Lumbard v. Western Fire Ins. Co., Fort Scott, Kan.

• Decision Date: 07 February 1986
• Docket Number: No. 84-801,84-801
• Citation: 381 N.W.2d 117,221 Neb. 804
• Parties: Carl W. LUMBARD, Doing Business As Lumbard-Leschinsky, Appellee, v. The WESTERN FIRE INSURANCE COMPANY, FORT SCOTT, KANSAS, A Corporation, Appellant.
• Court: Nebraska Supreme Court

Page 117

381 N.W.2d 117

221 Neb. 804

Carl W. LUMBARD, Doing Business As Lumbard-Leschinsky, Appellee, v. The WESTERN FIRE INSURANCE COMPANY, FORT SCOTT, KANSAS, A Corporation, Appellant.

No. 84-801.

Supreme Court of Nebraska.

Feb. 7, 1986.

Syllabus by the Court

1. Insurance: Contracts. An insurance policy is to be construed as any other contract; if its terms are clear, they are to be applied according to their plain and ordinary meaning.

2. Insurance: Contracts. If an insurance policy is ambiguous, it will be construed in favor of the insured.

3. Insurance: Contracts. An ambiguity exists only when a policy can be interpreted to have two or more reasonable meanings.

4. Insurance: Contracts. An ambiguity will not be read into policy language which is plain and unambiguous in order to construe it against the preparer of the contract.

5. Insurance: Contracts. A policy provision covering burglary only if felonious exit from the premises be by actual force and violence, as evidenced by visible

marks made by tools, explosives, electricity, or chemicals upon, or physical damage to, the interior of the premises at the place of such exit, is enforceable.

Kenneth H. Elson, Grand Island, for appellant.

Earl D. Ahlschwede, of Ahlschwede, DeBacker & Truell, Grand Island, for appellee.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

CAPORALE, Justice.

The plaintiff, Carl W. Lumbard, a merchant doing business as Lumbard-Leschinsky, seeks to recover the value of certain merchandise removed from his premises under a policy of burglary insurance issued by defendant, The Western Fire Insurance Company, Fort Scott, Kansas, a corporation. Western appeals from the summary judgment entered in favor of Lumbard on the grounds that the district court erred (1) in determining that the policy's definition of "burglary" violated public policy and thus was unconscionable and unenforceable and (2) in finding that the policy covered the loss. We reverse and remand for further proceedings.

The policy provided that Western would pay Lumbard "for all loss of or damage to merchandise, furniture, fixtures, and equipment within the premises occasioned by ... burglary...." The policy defined burglary as

the felonious abstraction of insured property (1) from within the premises by a person making felonious entry therein by actual force and violence ... or (3) from within the premises by a person making felonious exit therefrom by actual force and violence as evidenced by visible marks made by tools, explosives, electricity or chemicals upon, or physical damage to, the interior of the premises at the place of such exit.

When Lumbard's store was closed at the end of the business day on January 16, 1981, the supply door was fastened shut by means of two bars which fit into hooks on the inside of the door in such a manner as to render the door incapable of being opened from the outside. When the store was opened for business the next day, it was found that numerous items, mostly stereophonic equipment, had been removed from the store. There were no signs of forcible entry into or exit from the store, but the bars which held the supply door shut had been removed from the hooks and laid on the floor beside the door.

Western denied coverage for the loss of the items removed from the store on the basis that the occurrence did not fall within the policy's definition of a burglary.

Western's first ground of appeal, that the trial court erred in concluding that the policy's definition of burglary is void and unenforceable as violative of public policy, is meritorious.

Cochran v. MFA Mut. Ins. Co., 201 Neb. 631, 271 N.W.2d 331 (1978), involved an insurance policy which stated it did not apply to loss away from the described premises of

"property while unattended in or on any motor vehicle or trailer, other than a public conveyance, unless the loss is the result of forcible entry into such vehicle while all doors, windows or other openings thereof are closed and locked, provided there are visible marks of forcible entry upon the exterior of such vehicle or the loss is the result of the theft of such vehicle which is not recovered within 30 days, but property shall not be considered unattended when the Insured is required to surrender the keys of such vehicle to a bailee."

(Emphasis supplied.) Id. at 632, 271 N.W.2d at 332. Entry into the locked automobile from which the property was taken had been gained by the use of a "jiggle" key which was later found in the vehicle. As a result, there were no marks of forcible entry. In upholding the lower courts' denials of coverage, the Cochran opinion rejected the argument that it would be unconscionable to enforce a policy provision requiring such marks where other evidence of a burglary is present. The court specifically stated that the "provision requiring visible marks of forced entry is not unconscionable." Id. at 634, 271 N.W.2d at 333. The Cochran opinion also rejected the argument that the requirement establishes a mere rule of evidence which will not be literally enforced if it is clear the burglary was not "an inside job." Id. at 633, 271 N.W.2d at 333. While the cases discussed hereinafter with respect to Western's second ground of appeal do not expressly state that clauses such as that involved in this case are not unconscionable, their holdings so imply.

We turn, then, to Western's second ground of appeal, the trial court's finding that the loss is covered by the policy.

The rule controlling the resolution of the issues presented by that ground is that an insurance policy is to be construed as any other contract; if its terms are clear, they are to be applied according to their plain and ordinary meaning. Swanson v. First Fidelity Life Ins. Co., 214 Neb. 654, 335 N.W.2d 538 (1983); Hemenway v. MFA Life Ins. Co., 211 Neb. 193, 318 N.W.2d 70 (1982); Safeco Ins. Co. of America v. Husker Aviation, Inc., 211 Neb. 21, 317 N.W.2d 745 (1982).

As noted in Great Plains Ins. Co., Inc. v. Kalhorn, 203 Neb. 799, 803-04, 280 N.W.2d 642, 645 (1979):

An insurance policy is a contract between the insurance company and the insured. As such, the insurance company has the right to limit its liability by including those limitations in the policy definitions. If those definitions are clearly stated and...