Martinelli v. Security Ins. Co. of New Haven

• Decision Date: 21 November 1972
• Docket Number: No. 34500,34500
• Parties: Leo L. MARTINELLI, Plaintiff-Respondent, v. SECURITY INSURANCE COMPANY OF NEW HAVEN, Defendant-Appellant. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 427

490 S.W.2d 427

Leo L. MARTINELLI, Plaintiff-Respondent, v. SECURITY INSURANCE COMPANY OF NEW HAVEN, Defendant-Appellant.

No. 34500.

Missouri Court of Appeals, St. Louis District, Division Two.

Nov. 21, 1972.

Motion for Rehearing or to Transfer Denied Jan. 12, 1973.

Application to Transfer Denied March 12, 1973.

Padberg, Raack, McSweeney & Slater, St. Louis, for defendant-appellant.

Gray, Friedman & Ritter, Charles E. Gray, St. Louis, for plaintiff-respondent.

SIMEONE, Judge.

This is an appeal from a judgment of the Circuit Court of the City of St. Louis in favor of the plaintiff-respondent, Leo L. Martinelli, against the defendant-appellant, Security Insurance Company of New Haven (hereinafter Security) in the amount of $6,500 plus interest and costs. Security defends on the ground that the homeowner's policy issued by Security does not cover the loss sustained.

The appeal involves two deceptively simple issues: (1) is the act of walking by an insured an activity which is ordinarily incident to a non-business pursuit so that a homeowner's policy provides coverage to the insured while he is at his place of employment and allegedly injures a fellow employee; and (2) is the insurance company estopped from denying coverage in an action brought by the injured person when the attorney for the insurer makes statements in the defense of an action brought against the insured which indicate that there is coverage under the policy. For a resolution of these issues we turn to the facts.

Plaintiff-respondent, Martinelli, and Gilbert J. Engel, Jr., were fellow employees at the Progressive Pattern Company located in the City of St. Louis. The depositions of Martinelli and Engel which show the nature of the incident were introduced in the non-jury trial. The incident giving rise to all this litigation occurred on October 18, 1966, in the factory area of the company. There is a general middle aisleway running from the front to the rear, dividing two sides of the factory. The aisle is roughly eight to ten feet wide. Mr. Martinelli was pushing a 'large wooden core box' weighing approximately 200 pounds onto a forklift truck which was elevated about three feet. He was in a outstretched position '. . . leaning forward at an angle with both hands resting against the side of the box and my shoulder touching the box, pushing . . .' His right leg was outstretched to brace himself. At this time Mr. Engel, while walking in the aisle, came into contact with Martinelli, and as a result of the contact Martinelli suffered a fractured right leg. Mr. Engel was going from his machine to a storage rack to pick up a pair of 'parallels' for the job he was working on. Martinelli had been in the act of pushing for some three to four minutes at the time of the injury.

Thereafter suit was filed by Martinelli against Engel for the injuries sustained. The original petition alleged a wilfull and wanton act, but later was amended alleging that the injury was due to Engel's negligence. When the petition was amended to add the count of negligence, Security entered its appearance through its attorney. On March 11, 1969, after the filing of the suit, Security informed Mr. Engel by letter that they would proceed with the defense of the suit, but that '. . . we are reserving our rights to assert at a later date any policy defenses that may be available to us in connection with this matter . . .' This letter was written after Security had been informed by Engel's personal attorney that the amended petition had been filed. The cause of Martinelli against Engel was ultimately submitted to the jury on the negligence count and resulted in a verdict and judgment for Martinelli for $6,500 on January 6, 1970. That judgment has not been satisfied.

At the time of the injury to Martinelli, there was in force a homeowner's insurance policy issued by Security to Gilbert J. Engel, Jr. and Virginia L. Engel providing $25,000 coverage. The policy provided that the insurer would '. . . pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, and the Company shall defend any suit against the Insured alleging such bodily injury . . .' A special exclusion of the policy, and the one involved in this litigation, provided that:

'Section II of this Policy Does not Apply:

(a)(1) to any business pursuits of an Insured, except under Coverages E and F, activities therein which are ordinarily incident to non-business pursuits, . . .'

The judgment against Engel being unpaid, Martinelli filed his petition against Security on August 5, 1970, alleging that 'Under the aforesaid policy of insurance defendant is liable for the payment of said judgment but has refused and continues to refuse (to pay) said judgment.' Martinelli prayed judgment against Security in the amount of $6,500 plus interest and costs.

On November 4, 1971, the court below entered judgment in favor of the plaintiff, Martinelli, in the amount of $6,500 plus interest and costs, finding that '. . . the exclusionary clause contained in the defendant's policy to be certainly ambiguous or equivocal and therefore finds said clause of said policy must be strictly construed against defendant as to create coverage. The mere bumping into plaintiff by the defendant's insured is an excludable activity. The defendant in one case took the position the policy created coverage and is now estopped from taking a different position.'

The trial court therefore resolved that: (1) the exclusionary clause was ambiguous; (2) the 'walking' into Martinelli was an act ordinarily incident to a non-business pursuit, and hence an exception to the exclusionary clause; and (3) that the insurance company was estopped from denying coverage becuase in the Martinelli v. Engel trial it took the position that there was coverage under the policy.

The appellant, insurance company, urges that the exclusionary clause is not ambiguous and urges the incident giving rise to the judgment against the insured, Engel, is within the exclusionary clause of the policy. Security further contends that it is not estopped from denying coverage since it proceeded to defend under a reservation of rights.

Respondent, on the other hand, contends that the clause is ambiguous, that the 'bumping' into Martinelli was an 'activity ordinarily incident to a non-business pursuit' and that with complete knowledge of the facts, Security defended the Engel suit and admitted that the policy afforded coverage; hence, Security is now estopped from denying coverage in this cause of Martinelli v. Security.

The general principles relative to the construction of insurance policies are well-known and clear. The rules have been variously stated, but ". . . Plain and unambiguous language must be given its plain meaning. The contract should be construed as a whole; but, insofar as open to different constructions, that most favorable to the insured must be adopted . . ." Dieckman v. Moran, Mo., 414 S.W.2d 320(1--3). The rule ". . . does not authorize a perversion of language, or the exercise of inventive powers for the purpose of creating an ambiguity when none exists." Dieckman, supra. See Morris v. Western Cas. & Sur. Co., Mo.App., 421 S.W.2d 19(6--9); Jordan v. United Equitable Life Insurance Company, Mo.App., 486 S.W.2d 664, 1972. Exclusionary clauses are to be construed against the insurer if they are of uncertain import. Aetna Cas. & Sur. Co. v. Haas, Mo., 422 S.W.2d 316(4--7).

The same exclusionary clause involved in this case was the subject of litigation in Dieckman. Plaintiffs, the Dieckmans, recovered judgment for personal injuries and loss of consortium against Moran for $17,000, when, during the course of employment, Moran activated a power brake on a sheet metal machine causing injuries to Mr. Dieckman. The Dieckmans then brought an equitable garnishment proceeding against Moran and his insurer, Hartford Fire Insurance Company. The determinative question was whether the incident was excluded from coverage under Moran's homeowner's policy as a 'business pursuit.' The court held that the policy provision here under scrutiny ¹ is '. . . not ambiguous, as plaintiffs claim. True, it is poorly worded. The intent, however, is clear: business pursuits of the insured are excluded, except activities therein which are ordinarily incident to non-business pursuits . . .' Dieckman, supra, 414 S.W.2d at 321--322. We are constrained, therefore, to hold that the exclusionary clause is not ambiguous and rule this contention against respondent, Martinelli. ²

But Dieckman does not rule this case. It was not contended there that Moran (the insured) was not engaged in a business pursuit at the time of the injury, or that he was engaged in an activity '. . . ordinarily incident to a non-business pursuit under the exceptions to the excluded coverage.' Dieckman, supra, 414 S.W.2d at 322. So it must be determined whether walking or bumping into a fellow employee on business premises and during business hours is an activity which is ordinarily incident to a non-business pursuit.

The mere fact that the insured, Engel, was at his place of employment does not make the exclusionary clause applicable. For the exception in the exclusionary clause affords coverage for activities which are ordinarily incident to non-business pursuits. '. . . (C)overage will be extended to liability which arises, even though connected in some causal manner with the insured's 'business pursuits,' out of an act or omission that is ordinarily not associated with or related to the insured's business pursuits.' Gulf Insurance Co. v. Tilley, D.C.N.D.Ind., 280 F.Supp. 60, 64. Courts in other jurisdictions have also had difficulty in resolving the application of this exception found in the exclusionary clause. ³

Respondent relies on Gulf Insurance Co. v. Tilley, supra. In that case the insurance company sought a declaratory...