Prince v. Universal Underwriters Ins. Co.
| Citation | 143 N.W.2d 708 |
| Decision Date | 26 May 1966 |
| Docket Number | No. 8301,8301 |
| Parties | Leonard PRINCE, Plaintiff and Respondent, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, a corporation, Defendant andAppellant. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. If a contract is ambiguous and the intention of the parties cannot be ascertained from the writing alone, it is proper to refer to circumstances under which it was made and the matter to which it relates.
2. The insurance policy in question, for reasons stated in the opinion, is held to be ambiguous, and therefore held proper for trial court to admit evidence to explain and clarify the intention of the parties to the insurance contract.
3. Any ambiguity or reasonable doubt as to the meaning of a policy will be construed strictly against the insurer and favorably to the insured.
4. If the language of a policy is ambiguous and will reasonably support an interpretation, which will impose liability, as well as one which will not, the former interpretation will be adopted.
5. Where a garage liability insurance policy is used by an insurer to cover businesses other than a garage business by endorsement or other modification of the policy and where several businesses are so included, and where the policy recites that the insured does not conduct any other business operations not designated in the policy, the policy becomes a comprehensive liability insurance policy to cover all of an insured's business operations within the area covered by the policy, except those specifically excluded by endorsement.
6. Evidence held sufficient to support finding that insurance policy covered all of plaintiff's business operations including the bulk oil business.
7. Wrongful refusal to defend insured against claims coming within the coverage of the policy is a breach of contract and the measure of damages is that provided by statute for breach of contract.
8. Where an insurer wrongfully refuses to defend actions against the insured, the duty to defend is not limited to the insurer's own interest in the litigation, and the insurer becomes liable for all the costs and reasonable attorney's fees incurred by the insured in defense of the actions notwithstanding the fact that the total claims and final judgments recovered exceed the policy liability limitations.
9. In determining reasonable attorney's fees, various factors are to be considered by the court, including the amount and the character of the services rendered, the results obtained, the customary charge for such services, and the ability and skill of the attorney rendering the services.
10. The attorney's fees allowed by the trial court are held reasonable under the evidence in this case.
Freed, Dynes & Malloy, Dickinson, for defendant and appellant.
Greenwood & Swanson, Dickinson, for plaintiff and respondent.
The defendant has appealed from the order denying a new trial, order denying motion to amend the findings of fact and conclusions of law and order for judgment, and from the judgment awarded to the plaintiff in which the defendant is required to pay the sum of $5,000 for property damage pursuant to coverage provided under a certain insurance policy issued by the defendant, and the sum of $11,025.62 for attorneys' fees and costs.
The plaintiff owns and operates an automobile sales agency, implement business, service station, bulk oil plant, and appliance sales business at Regent, North Dakota. The automobile sales business is operated as a corporate entity under the name of Regent Garage Company, with Leonard Prince the principal stockholder and manager. The other businesses are owned and operated solely by Leonard E. Prince under various designations, such as 'Regent Implement Company,' 'Regent Oil Company,' and 'Regent Oil Co.--Regent Imp. Co., L. E. Prince, Owner.' The principal office and headquarters for all the businesses is located in the garage building of the Regent Garage Company.
Effective June 1, 1957, the defendant Universal Underwriters Insurance Company insured the plaintiff under a commonly referred to 'Garage Liability Policy.' This policy was renewed each year thereafter up to and including the policy issued effective June 1, 1960, to June 1, 1961.
On July 31, 1960, a fire at the bulk oil storage tanks operated by the plaintiff in Regent, North Dakota, on a leased site located on railroad right of way some blocks from the Regent Garage Company building, caused damages to various property owners adjoining the bulk oil storage tanks. A number of actions were commenced against the plaintiff as a result of this fire which eventually resulted in judgments against Leonard E. Prince, the plaintiff in this action.
Immediately after the fire the defendant was notified of the fire and the possible losses for which the plaintiff may become liable. The insurance company denied liability under its policy, and also refused to defend the several actions that were commenced against Leonard E. Prince, which resulted in judgments against him.
The plaintiff commenced this action seeking $5,000, the maximum amount of the property damage coverage under the insurance policy, and the amount of $12,500 for attorneys' fees and costs incurred by the plaintiff in the defense and settlement of actions which the defendant allegedly was obligated to defend under the terms of the policy. The case was tried to the court without a jury, and judgment was rendered in favor of the plaintiff on the coverage issue and for the full amount of attorneys' fees and costs proved at the trial.
The defendant has assigned various specifications of error of law and insufficiency of the evidence and has requested a trial de novo on all the issues.
The main issues on this appeal may be simply stated as follows:
1. Did the insurance policy in question cover the plaintiff's bulk petroleum business; and
2. Are the attorneys' fees and costs awarded properly recoverable under the facts and circumstances of this case?
The insurance policy issued to the plaintiff, Plaintiff's Exhibit 1, is entitled, 'Automobile Garage Liability Policy.' The named insured is stated as follows:
Regent Garage Company (A corporation) and/or Leonard E. Prince d/b/a Regent Implement Company, Regent, Hettinger County, North Dakota
Under the heading, 'Location of all Premises (enter 'same' if same location as insured's Address),' the following typewritten statement appears: 'Same and Elsewhere in the State of North Dakota.'
Under the heading 'Insuring Agreements,' the coverages and hazards are defined and, insofar as applicable, provide as follows:
Coverage B--Property Damage Liability: To pay 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, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined.
Division 1--Premises--Operations--Automobiles: The ownership, maintenance or use of the premises for the purpose of an automobile sales agency, repair shop, service station, storage garage or public parking place, and all operations necessary or incidental thereto;
II. Defense, Settlement, Supplementary Payments: With respect to such insurance as is afforded by this policy under coverages A, B and D, the company shall:
(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient;
III. Definition of Insured: With respect to the insurance under coverages A, B and D the unqualified word 'insured' includes the named insured and also includes (1) any partner, employee, * * *.
IV. Premises, Elevator, Automobile Defined, Two or More Automobiles:
(a) Premises. The unqualified word 'premises' means premises operated by the named insured for the purposes insured hereunder, and includes the ways immediately adjoining.
Attached to the policy are several endorsements, one reading:
Appliance Sales and Repair Endorsement
It is understood and agreed Division 1 under 'Definitions of Hazards' is hereby amended to read as follows:
'The ownership, maintenance or use of the premises for the purpose of an automobile dealer, repair shop, service station, storage garage, public parking place or appliance sales and repair, and all operations necessary or incidental thereto; and the ownership, maintenance or use of any automobile in connection with the above defined operations, and the occasional use for other business purposes and the use for non-business purposes of any automobiles owned by or in charge of the named insured and used principally in the above defined operations.'
The original insurance application, Defendant's Exhibit A, and the original insurance policy issued effective June 1, 1957, contained these statements:
Item 5. The named insured is conducting no other business operations at this or any other location not herein designated, except as herein stated:
In the blank space under this item was inserted:
Appliance Sales and Repair
Item. 6. No insurer has cancelled any similar insurance issued to the named insured, nor declined to issue such insurance, during the past year, except as herein stated:
In the blank space under this item was inserted: 'No Exceptions.'
The policy issued effective June 1, 1960, did not contain Item 5, but the language that was Item 6 in the first policy became Item 5. However, in the blank space under Item 5 in the second policy the same statement, 'Appliance Sales and Repair' was inserted.
It is the contention of the defendant that the plaintiff operated a bulk petroleum business under the trade name of 'Regent Oil Company,' and that this was a distinct and separate business from the...
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