Hays v. Pacific Indem. Group
Decision Date | 26 May 1970 |
Citation | 8 Cal.App.3d 158,86 Cal.Rptr. 815 |
Court | California Court of Appeals Court of Appeals |
Parties | Connie HAYS, Plaintiff and Respondent, v. PACIFIC INDEMNITY GROUP, a corporation, Defendant and Appellant. Civ. 12104. |
William W. Coshow, of Coshow & Barr, Redding, for plaintiff and respondent.
Claire H. Greve, of Johnson, Davies & Greve, Sacramento, for defendant and appellant.
In an action (No. 32659) for personal injuries suffered, the Superior Court of Shasta County rendered judgment in the sum of $35,000 together with costs in the sum of $150.48 in favor of plaintiff Connie Hayes and against Jack Liles, individually, and doing business as the Overhead Door Company of Chico. Thereafter plaintiff brought the present action (No. 36444) against defendant Pacific Indemnity Group predicated upon a contractor's comprehensive liability policy of insurance issued by defendant to Liles who, pursuant to a contract with plaintiff, installed a garage door on plaintiff's premises which, when plaintiff attempted to use the door for the first time, fell upon him. Judgment was rendered in favor of plaintiff and against the defendant insurer.
Defendant insurer declined to undertake the defense of Liles in the first action on the ground the policy afforded no coverage for the incident in question and thus it had no duty to defend.
Prior to the trial of action No. 32659 Liles entered into an agreement with plaintiff Connie Hayes pursuant to which Liles agreed to assign to plaintiff any rights which he (Liles) might have against the defendant insurer. Plaintiff agreed that if he recovered judgment against Liles he would not attempt to execute against Liles for any sum greater than $1,500.
Following the entry of judgment in action No. 32659, Liles paid the agreed sum of $1,500 to plaintiff and plaintiff brought the present action.
The trial court found, Inter alia, that:
'I
'That the plaintiff was injured as the result of the negligent installation of a garage door by Jack Liles on June 30, 1964.
'* * *.
'III
'That at the time of the incident, the defendant in this action had issued a comprehensive general liability policy excluding products liability and completed operations to the said Jack Liles.
'* * *.
'V
'VI
'That the said injury occurred as the result of the faulty installation and workmanship of the said Jack Liles and not due to any faulty product sold by said Jack Liles.
'VII
'That the garage door installation by the said Jack Liles was not a completed operation within the terms of the insurance policy issued by the defendant, PACIFIC INDEMNITY GROUP.
'VIII
'That the failure of the insurance company to investigate and defend Action No. 32659 contributed to the proximate cause of the loss suffered by Liles in said action.'
And as conclusions of law:
'I
'That the comprehensive general liability policy issued by the defendants to the said Jack Liles provided coverage to the extent of the policy limits.
'II
'That even if the said general comprehensive liability policy did not provide coverage for the said Jack Liles, the defendant had the duty to defend the said Jack Liles and the failure to do so was a breach of contract for which it would be liable for the attorneys' fees, for costs and judgment rendered in Action No. 32659' and rendered judgment as prayed for plus $998.43 as attorneys' fees and costs in action No. 32659.
The pertinent portions of the policy of liability insurance issued to Liles provide as follows:
Endorsement No. 13 reads:
'It is agreed that the policy does not apply to the products hazard as defined therein.'
Under 'Conditions,' the term 'products hazard' is defined, in part, to mean:
'(2) operations, if the accident or occurrence occurs after such operations Have been completed or abandoned and occurs away from premises owned, rented or controlled by the named insured: provided, Operations shall not be deemed incomplete because improperly or defectively performed or because further operations may be required pursuant to an agreement * * *.' (Emphasis added.)
Also on page 1 of the policy, under coverage for bodily injury, it is specified that 'aggregate products' are 'NOT COVERED.'
The policy, however, is a comprehensive liability policy which agrees, under 'Coverage A--Bodily Injury Liability
'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * including death at any time resulting therefrom, sustained by any person,' up to the amount specified.
Exclusion of products hazard applies to operations which have not been completed or abandoned. In other words, it would appear to the insured that in installing a products hazard (an automatic door is considered as such), the insured would be entitled to believe that he is insured up to the time of completion of the installation. But then we come to the language that the installation 'shall not be deemed incomplete because improperly or defectively performed or because further operations may be required pursuant to an agreement * * *.' Here, we find an ambiguity. How can an installation be deemed completed when it is incomplete?
The policy is not easy to decipher or understand. It consists of a package of papers some 33 in number composed of agreements, conditions and exclusions. As said in Insurance Co. of North America v. Electronic Purification Co. (1967) 67 Cal.2d 679, 689--690, 63 Cal.Rptr. 382, 389, 433 P.2d 174, 181, quoting from Peerless Ins. Co. v. Clough (1963) 105 N.H. 76, 193 A.2d 444, 449, the insurance company gave the insured coverage in relatively simple language easily understood by the common man in the market place, but 'attempted to take away a portion of this same coverage in paragraphs and language which even a lawyer, be he from Philadelphia or Bungy, would find it difficult to comprehend.'
The insurance contract is a contract of adhesion and as such requires that we recognize the status of the contracting parties, and resolve any ambiguities in favor of the insured. In 'The Individual and the Public Service Enterprise in the New Industrial State,' reprinted from 55 California Law Review, No. 5, November 1967, we read: (P. 1252.)
(P. 1253.)
(P. 1272.)
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