New Amsterdam Cas. Co. v. Addison

• Citation: 169 So.2d 877
• Decision Date: 21 October 1964
• Docket Number: 4102,Nos. 4096,s. 4096
• Parties: NEW AMSTERDAM CASUALTY COMPANY, an insurance company, Appellant, v. Richard M. ADDISON, d/b/a Addison Electric Company, Appellee.
• Court: Court of Appeal of Florida (US)

Page 877

169 So.2d 877

NEW AMSTERDAM CASUALTY COMPANY, an insurance company, Appellant, v. Richard M. ADDISON, d/b/a Addison Electric Company, Appellee.

Nos. 4096, 4102.

District Court of Appeal of Florida, Second District.

Oct. 21, 1964.

Rehearing Denied Nov. 25, 1964.

Fleming, O'Bryan & Fleming, Fort Lauderdale, for appellant.

Howard M. Duncanson, Hollywood, for appellee.

KANNER, Judge (Ret.).

The objective sought to be accomplished here by appellant, New Amsterdam Casualty Company, defendant below, is reversal of the declaratory decision in favor of plaintiff-appellee, Richard M. Addison, ordering that the insurer was responsible for defending of any claim 'arising out of Division 1 of the policy, and any judgment growing out thereof, although work may have been completed, it being contemplated that the policy should cover any negligent work that might have been performed by the plaintiff in the operation of its business covered by the said policy.' The matter appeared first in this court through appellant's notice of interlocutory appeal, followed shortly thereafter by its filing of an appeal from the same order, designating it as a final decree.

Another suit had been instituted against appellee by a third party for personal injuries claimed to have resulted from discharge of an electrical current from an uninsulated section of wire in a swimming pool where the third party was swimming and upon which appellee had performed services as an electrical contractor. The work of appellee had been done on June 16 24, and 25, 1959; the injuries complained of were sustained on July 11, 1959, allegedly as a result of appellee's negligence in performance of the work.

The parties in this declaratory suit in chancery stipulated that 'the question for determination by the Court is one of interpretation of the policy.' Other matters stipulated were that the insured is engaged in the electrical contracting business and not in manufacturing; that, when appellee did the electrical work, it was finished and that appellee considered it completed, had done what he had contracted to do and considered that he had done it in a workmanlike manner, for which he was paid by the prime contractor.

Appellant poses as its appeal question, 'Whether the trial court was correct in holding plaintiff was covered under Division 1 of the policy for an accident which occurred after the completion of plaintiff's operations at the scene of the injury, and plaintiff had not paid the premium for coverage under Division 4 of the policy, which division expressly provides for completed operations coverage.'

Here, as below, construction of the written instrument is the crux of the judicial labor required.

In general, the policy, entitled 'Schedule Manufacturers' and Contractors' Liability Policy,' is divided into parts 1 and 2, part 1 being composed of printed matter, while part 2 is the declarations page.

On the declarations page, 'Item 1' and 'Item 2' contain typed insertions identifying the policy by number and by the insured's name and individual data. The policy period is stated as being from January 1, 1959, to January 1, 1960. The business of the insured is specified as that of an electrician.

Item 3 comprises the major part of the declarations page. Under this, there is the preliminary statement:

'Item 3. The insurance afforded is only with respect to such and so many of the following coverages and divisions thereunder as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage shall be as stated herein, subject to all the terms of this policy having reference thereto.'

There is then set up a schedule of coverages, with typed figures supplied to show limits of liability under appellee's coverages.

Next under item 3 of the declarations is the 'Description of Hazards' setting out 'Div. 1. Premises-Operations,' 'Div. 2. Elevators,' 'Div. 3. Independent Contractors,' and 'Div. 4. Products-Completed Operations,' with columns along the right side of the page for computation of advance premiums. Hazards are described and premiums are computed and shown only under division 1, premises-operations. Division 1 of appellee's coverage reads as follows:

'Electrical Wiring--within buildings, including installation or repair of fixtures or appliances. Installation of electrical machinery or auxiliary apparatus to be separately rated.

'Electrical Apparatus Installation or Repair--Erection of Poles, stringing or wires, installation of service transformers on poles or on the outside of buildings or the making of service connections to be separately rated.'

Part 1 contains four centered topics in large print, 'INSURING AGREEMENTS,' 'DEFINITION OF HAZARDS,' 'EXCLUSIONS,' and 'CONDITIONS,' covering pages 1 through 5 set up contextually in small print. With its subdivisions, references, and cross references, part 1 comprehends in excess of 80 different parts designated by topics, numerals, or letters, most of these appearing under 'Exclusions' and 'Conditions.'

Under 'Definition of Hazards' appears the defining language for the divisions set out on the declarations page:

'Division 1-Premises Operations

'The ownership, maintenance or use of premises and all operations.' (This is the division under which appellee was insured .)

* * *

* * *

'Division 4-Products-Completed Operations

'(1) Goods or products manufactured, sold, handled or distributed by the named insured or by others trading under his name, if the accident occurs after possession of such goods or products has been relinquished to others by the named insured or by others trading under his name and if such accident occurs away from premises owned, rented or controlled by the named insured or on premises for which the classification stated in division 1 of Item 3 of the declarations excludes any part of the foregoing; provided, such goods or products shall be deemed to include any container thereof, other than a vehicle, but shall not include any vending machine or any property, other than such container, rented to or located for use of others but not sold.

'(2) Operations, if the accident occurs after usch 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, uninstalled equipment and abandoned or unused materials and (d) operations for which the classification stated in division 1 of Item 3 of the declarations specifically includes completed operations.'

The 'Exclusions' of part 1 include paragraphs '(a)' through '(q)' preceded by the words, 'This policy does not apply.' Paragraph (c) reads:

'(c) under division 1 of the Definition of Hazards and under coverage C, to (1) the Independent Contractors Hazard or (2) the Products-Completed Operations Hazard.'

Division 4, 'Products-Completed Operations,' is the coverage which appellant says appellee was required to have purchased in order to acquire protection for completed operations.

For better understanding of the problem before us, we have quoted portions of the policy and have depicted the physical makeup of the instrument, indicating its length and the numerous topics comprehended.

The parties are in accord that this is a case of first impression in Florida. We therefore preface our discussion by stating our awareness of certain principles of construction which are firmly ensconced in the jurisprudence of this state. Thus, we bear in mind that in construing an insurance policy to determine the intention of the parties, a court must consider the instrument in its entirety; and, if reasonably possible, that construction should be adopted which will give effect to the total instrument and to each of its various provisions. New York Life Ins. Co. v. Kincaid, 1939, 136 Fla.App., 120, 186 So. 675; King v. Sturge, Fla.App.,App.1959, 113 So.2d 257. If the language used is clear and unambiguous, it will be accorded its natural meaning. Pafford v. Standard Life Ins. Co. of Indiana, Fla.App., 1951, 52 So.2d 910. The court should not extend strictness in construction to the point of adding a meaning to language that is clear. Rigel v. National Casualty Company, Fla.App.,1954, 76 So.2d 285. For statement of the above principles, see 18 Fla.App.,Jur., Insurance, sections 93 and 95, pages 86, 88, and 89.

Also, Florida law renders applicable to contracts of insurance the principle that, where a contract of insurance is prepared and phrased by the insurer, it is to be construed liberally in favor of the insured and strictly against the insurer, where the meaning of the language is doubtful, uncertain, or ambiguous. Fireman's Fund Ins. Co. of San Francisco, Cal. v. Boyd, Fla.App.,1950, 45 So.2d 499. The general rule is that, if there are terms in an insurance policy which are ambiguous, equivocal, or uncertain to the extent that the intention of the parties is not clear and cannot be clearly ascertained by the application of ordinary rules of construction, these terms are to be construed strictly and most strongly against the insurer and liberally in favor of the insured so as to effect the dominant purpose of payment to the insured. Beasley v. Wolf, Fla.App.,App.1963, 151 So.2d 679. The accepted rationale back of this rule is that insurance policies are prepared by experts in this complex area, and the intricate interplay of their various provisions is difficult for a layman to understand. The Praetorians v. Fisher, Fla.App.,1956, 89 So.2d 329. Where there are two interpretations...