St. Paul Fire & Marine Ins. Co. v. Air Comfort Engineers, Inc.

• Decision Date: 29 September 1971
• Docket Number: 3 Div. 42
• Citation: 253 So.2d 525,47 Ala.App. 301
• Parties: ST. PAUL FIRE & MARINE INSURANCE COMPANY v. AIR COMFORT ENGINEERS, INCORPORATED. , 42--A.
• Court: Alabama Court of Civil Appeals

Page 525

253 So.2d 525

47 Ala.App. 301

ST. PAUL FIRE & MARINE INSURANCE COMPANY v. AIR COMFORT ENGINEERS, INCORPORATED.

3 Div. 42, 42--A.

Court of Civil Appeals of Alabama.

Sept. 29, 1971.

Rehearing Denied Oct. 20, 1971.

Hill, Hill, Stovall, Carter & Franco, and John M. Milling, Jr., and William Oldacre, Montgomery, for appellant.

Jones, Murray, Stewart & Yarbrough, Montgomery, for appellee.

WRIGHT, Judge.

Two suits were filed by Air Comfort Engineers, Incorporated, against St. Paul Fire & Marine Insurance Company on policies of insurance. Each suit contained two counts claiming damages for losses to air conditioning systems insured under the policies against loss or damage from accident. One policy covered a system installed in a store in Columbus, Georgia, owned by Columbus Discount City, Incorporated. The other policy covered a system installed in the Gaylord's store in Montgomery, Alabama, owned by Montgomery Gay Properties, Incorporated. The suits were consolidated for trial.

Upon trial by the court without a jury, judgment was entered in favor of plaintiff for the amount sued for, together with interest and costs in each case. Defendant, St. Paul Fire & Marine Insurance Company appeals.

The first assignment of error is the ruling of the trial court overruling demurrer to the complaint.

Each count of each complaint was stated substantially in the language of Forms 13 and 14 of Section 223 of Title 7, Alabama Code of 1940. There was attached to each complaint and incorporated into each count thereof by reference, a copy of the insurance policy being sued upon.

Since the enactment of code forms for suit upon certain insurance policies it has been held that a complaint substantially worded in accordance with the form was sufficient as against demurrer, even though there was no averment that plaintiff owned the policy or had an insurable interest in the property insured. Motors Ins. Corp. v. Stewart, 262 Ala. 15, 76 So.2d 171. There was no averment in the complaints in the instant cases that indicated plaintiff's interest in the policies or the property alleged to be insured thereunder. Several grounds of appellant's demurrer specifically attacked the complaints on the basis of this omission. In view of the case above cited and others, demurrer on such grounds would be of no avail. Clearly a complaint in code form would not be subject to attack because it failed to state therein the interest or authority of plaintiff to bring suit on the policy. However, though plaintiff began the complaint with the code form, it incorporated therein the insurance policy. The policy showed on its face in the declaration that plaintiff was not the insured, but rather the declared insured was one other than plaintiff. There was no endorsement, assignment or loss payable clause exhibited in or attached to the policy indicating that plaintiff had any interest in or right to the policy or to the property insured therein.

An exhibit attached to a complaint and made a part thereof either aids, supplements or detracts therefrom. The pleading and the attached exhibit are considered together on demurrer. Grimsley v. First Ave. Coal & Lmb. Co., 217 Ala. 159, 115 So. 90; Houston County v. Covington,233 Ala. 606, 172 So. 882. An exhibit, made the basis of a cause of action, contradicting the averments of pleading to which it is made a part will control such pleading. Waugaman v. Skyline Country Club, 277 Ala. 495, 172 So.2d 381; Ivey v. Wiggins, 271 Ala. 610, 126 So.2d 469. Grounds 15 and 19 of appellant's demurrer point out that the exhibit made a part of the complaint affirmatively shows that plaintiff has no interest in the contract of insurance which will support a cause of action thereon. Thus, the exhibit expressly contradicts the complaint.

Though the legislature by adopting a form for stating a cause of action on a contract of insurance removed the necessity of alleging certain elements thereof in the complaint, it did not change the foundations of such cause of action. In order for one to have such a cause of action there must exist a contractual relation with the party charged, either directly or by succession.

The legislature removed the necessity of alleging the existence of such a relationship but no the necessity of proof. Though not required to be stated, the right of plaintiff to bring the suit is presumed. An attached exhibit to the complaint affirmatively showing the absence of any right in the plaintiff to bring the action contradicts the presumption allowed by the use of the code form. Plaintiff's complaint including the exhibit thus became demurrable and appellant's demurrer should have been sustained on grounds 15 and 19.

There appears in the policy made a part of the plaintiff's complaint and each count thereof the following:

'CONDITIONS

'* * * 4(b) Repair or Replacement--Coverage A The Company agrees that loss on property of the insured as specified in Coverage A shall mean the amount actually expended by the insured to repair or replace such property of the insured all subject to the following provisions:

'(1) * * *

'(2) * * *

'(3) The Company's liability for any repair or replacement shall be limited to the smaller of the following:

'(a) The cost at the time of the accident to repair the said property, or

'(b) The cost at the time of the accident to replace the said property on the same site with property of like kind, capacity, size and quality; * * *'

Assignments of error 2 and 3 contend the court erred in not sustaining appellant's demurrer to the complaint on ground 20. Ground 20 presents the provisions of the policy quoted above and points out that no liability arises under the policy for damage to the property insured unless the insured has incurred cost for repair or replacement, and that the extent of appellant's liability is the cost to the insured of repair or replacement of the damaged property.

Count A of the amended complaint seeks recovery for the 'value of labor and materials necessary to repair the air conditioning system.' Count B seeks recovery for 'the reasonable amount of damage to the air conditioning system.' Under the clear provisions of the policy as quoted, neither count seeks damages properly recoverable thereunder. Ground 20 of the demurrer was improperly overruled.

To the complaint in each case, appellant filed various pleas. In addition to a plea of general issue, pleas 2 and 7 were that plaintiff was not insured by the policy sued upon. Pleas 3, 6, 8 and 9 in effect were that the insured had suffered no loss under the provisions of the policy which we have set out herein previously, because it had incurred no cost of repair or replacement for damage to the insured equipment. Insured had incurred no such cost because it had a contract with plaintiff by which plaintiff provided full service for maintenance and repair of the insured air conditioning systems for an annual fee without other costs to the insured.

Appellee filed no demurrer to appellant's pleas but joined issue on each of them and filed two special replications to pleas 2 through 9. Those special replications appear as follows:

'REPLICATION

'1. Comes the Plaintiff and joins issue on each plea of the Defendant and denies each and every allegation of said pleas.

'2. For special replication to pleas 2 through 9, separately and severally, Plaintiff says that Defendant, with full knowledge of the facts, issued the policy sued upon, accepted premiums from the Plaintiff and has therefore waived or is estopped from asserting any defense set out in pleas 2 through 9.

'3. For special replication to pleas 2 through 9, separately and severally, Plaintiff says that Defendant, with full knowledge of the facts, paid a claim to Plaintiff under this policy, arising from facts similar to those upon which this suit is based, and has therefore waived or is estopped from asserting any defense set out in pleas 2 through 9.

'WHEREFORE, Plaintiff says that the matters and things set forth in pleas 2 through 9 are no defenses to this action.'

To these replications appellant filed a demurrer. The demurrer was overruled. Assignment of error 9 charges error in this ruling of the court.

The grounds of the demurrer argued by appellant in brief may be consolidated into two. First, that waiver and estoppel are insufficiently pleaded in that they are each alleged merely as conclusions and no facts are set out which could give rise to either. Second, a contract of insurance may not be formed nor coverage extended or enlarged by waiver or estoppel.

It is our opinion that both of the above grounds of demurrer are well taken and the...