Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fremont Ind. Co. v. Sp. Earth Equip. Corp.

OPINION FILED FEBRUARY 14, 1985.

FREMONT INDEMNITY COMPANY, PLAINTIFF-APPELLEE,

v.

SPECIAL EARTH EQUIPMENT CORPORATION ET AL., DEFENDANTS-APPELLEES (FRUIN-COLNON CORPORATION ET AL., DEFENDANTS-APPELLANTS).



Appeal from the Circuit Court of Monroe County; the Hon. Joseph L. Cunningham, Judge, presiding.

JUSTICE WELCH DELIVERED THE OPINION OF THE COURT:

This case concerns pile-driving operations at the Jefferson Barracks Bridge Project and the construction of an insurance contract. Fremont Indemnity Company (Fremont) is the insurer. Special Earth Equipment Corporation (SEECO) is the insured. The pile-driving operations were performed by Fruin-Colnon Corporation and Granite Construction Company, which parties were engaged in a joint venture at all times pertinent to this appeal and will hereinafter be referred to collectively as "the Joint Venture." SEECO supplied the Joint Venture with various components for the pile-driving operations. Banner Iron Works, Inc. (Banner), supplied certain equipment to SEECO. Banner commenced an action against SEECO in the circuit court of Monroe County for the price allegedly due Banner on its contract with SEECO. The Joint Venture, also named a defendant in that action, cross-claimed against SEECO for damages based on incidents involving the pile driving apparatus. Banner and the Joint Venture each were awarded a judgment by default against SEECO. Fremont's counsel's subsequent motion to reconsider, filed on behalf of SEECO, was denied. Thereafter, Fremont commenced the instant action in the circuit court of Monroe County, naming SEECO, Banner, and the Joint Venture as defendants, seeking a declaratory judgment that the above-mentioned contract of insurance provided no coverage for the judgments obtained by the Joint Venture and Banner against SEECO. The trial court granted Fremont's motion for summary judgment as to both Banner and the Joint Venture. The Joint Venture appeals. Banner and SEECO are not involved in this appeal. There is no cross-appeal.

The pertinent facts are as follows: According to affidavits and copies of "purchase orders" of record, SEECO supplied the Joint Venture with a diesel pile hammer and guide rails, 150 feet of box leads, and the connectors and pins which hold the leads together. Box leads act as guides for the piling and the pile hammer during the pile-driving operation. The box leads and hammer are raised to and maintained in position by a crane. The purchase order price of the hammer with guide rails was $56,475. The purchase order price of the box leads was $22,877. The purchase order includes, inter alia, various hydraulic system components and "[a]ll necessary valving and hoses for plumbing into American 9Z99 crane."

On July 14, 1978, a set of box leads broke while the leads were being lowered from operating position. Herb Minatre, a SEECO engineer, visited the site the next day. According to Minatre, whose recorded statement is transcribed of record, Minatre suggested that a different raising and lowering procedure be employed. However, on July 21, 1978, while another set of leads was being raised, the leads broke again. Minatre's statement indicates his belief that SEECO's design of the leads may have been at fault. According to Minatre's statement, when he visited the site after the first lead failure, it was "very obvious that some sort of failure had occurred." According to Minatre, the hammer guides, though not defective, were also damaged. Asked whether the bridge itself had been damaged, Minatre replied that "very very minor" damage had been done to a trestle. He stated that the second failure was identical to the first.

In count I of its cross-claim against SEECO, the Joint Venture sought $57,610.14 as damages for repair of the defective leads, alleging that said leads were not fit for the particular purpose for which they were purchased in that they twice "snapped and broke." In count II, the Joint Venture sought $35,000 for labor, materials and overhead expenses for two weeks' delay of the project construction schedule. The Joint Venture was awarded judgment by default against SEECO for SEECO's failure to appear. After a damages hearing, judgment was entered in favor of the Joint Venture in the amount of $34,865.14 as to count I and $32,854.96 as to count II, which according to exhibits of record is itemized as follows: Labor, payroll taxes, workmen's compensation insurance, fringe benefits, overhead and profit totaling $14,960.16; equipment rental, $11,281.26; materials, $1,726.12; repair of damaged pile hammer, $2,484; repair of all lead connectors, $4,413.60; and two weeks' delay at $16,427.48 per week for "fixed and overhead costs," $32,854.96.

Fremont's complaint for declaratory judgment stated, in count I, that the insurance contract afforded no coverage for Banner's and the Joint Venture's judgments against SEECO, and, in count II, that Fremont was relieved of liability under the contract due to SEECO's breach of its duty to forward suit papers to Fremont. The trial court granted Fremont summary judgment against Banner and the Joint Venture based on the first count only. The order signed by the trial judge indicates the following conclusions: That the damage to the leads and the guide rails on the hammer were damages to a single pile-driving apparatus of which all components were sold by SEECO; the other damages incurred by the Joint Venture were a result of expenses incurred in the repair of the defective product itself and delay of the construction operations incident to that repair; no "damage" occurred to property other than that supplied by SEECO; and the damage did not occur in "sudden and accidental" manner. It is from this judgment that the Joint Venture appeals.

The relevant portions of the insurance contract provide in essence that Fremont will pay on behalf of SEECO all sums which SEECO shall become legally obligated to pay as damages because of bodily injury or "property damage to which this insurance applies, caused by an occurrence, if the bodily injury or property damage is included within the completed operations hazard or the products hazard * * *." Exclusion (e) states that this insurance does not apply

"to loss of use of tangible property which has not been physically injured or destroyed resulting from

(1) a delay in or lack of performance by or on behalf of the named insured of any contract or agreement, or

(2) the failure of the named insured's products or work performed by or on behalf of the named insured to meet the level of performance, quality, fitness or durability warranted or represented by the named insured;

but this exclusion does not apply to loss of use of other tangible property resulting from the sudden and accidental physical injury to or destruction of the named insured's products or work performed by or on behalf of the named insured after such products or work have been put to use by any person or organization other than an insured."

Exclusion (f) excludes from coverage

"property damage to the named insured's products arising out of such products or any part of such products."

The contract of insurance defines "damages" as, inter alia, damages for loss of use of property resulting from property damage. "Occurrence" is therein defined as an accident which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. "Property damage" is therein defined as injury to or destruction of tangible property. "Named insured's products" is defined as goods or products manufactured, sold, handled or distributed by the named insured. "Products hazard" is defined as including, inter ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.