Torrington Co. v. Aetna Cas. & Sur. Co., 20048

• Decision Date: 01 July 1975
• Docket Number: No. 20048,20048
• Citation: 264 S.C. 636,216 S.E.2d 547
• Court: South Carolina Supreme Court
• Parties: The TORRINGTON COMPANY, Appellant, v. The AETNA CASUALTY & SURETY COMPANY et al., Respondents.

Page 547

216 S.E.2d 547

264 S.C. 636

The TORRINGTON COMPANY, Appellant, v. The AETNA CASUALTY & SURETY COMPANY et al., Respondents.

No. 20048.

Supreme Court of South Carolina.

July 1, 1975.

Marvin R. Watson, Greenwood, and Leatherwood, Walker, Todd & Mann, Greenville, for appellant.

Love, Thornton, Arnold & Thomason, Greenville, for respondents.

LITTLEJOHN, Justice.

This case was heard in the Court of Common Pleas for Greenwood County before the Honorable George Bell Timmerman, Jr., presiding judge, without a jury, upon a stipulation of facts. It involves the construction of an insurance policy. The trial judge ruled that there was no coverage available to the plaintiff, Torrington Company. Torrington has appealed.

Aetna Casualty and Surety Company issued to Dan Byers Construction Company, Inc., its comprehensive liability insurance policy which was in force on August 17, 1965.

On August 17, 1965, Overnite Transportation Company was transporting on its truck a Heald Grinder owned by the plaintiff, Torrington Company, to Clinton, South Carolina, when the truck was involved in a collision with a train of the Piedmont and Northern Railroad Company in the town of Honea Path. The Heald Grinder, involved in this action, was not damaged in the train collision. Overnite employed Byers to go to the scene of the collision with its mobile crane and unload Torrington's Heald Grinder from the lowboy truck of Overnite onto the trailer of Byers and deliver the Heald Grinder to Torrington at its plant in Clinton.

While Byers, through its employees, was engaged in the act of removing the Heald Grinder from the lowboy truck of Overnite to the trailer of Byers, the machine fell and was damaged. The damage occurred when one of Byers' employees was operating a crane, with its cable which broke, causing the Heald Grinder to be dropped.

Thereafter, Torrington sued Byers for damages to the Heald Grinder, and for loss of use thereof, resulting in a judgment in Torrington's favor for $73,078.83.

The judgment was not paid by Byers, and Torrington brought this action against Aetna in an effort to collect the debt. It is the contention of Torrington that Aetna's policy afforded coverage to Byers for the accident hereinabove described such that Aetna should pay, to the extent of the coverage, Torrington's judgment against Byers.

Aetna contends that it affords no coverage because of the exclusions in the policy. The insuring agreement has two coverages, each with exclusions, with which we are concerned. Coverage D relates to liability other than that growing out of the use of an automobile. Relevant parts of D, together with the exception, read as follows:

'Coverage D--Property Damage Liability--Except Automobile

'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.

'This policy does not apply:

'(j) under Coverage D, to injury to or destruction of . . . (3) . . . property in the care, custody or control of the Insured or property as to which the Insured for any purpose is exercising physical control, . . ..'

We are of the opinion that the insuring agreement would protect the insured Byers except for the exclusion quoted hereinabove. The Heald Grinder at the time of the damage was 'property in the care, custody or control of the Insured or property as to which the Insured for any purpose is exercising physical control.' There are many cases which have arisen out of the 'care, custody or control' clauses included in many liability insurance policies. One of the leading cases in International Derrick & Equip. Co. v. Buxbaum, 240 F.2d 536, 62 A.L.R.2d 1237 (3rd Cir. 1957). The factual situation in that case is similar to the facts in this case. There, the plaintiff contracted to install a metal tower and antenna mast for a radio station. The plaintiff employed the defendant to raise the mast. Defendant furnished its own equipment, including the gin pole which he mounted on top of the tower to support the mast during the lift. While the mast was being raised the gin pole bent, and the mast fell and was damaged beyond repair. After judgment was entered against the defendant, an action was instituted by the plaintiff against defendant's insurer. The court held that the defendant had 'care, custody or control' within the meaning of the exclusion clause of the policy, and judgment in favor of the insurer was affirmed on appeal. The court said:

'(W)here the property damaged is under the supervision of the insured and is a necessary element of the work involved, the property is in the 'care, custody, or control' of the insured.'

In an annotation on the subject found in 62 A.L.R.2d 1242, at p. 1244, it is stated:

'All the cases, with one exception, support the view, either expressly or by necessary implication, that the clause in a contractor's liability policy or similar policy excluding from coverage liability for damage to property 'in care, custody, or control of insured' contemplates what is called 'possessory handling' of the property, as distinguished from 'proprietary' control. In other words, the exclusion clause applies not only in situations in which the insured is the owner of the damaged property but also in cases in which his dominion over the property damage is not based on ownership.'

We think that the language of the exclusion is clear and unambiguous such that no coverage is provided under Coverage D, and the trial judge correctly so ruled.

Coverage B, which relates to automobiles, with the exclusion, reads in pertinent part as follows:

'Coverage B--Property Damage Liability--Automobile

'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of any automobile.

'This policy does not apply:

'(e) under Coverage B, to injury to or destruction of property owned or transported by the Insured, or property rented to or In charge of the Insured other than a residence or private garage injured or destroyed by a private passenger automobile covered by this policy.' (emphasis added)

It is the contention of Torrington that the damage to the Heald Grinder, including the loss of use thereof, was caused when Byers accidentally dropped the Heald Grinder as it was being loaded onto the trailer of Byers, and that the trailer is an automobile within the definition in the policy. It is Torrington's further contention that loading and unloading is a use of an automobile as contemplated by the policy under the 'loading and unloading' cases. See Home Indemn. Co. v. Harleysville Mut. Ins. Co., 252 S.C. 452, 166 S.E.2d 819 (1969). The contentions are meritorious and might entitle Torrington to recover except for exclusion (e). Byers was employed to use its own special equipment and its employees with their specialized skills to perform a job apparently beyond the capabilities of Overnite. Byers had dominion and control over the entire operation. We need not determine whether the loading was 'transported by the insured' so as to come within the orbit of exclusion (e). It is sufficient to say that the damaged property was beyond question 'in charge of the Insured' and accordingly the damage is not covered by the policy. State Farm Mut. Auto. Ins. Co. v. Dorough, 277 Ala. 662, 174 So.2d 303 (1965); MacDonald v. Hardware Mut. Cas. Co., 105 N.H. 458, 202 A.2d 489 (1964); also see cases collected in 10 A.L.R.3d 515.

The judgment in the amount of $73,078.83, in favor of Torrington against Byers, represented a $59,306.50 claim for business interruption loss. The remainder of the judgment was for damage to the Heald Grinder itself and transportation costs. The plaintiff argues vigorously that exclusion (e) does not apply to loss of use of the Heald Grinder and contends that in spite of exclusion (e) Aetna should be made to pay, at least to the extent of its coverage, the $59,306.50. Such argument is bottomed on the fact that Coverage B applies to 'damages because of injury to or destruction of property, including the loss of use thereof,' whereas the exclusionary clause does not use the same verbiage. It excludes 'injury to or destruction of property.' Nevertheless, we think it is the only reasonable construction of the contract that damages arising from loss of use were excluded. Aetna must pay only when there has been injury to or destruction of property for which it is liable. Since the injury to and/or destruction of property is not covered, the resulting loss of use is not covered. The provision for 'including the loss of use thereof,' is merely a parenthetical phrase expressly providing for consequential damages when the insurer is Otherwise liable on the underlying claim. The loss of use grew out of the injury and/or destruction, and since the injury and/or destruction were excluded, the loss of use was excluded as a necessary consequence.

In concluding that the lower court should be affirmed, we have kept in mind our own line of cases holding that ambiguous insuring clauses should be liberally construed in favor of the insured. At the same time, the parties have a right to make their own contract and it is not the function of this Court to rewrite it or torture the meaning of a policy to extend coverage never...