Leroy v. Hartford Steam Boiler Inspec. and Ins. Co.
| Decision Date | 15 August 1988 |
| Docket Number | 84-2240-S,Civ. A. No. 84-2121-S,84-2312-S and 84-2213-S. |
| Citation | 695 F. Supp. 1120 |
| Parties | James R. LEROY, Plaintiff, and City of Coffeyville, Kansas, Insurance Company of North America and Aetna Insurance Company, Plaintiffs-Intervenors, v. HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY, et al., Defendants. Nancy LEMOS, et al., Plaintiffs, and City of Coffeyville, Kansas, Insurance Company of North America and Aetna Insurance Company, Plaintiffs-Intervenors, & Cross-Claim Defendants, v. HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY, et al., Defendants. Janice LAY, et al., Plaintiffs, and City of Coffeyville, Kansas, Insurance Company of North America and Aetna Insurance Company, Plaintiffs-Intervenors, v. HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY, et al., Defendants. Marci WILEY, et al., Plaintiffs, and City of Coffeyville, Kansas, Insurance Company of North America and Aetna Insurance Company, Plaintiffs-Intervenors, & Cross-Claim Defendants, v. HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
COPYRIGHT MATERIAL OMITTED
Rene M. Netherton, Jerry K. Levy, Janet Jo Smith, Levy, Smith, Garrett & Smith, Topeka, Kan., for James R. Leroy.
Bruce Keplinger, Payne & Jones Chartered, Overland Park, Kan., F. Timothy McNamara, Hartford, Conn., Neal E. Millert, Larry J. Tyrl, James, Millert, Houdek, Tyrl & Sommers, Kansas City, Mo., Randolph G. Austin, Speer, Austin, Holliday & Ruddick, Olathe, Kan., for Hartford Steam Boiler Inspection and Ins. Co.
Edward M. Boddington, Jr., Frank C. Weidling, Boddington & Brown, Kansas City, Kan., William Jamieson, Dennenberg, Tuffley & Bocan, Southfield, Mich., for
Barksdale Valve Co., Transamerica Delaval, Inc.
Joseph A. Sherman, R. Michael Steele, Ronald Edelman, Sherman, Wickens, Lysaught & Speck, P.C., Kansas City, Mo., Cynthia L. Harmison, Sherman, Wickens, Lysaught & Speck, Overland Park, Kan., for plaintiff intervenor Ins. Co. of North America and Aetna Ins. Co.
Gary D. McCallister, Davis, Wright, Unrein, Hummer & McCallister, Topeka, Kan., Danna F. Brabender, Paul H. Niewald, Niewald, Waldeck, Norris & Brown, Kansas City, Mo., Michael G. Norris, Terry Fitzgerald, B. Scott Tschudy, Niewald, Waldeck, Norris & Brown, Overland Park, Kan., for plaintiff intervenors City of Coffeyville, Kan., Ins. Co. of North America and Aetna Ins. Co.
Garen L. Cox, Coffeyville, Kan., John R. Clarey, Linde, Thomson, Fairchild, Langworthy, Kohn & Van Dyke, Kansas City, Mo., for Nancy Lemos.
P. Gae Widdows, C. Gene Howard, Jackson M. Zanerhaft, Tulsa, Okl., Sheryl Bussell, Iola, Kan., William La Sorsa, La Sorsa, Weber & Miles, Tulsa, Okl., for Janice Lay.
Garen Cox, Coffeyville, Kan., John R. Cleary, Linde, Thomson, Fairchild, Langworthy, Kohn & Van Dyke, Kansas City, Mo., for Marci Wiley.
Several matters are pending before the court in the above-captioned consolidated cases. Insurance Company of North America and Aetna Insurance Company ("INA/Aetna") has moved for summary judgment against the individual plaintiffs, Leroy, Lemos, Wiley, Lay, Frederick, and the Divelys. Hartford Steam Boiler Inspection and Insurance Company ("Hartford") has moved for summary judgment against plaintiffs-intervenors the City and INA/Aetna. The Benham Group, Inc. ("Benham") seeks summary judgment against plaintiffs-intervenors the City and INA/Aetna. INA/Aetna moves for a bifurcated trial. The City seeks to amend its complaint to add a cross-claim against INA/Aetna and to add a claim for punitive damages against Hartford. The City also appeals from a decision by the magistrate. Finally, individual plaintiffs Wiley, Lemos, Lay, Frederick and the Divelys move for a determination of their entitlement to attorney's fees and interest from the subrogated fund established through their settlement with Hartford, Combustion Engineering, Inc. ("Combustion") and Bailey Meter Company ("Bailey").
These consolidated cases arise out of a boiler explosion at the Coffeyville Municipal Power Plant in Coffeyville, Kansas, on August 5, 1983. Bradley Wiley, Richard Lemos, and Alfred W. "Dub" Lay were killed in the explosion, and plaintiffs James Leroy ("Leroy"), Larry Joe Frederick ("Frederick") and Richard Wayne Dively suffered serious injuries. Marci Wiley ("Wiley") and Nancy Lemos ("Lemos") bring this action individually and as administrices of their late husbands' estates; Lemos also brings this action on behalf of her minor children. Plaintiff Janice Lay ("Lay") brings this action as surviving spouse of Alfred W. "Dub" Lay and as next friend of her minor child. The surviving plaintiffs bring this action seeking recovery for their personal injuries, and plaintiff Lieta M. Dively brings this action as wife of plaintiff Richard Wayne Dively ("the Divelys"). The City of Coffeyville intervened in this action, along with its workers' compensation insurance carrier, INA/Aetna. The City and INA/Aetna seek recovery from Hartford and Benham, which allegedly contracted to inspect the boilers at the power plant. The individual plaintiffs seek recovery from INA/Aetna for negligent inspection. Additional claims among the parties and with Combustion and Bailey have been settled.
The court will first address INA/Aetna's motion for summary judgment on the claims brought against it by the individual plaintiffs. The uncontroverted facts for purposes of this motion are as follows. INA/Aetna issued two insurance policies to the City during the mid-1970's and those policies remained in effect through 1984. One policy covered property damage and liability claims, and the other provided workers' compensation coverage. Paragraph 9 of the "General Provisions" contained in the property damage/liability policy provided that:
The company (INA/Aetna) shall be permitted but not obligated to inspect the Main Insured's (the City's) premises, automobiles and operations and to examine and audit the Insured's books and records at any time during the policy period and any extension thereof and within three years after the final termination of this policy, as far as they relate to the premium bases or the subject matter of this insurance. Neither the Company's right to make inspections nor the making thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the named insured or others, to determine or warrant that such property or operations are safe or healthful, or in compliance with any law, rule, or regulation.
Paragraph 4 of the "Conditions" contained in the workers' compensation insurance policy contained a similar provision.
Representatives of INA/Aetna visited the power plant at least four times during the 1970's and again in January, 1983. They conducted inspections of the plant, but the parties disagree as to the character and purpose of those inspections. Plaintiffs argue INA/Aetna had a duty to inspect. INA/Aetna argues that its representatives made no representations or recommendations regarding the safety of Boiler # 3 and had no duty to do so. In January, 1983, INA/Aetna representative Kelly McClelland ("McClelland") visited the plant and met with City Clerk Carolyn Ernzen ("Ernzen"). They discussed institution of a loss maintenance program, whereby INA/Aetna would provide inspections and other services so the City could improve safety and avoid losses. McClelland did not inspect the plant at that time, but promised to return for another visit in April, 1983. McClelland failed to visit in April, 1983, and did not notify anyone with the City of his cancellation.
Plaintiffs contend that INA/Aetna was negligent in its failure to inspect and detect the defect in Boiler # 3 which caused the explosion. Since the insurance policies disclaim any duty to inspect, the parties agree that INA/Aetna may only be liable to plaintiffs by virtue of section 324A of the Second Restatement of Torts.
Section 324A provides that:
This provision has been recognized by the Kansas Supreme Court. See Schmeck v. City of Shawnee, 232 Kan. 11, 26, 651 P.2d 585, 597 (1982).
INA/Aetna contends there is no evidence to establish it "undertook" to render inspection services to the City. It argues that in the insurance contracts it disclaimed any duty to inspect and any inspections conducted were for underwriting purposes only. It also contends that any promises made by McClelland in January, 1983, did not constitute an "undertaking." Even if those promises did constitute an "undertaking," INA/Aetna argues that McClelland's actions were performed pursuant to the workers' compensation insurance policy, and that INA/Aetna therefore has statutory immunity pursuant to the Kansas Workers' Compensation Act, K.S.A. 44-532.
INA/Aetna also contends that even if it did "undertake" to provide inspection services for the City, there is no evidence that it undertook to assume the City's duty to provide a safe workplace, nor is there any evidence that the City relied upon INA/Aetna's inspections. The parties concede that there is no evidence to show INA/Aetna's actions in any way increased the risk of harm; see Restatement (Second) of Torts, § 324A(a).
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