Gerace v. Liberty Mutual Insurance Co.

• Decision Date: 01 December 1966
• Docket Number: Civ. A. No. 493-66.
• Citation: 264 F. Supp. 95
• Parties: William GERACE et al., Plaintiffs, v. LIBERTY MUTUAL INSURANCE CO., Defendant.
• Court: U.S. District Court — District of Columbia

264 F. Supp. 95

William GERACE et al., Plaintiffs, v. LIBERTY MUTUAL INSURANCE CO., Defendant.

Civ. A. No. 493-66.

United States District Court District of Columbia.

December 1, 1966.

Joseph H. Koonz, Jr., Washington, D. C., for plaintiffs.

John P. Arness, Washington, D. C., for defendant.

OPINION

HOLTZOFF, District Judge.

This is an action by an employee on a construction project who was injured in the course of his employment. This suit is brought as a third party action on the ground that the accident was caused in whole or in part by the defendant's negligence. The defendant is an insurance company that carried liability insurance for the general contractor on the project. The employee involved in this case was employed by a subcontractor. The defendant moves for summary judgment.

The plaintiff's claim is predicated on a clause in the liability insurance policy which the defendant wrote in behalf of the general contractor, reading as follows:

"The company shall be permitted to inspect the insured premises, operations and elevators, and to examine and to audit the insured's books and records at any time during the policy period and any extension thereof and within three years after the final termination of this policy as far as they relate to the premium basis or the subject matter of this insurance."

The question presented in this case is whether provisions such as this, which counsel informs the Court are common in liability insurance policies and in workmen's compensation insurance policies, creates a liability on the part of the insurance company for any injuries sustained as a result of negligence of the insured if the insurance carrier either fails to take advantage of the permission to inspect the insured premises or if the carrier does inspect the premises and fails to discover the defect or the condition that was the cause of the accident. This question does not appear to have been determined either by the Supreme Court of the United States or by the Court of Appeals for the District of Columbia Circuit.

It was presented in this Court in the case of Thompson v. National Press Corp., D.C., 264 F.Supp. 668. In the opinion this Court stated:

"This question involves the construction of a clause found in workmens compensation policies giving permission to the insurance carrier to inspect the place of work, machinery and equipment, et cetera, covered by the policy. It is claimed by the plaintiff that this created an obligation to inspect, and to inspect carefully, and that for failure to make a sufficiently careful inspection a cause of action for damages arises in behalf of any workman who is injured as a result of improper condition of the place to work or of the machinery and equipment connected with it.

"The Court is of the opinion that this provision is permissive and is intended for the benefit of the insurance carrier. It does not impose an obligation on the insurance carrier to carry on inspection unless it chooses to do so for its own benefit."

It is conceded that in the Thompson case no inspection was undertaken by the insurance carrier. Counsel for the plaintiff in this case seeks to distinguish the Thompson case in that in the case at bar the insurance carrier conducted a series of inspections of the construction project. It is claimed in behalf of the plaintiff that having undertaken to make inspections, irrespective of whether it was obligated to do so, it was under a duty to make inspections with sufficient care to discover the defective condition that caused the accident involved in this case.

There is a general principle of law that a person who volunteers to do something that he is under no obligation to do, must nevertheless use due care in carrying on the voluntary activity. This doctrine applies if the volunteered act is undertaken for the benefit of someone else. A Good Samaritan who carelessly injures the person he is trying to help may perhaps be liable for his negligence.

In this case, however, the insurance carrier did not undertake to perform a voluntary act for the benefit of someone else. It did so for its own protection in order to reduce risks that might give rise to liability on the policy. Not only is there no basis in reason for the creation of a...