45-ton crane, the truck is hoisted off its tires on retractable hydraulic outriggers which level the crane while in use.   The accident occurred while Murdaugh was using the truck crane to lift a condenser onto the roof of respondent M & R's building.   While lifting the condenser, the crane became unbalanced and tipped over, crashing into the building
                

ISSUES

1. Whether the policy excludes coverage?

2. Whether coverage is mandated under S.C.Code Ann. § 38-77-140 (1989)?

DISCUSSION

Canal argues the accident is not covered under its policy with Murdaugh for two reasons. First, it argues the exclusion for "mobile equipment" precludes coverage. The policy excludes from the definition of "automobile" any "mobile equipment" which is defined to include "a land vehicle ... designed or maintained for the sole purpose of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle: power cranes...." The trial judge found this exclusion did not apply.

We find the trial judge properly construed this exclusion in the policy. The truck crane is the only vehicle listed in the policy as a covered vehicle. The exclusion cannot be read to prohibit coverage for the only vehicle contemplated by the parties to the policy. Accord U.S. Fid. & Guar. Co. v. Gillis, 164 Ga.App. 278, 296 S.E.2d 253 (1982) (truck with boom and ladder covered despite exclusion for mobile equipment).

Second, Canal argues the accident is not covered because the policy includes the following endorsement:

It is hereby understood and agreed that no coverage is afforded for any accident resulting [from] the use of the crane.

The trial judge found this endorsement invalid because it would exclude coverage for the only covered vehicle in the policy.

We disagree with the trial court's construction of this endorsement. The endorsement specifies use of the crane, whereas the vehicle listed for coverage is a "1975 Linkbelt Truck Crane." It is unambiguous that the endorsement is intended to exclude from coverage only accidents caused by use of the crane part of the truck. Since the crane can be used only when the truck is hoisted on the outriggers, this endorsement would not exclude coverage for damages caused by the truck crane while used as a means of transportation. Thus, the endorsement provides a limited and facially valid exclusion.

Since the policy contemplates an exclusion for use of the crane, the question then becomes whether such an exclusion is allowable under the statutes governing automobile insurance.

Section 38-77-140 (1989) provides in pertinent part:

No automobile insurance policy may be issued ... unless it contains a provision insuring the persons defined as insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance,...