Hawkeye-Security Insurance Co v. Davis
| Decision Date | 28 October 1999 |
| Citation | 6 S.W.3d 419 |
| Parties | (Mo.App. S.D. 1999) Hawkeye-Security Insurance Company, Plaintiff-Respondent, v. John Davis, d/b/a Davis Construction, Defendant, and Thomas T. McGuinness and Marianne McGuinness, Defendants-Appellants. 22705 |
| Court | Missouri Court of Appeals |
Appeal From: Circuit Court of Stone County, Hon. J. Edward Sweeney
Counsel for Appellant: Richard L. Schnake, Dale L. Davis and Robert D. Lewis
Counsel for Respondent: Arlen L. Tanner
Opinion Summary: None
Hawkeye-Security Insurance Company ("Hawkeye") brought this declaratory judgment action to determine whether a commercial general liability insurance policy it issued to John Davis ("Davis"), a general contractor, covered a claim for damages made by Thomas and Marianne McGuinness ("Appellants") against Davis. Appellants' claim arose because Davis failed to build their house in a workmanlike manner and in accordance with their contract. Hawkeye and Appellants each filed motions for summary judgment. The trial court found that Hawkeye's policy did not cover Appellants' damages and entered summary judgment for Hawkeye. This appeal followed. We affirm.
Hawkeye insured Davis under a standard form liability policy having effective dates of July 30, 1994, to July 30, 1995. The declarations page describes the contract as a "Commercial General Liability Policy." Among other provisions, the declarations page provides:
In 1994, Davis contracted to build a house for Appellants. Davis hired subcontractors to perform most of the work. The contract specifically provided that Davis would be liable for any acts or omissions of the subcontractors. Davis also warranted that all of the work on the house would be of good quality and free from fault and defects.
When the house neared completion, Appellants discovered defects in the house, both in materials and workmanship, that "arose out of the work or operations" of Davis's subcontractors. On February 10, 1995, Davis "walked off and abandoned" the job site because of a dispute with Appellants about contract payment. At that point, Davis's work under the contract was substantially complete. All that remained to be done was a final walk-through and punch list, plus any work required to correct, repair, or replace inferior materials or remedy defective construction.
On October 4, 1996, Appellants sued Davis for damages, claiming that between September 1994 and February 10, 1995--which was within the policy period--Davis's subcontractors performed faulty work and used inferior materials in the house. Appellants' suit was for breach of contract (Count I) and breach of express and implied warranties (Counts II and III).
Hawkeye hired defense lawyers for Davis but did so under a reservation of rights. Later, Davis rejected Hawkeye's tendered defense because of its conditional nature. In January 1998, Appellants obtained a judgment against Davis for $422,210.
In July 1997, Hawkeye brought this action seeking a declaration that its Commercial General Liability ("CGL") policy did not insure Davis against Appellants' claims. The trial court agreed with Hawkeye and found, inter alia:
"[Appellants] . . . adroitly argue[] that because of the separate limits and separate premiums shown, there must be a separate policy for products-completed hazard coverage.
. . . .
"The products-completed hazard coverage is not a separate policy but a sub-part of the entire Commercial General Liability policy.
. . . .
"There is no language contained in the policy which provides coverage for the business risks of defective construction or breach of contract or breach of warranty.
. . . .
"The CGL policy contemplates coverage for injury to a person or property other than the property . . . upon which Davis and his subcontractors worked [for Appellants].
. . . .
"The Court finds that [Appellants] have failed to set forth policy language that establishes insurance coverage under the uncontroverted facts and the policy language."
The court adjudged that "no coverage exists under the insurance policy in question for the allegations of [Appellants] and further that various policy exclusions would further operate to limit or defeat coverage."
In their sole point relied on, Appellants contend the trial court erred in finding that Hawkeye's CGL policy did not cover Davis for their damages and in sustaining Hawkeye's motion for summary judgment. Appellants point to the policy's declarations as clear evidence that Davis bought and paid for two distinct types of coverage, i.e., "PRODUCTS/COMPLETED OPERATIONS" and "OTHER THAN PRODUCTS/COMPLETED OPERATIONS." Continuing, they assert that the policy contains only one coverage form, specifically a "COMMERCIAL GENERAL LIABILITY COVERAGE FORM." Based on this premise, Appellants make a two-pronged argument that Davis is covered for their loss.
In the first prong of their argument, Appellants contend that despite the absence of a "PRODUCTS/COMPLETED OPERATIONS" coverage form in Davis's policy, the policy provides "insight" into the meaning of "PRODUCTS/COMPLETED OPERATIONS" coverage in that the policy defines the term "Products-completed operations hazard." That definition, found in the "COMMERCIAL GENERAL LIABILITY COVERAGE FORM," provides:
Appellants correctly point out that "the definition of 'Products-completed operations hazard' is not in itself an insuring agreement" and is not part of the "Insuring Agreement" appearing at the outset of the "Coverages" section of the CGL Coverage Form.1 According to Appellants, the "Products-completed operations hazard" definition merely establishes the meaning of that phrase as it is used elsewhere in the basic CGL policy. Continuing, Appellants argue that the definition of "Products-completed operations hazard" is not exhaustive and should not be interpreted as describing all damage that might fall under the "PRODUCTS/COMPLETED OPERATIONS" coverage. They argue:
Based on the foregoing, Appellants assert that the definition of "Products-completed operations hazard" encompasses the damage to their house and compels a finding that Hawkeye is contractually obligated to cover Davis for the faulty work and materials he and his subcontractors used in Appellants' house. Appellants' argument continues as follows:
First, they point to uncontradicted evidence that Davis did not own the land but, instead, built the house on land owned by Appellants. Consequently, they argue the damage occurred "away from premises that [Davis] own[ed] or rent[ed]."
Second, they say there is no dispute that Appellants' damages were caused by "your [Davis's] work." They then point to undisputed evidence that (a) Davis warranted that all of the work on the house would be of good quality and would be free from faults and defects; (b) the policy defines "your work" to include work or operations "performed by [Davis] or on [Davis's] behalf" and "[m]aterials, parts or equipment furnished in connection with such work or operations;" and (c) the policy further defines "your work" to include "[w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use" of the work.
Third, they aver the undisputed evidence showed that Davis both "completed" and "abandoned" the project. All that remained to be done was "a walk-through and punch list" and "work that needed correction, repair, or replacement."2
Based on the foregoing, Appellants say that the definition of "Products-completed operations hazard" in Hawkeye's CGL Coverage Form "suggests" that Hawkeye's "PRODUCTS/COMPLETED OPERATIONS" coverage insures Davis for their damage.
In the second prong of their argument, Appellants contend that charging Davis for "PRODUCTS/COMPLETED OPERATIONS" and then omitting a "coverage part" for that risk is "duplicitous in the truest sense of the word." Consequently, they argue, the policy is ambiguous and the ambiguity must be resolved in favor of coverage....
To continue reading
Request your trial
-
Auto-Owners Ins. v. Home Pride Companies
...of providing coverage. See, Auto Owners Ins. Co. v. Travelers Cas. & Surety, 227 F.Supp.2d 1248 (M.D.Fla.2002); Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419 (Mo.App.1999); Lassiter Const. v. American States Ins., 699 So.2d 768 (Fla.App.1997). Stated otherwise, the exception contained wi......
-
Stone v. FARM BUREAU TOWN & COUNTRY INS.
...policy as a whole, rather than in isolation. Watters v. Travel Guard Int'l, 136 S.W.3d 100, 108 (Mo.App.2004); Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419, 424 (Mo.App.1999). "Proper interpretation requires that we seek to harmonize all provisions of the policy to avoid leaving some pr......
-
Kentucky Farm Bureau Mut. v. Blevins
...cannot constitute an `occurrence' under liability policies triggered by an accident or an occurrence"); Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419, 426 (Mo.Ct.App.S.D. 1999) (No coverage for losses "stemming solely from (the insured's) breach of his contractual obligations (and) breac......
-
Oak River Ins. Co. v. Truitt
...ambiguity exists, the policy language will be interpreted as understood by the lay person who purchased it. Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419, 424 (Mo.Ct.App.1999); Stotts, 118 S.W.3d at 662. Courts should not adopt an interpretation neutralizing a policy provision if another......
-
Chapter 14 - § 14.12 • INSURANCE COVERAGE FOR FAULTY RESIDENTIAL CONSTRUCTION
...policy, reflecting the overwhelming trend among courts and commentators interpreting such policies); Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419, 422 (Mo. Ct. App. 1999) (PCOH is "not a separate policy but a sub-part of the entire [CGL] policy"); Am. Home Assur. Co. v. AGM Marine Contr......
-
Chapter 12 - § 12.2 • LIABILITY INSURANCE POLICIES
...policy, reflecting the overwhelming trend among courts and commentators interpreting such policies); Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d 419, 422 (Mo. Ct. App. 1999) (PCOH is "not a separate policy but a sub-part of the entire [CGL] policy"); Am. Home Assur. Co. v. AGM Marine Contr......
-
Construction defect litigation: courts' fragmented rationales regarding coverage for contractor's faulty workmanship.
..."merely an exception to an exclusion and, therefore, incapable of providing coverage"); see also Hawkeye Security Ins. Co. v. Davis, 6 S.W.3d 419, 427 (Mo. Ct. App. 1999) (explaining exclusion provisions in an insurance policy); Lassiter Const. v. American States Ins., 699 So.2d 768, 770 (F......