Helfeldt v. Robinson
| Decision Date | 18 December 1981 |
| Docket Number | No. 14663,14663 |
| Citation | 170 W.Va. 133,290 S.E.2d 896 |
| Court | West Virginia Supreme Court |
| Parties | John P. HELFELDT and Diane L. Helfeldt v. William L. ROBINSON and Colleen Robinson v. UNITED STATES FIDELITY AND GUARANTY COMPANY. |
Syllabus by the Court
Although an exclusion in a comprehensive general automobile and property liability insurance contract contained an exception for "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," that exception to the contract's exclusion provision did not extend insurance coverage to a contractor for the defective construction of a home where the insurance contract contained other exclusions precluding insurance coverage and the insurance contract in question was a liability insurance policy and not a builder's risk policy.
Steptoe & Johnson and Herbert G. Underwood, Clarksburg, for appellant.
S. J. Angotti, Morgantown, for appellees.
This action is before this Court upon the petition of the third party defendants, United States Fidelity and Guaranty Company, Fidelity and Guaranty Underwriters, Inc., (hereinafter "U.S.F.&G."), for an appeal from the final order entered on October 30, 1978, of the Circuit Court of Monongalia County, West Virginia. Pursuant to that order, U.S.F.&G. was held liable upon a contract of insurance to its insureds, William L. and Colleen Robinson, d/b/a Robinson Construction Company, (hereinafter "Robinsons"), for a judgment entered by the circuit court against the Robinsons and in favor of the plaintiffs, John P. and Diane L. Helfeldt, (hereinafter "Helfeldts"), for the faulty construction of a home. This Court has before it the petition for appeal, all matters of record and the briefs and argument of counsel.
The record indicates that the Robinsons and U.S.F.&G. entered into a contract of insurance, policy number 1cc966892, whereby the Robinsons were insured for the period March 17, 1976, to March 17, 1977. In the pleadings filed in circuit court, U.S.F.&G. refers to this contract as a comprehensive general automobile and property liability insurance policy.
On June 26, 1976, William L. Robinson entered into a real estate purchase contract with John P. Helfeldt wherein Robinson agreed to convey to Helfeldt a lot known as Lot 17, Block C, Baker's Ridge Manor Addition, Union District, Monongalia County, West Virginia. Subsequently, by general warranty deed dated August 4, 1976, the Robinsons conveyed the lot to the Helfeldts. As stated in the deed, the consideration for that conveyance was $68,000.
The petition for appeal to this Court alleges that during the period in question the Robinsons were engaged in the building of homes in the area of Monongalia County, West Virginia, and that the home purchased by the Helfeldts from the Robinsons was not completed at the time of sale.
In June, 1977, the Helfeldts filed an action in the Circuit Court of Monongalia County against the Robinsons alleging that the home purchased by the Helfeldts was faulty in design, material and construction and not built "in a workmanlike manner." The Helfeldts alleged that the defendants, the Robinsons, had acted in a negligent manner, in breach of contract and in violation of implied and express warranties of fitness of the home.
Subsequent to a trial held on July 25 and 26, 1978, the circuit court by order entered August 1, 1978, entered judgment in favor of the Helfeldts and against the Robinsons in the amount of $28,037, being $21,037 for cost of repairs and $7,000 for annoyance and inconvenience. The Robinsons were also held liable for interests and costs. The circuit court concluded that the Robinsons had acted negligently and had breached an implied warranty of fitness in the construction of the home. The circuit court held that poor workmanship by the Robinsons had resulted in the damages to the Helfeldts.
Prior to the August 1, 1978, judgment against the Robinsons, the Robinsons filed a third party complaint against U.S.F.&G. That third party complaint asserted that U.S.F.&G. had improperly failed to defend the Robinsons in the Helfeldt action and that U.S.F.&G. was liable to the Robinsons for all sums adjudged against the Robinsons in favor of the Helfeldts concerning the property in question. In its answer to the third party complaint, U.S.F.&G. asserted that the Robinsons had failed to comply with the terms of the insurance contract and, further, that the insurance contract did not cover the type of damages sought by the Helfeldts against the Robinsons.
Nevertheless, by final order entered October 30, 1978, the circuit court entered judgment in favor of the Robinsons and against U.S.F.&G. in the amount of $28,037 plus interests and costs.
In entering judgment against U.S.F.&G., the circuit court concluded that the insurance contract between the Robinsons and U.S.F.&G. was ambiguous and therefore required construction. The circuit court in holding U.S.F.&G. liable to its insureds, the Robinsons, relied upon an exception to the insurance contract's enumerated exclusions of U.S.F.&G. from liability. As the circuit court stated in its October 23, 1978, memorandum opinion:
It is therefore the opinion of this Court that the Robinsons' insurance policy provides coverage for damages found to exist by this Court against the Robinsons and for the benefit of the original plaintiffs upon the liability of a breach of warranty of fitness and that work performed by or on behalf of the named insured will be done in a workmanlike manner. There can be no other conclusion when the policy in the instant case reads as follows, '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.'
It is from the final order of the Circuit Court of Monongalia County that the appellant, U.S.F.&G., appeals to this Court.
The provisions at issue of the insurance contract between the Robinsons and U.S.F.&G. relate to provisions concerning coverage and exclusion of insurance. Those provisions state as follows:
The Company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of ... property damage to which this insurance applies, caused by an occurrence....
This insurance does not apply:
(a) to liability assumed by the Insured under any contract or agreement except an incidental contract; 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....
(l) to property damage to premises alienated by the Named Insured arising out of such premises or any part thereof...
(n) to property damage to the Named Insured's products arising out of such products or any part of such products....
(o) to property damage to work performed by or on behalf of the Named Insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith....
In this appeal, U.S.F.&G. contends that the Helfeldt home was the product of the insureds, the Robinsons, and that defective construction by the Robinsons resulted in damage to that product. Furthermore, U.S.F.&G. asserts that no damage was caused by that defective construction to property other than the insured's product. Therefore, U.S.F.&G. concludes that the damages to the Helfeldt home were not covered by the insurance contract, particularly in view of exclusions (l), (n) and (o). These exclusions state, essentially, that the insurance contract does not cover damages to the insured's product. Rather, as U.S.F.&G. contends, the contract is a general liability insurance contract by which the Robinsons would be covered for damage caused by that product to the persons or property of others.
On the other hand, the Robinsons contend that the insurance contract is ambiguous and should be liberally construed in the Robinsons' favor. In support of this contention, the Robinsons, as did the circuit court, rely upon the exception to exclusion (a) of the insurance contract. Specifically, the Robinsons allege that the exception to exclusion (a) is inconsistent with the other exclusions in question thereby creating the ambiguity. That exception to exclusion (a) states that the exclusion "... does not apply to a warranty of fitness of quality of the Named Insured's products or a warranty that the work performed by or on behalf of the Named Insured will be done in a workmanlike manner."
In McGann v. Hobbs Lumber Company, 150 W.Va. 364, 145 S.E.2d 476 (1965), the plaintiffs retained the Hobbs Lumber Company to construct a home. Shortly after the home had been completed and occupied, a portion of the foundation wall collapsed resulting in damage. The plaintiffs, alleging negligent construction, instituted an action against Hobbs in the Circuit Court of Ohio County, West Virginia.
In McGann, the Hobbs Lumber Company filed a third party complaint against the Aetna Casualty and Surety Company whereby Hobbs alleged that, pursuant to certain insurance contracts, Hobbs could recover against Aetna all sums adjudged against Hobbs in the McGann action for damage to the home. This Court, however, held that an exclusion provision contained within the insurance contracts precluded Aetna from liability to Hobbs.
One of the insurance contracts in McGann provided that Aetna was to insure Hobbs as follows: "To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident." That insurance contract, however, also contained an...
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