Koehring Company v. American Automobile Insurance Co.
| Decision Date | 20 December 1965 |
| Docket Number | No. 15265.,15265. |
| Citation | 353 F.2d 993 |
| Parties | KOEHRING COMPANY, a corporation, Plaintiff-Appellee, v. AMERICAN AUTOMOBILE INSURANCE COMPANY, a corporation, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
John A. Kluwin, James P. Burns, Kulwin, Dunphy, Hankin & Hayes, Milwaukee, Wis., for appellant.
William A. Denny, John F. Friedl, Milwaukee, Wis., for appellee.
Before HASTINGS, Chief Judge, and CASTLE and KILEY, Circuit Judges.
Plaintiff-appellee, Koehring Company, a Wisconsin corporation, brought this action1 against American Automobile Insurance Company, the defendant-appellant, on a policy of liability insurance issued by American. Koehring sought recovery of damages because of American's refusal to defend Koehring in a Minnesota state court action against Koehring as a third-party defendant. Koehring incurred attorneys' fees in connection with and settled the Minnesota action after American had refused to defend on the ground that the claim asserted against its insured, Koehring, was not within the coverage afforded by the policy. The cause was tried to the court which entered judgment for Koehring for the sum of $34,173.21 after filing an opinion2 incorporating findings of fact and conclusions of law. American appealed.
The comprehensive liability policy issued by American to Koehring contains the following provisions:
The main contested issue presented by American's appeal is whether the claim asserted against Koehring in the Minnesota action involved damages caused by "accident".
The record discloses that Koehring's unincorporated division, the C. S. Johnson Company of Champaign, Illinois, which specialized in the manufacture and sale of concrete batching and mixing equipment, obtained two concrete mixers from Koehring-Waterous, Ltd., a Canadian subsidiary of Koehring, which with certain related equipment were delivered in June of 1959 to Swanson-Truax Company, a Minnesota highway construction contractor. Swanson-Truax had purchased the mixers and related equipment from Ruffridge-Johnson Equipment Company, Koehrings' dealer in Minnesota. The two mixers and the related equipment were to be used with existing equipment previously purchased by Swanson-Truax so as to provide a central mix plant for batching, hauling and placing concrete at the job-site of an interstate highway construction project in North Dakota.
Paving operations commenced on June 15, 1959. Certain difficulties were experienced in the operation and functioning of the central mix plant but there is conflict in the testimony as to whether the malfunctioning was attributable to faulty design of the equipment with resultant failure of the various parts to function in a coordinated manner or was attributable to lack of experience on the part of the contractor's operating personnel. In any event, a more serious disruption of the contractor's work occurred beginning on July 1, 1959, when one of the mixers suddenly toppled over spilling its contents. The hydraulic cylinder ram jets used to tilt the mixer in order to dump the contents had broken. The next day the second mixer broke down in the same manner. In addition, the mounting for the motor on one of the mixers broke and the motor fell off. These breakdowns resulted in a complete shut down of Swanson-Truax's paving operations until repairs were completed and the hydraulic cylinders were replaced several days later with duplicates procured by Koehring's Johnson Company division. These began to fail about a week later. It was then determined that Koehring-Waterous had installed the wrong type of hydraulic cylinders in the mixers — a type of cylinder inadequate for the purpose. Different hydraulic cylinders were then installed and thereafter the mixers functioned without further trouble.
The Minnesota action was brought by Swanson-Truax against Ruffridge-Johnson, Koehring's Minnesota dealer from which Swanson-Truax had purchased the mixers and related equipment. The contractor sought damages allegedly occasioned by breach of warranty and by negligence in the...
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