Hartford Fire Ins. Co. v. Electrical Dist. No. 4 of Pinal County

• Decision Date: 25 March 1969
• Docket Number: CA-CIV,No. 2,2
• Parties: HARTFORD FIRE INSURANCE COMPANY; the American Insurance Company; and Merchants Fire Assurance Corporation of New York, Appellants, v. ELECTRICAL DISTRICT NO. 4 OF PINAL COUNTY, Arizona, Appellee. 597.
• Court: Arizona Court of Appeals

Page 539

452 P.2d 539

9 Ariz.App. 374

HARTFORD FIRE INSURANCE COMPANY; the American Insurance Company; and Merchants Fire Assurance Corporation of New York, Appellants, v. ELECTRICAL DISTRICT NO. 4 OF PINAL COUNTY, Arizona, Appellee.

No. 2 CA-CIV 597.

Court of Appeals of Arizona.

March 25, 1969.

Rehearing Denied April 15, 1969.

Review Denied May 6, 1969.

Moore, Romley, Kaplan, Robbins & Green, by Craig R. Kepner, Phoenix, for appellants.

Rawlins, Ellis, Burrus & Kiewit, by Norman D. Hall, Jr., and R. J. Ellis, Phoenix, for appellee.

MOLLOY, Chief Judge.

In this case, we must determine whether the evidence presented justified a jury verdict in favor of the plaintiff-appellee's claim that damage to its electrical transformer was caused by 'fire' within the meaning and coverage of the standard fire insurance policies issued by appellants.

The plaintiff-appellee, Electrical District, owns and operates the Empire substation near the City of Eloy. The basic functioning mechanism of the substation is a transformer, which reduces or 'steps down' the 115,000 volt current in the nearby Bureau of Reclamation transmission line to a 12,000 volt current suitable for distribution. A transformer such as the one here involved consists of three sets of three basic elements, which are a core, a secondary winding, and a primary winding. The core, in the center, is made of laminated steel. It is surrounded by the secondary or lower voltage winding, which is essentially a coil of copper wire. The secondary winding is in turn surrounded by the primary or higher voltage winding, which is a larger and more extensive coil of copper wire. The turns or coils of copper wire which make up both sets of windings are wrapped in a paper-like insulating material made of wood pulp. In addition, the three basic elements are separated from each other by thicker, pressboard-like insulation, which is also made of wood pulp. All of the elements and insulation are immersed in a 'bath' of oil and are enclosed within a steel tank. One of the functions of the oil is to help insulate the component elements of the transformer.

On November 3, 1964, a coatimundi ¹ crawled onto a part of the substation apparatus, on the low voltage side, causing a short circuit. Due to the failure of certain protective devices to function, this short circuit caused many times the rated capacity to flow through the transformer for approximately six minutes. This excessive flow caused the copper wire in the two sets of windings to overheat, The overheating of the copper became such that the paper insulation 'burned,' or 'failed,' which was followed by additional short circuiting within the transformer, further overheating and eventually melting of the copper wiring and causing electrical arcing to the core. The entire transformer was badly damaged, necessitating rebuilding and repairs to the extent of $50,335.40.

Each of the similar policies issued by appellants insure the Electrical District '* * * against all DIRECT LOSS BY FIRE * * *' The policies contain a number of qualifying and exclusionary clauses, including an 'Electrical Apparatus Clause':

'IF ELECTRICAL APPLIANCES OR DEVICES (INCLUDING WIRING) ARE COVERED UNDER THIS POLICY, THIS COMPANY SHALL NOT BE LIABLE FOR ANY ELECTRICAL INJURY OR DISTURBANCE TO THE SAID ELECTRICAL APPLIANCES OR DEVICES (INCLUDING WIRING) CAUSED BY ELECTRICAL CURRENTS ARTIFICIALLY GENERATED UNLESS FIRE ENSUES, AND IF FIRE DOES ENSUE THIS COMPANY SHALL BE LIABLE ONLY FOR ITS PROPORTION OF LOSS CAUSED BY SUCH ENSUING FIRE.' (Emphasis added) ²

Neither the word 'fire' nor the term 'ensuing fire' is defined in the policy. ³ In the the absence of a policy definition, the courts have generally held that the word 'fire' is to be understood in ordinary and popular lay, rather than technical and scientific, terms. Thus, in the words of one court:

'The word 'fire,' in insurance, does not have the technical meaning which is developed from a scientific analysis of its nature and properties, but more nearly that which conforms to the popular understanding of the word.'

Lavitt v. Hartford County Mut. Fire Ins. Co., 105 Conn. 729, 136 A. 572, 574 (1927).

Such a construction of the word is in accord with the Arizona rule that undefined words in an insurance policy will be defined '* * * in the common sense terms of the average layman * * *,' rather than in technical terms. Malanga v. Royal Indemnity Company, 101 Ariz. 588, 591, 422 P.2d 704, 707 (1967); and See also Dairyland Mutual Insurance Company v. Andersen, 102 Ariz. 515, 517, 433 P.2d 963, 965 (1967).

The plaintiff's theory below, and here, is that there was a 'fire' when the paper insulation in this transformer charred from the heat, carbonized, and became a conductor rather than an insulator. Without such breaking down of the insulation, the plaintiff contends there would have been no appreciable damage to this transformer.

It is our view that the undisputed evidence does not support this theory. All testimony is to the effect that all of this 'burned' insulation was 'bathed' and 'wet' with oil at the time it was injured. When the oil in which it was immersed became overheated on this occasion, it expanded and came out an escape vent in the top of the steel tank in which these elements were contained. Though this oil poured forth on the ground around the transformer, it did not ignite. Though there was testimony that this insulation 'glowed' along with the wire contiguous to it, there is no evidence of a probability that there were flames in connection with this damage. There is testimony in the record, which stands undisputed, that as this insulation was carbonizing, it was absorbing heat rather than giving off heat. ⁴

There were three ⁵ electrical engineers who testified as to the cause of this damage. Their testimony is substantially without controversy. We believe the following excerpts from the transcript fairly summarize their opinions on the basic cause of the damage:

'MR. KEPNER: Let me ask you this final question, Mr. Locher: As far as the ultimate damage that was done in this transformer it was caused by the excessive electrical current flowing through it? Just yes or no if you can answer that?

'A Well, this triggered the whole set of events, yes.

'Q That is what caused this damage to the transformer, did it not?

'A Well, yes.' ⁶

'MR. KEPNER: Going back to your very original statement on the matter it would be fair to say that this entire damage was caused by the excessive heat developed from this excessive electrical current flowing through the transformer?

'A That's right.' ⁷

'Q Mr. Moody, based on your experience as an electrical engineer can you think of a more typical classic example of damage caused by excessive artificially generated electrical current?

'A This would be as typical as any one.' ⁸

One of the experts opined that there was 'combustion' within this tank, but he never explained his answer. ⁹ One testified that there '* * * could have been a momentary flame.' ¹⁰ But these conjectures must give way to the undisputed physical facts. 'Combustion' is not equivalent to a layman's concept of 'fire'. See Western Woolen Mill Co. v. Northern Assur. Co., 139 F. 637, 639, 72 CCA 1 (8th Cir. 1905), Cert. denied, 199 U.S. 608, 26 S.Ct. 750, 50 L.Ed. 331 (1905). And what 'could have been' is not sufficient to satisfy a plaintiff's burden of proof. See e.g., Ager v. Baltimore Transit Company, 213 Md. 414, 132 A.2d 469, 472--473 (1957), and compare Southwestern F. Lines, Ltd. v. Floyd, 58 Ariz. 249, 264--265, 119 P.2d 120, 127 (1941). In our view, a process which neither creates substantial amounts of heat nor has flame is not 'fire.'

Every definition of 'fire' that we have found includes the idea of heat, and it seems inherent that the alleged fire should itself create heat. There is also a sharp...