Neumann v. Wisconsin Natural Gas Co.

• Decision Date: 27 April 1965
• Citation: 134 N.W.2d 474,27 Wis.2d 410
• Parties: Harold E. NEUMANN, Plaintiff-Respondent, v. WISCONSIN NATURAL GAS CO., a Wis. corp., et al., Defendants-Respondents, The Travelers Indemnity Co., a foreign corp., Defendant-Appellant. FARMERS MUTUAL AUTOMOBILE INS. CO., now known as American Family Mut. Ins. Co., a Wis. Corp., Plaintiff-Respondent, v. WISCONSIN NATURAL GAS CO., a Wis. corp., et al., Defendants-Respondents, The Travelers Indemnity Co., a foreign corp., Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 474

134 N.W.2d 474

27 Wis.2d 410

Harold E. NEUMANN, Plaintiff-Respondent, v. WISCONSIN NATURAL GAS CO., a Wis. corp., et al.,

Defendants-Respondents,

The Travelers Indemnity Co., a foreign corp., Defendant-Appellant.

FARMERS MUTUAL AUTOMOBILE INS. CO., now known as American

Family Mut. Ins. Co., a Wis. Corp., Plaintiff-Respondent, v. WISCONSIN NATURAL GAS CO., a Wis. corp., et al.,

Defendants-Respondents,

The Travelers Indemnity Co., a foreign corp., Defendant-Appellant.

Supreme Court of Wisconsin.

April 27, 1965.

Rehearing Denied June 25, 1965.

Hippenmeyer & Reilly, Waukesha, for appellant.

Love, David & McGraw, Waukesha, for defendant-respondent, John Heuser.

WILKIE, Justice.

Two issues are presented on this appeal:

First, can appellant be named as a party defendant under the direct action statutes?

Second, assuming respondent is liable in any degree for damages resulting from the explosion, does the insurance policy cover his liability?

Direct Action Against Travelers

Appellant Travelers Indemnity Company can be named properly as a party in this action only if the 'Hy-Hoe' excavation unit is a motor vehicle pursuant to the direct-action statutes, sec. 260.11(1) and sec. 204.30(4). The policy contains the usual no-action clause. Paragraph 3(b) declares that unless otherwise stated, the word 'automobile' is deemed to mean 'motor vehicle.' Subparagraph (3) then eliminates the 'Hy-Hoe' from this category by declaring:

'The following described equipment shall be deemed an automobile while towed by or carried on an automobile as above defined solely for purposes of transportation or while being operated solely for locomotion, but not otherwise: If of the non-crawler type, any power crane or shovel, ditch or trench digger; * * *.'

Respondent urges that the premium provisions of the policy support the conclusion that the 'Hy-Hoe' unit was considered a motor vehicle like the truck itself. A rider to the policy specifically describes the truck and excavating unit. Premiums are extended for four of the seven coverages, namely: 'Bodily Injury Liability,' 'Property Damage Liability,' 'Comprehensive,' and 'Collision.' A typewritten notation 'Truck only' appears in a box labeled 'Rate * * *.' The double asterisks indicate that the rate is 'Applicable to such of the Comprehensive, Fire, Theft and Windstorm coverages as may be afforded with respect to the automobile.' Respondent contends that the coverage on the truck is thus limited to the four named coverages while the 'Hy-Hoe' is afforded protection under all seven categories. Appellant contends that the words 'Truck only' indicate that the designated coverage applies only to the truck and that there is no coverage under any category for the 'Hy-Hoe.' The rider is ambiguous. Resolving ambiguities in favor of the insured, we believe that an entirely different Construction is most reasonable, namely, that the 'Collision' coverage is limited to the truck while both the truck and the 'Hy-Hoe' are covered under the other three named categories. In any event, however, this construction does not mean that the 'Hy-Hoe' is deemed an automobile or motor vehicle under the policy.

Even if the policy did not expressly provide that the 'Hy-Hoe' was not a motor vehicle, the present facts would nonetheless be controlled by Smedley v. Milwaukee Automobile Ins. Co. ¹ Smedley involved an action for personal injuries by the negligent operation of a hydraulic crane which was mounted on a truck chassis. In discussing whether or not the operation of the crane was the operation of a motor vehicle within the meaning of sec. 260.11(1), Stats., the court said:

'It is undoubtedly true if the unit were being driven on a public street for the purposes of locomotion, it would be considered a motor vehicle. In the record there are several photographs and a lithograph of this unit. Arbitrarily classifying it either as a truck or a hydrocrane without reference to a particular use does not solve the problem. When the unit is in locomotion for the purpose of transporting the crane, it takes on the essential aspects of a motor vehicle for some purposes. However, after the unit arrives at its destination, the mobile aspect ceases and the crane is operated as an independent immobile unit. The test under the statutes is whether at the time of the accident the unit is being used, managed, controlled or operated as a motor vehicle in the ordinary meaning of those words. At the time of the accident the unit was stationary, the crane was stabilized, supported and rendered immobile by outriggers. The unit was not then used as a motor vehicle. Plaintiff was injured by the operation of the crane, not the operation of the truck. We do not believe such use of the unit is within the meaning of the negligent operation, management or control of a motor vehicle as used in sec. 260.11, Stats.' ²

A similar result was reached in Norton v. Huisman, ³ where the plaintiff was injured by a rod which was connected to a self-powered sewer cleaning machine which in turn was attached to a truck chassis.

Respondent argues that Smedley and Norton are not applicable because in the instant case the truck was positioned in the street abutting the Neumann property. The amended complaint contains an allegation to this effect. But Smedley and Norton both hold that where the negligence is in the operation of independent machines they are not 'motor vehicles' within the meaning of sec. 260.11(1), or sec. 204.30(4), Stats., and direct action against the insurance company is not permitted. The fact that here the truck may actually have been situated on the street is not decisive where the operation of the independent machine is the alleged cause of the accident. Norton implicitly holds to this effect since in that case the truck upon which the sewer cleaning device was mounted was always parked in the street.

To connect the accident with the operation of the truck as distinguished from the Hy-Hoe unit and thus to permit direct action against Travelers, respondent asserted for the first time on oral argument that the gas main could have been severed by the pressure exerted when the truck moved back and forth over the filled-in trench to pack down the dirt. There is no specific allegation to this effect in the complaints or in the stipulated facts. Even if the plaintiffs were permitted to amend their complaints to make this allegation, if that indeed is their theory of one alternative way in which the accident occurred, any such negligence on the part of Heuser would not be covered by the policy as hereinafter discussed and thus joinder of travelers would be unavailing. The crucial question, whether direct action against Travelers is permitted or not, is whether the Travelers' policy covered the alleged negligence of respondent.

Policy Coverage

At oral argument counsel for both sides indicated that even if Travelers were not a proper party defendant they desired to have the coverage question resolved on this appeal. Thus, any prematurity in resolving the coverage question has been waived.

Involved is an ordinary comprehensive liability policy which covered damages Heuser became obligated to pay as the result of personal injury (Coverage A) or property damage (Coverage C) caused by an accident. Travelers' liability was to be subject to the 'exclusions, conditions and other terms' of the policy and if there was on entry in a premium space, insurance was not to be 'afforded with respect to the coverage opposite each premium space.' No premium was charged for 'aggregate products' under Coverage A (bodily injury) or Coverage C. (property damage--except automobile). Coverage for 'Products (Including Completed Operations)' was expressly excluded by schedule 1(d) of the declarations. The term 'products hazard' was defined under paragraph 3(g)(2) of 'Conditions' as including:

'operations, if the accident occurs after such operations have been completed or abandoned and occurs away from premises owned, rented or controlled by the named insured; provided, operations shall not be deemed incomplete because improperly or defectively performed or because further operations may be required pursuant to an agreement; provided further, the following shall not be deemed to be 'operations' within the meaning of this paragraph: (a) pick-up or delivery, except from or onto a railroad car, (b) the maintenance of vehicles owned or used by or in behalf of the insured, (c) the existence of tools, unistalled equipment and abandoned or unused materials and (d) operations for which the classification stated in division (a) of the declarations specifically includes completed operations.' (Emphasis added.)

In essence appellant contends that since the accident occurred on November 18th, sixteen days after the work had been completed, coverage is excluded by the express provisions of Paragraph 3(g)(2) of Conditions because the operations had been completed. Respondent contends that there is coverage under two alternative theories: (1) The accident occurred on November 2d or 3d (while the injury occurred on November 18th), Heuser's liability grows out of negligence attributable to him that occurred at that earlier time, his operations were not completed at the time and, therefore, the exclusion provisions of the policy do not apply; or (2) the products-hzard-exclusion provisions do not apply since neither paragraph 3(g)(1) nor (2) contemplates the construction work performed by Heuser.

The coverage question raised here is one of first impression in this state. One of the relevant decisions in other jurisdictions is the Connecticut case of Smedley Co. v. Employers Mut. Liability Ins. Co. ⁴ . In that case the insured operated a warehouse and was used when the release to a deliveryman of a wrong product from storage subsequently caused the ruin of a large quantity of ice cream. The liability policy specifically excluded coverage for the products...