Pre-Cast Concrete Products, Inc. v. Home Insurance Co., 17588.

• Citation: 417 F.2d 1323
• Decision Date: 10 November 1969
• Docket Number: No. 17588.,17588.
• Parties: PRE-CAST CONCRETE PRODUCTS, INC., an Illinois Corporation, Plaintiff-Appellant, v. The HOME INSURANCE COMPANY, a New York Corporation, Successor to Springfield Fire and Marine Insurance Company, a Massachusetts Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

417 F.2d 1323 (1969)

PRE-CAST CONCRETE PRODUCTS, INC., an Illinois Corporation, Plaintiff-Appellant, v. The HOME INSURANCE COMPANY, a New York Corporation, Successor to Springfield Fire and Marine Insurance Company, a Massachusetts Corporation, Defendant-Appellee.

No. 17588.

United States Court of Appeals Seventh Circuit.

November 10, 1969.

Matthew J. Beemsterboer, Brunswick, Beemsterboer & Jemilo, Blue Island, Ill., for appellant.

John P. Gorman, Jacob T. Pincus, Chicago, Ill., Clausen, Hirsh, Miller & Gorman, Chicago, Ill., of counsel, for appellee.

Before CASTLE, Chief Judge, HASTINGS, Senior Circuit Judge, and GORDON, District Judge.^*

CASTLE, Chief Judge.

Plaintiff brought this diversity action on a policy of insurance issued by defendant to plaintiff which insured the latter's premises against damages resulting from various specified risks, including explosion. The parties submitted a "Stipulation of Uncontested Facts" and filed cross motions for summary judgment. The issue presented for decision was whether or not the damage to plaintiff's premises was caused by an "explosion" under the terms of the policy. The district court ruled in favor of defendant and plaintiff appeals.

On January 7, 1965, plaintiff's premises were in major part destroyed by the occurrence here in question, involving an autoclave used for the curing of concrete blocks. The autoclave was a cylindrical pressure vessel having an internal diameter of eight feet and a length of approximately ninety-two feet. The unit was designed to build up internal steam pressure with a maximum of 150 lbs. per square inch (psi). The safety valve was set at 142 lbs. psi. At 1:30 a. m. on the date in question the steam was turned on and the autoclave began building up pressure. At about 4:15 a. m., when the pressure was at 124 lbs. psi, a loud noise was heard. Inspection of the premises disclosed that the spherical door of the autoclave had become detached from the unit and had been propelled several hundred feet "by the suddenly released steam pressure," greatly damaging the building and its contents. The autoclave itself was propelled approximately one hundred feet in the opposite direction "by the remaining force" of steam pressure, causing further destruction. The parties stipulated that plaintiff's minimum damages are $88,589.66 and that "as far as is presently known, no sudden increase in internal pressure occurred."

The district court, in finding for the defendant, relied on this latter statement in holding that no explosion occurred. The court, in a memorandum opinion, stated:

"We are dealing with the word `explosion\' in the way in which it is commonly accepted and understood. The common intelligent and logical understanding of an explosion of a container by sellers and buyers of industrial insurance¹ is a sudden violent bursting or breaking apart of the container caused by abnormal pressure. It is what happens when pressure suddenly is built up in a container to a point sufficiently in excess of the normal capacity of the container to contain it, so that the container suddenly and violently gives way. * * *

"Under this definition, the defendant must prevail. It is undisputed that the autoclave was designed to operate under a steam pressure of 150 lbs. psi, and that at the time of the occurrence the pressure was 124 lbs. psi, or 26 lbs. psi under the rated capacity of the unit. Thus, the cause of the occurrence was not a sudden build up of pressure to a point in excess of the normal capacity of the container to contain it."

We respectfully disagree with the district court's conclusion that no explosion occurred. The policy did not define the term "explosion," but contained the following relevant provisions:

"Provisions Applicable Only to Explosion: Loss by explosion shall include direct loss resulting from the explosion of accumulated gases or unconsumed fuel within the firebox (or the combustion chamber) of any fired vessel or within the flues or passages which conduct the gases of combustion therefrom. However, this Company shall not be liable for loss by explosion, rupture or bursting of:

(a) steam boilers, steam pipes, steam turbines, or steam engines; or

(b) rotating parts of machinery caused by centrifugal force;

if owned by, leased by or actually operated under the control of the Insured.

"The following are not explosions within the intent or meaning of these provisions:

(a) Concussion unless caused by explosion,

(b) Electrical arcing,

(c) Water hammer,

(d) Rupture or bursting of water pipes."

The defendant conceded that liability was not denied on the basis of any of the specific exclusions contained in the policy, but contends that no explosion occurred because no sudden increase in internal pressure took place before the steam was violently released. Thus, the issue before this Court is whether or not such violent and sudden release of steam from a container operating at below maximum pressure is an "explosion," as that term is commonly understood. In determining this issue, we must follow the law of Illinois, the state of the forum. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

The rule of construction of insurance contracts was stated by the Illinois Supreme Court in Canadian Radium and Uranium Corp. v. Indemnity Insurance Co., 411 Ill. 325, 332, 104 N.E.2d 250, 254:

"The construction to be given insurance contracts, like other contracts, should be a natural and reasonable one. * * * If the language is clear, the terms are to be taken and understood according to their plain, ordinary and popular sense. * * * But because the insurer is the one who prepares the contract, ambiguous or equivocal expressions whereby the insurer seeks to limit its liability will be construed most strongly against the insurer."

The Court went on to look at the dictionary definition of the word there in question, "accident," as well as the Illinois cases dealing with the term.

In the instant case, we are directed by the parties to the dictionary as well as various cases defining "explosion." Webster's New International Dictionary, Unabridged (2d ed. 1954), defines explosion as "a violent bursting or expansion with noise, following the sudden production of great pressure, as in the case of explosives, or a sudden release of pressure, as in the destruction of a steam boiler." The Random House Dictionary of the English Language, Unabridged (1967), defines explosion as "a violent expansion or bursting with noise, as of gunpowder or a boiler (opposed to implosion)." Webster's Third New International Dictionary (1966) added the following definition to the term: "a violent expansion or bursting that is accompanied by noise and is caused by a sudden release of energy from a very rapid chemical reaction, from a nuclear reaction or from an escape of gases or vapor under pressure (as in a steam boiler)."²

Thus, as defined in the dictionary, an explosion includes an occurrence where a great and expanding pressure is suddenly released. It is the violent expansion itself which constitutes the explosion, and none of the above authorities limit the occurrence of such expansion to the inside of a container. Thus, the ignition of an uncontained combustible material, such as a plastic explosive or gunpowder, would cause an explosion since there would be a sudden and great increase in pressure, an expansion, in the area surrounding the ignition. Likewise, the internal pressure of a boiler, if suddenly released by a defective enclosure, would cause an explosion — "an escape of * * * vapor under pressure" (Webster's Third Edition, supra) — whether or not such pressure was built up slowly or rapidly. Again, it is the sudden creation or release of the great amount of pressure which causes the violent expansion which is the explosion.

Defendant relies heavily upon two cases to support its contention and the district court's conclusion that without a "sudden increase" in pressure within the autoclave, no explosion occurred. The first of these cases is Hulcher Soya Products v. Millers' Mutual Fire Insurance Association, 5 Ill.App.2d 235, 124 N.E.2d 570 (abstract opinion, Third District, 1955). The Appellate Court there dealt with the issue of whether or not damage to a grain elevator was caused by an "explosion," one of the perils insured against by the defendants. The evidence showed that a wall of the elevator had been forced out "accompanied by a loud noise, dust, grain, broken and crushed concrete, and some violence as shown by the pieces of concrete being thrown away from the building approximately 200 feet." The court held that the verdict for the plaintiff — which found that the damage was caused by an explosion — was against the manifest weight of the evidence since "the record disclosed no direct evidence of the sudden development of an internal force or that the incident characterized by plaintiff as an explosion was accompanied by a sudden or rapid expansion of air;"³ and that circumstantial evidence could not establish the fact of explosion since the existence of an inconsistent fact, or the complete non-existence of the first fact, could be inferred from the evidence with equal certainty. In reciting the facts of the case, the appellate court listed the stipulated jury instructions, which included as the definition of "explosion" the criteria advanced by defendant in the instant controversy:

"1. A sudden accidental violent bursting or breaking;

2. That such bursting or breaking, if any, was caused by a suddenly developed internal force;

3. That such bursting or breaking, if any, was accompanied by a sudden or rapid expansion of air; and,

4. That such bursting or breaking was accompanied by a sharp noise or report."

The district court in the instant case discussed Hulcher and concluded that it was not relevant since the instruction was there stipulated by the parties and not in issue, stating:

"The obvious reason

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