Randolph v. Fireman's Fund Ins. Co.
| Citation | 124 N.W.2d 528,255 Iowa 943,8 A.L.R.3d 907 |
| Decision Date | 12 November 1963 |
| Docket Number | No. 51040,51040 |
| Parties | , 8 A.L.R.3d 907 Howard RANDOLPH, Appellee, v. FIREMAN'S FUND INSURANCE COMPANY and William C. Bates, Appellant. |
| Court | United States State Supreme Court of Iowa |
John Paul Jones and W. C. Hoffmann, Des Moines, for appellant.
Frank Thompson (of Batchelet & Thompson), Guthrie Center, and Clyde Putnam, Jr. (of Putnam, Putnam & Putnam), Des Moines, for appellee.
Again we have a controversy between an insurance carrier and its insured as to the meaning and extent of coverage of a written contract of insurance. The issuance of the policy and that it was in force and effect at all material times is not in dispute. The plaintiff contends that the policy covered liability, to the extent of the stated amount, for an injury sustained by a farm employee of the plaintiff, as a result of which the employee claims damages from the plaintiff in an action pending at the time of the trial of this case. The defendant asserts the contract does not cover the injury and the plaintiff's liability therefor. It refused to defend the employee's suit, and this action for a declaratory judgment asking that it be decreed to be compelled to defend the suit and pay any damages assessed therein against the plaintiff to the extent of its stated coverage, $20,000.00, was brought. Trial resulted in a decree for the plaintiff as prayed, and we have this appeal.
The trial court was of the opinion that the provisions of the policy regarding coverage of farm employees were ambiguous, and under the familiar rule that in such cases the policy is to be construed against the insurer and in favor of the insured held that the defendant must appear and defend the suit brought against the plaintiff by a farm employee and respond to the extent of its stated liability coverage for any damages assessed against the plaintiff. The court also applied another well settled principle, that when ambiguity of a contract appears parol evidence may be admitted to ascertain the true meaning of the contract. Neither of these rules can be in real dispute, and citation of authorities would be a waste of time and paper. But neither of them comes into play unless it may fairly be said there is a real ambiguity in the terms of the policy. Field v. Southern Surety Company, 211 Iowa 1239, 1242, 235 N.W. 571, 572; Mallinger v. State Farm Mutual Automobile Insurance Co., 253 Iowa 222, 226, 111 N.W.2d 647, 649.
I. We turn then to the provisions of the policy. It was what was known as a Farmer's Comprehensive Personal Liability Policy. As is customary now, it stated the different coverages, with the limits of liability and the premium to be paid for each set in opposite columns. Thus, Coverage A stated the limits of liability as $20,000.00; Coverage B, medical payments, as $500.00; and the combined premium for the two as $81.97. The same system was used as to other coverages with which we are not concerned here. Since the insuring agreements as defined by the policy as to Coverages A and B are important, we set them out:
'1. Coverage A--Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, and as damages because of injury to or destruction of property, including the loss of use thereof.
'The term 'bodily injury' whenever used shall include injury arising out of the following hazards: False Arrest, Malicious Prosecution, Wilful Detention or Imprisonment, Libel, Slander or Defamation of Character, Invasion of Privacy, Wrongful Eviction or Wrongful Entry.
'Coverage B--Medical Payments: To pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, X-ray and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services, to or for each person who sustains bodily injury, sickness or disease, caused by accident.
'(1) while on the premises with the permission of an insured, or
'(2) while elsewhere if such injury, sickness or disease (a) arises out of the premises or a condition in the ways immediately adjoining, (b) is caused by the activities of an insured, (c) is caused by the activities of a farm or residence employee or is sustained by a residence employee and arises out of and in the course of his employment by an insured, or (d) is caused by an animal owned by or in the care of an insured.'
If the policy terminated there, we would have little difficulty in agreeing with the plaintiff's position and the decree of the trial court. But there are other pertinent provisions, conditions and exclusions, and these are as much a part of the policy as the coverage itself. Mallinger v. State Farm Mutual Automobile Insurance Co., supra; loc. cit. 253 Iowa 229, 111 N.W.2d 651.
Part One of the policy, under the heading of 'Exclusions', says: 'This policy does not apply: * * * (d) Under coverages A and B, to bodily injury to or sickness, disease or death of any farm employee arising out of and in the course of his employment by the insured unless farm employees are specifically declared in this policy * * *.' Item 3 of that part of the policy known as the 'Declarations' provides:
These provisions are plain and expressly limit the coverage of the policy to the items stated which are indicated by specific premium charges. Under the same heading of 'Declarations', Item 8, is this:
"The following discloses all Code Premium Rate Premiums
farm employees and all full No. Bases
time residence employees, in
excess of two, wherever Number Per Each
located, of the named insured
or spouse and of all other
insureds who are residents of
the named insured's household
except employees not covered
hereunder
Farms--all employees, full time
--part time (accumulated
time less than 9 months)
Full time residence employees
in excess of two
Opposite these categories in parallel columns are set out these headings: Code, No., Premium Bases (Number), Rate (Per Each), and Premiums. Each column is blank except for the headings indicated; that is to say, no number of employees is listed and no premium charge is made.
Here arises the major basis for the plaintiff's contention. It is his theory that it was not necessary to list the first two farm employees because of the language of the first part of Item 8 above. He contends that the words 'in excess of two' apply to either or both the classes of farm employees and residence employees. If we had nothing more than the first sentence of Item 8 before us, this would be a plausible argument for ambiguity. The punctuation of the item down to and including the words 'not covered hereunder', from the defendant's standpoint might be improved.
The plaintiff's case at this point depends upon the placing, or misplacing, of a comma.
But punctuation is a fragile basis for construction of a contract. We said in Seeger v. Manifold, 210 Iowa 683, 686, 231 N.W. 479, 480-481; 'While punctuation of a contract may assist, yet, ordinarily, it is of little aid in construing it.' We there quoted with approval from Ewing v. Burnet, 11 Pet. 41, 53, 36 U.S. 41, 53, 9 L.Ed 624, 630: 'Punctuation is a most fallible standard by which to interpret a writing; it may be resorted to when all other means fail, but the court will first take the instrument by its four corners, in order to ascertain its true meaning.' To the same effect is language in 17A C.J.S. Contracts § 306, page 159: '* * * the punctuation of a written contract, although it may aid in determining the meaning, will not control over words or change a meaning which is plain from a consideration of the whole document * * *.' The rule is...
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