King v. Travelers Ins. Co.

• Decision Date: 02 February 1973
• Docket Number: No. 9437,9437
• Citation: 84 N.M. 550,505 P.2d 1226,1973 NMSC 13
• Parties: Elmer G. KING and Ruth M. King, husband and wife, Plaintiffs- Appellants, v. The TRAVELERS INSURANCE COMPANY, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 1226

505 P.2d 1226

84 N.M. 550

Elmer G. KING and Ruth M. King, husband and wife Plaintiffs- Appellants, v. The TRAVELERS INSURANCE COMPANY, Defendant-Appellee.

No. 9437.

Supreme Court of New Mexico.

Feb. 2, 1973.

Edward E. Triviz, Las Cruces, for plaintiffs-appellants.

Bivins & Weinbrenner, Las Cruces, for defendant-appellee.

OPINION

MONTOYA, Justice.

This is an appeal by plaintiffs, hereinafter called 'Appellants,' from a summary judgment rendered in a suit which was brought to recover damages under a homeowners' insurance policy issued by the defendant insurance company, hereinafter called 'Appellee.'

The parties stipulated that a galvanized iron water line underneath the concrete floor slab, somewhere between the hot water heater and the kitchen in Appellants' home, broke or ruptured, allowing the escape and discharge of water which eroded the soil and proximately caused abnormal settling damage from the pressure of the said water underneath the slab; caused the concrete floor slab to buckle in the living room and the outside walls to crack, resulting in damages to the insured premises in the sum of $2,255.41. It was further stipulated that the leak from the galvanized iron water line occurred from within the plumbing system and was caused by a deterioration in the water line from a chemical reaction known as 'electrolysis.'

Appellee denied coverage and both parties moved for summary judgment. The trial court granted summary judgment to Appellee and this appeal ensued.

Both parties agree in their briefs that the basis for the trial court's ruling was that the claimed loss by Appellants was not covered under the terms of the policy in question.

The essential facts necessary for a determination of the issues between the parties are stipulated to and the basic issue to be determined is whether or not the loss was covered under the policy.

The first question to be considered is whether the loss was or was not a named peril under Section I of the policy. Under the 'perils insured against,' only paragraph 17 is applicable, and it reads, insofar as material herein, as follows:

'17. Water escape, meaning loss caused by accidental discharge, leakage or overflow of water or steam from within a plumbing, heating, or air conditioning system or domestic appliance, including the cost of tearing out and replacing any part of the insured building required to effect repairs to the system or appliance from which the water or steam escapes, * * *.'

Appellee argues that this damage is not covered by the policy because it was not the result of an 'accidental discharge,' rather that the damage was due to the process known as electrolysis, a result caused initially by defective installation.

The cases do not support the claim that the loss was not occasioned by an accident; indeed, a weath of authority sustains the conclusion that an accident occurred.

'* * * (T)he would 'accident' has never acquired any technical signification in law, and when used in insurance contracts, it is to be construed and considered according to the ordinary understanding and common usage of people generally. (Citations omitted.) * * *'

St Paul Fire and Marine Insurance Co. v. Northern Grain Co., 365 F.2d 361 (8th Cir. 1966). The court in St. Paul, supra, quotes from 7A Appleman, Insurance Law and Practice, § 4492, as follows:

"When used without restriction or qualification in insurance contracts, the term 'accident' has been held broader than the restricted definition of an event happening suddenly and violently."

The court went on to say:

'Reference to a relatively limited number of cases will suffice to demonstrate that courts have interpreted and applied the term 'accident', as used in general liability insurance policies, broadly, and have declined to limit its meaning to an event which happened suddenly and violently. (Citations omitted.) * * *'

Kraftsow v. Brown, 172 Pa.Super. 581, 94 A.2d 183 (1953), dealt with a 'water damage' policy. In holding the policy to be applicable in a situation where plaintiff's employee negligently used a plunger on the drain on the roof and a cap covering the opening in a wall pipe came off and flooded the basement, the court quoted the following from Hamilton v. American Indemnity Co., 82 Pa.Super. 191 (1923):

"Some authorities hold that the word 'accidental' means the happening of an event without fault or negligence on the part of anyone. This is a narrow and restricted meaning. In its ordinary, popular sense, it expresses the thought of an event occurring without design or purpose, or unintentionally on the part of the assured. Given the latter meaning, it does not negative the idea of negligence on the part of one whose physical act the occurrence follows. But it does not include the result of wilful design. If accident and negligence be not opposites, accident and design are * * *."

Furthermore, in Cross Properties, Inc. v. Home Indemnity Company, 41 Misc.2d 822, 246 N.Y.S.2d 683 (1964), the court states:

'* * * . Although an act is attributed solely to negligence, yet it may be an accident. * * *'

In Rex Roofing Co. v. Lumber Mut. Cas. Ins. Co. of New York, 280 App.Div. 665, 116 N.Y.S.2d 876 (1952), the defendant disclaimed liability upon the ground that the occurrence was due to faulty workmanship on the part of the plaintiff and was not caused by accident, and that the damaged property was under the care, custody and control of the plaintiff. In holding the loss was caused by accident and affirming coverage, the court stated:

'While undoubtedly the intentional infliction of injury cannot be regarded as an accident and conduct may be so heedless as to be equated to the willful, we cannot take seriously the suggestion that plaintiff's conduct here was more than negligent. Defendant does not go so far as to suggest that negligence on the part of plaintiff absolves the defendant of liability or that the term 'accident' should be so narrowly construed as to rule out an occurrence caused by negligence. Indeed, negligence would be the predicate of any likely liability insured against and defendant concedes that in construing a contract of this kind words should not be given a technical meaning but should be taken as they would be understood by an average man. We have no doubt that the average man would consider the occurrence in question as an 'accident' in the common conception of that word.'

The authorities cited above indicate that an insurance policy designed to compensate for damages suffered by 'accidental means' is no less effective when the damages result from negligence.

That there was a discharge of water from within the plumbing system is undisputed. The fact that the discharge resulted from and was caused by a deterioration in the water line from a chemical reaction known as electrolysis, as stipulated by the parties, does not make it any less an 'accident' as that word is understood to mean in its ordinary and common usage. If the water line was negligently installed this does not preclude the 'accident' from coverage under paragraph 17 of the policy. As the Supreme Court of Minnesota said in Hauenstein v. Saint Paul-Mercury Indem. Co., 242 Minn. 354, 65 N.W.2d 122 (1954):

'There is no doubt that the property damage to the building caused by the application of the defective plaster was 'caused by accident' within the meaning of the insurance contract, since the damage was a completely unexpected and unintended result. Accident, as a source and cause of damage to property, within the terms of an accident policy, is an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause.' (Emphasis added.)

In view of the foregoing, it is clear to us from the stipulated facts that the loss suffered by Appellants was loss caused by accidental discharge and leakage of water from within a plumbing system, and that no ruling to the contrary should be allowed to stand.

The next issues before this court are whether the loss was otherwise excluded under the policy, and whether the policy clauses with which we are concerned contain an ambiguity. Under the 'losses excluded' the insurer shall not be liable under Section I for:

'(b) (3) water below the surface of the ground including that which exerts pressure on or flows, seeps or leaks through sidewalks, driveways, foundations, walls, basement or other floors, or through doors, windows, or any other openings in such sidewalks, driveways, foundations, walls or floors, * * *;'

Appellee contends that the loss was, therefore, excluded under the policy, while Appellants contend otherwise. Appellants also argue that, if the loss is not covered under Section I, the pertinent provisions of the policy are ambiguous and any construction of the provisions should be resolved in Appellants' favor.

A case very analogous to the factual situation we have confronting us here, is World Fire & Marine Ins. Co. v. Carolina Mills Distributing Co., 169 F.2d 826 (8th Cir. 1948). There the facts show that a water damage policy was involved which insured all direct loss and damages caused solely by accidental discharge, leakage or overflow of water or steam from enumerated sources, including plumbing systems, and also providing in the exception clause that the insurer should not be liable for damage caused directly or indirectly by floods, inundation, backing up of sewers or drains. The damages in that case resulted when the city's main sewer became overloaded as a result of an unusually heavy rain and the resulting pressure in the sewer caused water to flow back through a soil pipe into insured's building, causing a metal cap covering an opening in the plumbing system to be broken and forced off, resulting in a flooding of the basement. There it was argued that the loss was not caused by an accidental discharge of water from the insured's plumbing system, but was indirectly caused by the backup water from the sewer...