Diamond State Ins. Co. v. Homestead Industries, Inc.

• Decision Date: 17 January 1995
• Docket Number: No. 24223,24223
• Citation: Diamond State Ins. Co. v. Homestead Industries, Inc., 318 S.C. 231, 456 S.E.2d 912 (S.C. 1995)
• Court: South Carolina Supreme Court
• Parties: DIAMOND STATE INSURANCE COMPANY, Appellant, v. HOMESTEAD INDUSTRIES, INC., Peggy A. Via, as Administratrix of the Estate of Timothy L. Via, Respondents. . Heard

Page 912

456 S.E.2d 912

DIAMOND STATE INSURANCE COMPANY, Appellant, v.HOMESTEAD INDUSTRIES, INC., Peggy A. Via, as Administratrix of the Estate of Timothy L. Via, Respondents.

No. 24223.

Supreme Court of South Carolina.

Heard Jan. 17, 1995.

Decided April 3, 1995.

Rehearing Denied May 3, 1995.

C. Mitchell Brown and M. Clifton Scott both of Nelson, Mullins, Riley & Scarborough, Columbia, for appellant.

Paul R. Hibbard of Johnson, Smith, Hibbard & Wildman and Charles J. Hodge of Hodge Law Offices, Spartanburg, for respondents.

Creighton B. Coleman of Whaley, McCutchen, Blanton & Rhodes, Columbia, for amicus curiae Gulf Ins. Group.

Walter Bilbro, Jr. of Walter Bilbro, Jr. & Associates, Charleston, for amicus curiaeNat. Ass'n of Professional Surplus Lines Offices, Ltd.

William Howell Morrison and Frederick Theodore LeClercq both of Holmes & Thomson, Charleston, for amicus curiaeEmployers Reinsurance Corp.

TOAL, Justice:

Diamond State appeals the circuit judge's finding that its commercial liability policy with Homestead provides $500,000 aggregate coverage for bodily injury resulting from products hazards and a separate $500,000 aggregate coverage for bodily injury resulting from completed operations hazard.We reverse.

FACTS

Timothy Via was electrocuted at the Long Mile Rubber Company in Spartanburg South Carolina while using a steam jenny, a high pressure cleaning machine Homestead manufactured.His widow filed a wrongful death and survival action against Homestead.This suit was settled by consent order.Under the terms of the consent order:

The court entered judgment against Homestead for $400,000.

Mrs. Via immediately received $100,000 under Homestead's commercial liability insurance policy with Diamond State.

Mrs. Via received $50,000 from Homestead and agreed not to execute judgment directly against Homestead for more than that amount.

Homestead assigned to Mrs. Via any rights that it possessed under its insurance policy and agreed to cooperate with Mrs. Via in pursuing any claim against Diamond State.

After paying Mrs. Via $100,000 under the order, Diamond State filed this declaratory judgment action to establish the extent of its liability under its policy with Homestead.Diamond State argued that during the policy year it paid the aggregate amount of $500,000 for bodily injuries under the policy and, therefore, was not liable to Homestead.Specifically, Diamond State argued it paid $400,000 under the policy for a death that occurred in Texas as a result of using a steam jenny manufactured by Homestead and it paid Mrs. Via the remaining $100,000 of the aggregate amount under the policy for bodily injuries.¹

Both parties filed motions for summary judgment.The circuit court judge granted Homestead's motion holding the $500,000 aggregate limit applied separately to the two deaths because each occurrence met the definition of "completed operations" and "products hazard" under the policy and such aggregate limits were to be applied separately to these coverages; or in the alternative paragraph (b) of the policy was ambiguous and should be construed in favor of the insured.The circuit court judge held Diamond State liable for the $300,000 it had not paid in Mrs. Via's settlement.Diamond State appeals.

LAW/ANALYSIS

Diamond State argues the circuit court judge erred in construing the insurance contract to include coverage for bodily injury beyond the $500,000 aggregate amount.We agree.

The policy states the limits of liability for bodily injury liability and property damage liability are $500,000 each occurrence and $500,000 aggregate.Additionally, the policy states in pertinent part:

LIMITS OF LIABILITY

Regardless of the number of (1) insureds under this policy, (2) persons or organizations who sustain bodily injury or property damage, or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:

Bodily injury Liability and Property Damage Liability:

(a) The limit of liability stated in the Schedule of this endorsement as applicable to "each occurrence" is the total limit of the company's liability for all damages including damages for care and loss of services because of bodily injury and property damage sustained by one or more persons or organizations as a result of any one occurrence, provided that with respect to any occurrence for which notice of this policy is given in lieu of security or when this policy is certified as proof of financial responsibility under the provisions of the Motor Vehicle Financial Responsibility Law of any state or province such limit of liability shall be applied to provide the separate limits required by extent of the coverage required by such law for Bodily Injury Liability and Property Damage Liability to the extent of the coverage required by such law, but the separate application of such limit shall not increase the total limit of the company's liability.

(b) Subject to the above provision respecting "each occurrence", the total liability of the company for all damages because of all bodily injury and property damage which occurs during each annual period while this policy is in force commencing from its effective date and which is described in any of the numbered subparagraphs below shall not exceed the limit of liability stated in the Schedule of this endorsement as "aggregate":

(1) all property damage ...

(2) all property damage ...

(3) if Products--Completed Operations insurance is afforded, all bodily injury and property damage included within the completed operations hazard and all bodily injury and property damage included within the products hazard;

(4) if Contractual Liability insurance is afforded, all property damage ...

Such aggregate limit shall apply separately:

(i) to the property damage described in subparagraphs (1) and (2) and separately with respect to each project away from premises owned by or rented to the named insured;

(ii) to the sum of the damages for all bodily injury and property damage described in subparagraph (3); and

(iii) to the property damage described in subparagraph (4) and separately with respect to each project away from premises owned by or rented to the named insured.

Insurance policies are subject to general rules of contract construction.Sloan Const. Co. v. Central Nat's Ins. Co., 269 S.C. 183, 236 S.E.2d 818(1977).This Court must give policy language its plain, ordinary and popular meaning.Fritz-Pontiac-Cadillac-Buick v. Goforth, --- S.C. ----, 440 S.E.2d 367(1994).Ambiguous or conflicting terms in an insurance policy must be construed liberally in favor of the insured and strictly against the insurer.Spinx Oil Co. v. Federated Mut. Ins., 310 S.C....