Standard Accident Ins. Co. v. Harrison-Wright Co.

• Decision Date: 28 January 1935
• Docket Number: 539.
• Parties: STANDARD ACCIDENT INS. CO. v. HARRISON-WRIGHT CO.
• Court: North Carolina Supreme Court

178 S.E. 235

207 N.C. 661

STANDARD ACCIDENT INS. CO. v. HARRISON-WRIGHT CO.

No. 539.

Supreme Court of North Carolina

January 28, 1935

Appeal from Superior Court, Mecklinburg County; Shaw, Emergency Judge.

Action by the Standard Accident Insurance Company against the Harrison-Wright Company, to which the defendant interposed a counterclaim. From an unsatisfactory judgment, plaintiff appeals.

Affirmed.

Assurer having unjustifiedly denied responsibility for personal injuries and property damage caused property owner through blasting by assured in constructing sewer, was liable for reasonable costs and expense, including attorney's fees incurred by assured in defending suit.

Liability of assurer, who had unjustifiedly denied responsibility for personal injuries and property damage caused property owner through blasting by assured in constructing sewer, for expenses incurred by assured in defending suit was not avoided by subsequent offer to defend suit upon condition that assurer would not be liable for any judgment.

The record discloses that:

"Upon the call of this case for trial, and after impaneling the jury and reading the pleadings, the Court suggested the first question to be determined in the case was: 'What was the real contract between plaintiff and defendant as to the matters in controversy in this action?" And with the consent of the attorneys, the Court directed counsel upon both sides to present to the Court and jury such evidence as they had of the contract, and to present all the evidence they had bearing upon the contract and the construction thereof. The Court announced to counsel that upon determining what the real contract was between the parties the Court would refer the question of damages, if any, to be determined by a referee.

"After the introduction of evidence, counsel announced they had no more evidence to offer upon the above question, and counsel for both sides agreed that upon the evidence offered, it is a question of law for the Court to determine what the contract was between the parties, and whether or not, if defendant was damaged as alleged in its counterclaim, plaintiff would be liable for such damages."

After hearing argument of counsel on both sides, the Court holds that the paper-writing offered in evidence by defendant marked 'Exhibit 1,' was the contract between the parties, and that under the terms and provisions of the contract it covered damages to property by blasting, and the plaintiff would be liable to the defendant for damages, if any, caused by blasting or explosion, as well as for expenses reasonably incurred by the defendant in the settlement of such matters. To which ruling the plaintiff excepts.

Subject to plaintiff's exceptions to the Court's ruling and to the plaintiff's right to appeal, and except as stated below with reference to attorney's fees it is agreed that if the Court, in making the ruling above, is correct, that under the provisions and conditions of the policy in question, the plaintiff would be liable to the defendant for damages, under its counter-claim, and that such damages would be as follows: (naming them)

It is agreed that the foregoing amounts were paid by the defendants on account of the valid claims for negligence of Harrison-Wright Company in the construction of sewer lines in Greenville, S. C., as alleged in the counter-claim said claims having been made against Harrison-Wright Company on account of property damages suffered by Crisp, Talley, Burdette, Whiteside and Goodman in connection with the blasting operations, described in the pleadings, and that the amounts paid H. C. Jones, Hicks & Johnston, and Tillett, Tillett & Kennedy, were on account of expenses incurred by the defendant in connection with the settlement of the Crisp, Talley, Burdette and Whiteside Claims, and the suit brought by Goodman.

The foregoing recovery to be subject to a credit in favor of the plaintiff against the defendant for $723.62 with interest from the 9th day of March, 1932. Notwithstanding anything in the stipulations and entries heretofore made and entered, the plaintiff contends that it is not liable for the payment of attorney fees incurred by the defendant in the Goodman Case, and as a basis for this contention offers the following portions of letters, marked 'Plaintiff's Exhibit B.'

It is agreed, and a jury trial being waived, the Court finds as a fact that the negotiations between the plaintiff and defendant with respect to furnishing counsel to defend the Goodman suit were as shown by correspondence, which has been introduced in evidence, as Plaintiff's Exhibit 'B,' and the above stipulations and agreements are made with the reservation that the plaintiff shall be entitled to contend in the Supreme Court that the facts being as shown by said correspondence, it is not liable to the defendant for the attorney fees paid on account of the Goodman suit. (correspondence set forth.) The plaintiff's motion to amend the pleadings is allowed. Thomas J. Shaw, Judge Presiding. This, the 5th day of May, 1934."

The judgment of the court below is as follows: "This cause came on to be heard before Thomas J. Shaw, Judge presiding, and a jury, at the April 30, 1934, Special Term. Proceedings were had, stipulations and agreements were entered into and rulings were made by the Court as appears upon the record of same which is attached to this judgment. Upon the said proceedings, stipulations, agreements and rulings, the Court finds and holds that the defendant is indebted to the plaintiff in the sum of Eight Hundred Seventeen and 81/100 ($817.81) Dollars, which includes interest to April 30, 1934, and that the plaintiff is indebted to the defendant in the sum of Four Thousand, Four Hundred Twenty-five and 79/100 ($4,425.79) Dollars, which includes interest to April 30, 1934; that the amount of defendant's indebtedness to the plaintiff should be offset against the amount of the plaintiff's indebtedness to the defendant, leaving a net amount due by the plaintiff to the defendant of Three Thousand, Six Hundred Seven and 98/100 ($3,607.98) Dollars, with interest from April 30, 1934. Upon motion of Tillett, Tillett & Kennedy, attorneys for the defendant, it is ordered, adjudged and decreed that the defendant recover of the plaintiff the sum of Three Thousand, Six Hundred Seven and 98/100 ($3,607.98) Dollars, with interest from April 30, 1934, and the costs of the action to be taxed by the clerk. This the 5th day of May, 1934. Thomas J. Shaw, Judge Presiding."

The plaintiff's exceptions and assignments of error are as follows: "(1) That the Court at the close of the evidence of the defendant on its counter-claim overruled the plaintiff's demurrer to the defendant's evidence upon the counter-claim and its motion to dismiss the counter-claim as of nonsuit. (2) After hearing the arguments of counsel, the Court ruled that the paper-writing offered in evidence by the defendant, marked 'Defendant's Exhibit No. 1,' was the contract between the parties and that under the terms and provisions of the contract covered damages to property by blasting and that plaintiff would be liable to the defendant for damages, if any, caused by blasting or explosion, as well as for expenses reasonably incurred by the defendant in the settlement of such matters. (3) That at the close of all the evidence, the Court overruled the plaintiff's demurrer to the defendant's evidence on its counter-claim and motion for judgment as of nonsuit upon the counter-claim then made. (4) That the Court entered a judgment in favor of the defendant, as appears in the record."

Appeal was duly taken to the Supreme Court. The necessary facts will be set forth in the opinion.

C. H. Gover and William T. Covington, Jr., both of Charlotte, for appellant.

Tillett, Tillett & Kennedy, of Charlotte, for appellee.

CLARKSON Justice.

Trial by jury was waived. The whole controversy was reduced to two questions: (1) Did the policy and/or the certificate cover the losses of the defendant set out in its counterclaim? (2) What was the amount of those losses? The judge ruled as a matter of law that the policy and/or certificate covered the losses. The amounts of the losses were fixed by an agreement of the parties. Judgment was entered on the judge's ruling and the agreement of parties. The judgment awarded the defendant the difference between the fixed amounts of the defendant's losses and the amount of the premiums admittedly due from the defendant to the plaintiff.

From this judgment, the plaintiff appealed to this court. The plaintiff contended that, as a matter of law, neither the policy nor the certificate of liability insurance covered the particular losses of the defendant enumerated in its counterclaim. We cannot so hold.

Harrison-Wright Company, the defendant, is a corporation engaged in the general contracting business extending over a number of states. While it was engaged in laying sewer pipes for the city of Greenville, S. C., certain damage was done to property owners, and one resident of Greenville, Mrs. Goodman, claimed that she suffered personal injuries, all arising out of blasting which was done by Harrison-Wright Company in removing rock in connection with the sewer construction.

The material part of the property damage certificate (manufacturers' and contractors' form), issued by plaintiff to defendant, which is printed as follows:

"Property Damage Certificate. (Manufacturers and Contractors Form) * * * Does Hereby Agree In consideration of the estimated advance premium shown in the Schedule on the reverse side hereof, Insuring Agreements with the assured named and described in said Schedule, subject to the conditions and agreements hereinafter provided, as respects damage to or

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