Leebov v. United States Fidelity & Guaranty Co.
| Decision Date | 15 November 1960 |
| Citation | 165 A.2d 82,401 Pa. 477 |
| Parties | Mike LEEBOV v. UNITED STATES FIDELITY AND GUARANTY COMPANY a corporation, Appellant. |
| Court | Pennsylvania Supreme Court |
Arthur G. Stein, Daniel B. Winters, Stein & Winters Pittsburgh, for appellant.
Abraham Pervin, Sachs, Pervin, Kaufman & Menzer, Pittsburgh, for appellee.
Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO, BENJAMIN R JONES, COHEN, BOK, and EAGEN, JJ.
In 1940, Mike Leebov, the plaintiff in this case, went into the building construction business and purchased from the United States Fidelity and Guaranty Company, the defendant, a contractor's liability policy which was renewed from year to year. The paragraph of the policy which is of principal concern in this lawsuit reads as follows:
'[The defendant insurance company agrees] to pay on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined.'
In 1948, a landslide occurred during the course of the plaintiff's operations, and the defendant insurance company paid claims resulting therefrom.
In 1950 while the policy was in full force and effect, the premiums having been paid regularly, the plaintiff was subjected to other losses because of another landslide. This time the defendant company refused to indemnify the plaintiff, arguing that the insurance policy did not cover landslides. As the result of this second mishap the plaintiff had to pay out the amount of $1,700 as the result of a lawsuit brought by a damaged property owner and the amount of $13,047.37 for expenses incurred in arresting the landslide and preventing other serious damage. He brought suit against the defendant insurance company and obtained verdicts in the sums of $1,700 and $13,047.77. The defendant appealed, seeking judgment n o. v., and, in the alternative, a new trial.
The defendant company argues that the amounts paid out by the plaintiff were not the result of tort liability but contractual responsibility which is not embraced within the provisions of the policy.
The facts are that on November 16, 1950, while the plaintiff was engaged in excavating along a hillside preparatory to erecting a one-story warehouse on Fifth Avenue in Pittsburgh, a break occurred in the bank to the rear of the property. The land began to slide, and the porch of one of the houses atop the hill collapsed. The plaintiff immediately ceased all excavating operations, drove his trucks against the bank, and pounded stakes into the ground to hold the trucks immobile. He summoned a shoring expert and at once notified the defendant company as to what was happening. The defendant sent to the scene its safety engineer who approved of the measures taken by the plaintiff and in no way suggested that the insurance company was disinterested on the basis the policy did not cover the situation.
As already stated, it cost the plaintiff $13,047.57 to repair the damage done and to prevent further losses. When the houseowner whose porch was destroyed, sued the plaintiff for his damages, the insurance company refused to defend the action. The houseowner recovered $1,150 from Leebov who also had to pay $550 for counsel fees, thus making up the sum of $1,700, heretofore also mentioned.
The defendant contends that the plaintiff's liability was one which arose out of a contractual relationship with the shoring expert and other workmen. The fact, however, that the money was paid to persons who worked for the plaintiff did not absolve the insurance company from liability under its policy which covered losses arising 'by reason of the liability imposed upon him [plaintiff] by law for damages because of injury to or destruction of property * * *.' The policy was not limited in its terms as the one in Desrochers v. New York Casualty Co., 99 N.H. 129, 106 A.2d 196, 198, relied upon by the defendant. There the carrier agreed----
'to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages * * * because of * * * destruction of property.' (Emphasis supplied).
The instant policy is not so limited. By its terms the defendant agreed to pay such sums as the plaintiff became obligated to pay 'by reason of' the liability imposed upon him by law for damages because of injury to or destruction of property.
If the plaintiff had not taken immediate and substantial measures to remedy the perilous situation, disastrous consequences might have befallen the adjoining and nearby properties. If that had happened, the defendant would have been required to pay considerably more than is involved in the present lawsuit. It would be a strange kind of argument and an equivocal type of justice which would hold that the defendant would be compelled to pay out, let us say, the sum of $100,000 if the plaintiff had not prevented what would have been inevitable, and yet not be called upon to pay the smaller sum which the plaintiff actually expended to avoid a foreseeable disaster. That the danger to the neighborhood was one of considerable substance is evidenced by the fact that the City authorities required the nearby owners to vacate their premises for a period of two months.
It is folly to argue that if a policy owner does nothing and thereby permits the piling up of mountainous claims at the eventual expense of the insurance carrier, he will be held harmless of all liability, but if he makes a reasonable expenditure and prevents a catastrophe he must do so at his own cost and expense. Then the defendant says that there was no proof of negligence on the part of the plaintiff and that, therefore, he was not obliged under the law to take the remedial measures described. But here the defendant ignores the fact that the plaintiff was absolutely liable for damages to the nearby lands in their natural state resulting from interference with their lateral support. The plaintiff also of course would be liable for damages to buildings and persons resulting from negligence attributable to him through failure to properly meet a peril he could not mistake.
In Diksajtsz v. Brosz, 104 Pa.Super. 246, 252, 158 A. 620, 622, the Superior Court said:
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