Niagara Mohawk Power Corp. v. Aetna Ins. Co.

• Decision Date: 15 February 1962
• Citation: 15 A.D.2d 390,224 N.Y.S.2d 536
• Parties: NIAGARA MOHAWK POWER CORPORATION, Plaintiff-Appellant, v. AETNA INSURANCE COMPANY, Agriculture Insurance Company, Fidelity Phenix Fire Insurance Company, Giens Falls Insurance Company, Home Insurance Company, insurance Company of North America, Phoenix Insurance Company, United States Fire Insurance Company of New York, Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 536

224 N.Y.S.2d 536

15 A.D.2d 390

NIAGARA MOHAWK POWER CORPORATION, Plaintiff-Appellant, v. AETNA INSURANCE COMPANY, Agriculture Insurance Company,

Fidelity Phenix Fire Insurance Company, Giens Falls

Insurance Company, Home Insurance Company, insurance Company

of North America, Phoenix Insurance Company, United States

Fire Insurance Company of New York, Defendants-Respondents.

Supreme Court, Appellate Division, Fourth Department.

Feb. 15, 1962.

Runals, Broderick, Shoemaker, Mathias & Rickert, Niagara Falls, for appellant; Clarence R. Runals, Niagara Falls, of counsel (John E. Runals, Niagara Falls, with him on the brief).

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, for respondents; Hugh McK. Russ, Buffalo, of counsel (John E. Dickenson and Victor T. Fuzak, Buffalo, with him on the brief).

Before WILLIAMS, P. J., and BASTOW, HALPERN, McCLUSKY and HENRY, JJ. HENRY, Justice.

This consolidated action concerns the liability of insurance companies under an electrical apparatus clause of fire insurance policies, which reads in part as follows:

'This Company shall not be liable for loss resulting from any electrical injury * * * to electrical equipment * * * unless fire ensues in electrical equipment * * * but if such fire does ensue * * * this Company shall be liable for * * * direct loss caused by electricity. * * *

'The words 'fire ensues' and 'ensuing fire' as used in the foregoing mean self-sustaining fire which continues after the electrical currents artifically generated have been interrupted. Electrical arcing and flashovers, caused by electrical currents artifically generated, shall not in themselves constitute an ensuing fire.'

Plaintiff claims that on June 7, 1956, when two of its three generating plants were demolished and swept into the gorge of the Niagara River by a series of rock slides, electrical generators in its third plant (Station 3A) were partially destroyed by electricity and enusing fire. It claims that its loss therefrom in the amount of $1,196,104.90 is covered by the electrical apparatus clause.

On the trial it adduced evidence from which the jury might have found that electrical currents artificially generated were interrupted before 6:15 P.M. of the day the loss occurred and further evidence that one-half hour thereafter firemen observed fires in two generators which continued to burn for a further period of about half an hour while they attempted, unsuccessfully, to extinguish them. It claims that this evidence brought its loss within the coverage of the policies because it thereby established that generation of electrical currents had ceased and that a self-sustaining fire continued.

Defendants contend that electrical currents were not interrupted but continued to be generated during the time that fire occurred and that such fire was not an ensuing fire within the meaning of thier policies.

The generators, and the turbines which turned them, were located in Station 3A at the edge of the river. The turbines were turned by water which came from the forebay at the top of the bank. Water flowed therefrom through gates into penstocks and through them down into the turbines. It passed through the turbines causing them to turn the generators and was discharged through tail races into the river. Water could also enter the tail races through openings in the floor of the turbine room and generator room. As long as water ran through the penstocks and turbines the generators were turning and producing electricity. The speed at which the generators turned was controlled by governors. The operator in the control room could shut them down completely. When Stations 3B and 3C collapsed and fell into the river, control of the turbines and generators in Station 3A was lost at 5:14 P.M. The generators then ran very fast. They were out of control, producing much arcing and sustaining electrical injuries. The only way that they could be stopped was by closing the gates in the forebay, thereby stopping the flow of water into the penstocks. The control room operator, Brennan, testified that such...