P & M Stone Co. v. Hartford Acc. & Indem. Co.

• Decision Date: 15 December 1959
• Docket Number: No. 49861,49861
• Citation: 251 Iowa 243,100 N.W.2d 28
• Parties: P & M STONE CO., Inc., Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 28

100 N.W.2d 28

251 Iowa 243

P & M STONE CO., Inc., Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.

No. 49861.

Supreme Court of Iowa.

Dec. 15, 1959.

Holliday, Miller, Myers & Stewart, Des Moines, by Robert W. Brennan and Joseph B. Joyce, Des Moines, for appellant.

Bannister, Carpenter, Ahlers & Cooney, Des Moines, for appellee.

OLIVER, Justice.

This action was brought by P. & M. Stone C., against Hartford Accident and Indemnity Company upon a general and automobile liability insurance policy issued plaintiff by defendant. Coverage D of the policy--'Property Damage Liability--Except Automobile'--requires defendant to 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 caused by accident. Under the heading, 'Exclusions', the policy provides in part, that it does not apply, under Coverage D, to injury to or destruction of, property owned or occupied by or rented to the insured, property used by the insured, 'property in care, custody or control of the insured or property as to which the insured for any purpose is exercising physical control. * * *.'

It was pleaded by plaintiff or stipulated, that Val Boulware, an employee of plaintiff, in the course of his employment, damaged a bulldozer owned by a construction company, that at the time and place plaintiff's employee was attempting to operate the bulldozer, that the damage occurred when he started or attempted to start the motor or put it into gear, that Boulware was the only person operating or attempting to operate the bulldozer and that the bulldozer was damaged in the amount of $1,961.96, which plaintiff paid and for which plaintiff brought this action upon defendant's refusal to repay.

The record does not show the nature of plaintiff's business, the work connected with the damage to the bulldozer in which plaintiff was then engaged, nor the work Boulware was then doing in the course of his employment. In oral argument it was stated plaintiff's employee Boulware, in the course of his employment, was driving an automobile which became lodged in the snow and Boulware intended to use the bulldozer, which apparently was standing nearby, to free the automobile. He started or attempted to start and operate the bulldozer, or put it into gear, and the damage to it resulted, apparently because its wheels were frozen into the ground.

Defendant pleaded that at the time and place in question the bulldozer was in the care, custody and control of plaintiff's employee and also that said employee was exercising physical control as to said bulldozer and that by reason of the exclusion clause hereinbefore quoted the insurance policy did not afford coverage for the loss. Plaintiff made application for a separate adjudication of points of law under Rules of Civil Procedure, rule 105, 58 I.C.A., asking that the court determine the meaning, for the purposes of this case, of such 'Exclusions'. The court adjudged certain provisions of the exclusion clause were applicable and, therefore, were a bar to plaintiff's recovery. Thereafter, upon motion by defendant, judgment was rendered against plaintiff on the pleadings. Plaintiff has appealed.

I. A number of courts have decided cases involving the effect of a clause in a general liability policy excluding from coverage, liability for injury or damage to property in care, custody or control of the insured. Most of these decisions are listed in an annotation in 62 A.L.R.2d 1242. The annotation states, at page 1244:

'All the cases, with one exception, support the view, either expressly or by necessary implication, that the clause in a contractor's liability policy or similar policy excluding from coverage liability for damage to property 'in care, custody, or control of insured' contemplates what is called 'possessory handling' of the property, as distinguished from 'proprietary' control. In other words, the exclusion clause applies not only in situations in which the insured is the owner of the damaged property but also in cases in which his dominion over the property damaged is not based on ownership.'

The case just referred to as not supporting the general view, is McLouth Steel Corp. v. Mesta Machine Co., 3 Cir., 1954, 214 F.2d 608, certiorari denied Hartford Acc. & Indem. Co. v. Foster, 348 U.S. 873, 75 S.Ct. 109, 99 L.Ed. 687, in which the court stated it was bound by the decision in Welborn v. Illinois Nat. Casualty Co., 347 Ill.App. 65, 106 N.E.2d 142, where the Illinois Court reasoned the exclusionary provision in a garage liability policy was limited to a proprietary type of control and did not cover the possessory handling incidental to repair. However, in International Derrick & Equipment Co. v. Buxbaum, 3 Cir., 1957, 240 F.2d 536, 62 A.L.R.2d 1237, the same court of appeals followed the general rule, stating that in the McLouth case which was governed by Illinois law, it was compelled to rely upon the Welborn case which had been since weakened by Maryland Casualty Co. v. Holmsgaard, 10 Ill.App.2d 1, 133 N.E.2d 910, which held such clause did exclude from coverage the insured's liability for damage to the automobile of a third person, of which insured had possession for the purpose of repair.

If the property damaged is merely incidental to the property upon which the work is being performed by the insured such exclusion clause is generally held not applicable while if the property damaged is under the supervision of the insured and is a necessary element of the work involved it is held to be in the care, custody and control of insured and therefore not within the coverage of the insurance. Hardware Mut. Cas. Co. v. Mason-Moore-Tracy, Inc., 2 Cir., 194 F.2d 173; International Derrick & Equipment Co. v. Buxbaum, 3 Cir., 1957, 240 F.2d 536, 62 A.L.R.2d 1237, supra, and citations.

II. Some other decisions involve damage to property owned by another and used by the insured without the consent of its owner. In Great American Indemnity Co. of New York v. Saltzman, 8 Cir., 213 F.2d 743, 747, certiorari denied 348 U.S. 862, 75 S.Ct. 85, 99 L.Ed. 679, an airplane enthusiast was insured under a personal liability policy which provided it did not apply to 'use' including loading or unloading, of aircraft, or to the destruction of property used by, or in the care, custody or control of insured. He entered a stranger's airplane without permission, for the purpose of inspection, and...