St. Paul Fire and Marine Insurance Company v. Coleman

• Decision Date: 20 May 1963
• Docket Number: No. 17106.,17106.
• Citation: 316 F.2d 77
• Parties: ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Appellant, v. Willis P. COLEMAN and Anne Wyles Coleman, d/b/a Lake Hamilton Marine Service, et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

316 F.2d 77 (1963)

ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Appellant, v. Willis P. COLEMAN and Anne Wyles Coleman, d/b/a Lake Hamilton Marine Service, et al., Appellees.

No. 17106.

United States Court of Appeals Eighth Circuit.

April 19, 1963.

Rehearing Denied May 20, 1963.

Alston Jennings, Little Rock, Ark., made argument for appellant and filed brief.

William H. Daggett, Marianna, Ark., made argument for appellees.

Daggett & Daggett, Marianna, Ark., attorneys for appellees Willis P. Coleman, Anne Wyles Coleman and Morgan Agar, filed brief with Catlett & Henderson, Little Rock, Ark., attorneys for appellees William T. Stover and others, and Eichenbaum, Scott & Miller, Little Rock, Ark., attorneys for appellee William T. Stover.

Before VOGEL, BLACKMUN and RIDGE, Circuit Judges.

RIDGE, Circuit Judge.

This appeal is from a judgment dismissing appellant's complaint seeking a declaratory judgment that the "occurrence" hereinafter described is not within the scope of coverage provided by its "Manufacturer's and Contractor's Liability Policy" issued to "Willis P. and Anne Wyles Coleman, d/b/a Lake Hamilton Marine Service" as named insured.

The primary issue presented herein is whether the District Court erred in not declaring such "occurrence" happened away from "premises owned, rented or controlled" by its named insured, and therefore within exclusions of the "Products — Completed Operations" coverage as defined in that liability policy. Concededly, under the policy here in suit, appellant assumed no liability for "Products — Completed Operations." Appellees do not assert that it did. They affirm that the "occurrence" in question arose from "business operations" hazards created by appellant's "Named Insured" in relation to the "ownership, maintenance or use of premises and all operations," as those hazards are defined and coverage provided therefor in appellant's policy.

Since there is no dispute between the parties as to the facts leading up to the "occurrence" in question; and District Judge Miller in his memorandum opinion, found at 204 F.Supp. 713, has set forth all the stipulated facts giving rise thereto, as well as a verbatim copy of the relevant "coverage" and "Insuring agreements" contained in the policy of insurance here to be considered, we appropriate his statement of the facts there made and incorporate the same herein by reference — thereby shortening what would otherwise require an extended opinion from us in the disposition of this appeal.

But, to give some continuity to the instant opinion, we think these background facts should be related: On June 6, 1961, an inboard motorboat owned by William T. Stover caught fire and burned on Lake Hamilton, near Hot Springs National Park, Arkansas. Seven passengers were in that boat, in addition to Stover. All the occupants thereof suffered personal injuries as a result of the fire. As a consequence, suits were filed in the courts of the State of Arkansas by all those injured parties, naming appellee Willis P. Coleman, d/b/a Lake Hamilton Marine Service, and Morgan Agar, an employee of Coleman, as defendants. It was alleged in each of the complaints filed in those lawsuits that the fire and resulting injuries to the occupants of the boat were proximately caused by negligence on the part of Agar, which specific claim of negligence was imputed to Coleman, appellant's named insured. In due course, Coleman called upon appellant to defend the lawsuits arising out of that "occurrence" and to pay any judgments that might be recovered in the actions commenced against him, up to the limits of liability provided by its policy. Appellant, after denying that the "occurrence" was within the coverage of its policy, brought the instant action in the United States District Court for the Western District of Arkansas, seeking a declaratory judgment to have that issue determined with finality. The District Court denied appellant declaratory relief as prayed. It ruled that under the particular circumstances here established, coverage for the above "occurrence" was provided by appellant's insurance policy.

The agreed-to facts establish that, prior to the fire, Stover had moored his boat at Coleman's boat-dock for the purpose of refueling. Agar, Coleman's employee, acting in the scope of his employment, undertook to perform that operation. In so doing, when he removed the cap from the gas tank of Stover's boat, he also disconnected the pipe between the cap and the gasoline tank. As a consequence, in performing the operation of refueling, a portion of the intended fuel missed the tank and ran down into the bilge of the boat. It is Agar's negligent performance of that operation which is asserted by appellees to be the proximate cause of their injuries and a "hazard" within the ambit of "Premises — Operations" coverage afforded by appellant's policy.

The gist of appellant's assertion of non-coverage for the "occurrence" is that the above facts establish appellees' claims to be within the "Products — Completed Operations" coverage of its policy. That coverage has an exclusion contained therein that "if the accident occurs after possession of such goods or products (i. e. those `manufactured, sold, handled or distributed by the Named Insured') has been relinquished to others * * * and if an accident occurs away from premises owned, rented or controlled by the Named Insured" coverage for such an "occurrence" is not afforded by its policy. Appellant factually buttresses its argument as to that contention in item 10 of the stipulated facts (l. c. 716) and "Division 4 * * * Products — Completed Operations" (l. c. 718) set forth in Judge Miller's opinion, supra. That is to say * * * solely because Stover's boat had drifted a distance of seventy-three feet from the dock when it caught fire as a result of the negligent refueling "operation" by Agar, appellant contends that such "occurrence" was not on property "owned, rented or controlled" by the named insured. However, appellant conceeds that Coleman at times had "used the waters" of Lake Hamilton where the fire occurred, for the "mooring" of boats and had a right to so use those waters in the "operations" of his "business". But it says, "such right of use does not establish that Coleman `controlled' the waters" where the fire occurred. It is from that singular premise of "control" that appellant asserts "non-coverage" under its liability policy. We do not believe that the place where the Stover boat was located when it caught fire as a result of Agar's negligence, is decisive of appellant's liability coverage under the facts here and the insuring provisions of its policy.

To bring that basic issue into clearer mental focus it should be noted that there are several different classifications or "divisions" of risks set forth in appellant's policy as reproduced at 204 F.Supp., l. c. 717. We are here concerned only with "Premises — Operations" and "Products — Completed Operations." It should be clearly understood that appellees make no claim of coverage under appellant's policy for "Products — Completed Operations" hazard as defined therein. It is appellant alone who undertakes to steer the personal injury claims made against its "Named Insured" into that channel of coverage. It asserts that the decision of the District Court is premised in a ruling that coverage for the above "occurrence" was within "Products — Completed Operations" because the opinion of the trial court contains the statement that "the gasoline was never delivered to the operator of the boat" and that "as a practical matter the gasoline" that found its way into "the bilge of the boat could not be construed as being in possession of the...