Snell v. Stein
| Decision Date | 27 March 1972 |
| Docket Number | No. 51313,51313 |
| Citation | 261 La. 358,259 So.2d 876 |
| Parties | Mrs. Patricia Lee SHERWOOD, Widow of Edmond P. SNELL, Plaintiff-Appellant-Relator, v. Mrs. Mercedes STEIN, a/k/a Mrs. Mercedes Stein Miorana, et al., Defendants(Firemen's Fund Insurance Company, Defendant-Appellee-Respondent). |
| Court | Louisiana Supreme Court |
Wilmer Glauner Hinrichs, New Orleans, for plaintiff-appellant-applicant.
Dillon & Williams, Gerard M. Dillon, New Orleans, for defendant-appellee-respondent.
The plaintiff widow sues for the wrongful death of her husband. The present proceeding reviews the dismissal by summary judgment of her suit against one of the defendants, Firemen's Fund Insurance Company. The trial and intermediate courts held that the liability policy issued by Firemen's to an alleged joint tortfeasor did not provide coverage for the accident in question. 244 So.2d 647 (La.App.4th Cir. 1971). We granted certiorari. 258 La. 566, 247 So.2d 391 (1971).
The issue of coverage by Firemen's is the sole question before us. The previous courts held that Firemen's comprehensive general liability policy did not apply to the present accident because of an exclusionary endorsement and because of certain instruments attached to the policy.
The plaintiff's husband was killed in a two-car intersectional collision in Jefferson Parish. Included among the defendants are the Parish of Jefferson, its traffic engineer, 1 and the liability insurer of the Parish and its employees. The basic claim of negligence against the Parish, its employee, and their insurer (Firemen's) is that the Parish grossly deviated from acceptable standards in the way it installed and maintained the traffic control system at the intersection where the fatal accident occurred.
Firemen's had issued a comprehensive general liability policy insuring all departments of Jefferson Parish government and their employees. 2 The pertinent insuring agreement here involved is Coverage A, by which the insurer agreed: '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 caused by accident.'
If the insured (the Parish and its employees) is liable for the negligent installation or maintenance of the traffic control system, 3 then by such insuring agreement the insurer clearly provides coverage for any liability, such as that alleged, on the part of the Parish and its employees.
The insurer successfully contended below, however, that coverage of the accident in question was not afforded by this policy, despite its broad wordings. In so contending, the insurer relies upon (I) a 'Streets and Sidewalks' exclusion endorsement and (II) argument that negligent operations by the traffic engineering and road departments were not intended to be within the coverage of the policy. 4
The principles applicable to construction of insurance policies are not disputed. In case of ambiguity, the policy provisions are construed most favorably to the insured and against the insurer. Of the permissible constructions, the courts adopt that which effectuates the insurance over that which defeats it. creole Explorations, Inc. v. Underwriters at Lloyd's, London, 245 La. 927, 161 So.2d 768 (1964); Schonberg v. New York Life Ins. Co., 235 La. 461, 104 So.2d 171 (1958); Stanley v. Cryer Drilling Co., 213 La. 980, 36 So.2d 9 (1948).
On the other hand, in the absence of conflict with statute or public policy, insurers have the same right as individuals to limit their liability and to impose whatever conditions they please upon their obligations. In such event, unambiguous provisions limiting liability must be given effect. Monteleone v. American Employers' Insurance Company, 239 La. 773, 120 So.2d 70 (1960); Hemel v. State Farm Mutual Auto. Ins. Co., 211 La. 95, 29 So.2d 483 (1947); Muse v. Metropolitan Life Ins. Co., 193 La. 605, 192 So. 72, 125 A.L.R. 1075 (1939).
The exclusionary endorsement relied upon provides, Tr. 156:
'STREETS AND SIDEWALKS
'Such insurance as is afforded under Division I of the Definitions of Hazard does not apply to the Existence of streets and sidewalks of the named insured, and the Definition of premises does not include such streets and sidewalks.' (Italics ours.)
As the dissenting opinion of the court of appeal notes, 244 So.2d 651, this exclusion clause is ambiguous in the context of the policy as a whole. The policy itself contains no 'definitions of Hazard' and no 'definition of premises'. 5 Further, even if we attempt to stretch these terms to fit what the insurer asks us to assume are the present policy's equivalents, nevertheless we are unable to ascribe to this clause any clear intent to exclude from coverage the negligent installation or maintenance of a traffic control system at an intersection.
The negligence alleged consists of the installation and maintenance of three traffic control lights at an intersection, two of them overhead on wires up above the street and one on a utility pole to the left of the intersection. Construing the exclusionary clause strictly, as we must, Salomon v. Equitable Life Assur. Society, 202 La. 1001, 13 So.2d 329 (1943), we cannot conclude it applies here:
The liability sought to be enforced does not arise from the 'existence of Streets' or from a Street premise-defect. It is not the negligent maintenance or installation of Streets or Sidewalks (alone excluded from coverage by the clause), it is the negligent control of traffic upon such streets that is here complained of.
Aside from other reasons why they may be inapplicable, we distinguish the two decisions relied upon by the court as holding to the contrary:
Foreman v. Maryland Casualty Company, 224 So.2d 553 (La.App.3d Cir. 1969) was based upon a broader exclusion claue 6 than the present one, in holding noncoverage for an accident caused by lack of a stop-sign and a failure to cut grass at an intersection; Labruzza v. Boston Insurance Co., 198 So.2d 436 (La.App.4th Cir. 1967) applies the present clause so as to exclude liability for an accident resulting from what the court held to be part of a 'sidewalk', a broken metal drain-cover within the grass walkway between the cement portion of the sidewalk and the street-curbing.
The other contention of the insurer is that the policy affords no coverage for the negligent installation and maintenance of traffic control signals by the parish Department of Roads and Bridges or the parish Department of Engineering. This seems to be founded upon the description of and the premium-ratings for the hazards created by the operations of these departments. They are described only under 'Premises-Operations-Auditable Payrolls' in the 18-pages of extension (six) schedules attached to the 'Declarations M & C . . . Description of Hazards' appended to the policy. Tr. 172--91.
This argument lacks merit: The 'Description of Hazards' set forth by the 'Declarations' and the 18-pages of extension schedules was expressly not intended to limit the coverage of the policy. See Tr. 172, to be quoted below. Its purpose was solely to show the ratings for the calculation of the total premium; both the advance premium at the inception of the policy and the final premium (after audit) at the policy's termination. 7
The highly technical argument of the insurer in this regard must be understood in the light of the complex and lengthy insuring instrument issued by it. The entire instrument is found in the 49 pages of the transcript at Tr. 154--202. 8 Its first four printed pages (with typed completion of blanks) set forth the named insured, the coverages, the limits of liability, the insuring agreements, the exclusions, and the conditions of the policy. To this are added forty-plus pages of attachments, being various endorsements and a description of hazards with extension schedules attached thereto.
The policy itself is a 'Comprehensive General Liability Policy.' The policy provides coverage generally for all risks of the insured except where coverage is excluded; it is unlike other liability policies, such as the 'Manufacturer's and Contractor's Liability Policy', which insure only risks arising out of hazards thereafter defined. 9
Under the insuring agreement of the policy, as earlier noted, the insurer is liable for injury caused by the negligence of Jefferson Parish governmental units under the direction of the parish president and council. See Footnote 2. These include the Department of Roads and Bridges and the Department of Traffic Engineering. 10 The risks insured against do not exclude, under the terms of the policy, the negligent installation and maintenance of traffic control systems by these governmental units or any other under the direction and control of the parish president and council.
Aside from its argument (which we have rejected) that the 'Streets and Sidewalks' exclusion exempts this risk, the insurer does not seem to rely upon any exclusion clause or condition of the policy in contending no coverage is afforded by the policy. It does refer to two endorsements related to 'completed operations' 11, apparently in answer to arguments by the plaintiff. However, the negligent installation and operation of the traffic control system cannot be considered a 'completed operation' as defined by the policy 12, and we do not understand the insurer to so contend.
The substance of the insurer's contention that the negligent acts alleged of the road and traffic engineering departments are not within the coverage seems to be based upon a strained construction of the 'Description of Hazards' in the 'Declarations M & C' annexed to the policy, including its 18-pages of...
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