Michigan Mut. Liability Co. v. Mattox

• Decision Date: 01 April 1965
• Docket Number: No. F-367,F-367
• Citation: 173 So.2d 754
• Court: Florida District Court of Appeals
• Parties: MICHIGAN MUTUAL LIABILITY COMPANY, a foreign insurance company, Appellant, v. O'Neil MATTOX, d/b/a Mattox, Electric Company, Appellee.

Page 754

173 So.2d 754

MICHIGAN MUTUAL LIABILITY COMPANY, a foreign insurance company, Appellant, v. O'Neil MATTOX, d/b/a Mattox, Electric Company, Appellee.

No. F-367.

District Court of Appeal of Florida, First District.

April 1, 1965.

Rehearing Denied April 29, 1965.

Howell, Kirby, Montgomery & Sands, Jacksonvill, for appellant.

Greene, Greene & Kennely, Jacksonville, for appellee.

STURGIS, Chief Judge.

Appellant, Michigan Mutual Liability Company, hereinafter referred to as the 'insurer' brings this appeal from a judgment entered upon a jury verdict for appellee, O'Neil Mattox, plaintiff below, hereinafter referred to as the 'insured.'

The insured, an electrical subcontractor, entered into a subcontract with The Auchter Company, a general contractor, to do certain electrical work on the municipal civic auditorium in Jacksonville, Florida. The subcontract contains the following provision:

'6. The SUB-CONTRACTOR shall be solely responsible for all injury or damage to persons or property resulting from any act or omission of the SUB-CONTRACTOR in connection with the performance by it of the work covered by this Agreement and shall indemnify and hold the CONTRACTOR and/or the Owner harmless from any and all liability whatsoever which the CONTRACTOR and/or the Owner may incur as a result of any such act or omission.'

The insurer issued a comprehensive general liability policy to the insured, and by reference incorporated therein the contract between the insured (subcontractor) and the general contractor. The policy required the insurer to pay on behalf of the insured all sums which the insured should become legally obligated to pay as damages because of injury to or destruction of property incident to its said contract with the general contractor. The policy excluded injury to or destruction of 'property used by or in the care, custody or control of the insured or property as to which the insured for any purpose is exercising physical control.'

The main switchboard in the auditorium was completed by the insured and had been turned over to the general contractor. It was located in a room in the basement of the auditorium and kept under lock and key, the keys being held by the general contractor and the electrical department of the City of Jacksonville. It had been in use about two months when an accident damaged it.

On the day of the accident giving rise to this suit, employees of the insured were in the process of completing other electrical work called for under the subcontract. Two employees of the City's electrtrical department desired to check the metering device on the switchboard. They did not have a key to the switchboard room and contacted one of the insured's employees to secure same. The employee obtained a key from the key board of the general contractor and opened the door to the switchboard room, then returned to his duties. Shortly thereafter the lights in the building went out and several of the insured's employees went to the switchboard room to determine the cause. One of them activated the circuit breaker on the switchboard and an explosion ensued which severely damaged the switchboard. The insured notified the insurer of the accident and proceeded to repair the damage. An arbitration agreement was entered into between the City and the general contractor to determine the responsibility for the accident. The insurer informed appellee that it would not acquiesce in or consent to any arbitration agreement. The insured agreed with the general contractor to abide by the terms of the arbitration agreement, conceiving itself to be so obligated under the terms of the subcontract. The arbitrator found that the City of Jacksonville had been two-thirds at fault and the general contractor one-third at fault. Pursuant thereto the insured paid the general contractor $8,121.85 and then made a claim against the insurer for that amount. The insurer denied coverage and the insured brought this suit, resulting in a jury verdict in its favor for $8,831.61. Final judgment was entered thereon, hence this appeal.

The insurer's first point on appeal is that the insured failed to establish the material allegation of the complaint to the effect that the switchboard was damaged by employees of the insured while in the performance of the contract between the insured and the general contractor. It is the insurer's contention that the evidence shows, on the contrary, that the insured was not performing any duty under the subcontract when the accident occurred, and that such is a prerequisite to liability under the insurance policy. To sustain this contention, the insurer submits that the switchboard had been completed and that the insured was under no duty at the time of the accident to repair it should anything happen to impair its operation, as did occur. We find no merit in this contention. The evidence is clear that employees of the insured were at the time engaged in the performance of the over-all subcontract, of which the installation of the switchboard was but a part.

The insurer also contends that the aforementioned exclusionary clause of the policy bars the insured from recovery. As we have noted, the clause purports to disallow coverage for injury or destruction of 'property used by or in the care, custody or control of the insured or property as to which the insured for any purpose is exercising physical control.' The insurer insists that the insured's employees were clearly shown to have been exercising control over the switchboard in that (a) the insured was the electrical subcontractor, (b) the switchboard had not been turned over to the owner, (c) its foreman was in charge of the entire job, (d) its employee threw the switch which caused the explosion, and (e) its employees had let the City's employees into the switchboard room. A construction of said exclusionary clause is necessary to a determination of this point. There are no Florida cases construing same but we find well-reasoned cases from other jurisdictions construing the same contrary to the insurer's contentions. It is axiomatic, of course, that such provisions are to be strictly construed against the insurer.

The identical clause was recently construed in Klapper v. Hanover Insurance Company, 39 Misc.2d 215, 240 N.Y.S.2d 284 (1963). This was a suit by a subcontractor against his insurer to determine the applicability of the clause to a situation...