The question posed in this appeal is one of coverage to defend an insured under a liability insurance policy. More particularly, the case requires the selection and application of a "completed operations" clause from either an insurance policy issued to the appellee by the appellant or a renewal policy. The district court ruled in favor of coverage, and Aetna Insurance Company has appealed from that judgment. We will affirm the judgment of the district court.
A summary of the events leading to the coverage issue can be found in Brubaker v.
As framed by the appellant, the issues on appeal are as follows:
The appellee in his brief presents a more detailed statement of his perception of the issues. Without reciting his position in detail, he claims that the provisions of the earlier policy govern over those of the renewal policy. He then urges the application of the "completed operations" exclusion clause in the earlier policy, but argues in the alternative that his operations had not been completed even under the renewal policy. In further defending the appeal, the appellee contends that the pleadings of the personal injury case which invoked the duty to defend came within the policy coverage and that there is no suggestion in the Brubaker personal injury complaint leading to relief for Aetna under the "completed operations" exclusion. He further urges that the doctrine of reasonable expectations should be adopted in the State of Wyoming.
Aetna Insurance Company relies upon the proposition that Lythgoe's operations on the job out of which the personal injury claim by Mrs. Brubaker arose had been completed under the provisions of Policy Number CG 75 14 19. The language of the policy on which Aetna Insurance Company relies is as follows:
In the definitions section of that policy appears the following language:
Lythgoe relies upon the language of policy MCL 27 20 80. In the Definition of Hazards section of that policy appears the following language:
The Exclusions section of this policy, which was the earlier of the two policies provides:
There is no question that the second policy states on its face that it is a renewal of the policy upon which Lythgoe relies. From the record, it appears that Lythgoe directed to Aetna Insurance Company a Request for Admissions, which included the following request:
The Answer to Request for Admissions by Aetna Insurance Company with respect to their request quoted above states:
With respect to which policy should be looked to as the controlling one in this factual situation, we espouse the language of the United States Court of Appeals for the Tenth Circuit:
This language was quoted with approval by the United States Court of Appeals in Government Employees Insurance Company v. United States, 10 Cir., 400 F.2d 172 (1968). In this latter case the court also noted that:
This same proposition is found in Noyes Supervision, Inc. v. Canadian Indemnity Company, 487 F.Supp. 433 (D.Colo. 1980); Giles v. St. Paul Fire & Marine Insurance Company, 405 F.Supp. 719 (N.D.Ala. 1975); Commercial Insurance Company v. American and Foreign Insurance Association, 370 F.Supp. 345 (D. Puerto Rico 1974); and Industro Motive Corporation v. Morris Agency, Inc., 76 Mich.App. 390, 256 N.W.2d 607 (1977).
In 17 Couch on Insurance 2d, § 68:63, p. 699 (Lawyers Cooperative Publishing Co. 1967), can be found the consistent propositions that unless the insurer calls to the attention of the insured changes in the coverage or conditions of the policy the insured has a right to presume that they are the same as those in the policy renewed even in light of the failure of the insured to examine the policy. The obligation is with the insurer to specifically inform the insured of the changes in the terms of the policy which is a renewal policy. To the same effect are cases cited in Annotation 91 A.L.R.2d 546 (1963), and this view apparently represents a clear majority rule. All of these statements are consistent with the principle of liberal construction of insurance policies in favor of the insureds. From the record, there is no dispute between the parties that when the second policy was issued Lythgoe's attention was not, by correspondence or otherwise, specifically directed to the adjustment in language relating to completed operations.
In W.N. Leslie, Inc. v. Travelers Insurance Company, supra, the Supreme Court of South Carolina had before it a situation markedly similar to the facts in this one. The policy language presented was that of Policy CG 75 14 19, the second policy in this case. The court there held that even under the specific standards found in the second policy the operations had not been completed:
It is apparent that the coverage afforded Lythgoe was more limited under the second policy than it was under the first policy. The effect of the exclusion in the first policy was that no coverage would be afforded "after such operations have been completed." The exclusionary language of the second policy is substantially the same, but it incorporates the more specific definition of completed operations which is quoted above. We eschew the specific standards in the second policy in favor of the more general language in the first policy. If the language of the first policy is applied the question of whether the operations have been completed is one for the trier of fact.
The record testimony with respect to the stage of the operations is that of Lythgoe, as follows:
Under the general language of the first policy, we hold that the testimony of Lythgoe is sufficient to support the trial court's finding of fact that the operations had not been completed. While our previous decision arises in an entirely different context, our judgment is that this approach and result are consistent with Tottenhoff v. Rocky Mountain Construction Company, Inc., Wyo., 609 P.2d 464 (1980), which involved a question of when a roofing contract had been completed for purposes of applying our mechanic's lien statute, § 29-2-109, W.S. 1977. Referring there to earlier Wyoming cases, the court said at 609 P.2d 567:
There is no dispute over the proposition that the duty of an insurer to defend is broader than the duty of the insurer to indemnify, Lanoue v. Fireman's Insurance Companies, Minn., 278 N.W.2d 49 (1979); Boston Insurance Company v. Maddux Well Service, Wyo., 459 P.2d 777 (1967). Cf., Flori v. Allstate Insurance Company, R.I., 388 A.2d 25 (1978).
We conclude that coverage to defend did exist under the first policy.
The judgment of the trial court is affirmed.
ROONEY, Justice, dissenting, with whom RAPER, Chief Justice, joins.
The majority opinion finds liability insurance coverage of appellee under the first policy issued to him by appellant, and it recognizes that such policy does not provide coverage "after such operations have been completed." It then finds that the operations were not completed, relying on appellee's testimony that "there might have been some other small things that we had to do but that part of it [the stairs] was completed" and that "there might have been a few touch ups and things like that" (emphasis added.)
We are concerned here with an injury resulting from carpenter work in moving a stairway. Both parties acknowledge that the work on the stairs was completed. It borders on the incredible to find the operation of moving a stairway was incomplete because "there might have been" a few touch ups remaining. The situation is completely different from that in Tottenhoff v. Rocky Mountain Construction Co., Wyo., 609 P.2d 464 (1980), quoted from in the majority opinion in an effort to justify the reach for reason there made. In the Tottenhoff case, the operation to be accomplished was the roofing of a house. Shakes were installed, but the metal flashings were not. It was agreed that the metal flashings were "an integral part of the roofing work done" in order "to protect the building from the elements," otherwise it would not be "watertight." We held that the operation was not completed. But the situation is a far cry from that wherein "there might have been a few touch ups." The situation in the Tottenhoff case would approach some similarity to this case if the remaining work was to pick up two or three of the old shingle scraps from the lawn. The result in such case could then have been different. See quotation, infra, from 12 Couch on Insurance 2d and cases there cited in supplement thereof.
Not only do the "might have beens" referring to a few touch ups and small things yet to be done by appellee amount to a de minimis with reference to substantial completion of his task, but the doctrine of judicial estoppel should prevent appellee from now taking the posture that he was working as an independent contractor on a defined project which "might" not have been completed when he previously represented to this court in connection with the first appeal of this matter (Brubaker v. Glenrock Lodge International Order of Odd Fellows v. Lythgoe, Wyo., 526 P.2d 52 (1974)) that:
In Allen v. Allen, Wyo., 550 P.2d 1137, 1142 (1976), we said:
Appellee here takes the position that he had a composite operation to perform and that it was not completed (although the stairway part was) because there "might have been some other things" and "there might have been a few touch ups" to do-not having anything to do with the stairs. In the previous case he took the position that he was working on an hourly basis (rather than on a composite operation) to do some carpentry work, and that his employment could be terminated at anytime. In the first appeal, we summarized the testimony relative to appellee's status as follows:
And seven months elapsed between the time appellee completed the stairway work and the time of the accident. Appellee ought not be allowed to first tell this court that he completed the stairs and was working by the hour on other tasks and to now tell this court that his operation, including the stairs, was not completed-even if he now uses the words "might have." The doctrine of judicial estoppel should be invoked against him.
On June 5, 1980, I presented the following to the other members of the court with a suggestion that it be published as the opinion of the court. The majority of the court did not agree with the suggestion. I believe it reflects the proper disposition to have been made of this case:
This case involves questions concerning the existence, interpretation and application of a "completed operations hazard" provision of a liability insurance policy. This, in turn, is determinative as to whether or not appellant-insurer is obligated to defendant-appellee-insured in an action brought by a third party against appellee for damages resulting from personal injuries received when a basement stairway installed by appellee collapsed.
After a trial to the court, judgment was entered in favor of appellee and against appellant for attorney fees and costs in the amount of $14,346.83 incurred by appellee in defense of the personal injury action.
Appellee was in the construction and carpenter business. He was employed by Glenrock Lodge International Order of Odd Fellows to do certain remodeling work in a building in Glenrock, including the rebuilding, reconstruction and relocation of the stairway leading to the basement. A third party, Katherine Brubaker, was using the stairway to go to the basement when it collapsed. A jury found in favor of appellee and the Glenrock Lodge in Mrs. Brubaker's action against them for damages resulting from injuries occasioned by the collapse of the stairway. After we reversed on appeal and remanded for a new trial (Brubaker v. Glenrock Lodge International Order of Odd Fellows, supra), the matter was settled without loss to appellee, except for the expended attorney fees and costs. Appellant had refused appellee's demand to defend or assume liability in the Brubaker action on the ground that the policy issued to appellee by appellant did not cover such occurrence.
Appellant issued a policy to appellee for the period of May 24, 1965 to May 24, 1968 (hereinafter referred to as first policy) and renewed it with a policy for the period of May 24, 1968 to May 24, 1971 (hereinafter referred to as second policy). The stairway collapsed with Mrs. Brubaker on October 17, 1968. In light of the "renewal" feature of the second policy, the parties have argued at length concerning whether or not provisions of the first policy applied to the occurrence in addition to, or in lieu of, the provisions of the second policy. Since appellee
"Completed operations hazard" is a risk which can be insured. However, it is a risk which need not be included in a liability insurance policy. An insurance policy may insure against liability for damages resulting to person or property on the insured's premises. Except for liability insurance covering the operation of motor vehicles, this "on premise" type of liability insurance is the most common. An insurance policy can also be obtained which also insures against liability for damages resulting to person or property from operations performed by the insured off the insured's premises. Such policy normally covers the risk only until the off-premises operation is completed. Of course, both risks can be covered in the same policy. Finally, a "completed operations hazard" policy can be obtained which insures against liability for damages to person or property that occur after the operation is completed. This type of coverage differs from regular liability coverage for damages resulting on or off premises in that it insures against defective workmanship. A policy which excludes coverage on defective workmanship normally does so by specifying the exclusion. As said in Leakakos Construction Company, Inc. v. American Surety Company of New York, 8 Ill.App.3d 842, 291 N.E.2d 176, 179 (1972):
The first policy reflects that bodily injury and property damage liability coverage was purchased for "Division" "1. Premises-Operations." Coverage was not purchased for the other three "divisions" listed on the policy as available for coverage, i.e., "2. Elevators"; "3. Independent Contractors," and "4. Products-Completed Operations." Accordingly, the policy did not apply to "completed operations." The policy defined "Products-Completed Operations" in pertinent part as the damage which "occurs after such operations have been completed or abandoned."
The second policy reflects that bodily injury and property damage liability coverage was purchased for "manufacturers' and contractors' liability insurance." Coverage was not purchased for the other four policy listed coverages, i.e., "Comprehensive General Liability Insurance," "Owners', Landlords' and Tenants' Liability Insurance," "Contractual Liability Insurance," and "Completed Operations and Products Liability Insurance." Accordingly, the policy did not apply to "completed operations and products liability." The policy defined "completed operations hazard" in pertinent part as damage which "occurs after such operations have been completed or abandoned." Additionally the page of the policy captioned "Coverage for Premises and for the Named Insured's Operations in Progress" recites that "this insurance does not apply: * * * (m) to bodily injury or property damage included within the completed operations hazard or the products hazard."
Accordingly, appellee did not purchase insurance covering liability for damages resulting from defective workmanship which occurred after completion of the operation.
The question, then, is whether or not there was any evidence to support a finding that the operation was not completed. The trial court did not make a specific finding relative thereto, but it indicated that it reviewed the matter with particular reference to, among other things, the question of "was the operation completed?" A general finding was made in favor of appellee, and the judgment was rendered in his favor. On appeal, we must treat a judgment which is rendered without special findings of fact as carrying with it every finding of fact supported by the evidence. Brug v. Case, Wyo., 600 P.2d 710, 715 (1979); Zitterkopf
However, we find none. And both parties acknowledge that the stairway work was completed. Appellee states in his brief that "the record only indicates that appellee's work on the staircase had been completed," and that "appellee had completed his work on the staircase that later collapsed." However, appellee points to the definition of completion in the second policy and contends that there is no evidence that Mrs. Brubaker had used the stairs on a previous occasion, wherefore, they were not put to the intended use under paragraph (3) of that definition.
In this, appellee overlooks three things: (1) The definition of completion in the second policy has reference to the earliest of the three times listed in the numbered paragraphs. The evidence reflects that the operation was finished without reference to being put to intended use. (2) The stairway was being put to the intended use at the time of collapse. The test of "intended use" is not for the purpose of using to test the workmanship of the construction or repair, i.e., to see if it was done correctly; rather it is for the purpose of specifying the exact time at which the operation was completed and liability ceases for damages due to work activity. (3) Finally, we can take notice of our opinion in Brubaker v. Glenrock Lodge, supra, in which we commented on the facts that Mrs. Brubaker had ascended the stairs, met Mrs. Hendricks at the top; Mrs. Hendricks said something about the stairs "feeling funny"; Mrs. Brubaker turned to go down to see what was the matter, and the collapse then occurred. We also commented therein on Mrs. Brubaker's claim against the Lodge for the Lodge's negligent use of the stairs "by moving heavy objects over them."
Appellee's testimony relative to completion of the operation was:
There is no evidence that the repair or reconstruction of the stairway was not completed. The only evidence is to the contrary. The stairway had been put to its intended use pursuant to the definition thereof in the second policy. Appellee testified that the stairway had been completed but that there "might have been other small things that we had to do * * * a few touch ups and things like that." (Emphasis added.)
Since the coverage purchased by appellee under both the first policy and the second policy is clear and does not include "completed operations hazard," appellant did not have an obligation to defend appellee in an action brought against him for damages arising out of an operation which was not covered, i.e., for damages due to defective workmanship.
The first policy provides that defense of legal action shall be provided "with respect to such insurance as is afforded by this policy * * *," and the second policy provides that appellee "shall have the right and duty to defend any suit against insured seeking damages on account of such bodily injury and property damage" (emphasis added). The bodily injury and property damage referred to is stated to be that "to which this insurance applies."
Although an insurer's duty to defend is broader than the duty to indemnify, Lanoue v. Fireman's Fund American Insurance Companies, Minn., 278 N.W.2d 49 (1979); Boston Insurance Company v. Maddux Well Service, Wyo., 459 P.2d 777 (1967), the determination as to whether or not the legal action is one which the insurer has an obligation to defend is not made on the basis of the ultimate liability of the insurer to indemnify the insured, nor is it made on the basis of whether or not the action is groundless or unsuccessful. Employers' Fire Insurance Company v. Beals, 103 R.I. 623, 240 A.2d 397 (1968); Burger v. Continental National American Group, 6th Cir.1971, 441 F.2d 1293. Rather the determination as to whether or not the insurer has a duty to defend an action against the insured is first made on the basis of the allegations of the complaint. If the complaint alleges facts within the coverage of the policy, the duty to defend exists regardless of the merits of the action or of the ultimate outcome of it. The converse is not always true. Although the facts alleged in the complaint do not bring the action within coverage of the policy, the insurer may still have a duty to defend if it is in possession of other facts, or if it reasonably should be in possession of other facts by virtue of a reasonable investigation or inquiry, which would bring the action within coverage of the policy. J.L. Simmons Co., Inc. v. Fidelity and Casualty Co., 7th Cir.1975, 511 F.2d 87; Sheppard, Morgan and Schwaab, Inc. v. United States Fidelity and Guaranty Company, 3 Ill.Dec. 138, 44 Ill.App.3d 481, 358 N.E.2d 305 (1976); City of Palmyra v. Western Casualty and Surety Company, Mo. App., 477 S.W.2d 428 (1972); United States Fidelity and Guaranty Company v. Baugh, 146 Ind.App. 583, 257 N.E.2d 699 (1970).
The third-party complaint of Glenrock Lodge International Order of Odd Fellows,
Accordingly, the two complaints alleged injuries which occurred when the stairway was put to its intended use and which occurred as a result of poor workmanship on the part of appellee. The two complaints did not set forth an occurrence within the coverage of either the first or second policies. There is nothing in the record to indicate that appellant had knowledge of facts which would bring the action within such coverage, or to indicate that appellant should have had such facts as a result of a reasonable investigation or inquiry. Actually, an investigation or inquiry would develop facts to exclude the action from such coverage.
Appellee urges us to adopt and apply the "doctrine of reasonable expectations" to this case, i.e., to make the questions of coverage and the duty to defend depend upon the reasonable expectations of the insured even though the policy provisions negate these expectations. The adoption and application of such a doctrine would make the important relationship of insurer and insured too nebulous and uncertain. We will not reverse or change the position set forth by us in Alm v. Hartford Fire Insurance Company, Wyo., 369 P.2d 216, 217-218 (1962):
I would reverse and remand with direction to enter a judgment for appellant.