Southern States Masonry Co., Inc. v. Mission Ins. Co.

• Decision Date: 21 November 1977
• Docket Number: No. 11568,11568
• Citation: 353 So.2d 307
• Parties: SOUTHERN STATES MASONRY COMPANY, INC. v. MISSION INSURANCE COMPANY.
• Court: Court of Appeal of Louisiana — District of US

Page 307

353 So.2d 307

SOUTHERN STATES MASONRY COMPANY, INC. v. MISSION INSURANCE COMPANY.

No. 11568.

Court of Appeal of Louisiana, First Circuit.

Nov. 21, 1977.

Rehearing Denied Dec. 28, 1977.

Writ Refused Feb. 17, 1978.

Lee C. Kantrow, Baton Rouge, of counsel, for plaintiff-appellant, Southern States Masonry Co., Inc.

Robert Vandaworker, Baton Rouge, of counsel, for defendant-appellee, Mission Ins. Co.

Before LANDRY, SARTAIN and ELLIS, JJ.

LANDRY, Judge.

Plaintiff-Appellant (Southern), sub-contractor on the project for construction of the new Our Lady of the Lake Hospital, Baton Rouge, Louisiana, appeals dismissal of his action against the builder's risk insurer of the prime contractor and project owner, for the loss of fabricated materials intended for installation in the hospital project which were destroyed by natural forces while located on Appellant's premises. The trial court rejected Appellant's claim upon finding the goods were not "in transit" to the construction site and therefore not within the coverage provided by the policy issued by defendant Mission Insurance Company (Insurer). We affirm.

The essential facts are undisputed and stipulated. Southern Builders, Inc. (Contractor) is the general contractor for the hospital project being constructed for Our Lady of the Lake Hospital, Inc. (Owner). Appellant has a sub-contract with Contractor for the performance of certain brick and masonry work for the job. Pursuant to its sub-contract, Appellant assembled certain brick panels at Appellant's place of business, off the hospital construction site, which panels were designed for incorporation in the hospital project. On or about May 8, 1975, while said assembled panels were on Appellant's premises, they were destroyed by high winds. The panels were composed of materials ordered by Appellant for the specific work.

The policy in question, which names Our Lady of the Lake Hospital, Inc., Southern Builders, Inc., Department of Health, Education and Welfare of the United States, State Treasurer of the State of Michigan and Custodian of State Employees Retirement System Funds, A.T.I.W.A. as insureds, provides coverage as follows:

"8. PROPERTY COVERED:

Any and all materials, equipment, machinery and supplies of any nature whatsoever, to be used in or incidental to the fabrication and/or erection and/or completion of the project stated in Item F of Declarations, while in transit by land, air or water conveyance under and/or on deck from points and/or places in the 48 contiguous United States, the District of Columbia and/or Canada to the erection site as stated in Item F of Declarations, and while there awaiting and during erection and/or installation, subject to the limitations of Item C of Declarations. Also said property while in transit in the 48 contiguous United States, The District of Columbia and/or Canada prior to delivery to the erection site.

In the event of loss or damage by perils insured under this policy, this insurance shall also pay the cost of removal of material and debris being an insured part of the property, including cost of removal or demolition of any portion of the insured property no longer useful for the purpose for which it was intended. This clause does not increase the limits of liability stated in Item D of Declarations attached hereto."

"14. It is hereby understood and agreed that no claim for loss or damage during transit shall be payable hereunder until claim has been filed with the carrier and the carrier has either denied liability or until a reasonable time has elapsed during which the Insured has made efforts to secure payment or denial of liability on the part of the carrier."

Appellant, although not a named insured under the policy, asserts its claim herein by virtue of an assignment from Contractor of all claims Contractor might have for the loss. Insurer contends Appellant has no right of action herein because Appellant is not a named insured. The trial court held that Section 8 provides coverage only: (1) while goods are in transit on a conveyance; (2) while at the erection site awaiting erection and/or installation; and, (3) while at the erection site during erection and/or installation. Finding no coverage, the trial concluded there was no need to consider Appellant's alleged lack of right of action.

Appellant contends coverage under Paragraph 8, above, is twofold. First, it is argued that the first sentence of the paragraph affords coverage because it includes all materials, equipment, machinery and supplies to be used in or incidental to the fabrication and/or erection and/or completion of the project; (i) while in transit on conveyance to the erection site; (ii) while awaiting erection and/or installation at the erection site; and, (iii) during erection and/or installation. It is argued that the trial court erred as a matter of law in construing the first sentence of Paragraph 8 to limit coverage to materials in transit on conveyance and not to extend coverage to stopovers during transit because if Insurer intended to so limit its coverage Insurer could have done so by express provision and Insurer's failure to do so must be...