Insurance Co. of No. Amer. v. Bosworth Construction Co.

• Decision Date: 10 October 1972
• Docket Number: No. 72-2150 Summary Calendar.,72-2150 Summary Calendar.
• Citation: 469 F.2d 1266
• Parties: INSURANCE COMPANY OF NORTH AMERICA, Plaintiff-Appellant, v. BOSWORTH CONSTRUCTION CO. et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

469 F.2d 1266 (1972)

INSURANCE COMPANY OF NORTH AMERICA, Plaintiff-Appellant, v. BOSWORTH CONSTRUCTION CO. et al., Defendants-Appellees.

No. 72-2150 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

October 10, 1972.

C. Murphy Moss, Jr., William S. Penick, Lemle, Kelleher, Kohlmeyer, Matthews & Schumacher, New Orleans, La., for plaintiff-appellant.

Peter A. Feringa, Jr., Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, La., for United States Fidelity & Guaranty Co.

William J. Wegmann, New Orleans, La., for Krebs and LeMieux.

John V. Baus, New Orleans, La., for Hughes Constr. Co.

Ben C. Toledano, New Orleans, La., L. Drew Redden, William H. Mills, Birmingham, Ala., for Schuler.

Felicien P. Lozes, New Orleans, La., for Bosworth Constr. Co.

Before WISDOM, GODBOLD and RONEY, Circuit Judges.

WISDOM, Circuit Judge.

The appellant, Insurance Company of North America, appeals from the decision of the district court granting summary judgment. We affirm.

On December 2, 1966, a portion of the Governor House Motel in New Orleans collapsed. In accordance with an insurance policy then in effect, Insurance Company of North America paid the owners of the collapsed structure the sum due under the terms of the policy and exercised its rights of subrogation by commencing the present damage action against the defendants for $1,810,624.95. The defendants, all of whom participated in the design, fabrication, or erection of the structural steel portions of the building which are alleged to have failed and caused the collapse, include the following parties:¹

(1) Bosworth Construction Company, Inc., the general contractor; (2) Guy LeMieux and J.J. Krebs & Sons, Inc., the structural engineers; (3) Schuler Equipment Company, Inc., the fabricator of the structural steel; (4) R.H. Hughes Construction Company, Inc., the structural steel erector; and (5) United States Fidelity and Guaranty Company, the general liability insurer of Schuler Equipment Company, Inc.

U.S. F. & G. filed a motion for summary judgment on the ground that its policy did not cover Schuler for the type of loss alleged in the complaint. After a hearing, the district court granted the motion and entered a judgment dismissing U.S. F. & G. from the action.

On appeal, INA contends that the district court erred, first, in concluding that coverage was not apparent on the face of the contract, and alternatively, in concluding that the policy was not sufficiently ambiguous to present factual issues warranting trial on the merits.

A summary judgment, of course, should not be granted if there is a genuine issue as to any material fact. The burden is on the moving party to show that there is not the slightest doubt as to the facts and that only the legal conclusion remains to be resolved. Lighting Fixture & Elec. Sup. Co. v. Continental Ins. Co., 5 Cir. 1969, 420 F.2d 1211, 1213; United States v. Burket, 5 Cir. 1968, 402 F.2d 426; National Screen Service Corp. v. Poster Exchange, Inc., 5 Cir. 1962, 305 F.2d 647. Even though the facts are undisputed, summary judgment is inappropriate if competing reasonable inferences may be drawn as to any material factual issue. Cole v. Chevron Chem. Co., 5 Cir. 1970, 427 F.2d 390; N.L.R.B. v. Smith Industries, Inc., 5 Cir. 1968, 403 F.2d 889.

Applying these principles to the present case, we find that the district court was correct in granting summary judgment. In its complaint, INA alleges that the collapse of the building was partially attributable to the negligence of an independent contractor employed by Schuler and that the insurance policy issued by U.S. F. & G. covers this type of loss. The policy specifies three categories of risk for which Schuler is covered: (1) "aggregate operations"; (2) "aggregate protective"; and (3) "aggregate contractual". Coverage for a fourth type of risk, "aggregate products", is expressly excluded from the policy. The dispute between the parties centers on whether the coverage under "aggregate protective" for acts of independent contractors is affected by the exclusion of coverage for "aggregate products". The policy defines "aggregate protective" coverage as follows:

Subject to the limit of liability with respect to "each accident," the limit of property damage liability stated in the declarations as "aggregate protective" is the total limit of the Company\'s liability for all damages arising out of injury to or destruction of property, including the loss of use thereof, caused by operations performed for the Named insured by independent contractors or general supervision thereof by the named insured. . . . (Emphasis added.)

INA contends that since the acts of independent contractors are alleged to have contributed to the collapse of the building, coverage for the resulting loss is apparent from the face of the policy.

Although INA's argument exhibits a surface plausibility, a more careful reading of the policy compels a different interpretation. "Aggregate products", which is excluded from coverage under the policy, is defined as liability for bodily injury or property damage arising out of "the products hazard". "Products hazard", in turn, is defined to include:

(1) goods or products manufactured, sold, handled, or distributed by the Named Insured or by others trading under his name, if the accident occurs after possession of such goods or products has been relinquished to others by the Named Insured or by others trading under his name and if such accident occurs away from premises owned, rented or controlled by the Named Insured. . . .;

(2) operations, including any act or omission in connection with operations performed by or on behalf of the Named Insured on the premises or elsewhere and whether or not goods or products are involved in such operations, if the accident occurs after

...