U.S. Fidelity & Guaranty Co. v. Baugh

• Decision Date: 23 April 1970
• Docket Number: No. 1,No. 1268A210,1268A210,1
• Citation: 146 Ind.App. 583,257 N.E.2d 699
• Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellant, v. Gale BAUGH
• Court: Indiana Appellate Court

Page 699

257 N.E.2d 699

146 Ind.App. 583

UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellant, v. Gale BAUGH.

No. 1268A210.

Appellate Court of Indiana, Division No. 1.

April 23, 1970.

Willis Hickam, Hickam & Hickam, Spencer, for appellant.

McCrea & McCrea, Applegate & Ream, Bloomington, for appellee.

LOWDERMILK, Chief Justice.

This is an action brought by plaintiff, appellee herein, against defendant, appellant herein, on a liability insurance policy designated as a Contractor's Operations Liability Policy.

The issues were formed by appellee's second amended complaint in one paragraph, as amended by interlineation, against appellant, United States Fidelity and Guaranty Company (herein referred to as 'USF&G') on its 'Schedule of Liability Policy' defining hazards insured against as 'Premises--Operations' which was set out under the definition of hazards and set out immediately under said heading was the following: 'The ownership, maintenance or use of premises, and all operations.'; and also against the Wabash Fire and Casualty Insurance Company (herein referred to as 'Wabash') on its 'Combination Automobile Policy', alleging (1) the failure and refusal by USF&G and Wabash to defend appellee in an action against him filed by Robert Branum alleging Branum sustained prsonal injuries when a fuel oil drum attached to and a part of a truck owned by appellee, Gale Baugh, exploded while Branum was performing a welding job on the drum in Branum's shop, and alleging (2) that Branum recovered and collected a judgment from Baugh which USF&G and Wabash refused to pay.

USF&G filed its motion under Rule 1--3A to separate and separately docket the action against USF&G or, in the alternative, to require appellee to separate his complaint into two paragraphs. This motion was overruled. Appellant then filed its demurrer to said second amended complaint, as amended by interlineation, which demurrer was by the court overruled.

Appellant then filed answer in two paragraphs in compliance with Rule 1--3, denying any obligation under its policy of insurance to defend the action brought by Branum or to pay his judgment, its motion for separate trial, which was overruled, and its motion for summary judgment, which the court overruled. Later appellant filed an affirmative Paragraph III of answer, alleging appellee's release, shortly before trial date, of appellee's claim against Wabash in consideration of $18,760. Paragraph II of the answer was later stricken by the court. Appellee filed his reply that no release would be given, but that he would give Wabash a covenant not to sue. Appellee then filed his motion for separate trial and elected that his cause of action against USF&G be first tried; this motion was sustained by the court and separate trial was ordered of appellee's cause of action against USF&G.

The action against USF&G was tried by jury, which returned a verdict for appellee in the sum of $22,519.89, upon which the court duly entered its judgment in that amount. Appellant USF&G filed its motion for new trial, which was overruled.

The facts are, briefly, that on July 30, 1960, appellee, Gale Baugh, owned business premises on West 17th Street in Bloomington, where he operated a plumbing and excavating business with trucks, bulldozers and other heavy equipment which he owned. His equipment included a 1955 Ford dump truck from which the cylinder to make the bed dump automatically had been removed and the truck was used only to haul tools and diesel fuel to service their heavy equipment. For two years or more a 55-gallon oil drum had been used as a tank to haul diesel fuel to appellee's equipment. This tank was installed in the truck where it stood on end in the left front corner of the dump bed and was anchored with a piece of plumber's strap iron nailed with eight-penny nails to some wood which was fastened to a metal piece welded to the dump bed. It was firmly attached, but could be removed in a minute and was attached so that it would stay in place and not bump around over the truck bed when moving.

A pump about one and a half feet high in a 2-inch iron pipe weighing about forty pounds was screwed down in the top of the tank. The tank, when filled with oil, weighed about four hundred pounds.

When the truck was in motion it caused a vibration which, in turn, would crack the top of the drum around the pump.

A few days before the accident in question Donald Baugh, son and employee of appellee, had replaced the old tank with a new one and asked Robert Branum, who owned and operated a welding shop in Bloomington, if he could fix the drum so the vibration would not break the top out of the new drum, and was informed that it could be done, but not that day, and to bring the truck to Branum's place of business at a later date.

Branum was adding a new building to his welding shop and before noon on July 30th, called Donald Baugh to do some grading and level stone inside his new building to prepare it for a concrete floor. Donald Baugh loaded a bulldozer with a back-hoe onto a lowboy, which he connected to the truck and pulled from Baugh's premises to Branum's shop, which was about a mile away, where he unloaded it and used it to level the stone inside Branum's building and to grade around the outside. After this work was finished Donald parked his back-hoe on Branum's lot and Branum asked if he still wanted him to do that welding. Donald told Branum he wanted the welding done and Branum told Donald to pull the truck onto the driveway where his welding calbes would reach so he could fix it and the truck was placed where directed.

Branum had told the applellee prior to July 30th to fill the barrel and the pump with oil before he was to weld it. Branum started to weld the drum head and when he struck the arc the barrel and pump were not full of oil, and exploded, seriously injuring Robert Branum.

Appellee also held Wabash's Combination Automobile Policy which was in effect and included the truck in question and insured Baugh against liability for bodily injury 'sustained by any person caused by accident and arising out of ownership, maintenance or use of the automobile.'

Both insurers were notified of the accident. On May 12, 1962, Branum filed his complaint against Gale Baugh and his son, Donald Baugh, asking $100,000 damages for bodily injuries. This complaint, as amended, alleged that Donald Baugh brought a truck onto the business premises of plaintiff in Bloomington containing an oil drum which was attached to said truck, a part thereof and used in conjunction therewith for supplying fuel oil for defendants' motor vehicles and tractors in connection with defendants' business operations, and employed plaintiff to perform the welding job on said barrel, consisting of attaching a metal brace to the pump on top of the barrel and attaching said metal brace to the edge of the barrel to brace the pump. Plaintiff's amended complaint alleged further that Baugh represented that he had complied with prior instructions of Branum of fill the barrel and pump with oil before the welding operation could be performed, but unknown to branum the pump and drum contained vapors of highly volatile substance and the drum exploded when Branum began welding operations and thereby injured him. There were further acts of negligence charged against the Baughs, one of which was that the Baughs failed to warn Branum that the barrel and pump were not full of oil and that the statement that the pump and drum were filled with oil was either false, or made without sufficient knowledge as to its truth to warrant Branum's reliance thereon.

In the case now before us we are not concerned with whether appellee Baugh was liable to Branum for the negligence charged in Branum's complaint. The question is whether Branum's complaint alleged facts to support a finding that his injury was caused by accident arising out of the hazards insured against in USF&G's policy.

The parties hereto agree in their respective briefs that the court correctly instructed the jury in this cause now before us that there was no evidence that Branum's injuries were caused by accident arising out of the 'ownership, maintenance or use' of the premises described in the USF&G policy. The parties further agree by their briefs that this eliminated coverage under the policy except 'all operations.'

Appellant's motion for new trial is as follows:

'The defendant United States Fidelity and Guaranty Company moves the court for a new trial herein on each of the following grounds:

'1. Error in the assessment of the amount of recovery, in this, the amount thereof is too large.

'2. The verdict of the jury is not sustained by sufficient evidence.

'3. The verdict of the jury is contrary to law.

'4. Error of law occurring at the trial as follows:

'(a) The court erred in refusing to permit this defendant to read in evidence from the discovery deposition of Donald Baugh, taken on behalf of this defendant, only that portion beginning with the last line on page 4 and including all of pages 5, 6 and 7, and from lines 1--20 on page 8. Upon defendant's offer to read that part only of said discovery deposition, plaintiff objected to reading any portion of the deposition unless read in its entirety. The court's ruling on the offer and objection was: 'If you want to read it, read it, the whole thing.'

'* * *

'(c) The court erred in giving to the jury, at the request of the plaintiff, each of plaintiff's instructions numbered 1 and 5, and to the giving of each of which instructions this defendant duly objected within the proper time by stating its specific objections to each of said instructions after the court had indicated the instructions it would give to the jury.

'5. The court erred in overruling this defendant's motion, made at the close of plaintiff's evidence, to instruct the jury to return its verdict for this defendant.

'6. The court erred in overruling this defendant's motion, made...