Loewenthal v. Security Ins. Co. of Hartford
| Decision Date | 04 November 1981 |
| Docket Number | No. 145,145 |
| Parties | Daniel LOEWENTHAL t/a Loewenthal Construction Company v. SECURITY INSURANCE COMPANY OF HARTFORD. |
| Court | Court of Special Appeals of Maryland |
George H. Eggers, Silver Spring, for appellant.
James J. Debelius, Chevy Chase, with whom were Leonard C. Greenebaum and Harlan L. Weiss, Chevy Chase, on the brief, for appellee.
Argued before GILBERT, C. J., and MORTON and THOMPSON, JJ.
The appellant, Daniel Loewenthal, t/a Loewenthal Construction Company (hereinafter "Loewenthal"), brought an action for a declaratory judgment that the comprehensive general liability insurance policy with appellee, Security Insurance Company of Hartford (hereinafter "Security"), provided either coverage for or an obligation to defend Loewenthal against claims resulting in an action at law, instituted by Steven D. Newburg-Rinn et ux., et al. against Daniel Loewenthal, etc. In the declaratory judgment action, the Circuit Court for Montgomery County (Mitchell, J.), sitting as a court of equity, by order dated December 2, 1980, granted Security's motion for summary judgment and denied that of Loewenthal, finding that under the insurance policy Security had no obligation to defend Loewenthal in the suit at law. It is from this action that Loewenthal now appeals.
The "Declaration," filed by Newburg-Rinn against Loewenthal alleges, in pertinent part:
"(Loewenthal) commenced performance on or about June 26, 1978. In direct contradiction to the explicit instructions of the plaintiffs' architect as to the procedure to be utilized in excavating the basement area of the Newburg-Rinn residence, (Loewenthal) bulldozed the entire center area of the basement prior to providing adequate bracing and support for the existing foundation. (Loewenthal) had completed a substantial part of the excavation, when, on July 23, 1978, cracks began to appear on one side wall under which (Loewenthal) had excavated.
Soon thereafter, the inadequate bracing and underpinning were pointed out to (Loewenthal) by the plaintiffs' architect, and (Loewenthal) then promised that he would correct the situation. (Loewenthal) inspected the site on July 4, 1978 and again promised to correct the problem, however this was not done. In addition, (Loewenthal) had an implied contractual obligation to perform the work he undertook with skill and care, as is required by one doing excavation work in the building community.
Notwithstanding (Loewenthal's) representations, and as a result of his breach of contract in failing to properly perform the excavation and underpinning work as contracted, and by failing to perform this work with skill and care, a major portion of the improvement suffered serious property damage. As a direct and proximate result of (Loewenthal's) breach, emergency repairs were required to prevent further destruction, and it was necessary to replace portions of walls, floors and other structural elements. This also necessitated plaintiffs being caused to vacate their home and to seek temporary shelter."
As a result of Loewenthal's alleged negligent actions, the Newburg-Rinns claim damages as measured by "(1) lost rental value of their home, (2) time differential losses in replacement costs, (3) lost wages, (4) property damage, and (5) pain, suffering and mental anguish."
The comprehensive general liability insurance policy issued by Security to Loewenthal provides, in pertinent part:
"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of A. bodily injury or B. property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent...." (Emphasis supplied.)
....
'(U)nderground property damage hazard' includes underground property damage as defined herein and property damage to any other property at any time resulting therefrom. 'Underground property damage' means property damage to wires, conduits, pipes, mains, sewers, tanks, tunnels, any similar property, and any apparatus in connection therewith, beneath the surface of the ground or water, caused by and occurring during the use of mechanical equipment for the purpose of grading land, paving, excavating, drilling, burrowing, filling, back-filling or pile driving. The underground property damage hazard does not include property damage (1) arising out of operations performed for the named insured by independent contractors, or (2) included within the completed operations hazard, or (3) for which liability is assumed by the insured under an incidental contract."
Although Loewenthal paid a premium to eliminate the underground property damage hazard exclusion, there is no question that Loewenthal did not purchase the collapse hazard coverage. Subject to the collapse hazard exclusion were the operational hazards "Excavation 15111 x c" and "Underpinning Buildings or Structures-including incidental shoring, removal or rebuilding of walls, foundations, columns or piers ... 17885 sxc." Damages arising from excavation or underpinning operations would be covered by the policy if they fell within the underground property damage hazard, but excluded from policy coverage if within the collapse hazard exception.
Loewenthal argues that the policy provides coverage or an obligation to defend for the damage to the Newburg-Rinns for any one of four reasons:
(1) the collapse hazard exclusion is inapplicable and/or unenforceable;
(2) the occurrence is potentially covered by the underground property damage provision;
(3) there is a potentiality of coverage under the basic policy provisions, notwithstanding the above two exclusions;
(4) if the collapse hazard exclusion applies, Security is obligated to provide a defense because of the plaintiffs' allegations of personal injuries, which are clearly not excluded from coverage under the collapse hazard exclusion.
Turning first to the procedural posture of this case, Maryland Rule 610 provides that a motion for summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there are no genuine issues as to any material fact and the movant is entitled to judgment as a matter of law.
Although a summary judgment in a declaratory judgment action is the exception rather than the rule, circumstances may warrant the entry of a full or partial summary judgment. See Pennsylvania Nat. Mut. v. Gartelman, 288 Md. 151, 416 A.2d 734 (1980); National Grange Mut. Ins. v. Pinkney, 284 Md. 694, 399 A.2d 877 (1979). As the Court of Appeals stated in Dart Drug Corp. v. Hechinger Co., 272 Md. 15, 29, 320 A.2d 266 (1974), "(w)hile a declaratory decree need not be in any particular form, it must pass upon and adjudicate the issues raised in the proceeding, to the end that the rights of the parties are clearly delineated and the controversy terminated ...." The issues presented warrant a summary disposition.
On the issues properly before us, there is no factual dispute disclosed by the pleadings and affidavits. Rather, the parties disagree on what label should be attached to the facts. There being no dispute as to fact, Security's liability under the policy turns on the construction of the policy exclusions; this presents a question of law for the court.
The applicable law is set forth in Appleman, Insurance Law and Practice (Berdal ed.) § 4683, as follows:
"An insurer's duty to defend an action against the insured is measured by the allegations in the plaintiff's pleadings, and if such pleadings state facts bringing the injury within the coverage of the policy, the insurer must defend, irrespective of the insured's ultimate liability to the plaintiff."
See also Brohawn v. Transamerica Ins. Co., 276 Md. 396, 407, 347 A.2d 842 (1975), and numerous authorities cited therein.
Furthermore, where the complaint does not state facts sufficient to clearly bring the case within or without coverage, the general rule, followed in Maryland, is that the insurer is obligated to defend if...
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