McGann v. Hobbs Lumber Co.
| Decision Date | 14 December 1965 |
| Docket Number | No. 12396,12396 |
| Citation | 150 W.Va. 364,145 S.E.2d 476 |
| Parties | F. D. McGANN et al. v. HOBBS LUMBER COMPANY, a Corporation, v. The AETNA CASUALTY AND SURETY CO., a Corporation, et al. |
| Court | West Virginia Supreme Court |
Syllabus by the Court
1. In determining the coverage afforded by an insurance policy such policy must receive a practical and reasonable interpretation consonant with the apparent object thereof and the intent of the parties.
2. A liability insurance policy, unlike a builder's risk policy, is designed to indemnify the insured against damage to other persons or property caused by his work or property and is not intended to cover damage to the insured's property or work completed by him.
3. Representations of a soliciting agent of the insurer made subsequent to an accident for which recovery is sought under the policy, relating to coverage or liability afforded by the policy, are not binding on the insurer.
Clowes, McDermott & Ewing, James R. Ewing, Wheeling, for appellant.
McCamic & Tinker, Jeremy C. McCamic, Wheeling, for appellee.
This is an appeal from a final order of the Circuit Court of Ohio County wherein the court, ruling on cross-motions for summary judgments, granted summary judgment to Hobbs Lumber Company, a Corporation, and denied a like motion of the Aetna Casualty and Surety Company. The question presented is whether, in the circumstances of this case, certain insurance policies issued by Aetna to Hobbs afford coverage. The trial court held that Hobbs was covered under the provisions of such policies and from that judgment Aetna prosecutes this appeal.
F. D. McGann and Margaret B. McGann, plaintiffs in the original action, retained Hobbs Lumber Company, a building contractor, to construct a residence for them on a lot owned by the McGanns. Pursuant thereto, Hobbs proceeded to construct the residence and when it was completed the McGanns took possession thereof and moved in. Approximately six months after the house had been completed and occupied a portion of the foundation wall collapsed, resulting in substantial damage. The McGanns instituted an action against Hobbs, alleging in their complaint that the damage to the residence was the result of the negligence of Hobbs in the construction thereof.
Thereafter, the defendant, Hobbs, moved the court, in accordance with the provisions of Rule 14, R.C.P., to make Aetna Casualty and Surety Company, and others not here involved, third party defendants. By an order of the court the third party complaint was filed and served upon the third party defendants.
In the third party complaint, as it relates to Aetna, Hobbs charges that it is entitled to recover from Aetna all sums that may be adjudged against Hobbs in favor of the McGanns, in their civil action, by reason of the provisions of insurance policy No. 29LC3088 and/or policy No. 29AL3946, issued to Hobbs by Aetna; that Aetna negligently failed to insure Hobbs against the risk or hazard which is the subject of the complaint of the McGanns; that Aetna represented to Hobbs that it was insured against the risk or hazard which is the subject of said complaint and that Hobbs was misled to its detriment; and that Aetna is obligated, under the provisions of said insurance, to defend Hobbs in any action against it arising out of its business.
Answering the trird party complaint, Aetna refutes Hobbs' claim, denying that the provisions of said policies of insurance entitle Hobbs to indemnification on the claim of the McGanns. Aetna further denies any negligent failure to insure Hobbs against the risk or hazard which is the subject of the McGann suit, and all other claims of Hobbs.
Hobbs Lumber Company then filed a motion for summary judgment against The Aetna Casualty and Surety Company on the ground that the pleadings, depositions and admissions show there is no issue as to any material fact and that Hobbs is entitled to judgment as a matter of law by reason of the allegations stated in the third party complaint. Aetna also moved for summary judgment, basing its motion on the ground that, there being no issue as to any material fact, no coverage was afforded Hobbs by the policies of insurance in question. Finding that Hobbs was covered by the policies and that Aetna was obligated to defend the insured, the trial court granted Hobbs' motion for summary judgment and denied the motion of Aetna.
Thus, the principal issue presented for decision is: Do the provisions of the insurance policy in question afford coverage to Hobbs which would indemnify it in relation to the action instituted by the McGanns?
To properly answer this question it is necessary to examine and consider the insurance policy here involved and to determine therefrom its true purpose and intent. Therein Aetna 'Agrees with the Insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declaration and subject to the limits of liability, exclusions, conditions and other terms of this policy' to issue certain insurance to Hobbs. Under the Insuring Agreements, in Part 1 of the policy, is the following:
'Coverage D--Property Damage Liability----
'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'
Part 2 of this policy includes a General Liability Schedule which discloses all hazards insured thereunder, one of which is:
'(D) Products (Including Completed Operations) General Contracting--Building construction (Not Prefabricated)
One or Two Family Dwellings'
This is merely a designation of what the insuring clause covers and must be considered together with all the provisions contained in the policy. Part 1 of the policy contains 'Exclusions', which, where pertinent, read as follows:
'This policy does not apply: * * * (j) under Coverage D, to injury to or destruction of * * * (4) any goods, products or containers thereof manufactured, sold, handled or distributed or premises alienated by the named Insured, or work completed by or for the named Insured, out of which the accident arises; * * *.'
The above quoted policy provisions give rise to this controversy. Aetna contends that the damage referred to in this case having occurred to work completed by Hobbs, the insured, exclusion (j)(4) is operative, and no coverage is afforded. Hobbs, on the other hand, asserts that the inclusion of '(D) Products (Including Completed Operations)', under the General liability Schedule, is in direct conflict with the above quoted exclusion and creates an inconsistency in this policy. It must be kept in mind that the policy in question is a liability policy, not one insuring the property or work of the insured. Covered is any damage caused by the products or operations used or completed by the insured. In other words, if any product used in the operations of the insured or any work completed by the insured caused damage to any property of another for which the insured may be legally liable, the insurer is liable under this policy. This appears to lend coverage to Hobbs in this case, and it would, except for exclusion (j)(4) contained in the policy. At this point Hobbs contends that such exclusion is in direct conflict with (D), listed under the General Liability Schedule and quoted above. We do not agree with this contention. The insuring agreement, Coverage D--Property Damage Liability--Except Automobile, and the items designated in the Liability Schedule including (D), must be read together. These, where pertinent to this case, constitute the coverage afforded by this policy, subject to the exclusions. As noted above, Exclusion (j)(4) clearly provides that this policy does not apply to premises alienated by the insured or to work completed by the insured out of which the accident arises. It is undisputed that the damaged premises here involved was that alienated by the insured and was work completed by the insured out of which the accident arose.
It is the position of Hobbs that if it does not have coverage by virtue of (D) of the General Liability Schedule, the policy offers no coverage at all. This does not follow. If the completed operations referred to in (D), being the house constructed by Hobbs for the McGanns, had damaged or destroyed other property of the McGanns or had caused damage to some third person's property, the insurer, Aetna, would be liable therefor. Thus, due to the inclusions of (D), liability insurance is provided for damage done by completed operations. By reason of the aforesaid exclusion, however, damage to completed operations is not covered.
In Liberty Building Co. v. Royal Indemnity Company, 177 Cal.App.2d...
To continue reading
Request your trial
-
Cherrington v. Erie Ins. Prop.
...and Casualty Co. v. Pioneer Home Improvement, Inc., 206 W.Va. 506, 526 S.E.2d 28 (1999); and Syllabus point 2 of McGann v. Hobbs Lumber Co., 150 W.Va. 364, 145 S.E.2d 476 (1965), and their progeny are inconsistent with this opinion, they are expressly overruled. 7. “Although our standard of......
-
BPI, Inc. v. Nationwide Mut. Ins. Co.
...Casualty Co. v. Pioneer Home Improvement, Inc., 206 W.Va. 506, 526 S.E.2d 28 (1999) ; and Syllabus point 2 of McGann v. Hobbs Lumber Co., 150 W.Va. 364, 145 S.E.2d 476 (1965), and their progeny are inconsistent with this opinion, they are expressly overruled.231 W.Va. at 473, 745 S.E.2d at ......
-
Johnson v. National Union Fire Ins. Co. of Pittsburgh, Pa.
...that there are cases to the contrary, Neumann v. Wisconsin Natural Gas Co., 27 Wis.2d 410, 134 N.W.2d 474; McGann v. Hobbs Lumber Company, 150 W.Va. 364, 145 S.E.2d 476; Green v. Aetna Insurance Company, 349 F.2d 919 (C.A.5); Orchard v. Agricultural Insurance Co., D.C., 228 F.Supp. 564, aff......
-
Alverson v. Northwestern Nat. Cas. Co.
...Constr. Co. v. Employers' Surplus Lines Ins. Co., 110 NJSuperCt 181, 110 N.J.Super. 181, 264 A.2d 752 (1970); McGann v. Hobbs Lumber Co., 150 W.Va. 364, 145 S.E.2d 476 (1965); Engine Serv., Inc. v. Reliance Ins. Co., 487 P.2d 474 (Wyo.1971). Haugan, 86 S.D. at 412-13, 197 N.W.2d at ¶24 The ......