Charles Dowd Box Co. v. Fireman's Fund Ins. Co.

• Decision Date: 13 June 1966
• Citation: 218 N.E.2d 64,351 Mass. 113
• Parties: CHARLES DOWD BOX CO., Inc., et al. v. FIREMAN'S FUND INSURANCE COMPANY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 64

218 N.E.2d 64

351 Mass. 113

CHARLES DOWD BOX CO., Inc., et al. v. FIREMAN'S FUND INSURANCE COMPANY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued March 9, 1966.

Decided June 13, 1966.

John W. Burke, Boston (Joseph J. Hurley, Boston, with him) for Fireman's Fund Ins. Co. and others; Robert E. McCourt, Boston, for Merchants and Business Men's Mut. Ins. Co., also with him.

Summer H. Babcock, Boston (Wilmot R. Hastings and Everett H. Parker, Boston, with him) for plaintiffs.

Before WILKINS, C.J., and SPALDING, CUTTER, SPIEGEL and REARDON, JJ.

SPIEGEL, Justice.

This is an action of contract against thirty-nine insurance companies to recover, under sixty-one insurance policies, damages resulting from a fire on the plaintiffs' ¹ premises on July 11, 1960, and a 'rekindling' of that fire on July 16, 1960. The parties stipulated that the 'question of liability' be submitted to the jury, and that the question of damages be reserved for subsequent hearings subject to the order of the trial judge. The following questions were submitted to the jury 'Are the defendants named in Counts 1 through 24 and Counts 27 through 61 liable to the plaintiff(s)?' and 'Is the defendant named in Counts 25 through 26 liable to the plaintiff(s)?' The jury answered each question affirmatively. 'Thereafter the case was ordered tried before * * * (a judge) sitting without a jury * * * on the issue of what, if any, damages the plaintiffs were entitled to recover.' The judge found for the plaintiffs on policies covering damage to buildings and contents in the amount of $927,234, and on policies covering business interruption losses in the amount of $155,000. The plaintiffs' motion to amend the judge's findings to include interest from September 11, 1960, was allowed. The case is here on the defendants' exceptions.

At the trial on the issue of liability, there was evidence that the plaintiffs stored paper rolls in an open area. In March of 1960 construction began on an addition to an adjacent building in order to cover and protect the paper rolls from the weather. 'At the start of construction at least 25% of the ground area by (sic) the new building was covered with roll stock.' One witness testified that he was told 'that we would have to work around this paper so that they could keep their operation going at all times.' The plaintiffs' employees moved the paper rolls around within the area to facilitate construction as requested by the contractor. The contractor testified that this was 'sound construction practice.' The addition was a prefabricated structure, sheeted over with metal and held together with bolts--fasteners. 'There was no welding in putting together the columns, roof trusses or the sidewalls.' However, there was welding in connection with the removal of panels in the existing wall of the adjoining building and putting them in the walls of the new building--'generally in connection with sidewall panels in odd places where you couldn't get nuts and bolts in.' This welding involved 'maybe an hour or so, maybe once or twice a week.' There was also some welding of braces to columns on one wall which 'probably took 5 minutes for each side' of six or seven columns. The welding was done over a cement floor in an area which had been cleared of paper within a radius of ten to fifteen feet.

There was testimony by a welder that 'the space * * * (he) felt was safe in that area and there was no need to ask anybody to move it (the paper).'

On July 11, 1960, 'the building was substantially complete, but there were still some minor things to do.' The plaintiffs planned to install a sprinkler system, but had not yet done so. Some work was being done on the roof, and an employee of the contractor was welding a brace to one of the columns. Feeling an unusual amount of heat, the welder turned and saw a fire between rolls of paper ten or fifteen feet behind him.

All of the fire insurance policies contained the following clauses: 'Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring * * * while the hazard is increased by any means within the control or knowledge of the insured * * *.'

'This policy being written at a rate based on the protection of the premises by the sprinkler system, it is a condition of this policy that * * * no unsprinklered additions or extensions shall be made to the building(s) unless immediate notification is given to the New England Fire Insurance Rating Association.'

'Alterations and Repairs Clauses: (a) (This clause applies only to such item(s) that cover on or in one building.) Permission granted to make additions, alterations and repairs to the building or structure described; and this policy (insofar as it covers building or structure) shall also cover such additions, alterations and repairs when not otherwise covered by insurance, and shall cover all temporary structures, materials, equipment and supplies therefor on the premises described or within 100 feet thereof, and (insofar as it covers contents) shall also cover contents in such additions.

'(b) (This clause applies only to such item(s) as cover on or in two or more fire divisions.) Permission granted to make additons, alterations and repairs to the buildings or structures described, and to construct new buildings on the premises described; and this policy (insofar as it covers buildings or structures) shall also cover such additions, alterations and repairs and new buildings on the premises described when not otherwise covered by insurance, and shall cover all temporary structures, materials, equipment and supplies therefor on the premises described or within 100 feet thereof, and (insofar as it covers contents) shall also cover contents in such additions and new buildings.

'The above alterations and repairs clauses do not waive or modify any of the conditions of the Automatic Sprinkler Clause, if any, applying to this policy.'

'Work and Materials: Permission granted for such use of the premises as is usual or incidental to the occupany as described in this policy.'

The defendants excepted to the denial of their motion for directed verdicts and to the denial of their motion for a new trial on the grounds that the evidence showed 'there was an increase in risk and a breach of the sprinkler clause.' They also took exception to the 'part of * * * (the judge's) charge where * * * (he) said that the Dowds had a right to use the warehouse while it was being constructed by its use of storing of paper,' and '(t)o the part of * * * (the judge's) charge where * * * (he) refer(s) to the Worcester Building Code and said that there is nothing in the Code to tell you when a sprinkler system should be installed.'

The defendants contend that verdicts should have been directed for them because '(t)he absence of a sprinkler system and the presence of tons of combustible paper is a combination that increases the risk of fire beyond question,' and '(t)he change in use here was not temporry or casual.'

The presence of paper rolls in the area did not increase the hazard since they were stored there prior to construction; and there was no evidence to show that, when completed, the new metal building for housing the rolls would increase the risk of fire. The use of welding equipment during construction did increase the risk of fire, but the jury could have found that such use was casual or temporary. '(A)cts (of the insured) increasing the risk must be more than casual or temporary; ordinary repairs and changes of the premises insured of a temporary character do not render a policy void although the property may be exposed to an additional hazard.' Thomson & Kelly Co. v. United States Merchs. & Shippers' Ins. Co., 263 Mass. 181, 187, 160 N.E. 668, 670, 57 A.L.R. 944.

Further, the policy gave permission 'to make additions, alterations and repairs to the buildings or structures described, and to construct new buildings on the premises described.' This clause permits construction in a reasonable, proper and usual way even though such construction may increase the hazard. See First Congregational Church of Rockland v. Holyoke Mut. Fire Ins. Co., 158 Mass. 475, 479--480, 33 N.E. 572, 19 L.R.A. 587. See also Miller v. Spring Garden Ins. Co., 9 Cir., 202 F. 442, 443--445. Otherwise the permision to build would be illusory. There was evidence from which the jury could have found that the contractor followed sound construction practice and, therefore, there was no breach of the terms of the policy.

The defendants maintain that it was error for the judge to instruct the jury that '(i)t is not contemplated * * * that in order to make the addition that the Dowd people are to shut up this warehouse area.' They argue that the 'plaintiffs would have * * * no right to subject defendants to a greater risk than contemplated by the policies in order to save themselves inconvenience or business loss.' But the policies expressly contemplated 'such use of the premises as is * * * incidental to the occupancy as described in this policy.' This clause, when read with the clause permitting additions and new buildings, appears to us to allow the continuation of the business during construction. There was testimony that it was necessary to build around the paper 'so that * * * (the plaintiffs) could keep their operation going at all times,' and there was no evidence to dispute this.

The defendants assert that verdicts should have been directed for them because the plaintiffs violated the contract provision which stated that 'no unsprinklered additions or extensions shall be made to the building(s).' They maintain that the violation consists 'not in failing to install the sprinkler system but in using the addition prior to the installation of the sprinklers.'

The clause in question makes no mention as to whether the addition or extension may be used during construction prior to the installation of a...