Iowa Electric Co. v. Home Ins. Co.

• Decision Date: 06 February 1945
• Docket Number: 46597.
• Citation: 17 N.W.2d 414,235 Iowa 672
• Parties: IOWA ELECTRIC CO. v. HOME INS. CO.
• Court: Iowa Supreme Court

17 N.W.2d 414

235 Iowa 672

IOWA ELECTRIC CO. v. HOME INS. CO.

No. 46597.

Supreme Court of Iowa

February 6, 1945

Barnes, Chamberlain, Hanzlik & Wadsworth, of Cedar Rapids, for appellants.

Donnelly Lynch, Anderson & Lynch, of Cedar Rapids, for appellee.

GARFIELD Justice.

We disregard the fact that two mortgagees joined as plaintiffs with the owner.

The trial court held as a matter of law that the policy did not cover the hydrogenerator which had been damaged by fire, set aside the jury's verdict for plaintiff and entered judgment for defendant as though it had sustained defendant's motion for a directed verdict. See Rule 243(b), Rules of Civil Procedure. Defendant's motion for new trial was overruled. We are required to consider the evidence in the light most favorable to plaintiff-appellant.

The policy dated October 1, 1938, is an Iowa standard fire policy with numerous riders and certificates. The provisions around which the controversy centers are contained in this attached papers and not in the policy proper. The coverage is '$70,000 on contents contained in the brick Electric Generating Plant building situate S Walrouth Avenue and River Street' in Anamosa. The fourth section of one of several attached papers provides, 'The term 'Building' shall be construed to cover the entire structure including all communicating and/or connected additions and attachments; * * *.' The vital question is whether it can be said as a matter of law that the damaged hydro-generator was not contained in a communicating or connected addition to the 'generating plant building' referred to in the coverage.

At all times material hereto plaintiff has owned and operated an electric generating plant in Anamosa. The main building, 55X60 feet 32 feet to the eaves, had been built for many years. It contains the main switchboard that controls all the generators, the high voltage switch gears for the main transmission lines, two diesel engine driven generators, the heating plant and washroom. A smaller building was built in 1936, 18 or 20X24 feet, 35 feet high, at a distance of 24 feet from the main building, with a lawn in between. Both buildings are of brick. The smaller building, 'just a simple rectangular brick box,' sits out over the flume that carries the water into the water wheel and houses the hydro-electric generator which was damaged by fire on January 19, 1943. The hydro-electric unit consists of the water wheel, the generator and the speed regulator or governor. The current generated in the hydro-generator goes into the main switchboard in the old building and is distributed from there.

Both buildings face west. There is a sidewalk along the west side of the buildings between the door to each building. There are four conduits about four inches inside diameter that extend underground between the buildings. One conduit carries three wires in a cable carrying 2,300 volts of current generated by the hydro unit into the main switchboard. Another conduit carries wires from the main switchboard to 'the field' of the hydro-generator. A third conduit carries a set of control circuits from the main switchboard to the governor on the water wheel. The fourth conduit carries wires for the lighting and heating of the main building. The controls that start and stop the hydrogenerator are on the main switchboard and it is operated and controlled entirely from the main building. An exciter located in the old building near the switchboard is used in connection with the hydro unit. It is an electric generator which causes the hydro unit to generate alternating current. Without the exciter the hydro unit would not generate alternating current.

The hydro-generator is operated by the water power from the river and runs most of the time. When additional current is needed it comes into the main building through transmission lines from Cedar Rapids and Maquoketa. The two diesel engines in the old building are used only in an emergency when the transmission lines are down. Two electrical engineers connected with plaintiff company testified in substance that the hydro unit is an integral part of plaintiff's generating plant. One of the engineers testified that the hydro unit could be located several miles from the main switchboard but it would then require an entirely different system of controls than that employed when it is within a relatively few feet of the switchboard. Also that overhead wires could be used rather than underground conduits but not as efficiently and that special control equipment would then be needed.

The trial court left it to the jury to determine whether the smaller building was a 'communicating and/or connected addition or attachment' to the main building. After the verdict was returned, however, he ruled as a matter of law that it was not and, in effect, sustained defendant's motion for directed verdict.

The term 'communicating or connected addition' or similar term frequently found in fire insurance policies has never been construed by this court. A similar term was involved in Kimball Bros. Co. v. Palatine Ins. Co., 197 Iowa 598, 601, 195 N.W. 987, where the opinion uses language upon which plaintiff places some reliance. The court did not commit itself, however, since another clause in the policy was controlling.

In general, plaintiff contends that as used in insurance policies, a communicating or connected addition need not be physically joined to the main building and that here the smaller building was such an addition to the larger because of their ownership, relative location, accessibility, adaptability and use. Defendant contends, however, that the smaller building is not such an addition because it is not structurally connected with the main building and the parties did not intend the insurance to cover the property which was damaged.

Before proceeding further, it seems necessary to determine whether the testimony of defendant's witness Larson, which was subsequently stricken upon plaintiff's motion, is to be considered by us. Larson, a special agent for defendant, testified over plaintiff's objection to a conference between him and Fratcher, plaintiff's vice president and general manager (who had also been a practicing attorney), a short time before the policy in suit was issued in which the insurance on plaintiff's different properties, including the hydro-generating station, was discussed; following the discussion but during the conference, the word 'no' was written in pencil on a typewritten memorandum opposite the description of the hydro-generating station; a subsequent memorandum was then prepared by defendant which listed the hydro-generating station as one of the properties on which no insurance was carried; this later memorandum was sent by defendant to one of its agents in Cedar Rapids, along with the policy in suit, to be delivered to plaintiff.

Plaintiff's counsel did not cross-examine Larson. And Fratcher, though present in court, was not called in rebuttal to deny or explain Larson's testimony. The inference defendant seeks to draw from Larson's testimony is that...