Feeney and Meyers v. Empire State Insurance Co.

• Decision Date: 27 December 1955
• Docket Number: No. 5176.,5176.
• Citation: 228 F.2d 770
• Parties: FEENEY AND MEYERS, a copartnership, composed of Mark Feeney and Chas. Meyers doing business as Feeney and Meyers, Appellants, v. EMPIRE STATE INSURANCE COMPANY OF WATERTOWN, NEW YORK, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

228 F.2d 770 (1955)

FEENEY AND MEYERS, a copartnership, composed of Mark Feeney and Chas. Meyers doing business as Feeney and Meyers, Appellants, v. EMPIRE STATE INSURANCE COMPANY OF WATERTOWN, NEW YORK, Appellee.

No. 5176.

United States Court of Appeals Tenth Circuit.

December 27, 1955.

J. E. Williams and George N. Otey, Ardmore, Okl. (E. H. Williams, W. J. Williams and Otey, Johnson & Evans, Ardmore, Okl., were with them on the brief), for appellants.

Walter D. Hanson, Oklahoma City, Okl. (Clarence P. Green, Oklahoma City, Okl., was with him on the brief), for appellee.

Before BRATTON and HUXMAN, Circuit Judges, and CHRISTENSON, District Judge.

HUXMAN, Circuit Judge.

Appellants, Feeney and Meyers, instituted this action against the appellee, the Empire State Insurance Company of Watertown, New York, on an insurance policy issued by the company to recover for loss of certain well servicing equipment which was destroyed or damaged while an oil well was being serviced by appellants. The policy on which suit was predicated insured the equipment against loss resulting from "Fire and Lightning, Cyclone, Tornado and/or Windstorm, Flood, Earthquake, Explosion (with exceptions not material herein), etc." It contained an exclusion clause providing that the "policy does not cover loss or damage caused by a Blowout or Cratering of an oil or gas well."

The defense to the action was that the loss resulted from a blowout and was therefore excluded from coverage under the above quoted exclusion clause.

A jury was empanelled and evidence was taken. It is without dispute that a fire occurred and that the loss resulted directly from the fire. The only disputed issue of fact was whether there was a preceding blowout and whether it was the proximate cause of the loss so as to relieve the company from liability under the exclusion clause.

At the conclusion of the evidence, the trial court dismissed the jury, wrote an opinion holding there was a blowout and that the loss was the direct result of the blowout, for which the company was not liable under the exclusion clause, and directed entry of judgment for appellee.

While appellants do not concede that a blowout occurred and contend that that was a disputed issue of fact which should have been submitted to the jury, for the purpose of this opinion it will be assumed that a blowout did occur and that it was the cause of the ensuing fire. It is nonetheless our conclusion that there was liability under the policy.

It is a well-recognized principle of law that exclusion clauses will be strictly construed and any ambiguity therein will be resolved against the company.¹ That, of course, does not warrant one in seeking ambiguity where none in fact exists.

The question then is what did the company intend to exclude from coverage by the use of the term "loss or damage caused by Blowout * * *, etc." It must be conceded that there can be a blowout without resulting fire and that such a blowout can result in loss. Such loss clearly would be outside the coverage of the policy under the exclusion clause. The policy in general terms...