Hursh Agency, Inc. v. Wigwam Homes, Inc.

• Citation: 664 P.2d 27
• Decision Date: 19 May 1983
• Docket Number: No. 5827,5827
• Parties: HURSH AGENCY, INC., a Wyoming corporation, Appellant (Defendant and Third-Party Plaintiff), v. WIGWAM HOMES, INC., a Wyoming corporation, Appellee (Plaintiff).
• Court: United States State Supreme Court of Wyoming

Page 27

664 P.2d 27

HURSH AGENCY, INC., a Wyoming corporation, Appellant (Defendant and Third-Party Plaintiff), v. WIGWAM HOMES, INC., a Wyoming corporation, Appellee (Plaintiff).

No. 5827.

Supreme Court of Wyoming.

May 19, 1983.

William L. Miller (argued), and Holly B. Brown of Central Wyoming Law Associates, P.C., Riverton, for appellant.

David B. Hooper of David B. Hooper, P.C., Riverton, for appellee.

Before ROONEY, C.J., and RAPER, THOMAS, ROSE and BROWN, JJ.

RAPER, Justice.

As the result of a jury verdict, a judgment for damages was made and entered by the trial judge in favor of Wigwam Homes, Inc. (appellee) against Hursh Agency, Inc. (appellant) in the stipulated sum of $19,169.61 plus interest thereon in the amount of $3,158.46. The damages were awarded because it was found by the jury that appellant, as agreed, failed to provide insurance which would have covered appellee's loss arising when half of a modular house fell into the basement during installation.

The appellant presents as issues:

"1. The trial court erred by instructing the jury as a matter of law that the loss sustained would have been covered by the insurance company had a contract been in force.

"2. The trial court erred in excluding evidence of insurance policy exclusions and changes in specifications and increased hazards of risk.

"3. The trial court erred in not, sua sponte, directing a mistrial when Plaintiff-Appellee's counsel, during cross-examination of Mr. Hursh, asked a leading question, disclosing an offer to settle for a specific sum. The cautionary instruction given was inadequate.

"4. The trial court erred in excluding the testimony of Mr. Strickler, whose testimony was relevant and credible. Said testimony directly impeached the Plaintiff's sworn testimony of the facts concerning attempts to obtain insurance coverage."

We will affirm.

The appellee is in the business of selling modular homes which are installed on foundations on buyers' lots. The appellant is an independent insurance agency.

In November 1979, appellee had acquired an installation floater from appellant to cover the transportation and installation of two modular homes. An installation floater insures against all risks of direct physical loss or damages to the insured property except as its terms otherwise provide. Those installations were completed without loss.

In January 1980, appellee had on its lot two halves of a modular home which it sold to Jack Long for installation on his lot. Long contracted for construction of a foundation with basement. He reported completion to appellee. Appellee employed James Francisco to transport the two halves of the modular home to the Long homesite and install it on Long's foundation.

On Friday, January 11, 1980, Francisco moved the first half of the modular home to the foundation site. Upon arrival he discovered that the foundation had not been constructed to the particular modular home requirements in that it was two feet too long. He immediately so notified James Barquin, president of appellee.

Later on that same day, Barquin and his wife Marguerite, along with Betty O'Donley and her husband, all the shareholders of appellee, met with Francisco to discuss the problem. James Barquin contacted Long, and it was decided that a beam to carry one end of the home be placed in the foundation to correct the error.

Francisco did not have insurance. All parties agreed to hold each other harmless and that appellee get insurance. On Saturday, January 12, 1980, Mrs. Barquin attempted to call someone at appellant insurance agency. She finally called John Hursh, president of appellant, a corporation.

At this point, the trial testimony of Mrs. Barquin and John Hursh is in conflict. Mrs. Barquin testified that John Hursh assured her the insurance would be arranged. Hursh testified that he told Mrs. Barquin nothing could be done over the weekend, and she would have to take the necessary information to the appellant's office on Monday, January 14, 1980 to see if the personnel there could help her. Mrs. Barquin did call the appellant agency office over the noon hour of Tuesday, January 15, 1980, and supplied the necessary information, i.e., descriptive data and identification numbers, etc. No policy with installation floater had been, nor was it thereafter, issued.

Long, in the meantime, had his contractor install the beam decided upon. On Monday, January 14, 1980, Francisco started installation of one-half of the modular house. On Tuesday, January 15, 1980, at about 3:30 p.m. when he lowered it onto the foundation, the beam gave way, and the modular half fell into the basement completely destroying it.

As we move along through the issues, other factual material will be added as required.

I

The trial judge instructed the jury that as a matter of law:

"INSTRUCTION NO. 9

"The physical loss and damage which the plaintiff sustained when the half of the modular home fell into the basement is a loss which the insurance company would have been obliged to reimburse, had an insurance contract similar to that of Plaintiff's Exhibit 1 (the November insurance policy) ¹ been in force at the time."

Appellant asserts this to be error on the ground that the insured (appellee) must meet its burden of proving that its loss came within coverage extended by a preponderance of the evidence, and any questions concerning the proximate cause of the loss must be resolved by the jury.

We have no argument with the rules set out in the various cases cited by appellant. They are all court tried without a jury. Though findings of fact must be made by a trial judge, when sitting without a jury, the problems are different. Pacific Indemnity Co. v. Kohlhase, 9 Ariz.App. 595, 455 P.2d 277, 48 A.L.R.3d 1114 (1969), cited by appellant, pretty well summarized the various burdens in establishing coverage: the insured has the burden of proving that its loss was due to an insured risk; the insurer has the burden of showing that the loss was within a policy exclusion; when the undisputed facts show no coverage exists, the court must direct a verdict for the insurer; when the undisputed facts show that the loss was a covered risk, then only the other facets of the litigation must be disposed of, whether questions of law or fact, by the court and jury respectively; and, when the evidence is conflicting, the question of whether the loss is within the risks of the policy or excepted therefrom is ordinarily for the trier of fact.

In the case now before us there is no dispute as to what caused the loss: a beam gave way, and one-half of the structure was destroyed during installation; therefore, a loss occurred during installation. The court determined as a matter of law that if a policy had been issued, such a loss was a covered risk. ² There was no dispute in the evidence that the foundation was too long and it was necessary to install a beam on the foundation to accommodate the shorter module. There was no credible evidence that such a corrective method was not acceptable and would justify refusal to issue or cancellation of the policy, if issued. The court, in the face of such undisputed facts, found that the installation of the beam was not within the policy exclusions. ³ We will discuss the exclusion matter a bit further in Part II since that is encompassed by appellant's separate issue 2.

As we view it, the trial judge, by the questioned instruction, merely instructed the jury on a question of contract construction. A policy of insurance is a contract between the insurer and the insured and construed in the same way. ⁴ Worthington v. State, Wyo., 598 P.2d 796 (1979); State Farm Mutual Automobile Insurance Co. v. Farmer's Insurance Group, Wyo., 569 P.2d 1260 (1977). When terms of a contract are shown without any conflict of evidence, interpretation of a contract becomes a question of law for the court. Engle v. First National Bank of Chugwater, Wyo., 590 P.2d 826 (1979). Paraphrased, and as said approvingly from a quote in Horvath v. Sheridan-Wyoming Coal Co., 58 Wyo. 211, 131 P.2d 315 (1942), the interpretation of a written contract is a question of law for the court; but where the terms of a contract are conflicting or doubtful, it is for the jury to ascertain the intention of the parties and determine what the contract was under proper instructions. The interpretation and construction of a contract are done by the court as a matter of law. Amoco Production Co. v. Stauffer Chemical Company of Wyoming, Wyo., 612 P.2d 463 (1980). See also, Goodman v. Kelly, Wyo., 390 P.2d 244 (1964).

Since it was the duty of the trial judge to interpret the contract of insurance and not that of the jury, his interpretation must be conveyed to the jury. It is the function of instructions to give the jury guidance in reference to the law of the case to assist it in arriving at correct conclusions. Gale v. Kay, Wyo., 390 P.2d 596 (1964); MacManus v. Getter Trucking Co., Wyo., 384 P.2d 974 (1963). The submission of a legal proposition to a jury would necessarily be reversible error. Chosen Friends Home Loan & Savings League v. Otterson, 7 Wyo. 89, 50 P. 194 (1897).

It was not error for the trial judge to give to the jury the benefit of his construction of the insurance contract under circumstances where there was no dispute as to the nature of the loss. The language of insurance policies at best is not always easy for the layman to understand. The policy pertinent to the circumstances of this case devotes itself for the most part to conditions and exclusions and never does specify what particular risks are covered. The jury was entitled to know wherein it covered appellee's loss, even if issued.

The controlling question in this appeal is whether appellant had committed itself to procure installation insurance through an installation floater covering the loss for appellee--did appellant enter into an oral contract to furnish insurance such as it had sold to appellee pr...