Harrison Plumbing & Heating, Inc. v. New Hampshire Ins. Group

• Decision Date: 21 May 1984
• Docket Number: No. 4670-9-II,4670-9-II
• Citation: 681 P.2d 875,37 Wn.App. 621
• Court: Washington Court of Appeals
• Parties: HARRISON PLUMBING & HEATING, INC., Appellant, v. NEW HAMPSHIRE INSURANCE GROUP, Respondent.

Page 621

37 Wn.App. 621

681 P.2d 875

HARRISON PLUMBING & HEATING, INC., Appellant, v. NEW HAMPSHIRE INSURANCE GROUP, Respondent.

No. 4670-9-II.

Court of Appeals of Washington,

Division 2.

May 21, 1984.

Richard F. DeJean, Sumner, for appellant.

Dennis J. LaPorte, Charles W. Langfitt, Tacoma, for respondent.

WORSWICK, Judge.

In 1977, Harrison Plumbing & Heating, Inc. contracted to build a water system for Dan Perkins and Paul Garrison. Problems developed between the parties, and Harrison brought a lien foreclosure action. Perkins and Garrison counter-claimed, contending that Harrison failed to complete work required by the contract. Harrison tendered defense of the counter-claim to New Hampshire Insurance Group, its insurer under a comprehensive general liability policy. New Hampshire refused the tender, contending that the counter-claim did not allege facts which, if proved, would render it liable under the policy.

Harrison successfully defended the counter-claim, then sued New Hampshire to recover attorney's fees incurred in the defense. The facts being undisputed, ¹ both parties moved for summary judgment. The trial court granted New Hampshire's motion. Harrison appeals. We affirm.

Generally, an insurer's duty to defend arises when a complaint against its insured alleges facts which, if proved, would render the insurer liable under the policy. Parks v. Western Washington Fair Ass'n, 15 Wash.App. 852, 553 P.2d 459 (1976). If the pleadings are not ambiguous, the insurer need not look beyond them. R.A. Hanson Co., Inc. v. Aetna Ins. Co., Inc., 26 Wash.App. 290, 612 P.2d 456 (1980). Harrison contends that the facts alleged in the Perkins-Garrison counter-claim would, if proved, render New Hampshire liable under the policy. We disagree.

The counter-claim alleged:

(I)

That on July 7, 1977, defendants [Perkins-Garrison] entered into a contract with plaintiff [Harrison] to install a water system to serve certain real property in Pierce County, Washington; that plaintiff failed, neglected and refused to complete the work in accordance with the terms of the contract and as a result thereof defendants have been damaged to date in the sum of $15,266.50.

(II)

That because of plaintiff's failure to fulfill the terms of the contract to install a water system in accordance with the terms of his agreement with defendants, defendants will be required to pave over excavations improperly dug by plaintiff to their further loss and damage in the sum of not less than $5,000.00.

(III)

That because of plaintiff's refusal to complete the water system, defendants have suffered a loss of business reputation and goodwill among members of the public which has hampered sale of lots owned by defendants and defendants have been damaged thereby in the sum of not less than $10,000.

The policy provided, in part:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

A. Bodily injury or

B. Property damage to which this insurance applies, caused by an occurrence, ...

The policy defined property damage as:

(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; ...

The policy defined "occurrence" as:

... 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; ...

"Accident" was not defined further in the policy. Therefore, the term must be given its popular and ordinary meaning. Transamerica Ins. Co. v. Preston, 30 Wash.App. 101, 632 P.2d 900 (1981). An "accident" generally means an unusual, unexpected and unforeseen event. Town of Tieton v. General Ins. Co. of America, 61 Wash.2d 716, 380 P.2d 127 (1963). An accident is never present when a deliberate act is performed unless some additional unexpected, independent and unforeseen happening occurs which produces the damage. Unigard Mut. Ins. Co. v. Spokane School Dist. 81, 20 Wash.App. 261, 579 P.2d 1015 (1978). To be an accident, both the means and the result must be unforeseen, involuntary, unexpected, and unusual. Unigard Mut. Ins. Co. v. Spokane School Dist. 81, 20 Wash.App. at 264, 579 P.2d 1015.

Neither paragraph I or III allege accidental injury or damage. ² Rather, both allege breaches of contract, and intentional acts and foreseeable results. ³

Paragraph II presents a different question because, at least arguably, it can be construed as alleging damage to or loss of use of tangible property caused by Harrison's negligence. For the purposes of this policy, a negligent act or omission is an "accident" and, consequently, an "occurrence." Yakima Cement Prods. Co. v. Great American Ins. Co., 93 Wash.2d 210, 608 P.2d 254 (1980). Nevertheless, the New Hampshire policy excluded this claim as well.

The policy provided:

This insurance does not apply to ... property damage ... to ... that particular part of any property, not on premises owned by or rented to the insured, ... the restoration, repair or replacement of which has been made or is necessary by reason of faulty workmanship thereon by or on behalf of the insured; ... ⁴ Therefore, even if Garrison and Perkins were required to repair property damage caused by workmanship of Harrison that was faulty because of negligence, the policy excluded that risk from coverage. The policy was not intended to indemnify Harrison for direct damages resulting because Harrison furnished defective materials or workmanship. St. Paul Fire & Marine Ins. Co. v. Coss, 80 Cal.App.3d 888, 145 Cal.Rptr. 836 (1978). Because the facts alleged in the counter-claim would not make New Hampshire liable under its policy, the trial court did not err in ruling New Hampshire had no duty to defend.

Harrison contends that an exception to exclusion (a) of the basic policy amended the coverage paragraph to extend coverage for the breach of contract claims alleged in the counter-claim. We disagree.

Exclusion (a) provided:

This insurance does not apply:

(a) to liability assumed by the insured under any contract or agreement except an incidental contract; ⁵ but this exclusion does not apply to a warranty of fitness or quality of the named insured's products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner;

* * *

Exclusion clauses do not grant coverage; rather, they subtract from it. Stillwater Condominium Ass'n v. American Home Assur. Co., 508 F.Supp. 1075 (D.Mont.1981), aff'd, 688 F.2d 848 (9th Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 1429, 75 L.Ed.2d 789 (1983); Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788 (1979). Therefore, exclusion (a) did not enlarge upon the coverages to encompass nonaccidental contractual claims. Harrison nevertheless argues that, because exclusion (a) appeared to grant coverage and the exclusion discussed above in footnote 4 appeared to deny it, an ambiguity was created which we must construe in Harrison's favor. We disagree.

This argument is based on two false assumptions. First, it assumes that exclusions grant coverage. They do not. Second, it assumes that the exclusions must be harmonized with each other. This is not true. Each exclusion refers to the risks insured against in the coverages and not to the other exclusions. St. Paul Fire & Marine Ins. Co. v. Coss, 145 Cal.Rptr. at 841. Each exclusion is to be read with the insuring agreement, independently of each other exclusion. Stillwater Condominium Assur. Co. v. American Home Assur. Co., 508 F.Supp. at 1079; Weedo v. Stone-E-Brick, Inc., 405 A.2d at 795. Read in this way, there is no ambiguity in this policy requiring us to construe it in favor of coverage.

Finally, Harrison contends that the New Hampshire policy is meaningless if it does not cover the claims alleged in the counter-claim. We disagree. Accidental injury to persons and damage to property other than the product or completed work itself constitute the risks covered by this comprehensive general liability policy. See Weedo v. Stone-E-Brick, Inc., 405 A.2d at 791-92. What Harrison really contends is that the policy was a performance...