Travelers Ins. Co. v. Volentine

• Decision Date: 27 February 1979
• Docket Number: No. 8624,8624
• Citation: 578 S.W.2d 501
• Parties: TRAVELERS INSURANCE COMPANY, Appellant, v. Kelsey VOLENTINE, d/b/a Volentine Automotive, Appellee.
• Court: Texas Court of Appeals

Page 501

578 S.W.2d 501

TRAVELERS INSURANCE COMPANY, Appellant, v. Kelsey VOLENTINE, d/b/a Volentine Automotive, Appellee.

No. 8624.

Court of Civil Appeals of Texas, Texarkana.

Feb. 27, 1979.

Rehearing Denied March 27, 1979.

Michael Stevens, Atchley, Russell, Waldrop & Hlavinka, Texarkana, for appellant.

Sherman A. Kusin, Harkness, Friedman, Kusin & Hooper, Texarkana, for appellee.

CORNELIUS, Chief Judge.

This case involves the interpretation of a garage liability insurance policy. Kelsey Volentine, a garage owner and the insured under the policy, sought a declaratory judgment that the insurer, Travelers Insurance Company, was obligated to defend him in a lawsuit brought by Bobby Garrard. Volentine had performed a "valve job" on Garrard's automobile, and Garrard sued Volentine claiming that by reason of defective performance of the work a valve keeper failed to function, resulting in the destruction of the entire engine. Both Volentine and Travelers filed motions for summary judgment, and the motion of Volentine was granted. Travelers brings this appeal, contending that the policy afforded no coverage for the damages sought by Garrard, and consequently it had no obligation to defend Garrard's suit.

The insurance policy contained the following provision:

"I. Garage Liability

Coverage G-Bodily Injury Liability

Coverage H-Property Damage Liability

The company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of

Coverage G. Bodily injury or

Coverage H. Property damage

to which this insurance applies, caused by an Occurrence and arising out of Garage operations, including only the Automobile hazard for which insurance is afforded as indicated in the declarations, and the company shall have the right and duty to defend any suit against the Insured seeking damages on account of such Bodily injury or Property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements."

" 'occurrence' means an accident, including continuous or repeated exposure to conditions, which results in Bodily injury or Property damage neither expected nor intended from the standpoint of the Insured ;"

First, Travelers argues that the general coverage provisions of the policy exclude Garrard's claim because his damages were not caused by an accident, and the policy provides coverage only for liability due to an "occurrence," which the policy defines as an accident. We cannot agree. The term accident, as used in a policy of this type, means an unexpected, unforeseen or undesigned happening or consequence from either a known or unknown cause. Employers Casualty Company v. Brown-McKee, Inc., 430 S.W.2d 21 (Tex.Civ.App. Tyler 1968, writ ref'd n. r. e.); Bundy Tubing Company v. Royal Indemnity Company, 298 F.2d 151 (6th Cir. 1962); Hauenstein v. St. Paul-Mercury Indemnity Company, 242 Minn. 354, 65 N.W.2d 122 (S.Ct.1954). Although the allegedly defective Performance of the work itself might or might not be considered an accident (see Womack v. Employers Mutual Liability Ins. Co. of Wisconsin, 233 Miss. 110, 101 So.2d 107 (S.Ct.1958)), yet the destruction of the entire engine as a result of the malfunction of one of the repaired valves was certainly unexpected and unintended, and constituted an accident within the meaning of the policy provisions.

Second, Travelers urges that coverage was specifically denied by the policy exclusions. Among those exclusions is the following:

"This insurance does not apply, under the Garage Liability Coverages:

(k) to Property damage to work performed by or on behalf of the Named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith;"

Travelers contends that exclusion (k) denies coverage for all damages Due to work performed by the insured, or materials, parts or equipment furnished in connection therewith. But the language of the exclusion does not refer to damages Due to work performed; it refers to damages To the work performed. Similar and even identical policy provisions have on many occasions been construed by the courts, and it has been uniformly held that a liability policy containing such an exclusion does not insure the policyholder against liability to repair or replace his own defective work or product but it does provide coverage for the insured's liability for damages to other property resulting from the defective condition of the work, even though injury to the work product itself is excluded. Haugan v. Home Indemnity Company, 197 N.W.2d 18 (S.Ct.S.D.1972); Hartford Accident & Indemnity Co. v. Olson Bros., Inc., 187 Neb. 179, 188 N.W.2d 699 (S.Ct.1971); Engine Service, Inc. v. Reliance Insurance Company, Wyo., 487 P.2d 474 (1971); Bryan Const. Co. v. Employers' Surplus Lines Ins. Co., 110 N.J.Super. 181, 264 A.2d 752 (S.Ct.1970); Dakota Block Co. v. Western Casualty & Surety Co., 81 S.D. 213, 132 N.W.2d...