Singsaas v. Diederich

• Decision Date: 30 January 1976
• Docket Number: No. 45636,45636
• Citation: Singsaas v. Diederich, 238 N.W.2d 878, 307 Minn. 153 (Minn. 1976)
• Court: Minnesota Supreme Court
• Parties: Bruce Allen SINGSAAS, a Minor, by Thelmer E. Singsaas, His Father and Natural Guardian, and Thelmer E. Singsaas, Appellants, v. Jerome A. DIEDERICH and Daniel Diederich, Individually and d.b.a. Diederich Bros. Construction Company, Respondent, Western Casualty & Surety Company, Respondent.

Page 878

238 N.W.2d 878

307 Minn. 153

Bruce Allen SINGSAAS, a Minor, by Thelmer E. Singsaas, His Father and Natural Guardian, and Thelmer E Singsaas, Appellants, v. Jerome A. DIEDERICH and Daniel Diederich, Individually and d.b.a. Diederich Bros. Construction Company Respondent, Western Casualty & Surety Company, Respondent.

No. 45636.

Supreme Court of Minnesota.

Jan. 30, 1976.

Syllabus by the Court

Insurance policy, containing a completed operations hazard endorsement and providing that coverage is limited to accidents which result in bodily injury during the policy period, does not provide coverage for injuries resulting after policy cancellation by insured from negligent acts of insured occurring during policy period.

Schmidt, Thompson, Lindstrom & Thompson and J. E. Thompson, Willmar, Severson & Qualley, Canby, Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, Minneapolis, for plaintiffs.

Harold C. Lucking, Benson, for Diederich Bros. Const.

Carroll, Cronan, Roth & Austin, Robert M. Austin and John A. Doyle, Minneapolis, for Western Cas. & Sur. Co.

Heard before OTIS, SCOTT, and AMDAHL, JJ., and considered and decided by the court en banc.

DOUGLAS K. AMDAHL, Justice. ^*

Appeal from an order of the District Court of Yellow Medicine County determining that bodily injuries, occurring after cancellation of a general liability insurance policy with completed operations hazard and products hazard endorsements but caused by negligence occurring while the policy was in effect prior to cancellation, were not covered by the policy. Affirmed.

The parties stipulated, for purposes of this declaratory judgment action only and so far as material here, that prior to December 1971, Jerome A. and Daniel Diederich organized a business partnership doing business as Diederich Bros. Construction Company (Diederich). They subsequently purchased a policy of insurance from respondent, Western Casualty & Surety Company. The policy contained both a products hazard endorsement and a completed operations hazard endorsement, and its stated term was from November 24, 1971, to November 24, 1974. On or about December 6, 1971, Diederich negligently performed some work in connection with repairs and modification on a manlift located in a grain elevator structure owned and operated by the Burr Farmers Elevator & Supply Company in the village of Burr, Minnesota. The negligent work consisted of using a cast iron socket clamp into which a soft metal, called babbitt, was placed for the purpose of holding the end of the manlift hoisting cable. Diederich decided to go out of business and requested cancellation of the policy. The policy was canceled on July 21, 1972, and some amount of premium was refunded to Diederich. On August 8, 1972, plaintiff Bruce Singsaas, an employee of the Burr Farmers Elevator & Supply Company, used the manlift and the cable came loose from the cast iron socket, causing the manlift to fall, rendering him a permanent paraplegic.

The policy by its terms applied to bodily injuries caused by an 'occurrence' and 'occurrence' was defined in the policy as:

"(O)ccurence' means an accident, including injurious exposure to conditions which results, During the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.' (Italics supplied.)

The policy further provided that it applied 'only to bodily injury * * * which occurs during the policy period * * *.'

The issue is: Does a liability insurance policy containing a completed operations hazard endorsement provide coverage where the policyholder's negligent acts during a time the policy is in effect result in injury after a policy has been canceled and the policy specifically provides that its coverage is limited to accidents which result, during the policy period, in bodily injury and to bodily injury which occurs during the policy period?

We agree with the trial court and answer the question in the negative.

The definition of 'occurrence' in the policy is derived from a 1966 revision of a nationally standardized liability policy form. The underwriting intent of the language is to make coverage depend upon whether bodily injury results during the policy period. Tarpey, The New Comprehensive Policy: Some of the Changes, 33 Ins. Counsel J. 223; Gowan, Completed Operations and Products Liability Insurance Coverage of the New Comprehensive General-Automobile Policy, A.B.A. Section of Insurance, Negligence and Compensation Law, 1965--1966 Proceedings, pp. 265, 280; R. Keeton, Insurance Law, §§ 2.11(d), 5.10(d). This intent is emphasized by the further explicit provision, noted Supra, that '(t)his insurance applies only to bodily injury * * * which occurs during the policy period * * *.'

The trial court decision is consistent with the generally accepted rule that the time of the occurrence is not the time the wrongful act was committed but the time the complaining party was actually damaged. 1 Long, The Law of Liability Insurance, § 11.02; 43 Am.Jur.2d, Insurance, § 340; Remmer v. Glens Falls Ind. Co., 140 Cal.App.2d 84, 295 P.2d 19, 57 A.L.R.2d 1379 (1956) (land graded and filled while comprehensive personal liability policy in effect but landslide damaging adjoining property happened after termination of policy); Troy v. London & Lancashire Ind. Co., 129 N.Y.S.2d 84 (1953) (injuries occurred after termination of policy from products manufactured and sold during policy period); Protex-A-Kar Co. v. Hartford Acc. & Ind. Co., 102 Cal.App.2d 408, 227 P.2d 509 (1951) (insurer canceled policy after learning of some claims for damages from antifreeze products and avoided liability for all claims made after the date of cancellation); Landerman v. United States Fidelity & Guaranty Co., 25 Conn.Supp. 297, 203 A.2d 150 (1964) (product liability policy did not apply when ladder sold during policy period broke after expiration); Scott v. Keever, 212 Kan. 719, 512 P.2d 346 (1973) (injury from ladder after policy period); National Aviation Underwriters, Inc. v. Idaho Aviation Center, Inc., 93 Idaho 668, 471 P.2d 55 (1970) (propeller failure after cancellation by insured); Silver Eagle Co. v. National Union Fire Ins. Co., 246 Or. 398, 423 P.2d 944, 40 A.L.R.3d 1432 (1967) (insurer canceled policy after learning of two other accidents from defective truck coupling device); Oceanonics, Inc. v. Petroleum Distributing Co., 280 So.2d 874 (La.App.1973)(defective weld on crane boom during period of completed operations and products liability policy but collapse of boom occurred after expiration); Great American Ins. Co. v. Tinley Park Recreation Comm., 124 Ill.App.2d 19, 259 N.E.2d 867 (1970) (insurance in effect only on day of fireworks display and injury occurred 2 days later when small boy found unexploded bomb and it exploded).

Appellants urge that it is the accident and not the injury which must occur within the policy period; that an accident may be a gradual process, The Travelers v. Humming Bird Coal Co., 371 S.W.2d 35, 38 (Ky. 1963); and that such a gradual accident is covered by the policy if the process begins within the policy period even if its results occur after policy termination, Kissel v. Aetna...