General American Transp. Corp. v. Sun Insurance Office, Ltd.

• Decision Date: 30 March 1965
• Docket Number: Civ. A. No. 707.
• Citation: 239 F. Supp. 844
• Parties: GENERAL AMERICAN TRANSPORTATION CORPORATION, Plaintiff, v. SUN INSURANCE OFFICE, LTD., Defendant.
• Court: U.S. District Court — Eastern District of Tennessee

239 F. Supp. 844

GENERAL AMERICAN TRANSPORTATION CORPORATION, Plaintiff, v. SUN INSURANCE OFFICE, LTD., Defendant.

Civ. A. No. 707.

United States District Court E. D. Tennessee, Winchester Division.

March 30, 1965.

Sonnenschein, Levinson, Carlin, Nath & Rosenthal, Chicago, Ill., James M. Goff, Chicago, Ill., of counsel, Boult, Hunt, Cummings & Conners, Nashville, Tenn., Joseph G. Cummings, Nashville, Tenn., of counsel, for plaintiff.

Spears, Moore, Rebman & Williams, Chattanooga, Tenn., Alvin O. Moore, Chattanooga, Tenn., of counsel, Bigham, Englar, Jones & Houston, New York City, Donald F. Connors, New York City, of counsel, for defendant.

NEESE, District Judge.

This is an action on an insurance contract. The Court's jurisdiction under 28 U.S.C. § 1332 was not disputed, and the action was tried by the Court without the intervention of a jury on October 5, 6, 7 and 8 and November 9 and 10, 1964. Final briefs have now been submitted and considered by the Court.

The plaintiff, as a subcontractor, was engaged in the performance of certain phases of a construction contract at a federal government project, Arnold Engineering Development Center, in Coffee County, Tennessee. A unique structure was being built, principally underground, as a testing facility for jet propulsion engines. A concrete cap was to cover this structure, except for a center-hole, where it was to protrude above the surface of the ground. The cap was to be created by the pouring, in series, of six segments of concrete. This pouring was being accomplished by the prime contractor, but the temporary supporting steel work for the cap was constructed by the plaintiff. When the first such segment had been poured to the extent of 85% to 90% of the segment and about 825 tons of fresh concrete, on December 17, 1962, the supporting structure emitted a loud noise and, immediately, if not simultaneously, the entire temporary steel falsework and fresh concrete under the segment involved fell some 250 feet to the bottom of the silo.

There was in effect at this time a policy of insurance issued to the plaintiff by the defendant, which insured the defendant against "* * * all risks of physical loss or damage * * * from any cause * * * except * * *" certain specified perils. Specifically excluded, inter alia, was "* * * (l)oss or damage due to * * * inherent vice or latent defect * * *" and "* * * (l)oss or damage due to delay, loss of use, * * * or other consequential loss extending beyond the direct physical loss or damage to the insured property. * * *" The policy included a deduction of $500.00 from any such loss or damage, and limited any recovery to "* * * (t)he actual cash value at the time and place of loss, in no event exceeding however, what it would cost to repair or replace same with material of like kind and quality. * * *" Where improvements and betterments were involved, the contract limited any recovery to "* * * (t)he replacement cost less physical depreciation at time and place of loss, if actually replaced at assured's expense * * *." All the conditions precedent required by the contract and all terms of the policy required to be performed by the plaintiff were seasonably performed or occurred.

The first question for adjudication, therefore, is whether the casualty was covered by the insurance contract of the parties.

The Court finds that the damages sustained by the plaintiff resulted from a combination or concurrence of proximate causes, including at least the negligent welding by the plaintiff's workmen in prefabrication of the highly-stressed top flange of the insert at a truss, designated as truss #3, which apparently failed and permitted...