Federated Mut. Ins. Co. v. Madden Oil Co., Inc.
Decision Date | 27 July 1987 |
Docket Number | No. 14915,14915 |
Citation | 734 S.W.2d 258 |
Parties | FEDERATED MUTUAL INSURANCE COMPANY, Plaintiff-Respondent, v. MADDEN OIL COMPANY, INC., Defendant-Appellant. |
Court | Missouri Court of Appeals |
Nicholas R. Fiorella, Gannaway, Fiorella, Cummings & Bennett, Springfield, for defendant-appellant.
Glenn A. Burkart, Mann, Walter, Burkart, Weathers & Walter, Springfield, for plaintiff-respondent.
Plaintiff-respondent Federated Mutual Insurance Company, ("Federated"), brought this declaratory judgment action against defendant-appellant Madden Oil Company, Inc., ("Madden"), seeking a determination of whether Federated's "special multi-peril policy," No. SMP017925, issued to Madden as the named insured, covered a loss of $27,500 which Madden incurred. The loss arose out of Madden's dispute with one Campbell with respect to a transport trailer. The trial court, sitting without a jury, declared that the policy did not apply to the loss and found the issues generally in favor of Federated. Madden appeals.
The policy obligated Federated to pay on behalf of the insured "all sums which the insured shall become legally obligated to pay as damages because of property damage to which this insurance applies, caused by an occurrence, and [Federated] shall have the right and duty to defend any suit against the insured seeking damages on account of such property damage." The issue is whether the $27,500 loss constituted "property damage" caused by an "occurrence" as those two terms are respectively defined in the policy.
The policy contains the following definitions:
" 'Property damage' means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period."
" 'Occurrence' means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." (Emphasis added.)
It is the position of Madden that the $27,500 loss was "property damage" caused by an "occurrence" and that the trial court erred in ruling otherwise. It is the position of Federated that the $27,500 loss was not "property damage" caused by an "occurrence" and that the trial court properly found that the policy did not apply to the loss. Federated does not rely on any exclusion and neither side mentions an exclusion.
There is no significant dispute concerning the background facts which are as follows:
(1) The policy period of Policy No. SMP017925 was from June 1, 1979 to June 1, 1980.
(2) On May 1, 1978, one Stomboly executed in favor of one Campbell a security agreement on a 1969 model aluminum transport trailer. Later Stomboly defaulted on the promissory note held by Campbell but failed to retransfer the trailer in accordance with the security agreement.
(3) On June 13, 1979, Stomboly purported to transfer the title to the trailer to Madden. Prior to such purported transfer, Madden knew that Campbell claimed ownership of the trailer and right to its possession under the security agreement and that Campbell had a lawsuit pending against Stomboly to replevy the trailer.
(4) On September 5, 1984, Campbell obtained a judgment against Madden in a replevin action. The judgment awarded Campbell possession of the trailer and $31,000 as damages for Madden's wrongful detention of it from June 13, 1979, to August 31, 1984. The judgment recited, among other things, that Madden, at the time of the "purchase" of the trailer from Stomboly, "was not a bona fide purchaser without notice of said trailer" because Madden negotiated for the purchase of said trailer with actual knowledge of Campbell's claim and security interest and that Campbell "was entitled to priority and possession as to Madden." The judgment also recited that the "reasonable fair market value" of the trailer in 1979 was $9,000 and that, in 1984, it still had that value.
(5) Following the entry of judgment in the replevin action, Madden settled with Campbell for $20,000. Madden spent an additional $7,500 in defending the replevin action.
No issue is raised concerning the reasonableness of the $20,000 settlement or the $7,500 expenses. Neither party claims that those two components should be treated separately for coverage purposes. There is no claim that a portion, but not all, of either component is covered or not covered. The briefs of both parties approach the coverage issue on the theory that either the policy applies to the entire $27,500 loss or it does not apply at all. This court, accordingly, adopts the same approach.
Madden's brief makes the following argument:
The trial court found, and this court agrees, that from the standpoint of Madden, Campbell's loss of use of the trailer was not caused by an "occurrence." The trial court found, and this court agrees, that Campbell's loss of use "was planned and expected" by Madden.
The policy definition of "occurrence," as pertinent here, requires these elements: (1) an accident; (2) resultant property damage which is neither expected nor intended by Madden.
Madden's brief does not state specifically what it was which Madden claims constituted "an accident." Apparently it was the outcome of the lawsuit by Campbell against Madden which, so Madden claims, was "neither expected nor intended" from Madden's standpoint, yet Madden's brief concedes that the damages assessed against Madden "might have been foreseeable."
In Travelers Ins. Co. v. Cole, 631 S.W.2d 661 (Mo.App.1982), the court dealt with a policy definition of "occurrence" essentially similar to the definition of that term contained in the instant policy. The court said, at p. 664:
In Truck Ins. Exchange v. Pickering, 642 S.W.2d 113, 116 (Mo.App.1982), a case dealing with bodily injury rather than property damage, the court said:
"[A]n injury is 'expected or intended' from the standpoint of the insured if a reason for an insured's act is to inflict bodily injury or 'when the character of the act is such that an intention to inflict an injury can be inferred' as a matter of law."
In Taylor-Morley-Simon v. Michigan Mut. Ins. Co., 645 F.Supp. 596 (E.D.Mo.1986), a comprehensive general liability policy contained the definitions of "occurrence" and "property damage" which appear in the instant policy. Referring to the term "accident" contained in the definition of "occurrence," the court said at pp. 599-600:
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