Case Title: Kendall Plumbing, Inc. v. St. Paul Mercury Ins. Co.

Citation: 189 Kan. 528, 370 P.2d 396

Docket Number: 42,611

State: kansas

Court: Kansas Supreme Court

Date: 1962-04-07T00:00:00Z

Document:
189 Kan. 528 (1962)
370 P.2d 396
KENDALL PLUMBING, INC., Appellant,
v.
ST. PAUL MERCURY INSURANCE COMPANY, Appellee.
No. 42,611

Supreme Court of Kansas.
Opinion filed April 7, 1962.
Marvin J. Martin, of Wichita, argued the cause, and John D. McBride, of Wichita, was with him on the briefs for the appellant.
William Tinker, of Wichita, argued the cause, and Arthur W. Skaer, Hugh P. Quinn, William Porter, Alvin D. Herrington, and Darrell E. Kellogg, all of Wichita, were with him on the briefs, and Richard T. Foster and W. Getto McDonald, both of Wichita, of counsel, for the appellee.
The opinion of the court was delivered by
PARKER, C.J.:
This action involves the construction of exclusion provisions of an insurance policy covering property damage liability. The district court found in favor of the insurance carrier and the insured has appealed.
*529 The facts, all of which are stipulated or admitted by the pleadings, may be summarized as follows:
The Kendall Plumbing, Inc., entered into a contract to install a complete heating and air conditioning system in the Brown Building, Wichita, Kansas. In the prosecution of the work Kendall purchased, from two separate manufacturers, and installed a refrigerator unit and a Square D Starter. The only connection between the refrigerator unit and the Square D Starter was electrical wires.
At the time of the installation Kendall negligently failed to make the necessary pressure settings to the spring unit within the Square D Starter. About two months after the construction was completed the starter was disengaged by a Brown Building employee in the regular course of his duties and, because of insufficient spring pressure to push back the contactor within the Square D Starter, the electricity arced across and welded the contactors together. The power provided through the starter not being shut off the refrigerator unit ran without lubrication and was damaged in the sum of $2,711.73.
During all times material to this controversy Kendall had a property damage liability insurance policy with the appellee, The St. Paul Mercury Insurance Company, which was in full force and effect. It contained the following provision:
The policy also contained an exclusion provision which excluded, from the coverage above mentioned, damage to or destruction of 
Kendall paid for the damages to the Square D Starter and the refrigerator unit. It admits there is no liability on the part of the insurance carrier for damage to the Square D Starter but seeks to recover from such carrier the damage to the refrigerator unit. There was no other property damage caused by the defective installation of the Square D Starter. The district court found as follows:
Judgment was rendered accordingly. Kendall appeals.
The insurance carrier (hereinafter referred to as the appellee) contends that the exclusion provision excludes coverage damage to any item or part handled by Kendall (hereinafter referred to as the appellant) whether or not such item or part contributed to the injury.
Appellant contends that the exclusion provision excludes only the defective part which caused the injury but does not exclude other items handled or installed by it which were damaged by the defective item. This contention cannot be sustained. The exclusion provision definitely states that any goods or products handled or work completed by the insured are excluded. It is clear that the policy was intended to cover only damage to property or items which had not been handled by appellant. Goods or products handled by it, or work completed by it, were specifically excluded.
This court has not heretofore been called upon to place an interpretation on an exclusion provision such as the one now before us. However, similar provisions have been considered by courts of other states. In the case of Liberty Bldg. Co. v. Royal Indem. Co., 177 Cal. App. 2d 583, 2 Cal. Rptr. 329, 346 P.2d 444, the court had under consideration a similar exclusion provision where a building contractor had constructed a large number of dwelling houses and many of the houses developed defects in the outside stucco walls. We quote from the opinion at some length because it makes reference to earlier decisions from other courts which will not need further mention. In the opinion the court said:
In the case of Hauenstein v. St. Paul-Mercury Indemnity Co., 242 Minn. 354, 65 N.W.2d 122, the court had under consideration an exclusion clause similar to the one under consideration. In that case a plaster distributor sold plaster which after being applied shrunk and cracked making it necessary to remove the plaster and apply new plaster to the walls and ceilings of the building. The plaster distributor was sued and its insurer refused to defend. In the opinion the court stated:
The court refused to allow recovery under the policy for the defective plaster but did allow resulting damages to the building.
Appellant relies upon the case of Pittsburgh Plate Glass Co. v. Fidelity & Cas. Co. of N.Y., 281 F.2d 538. The case does not support its contention. In that case Pittsburgh Plate Glass Co. sold paint to a manufacturer of jalousies or outside venetian blinds. The paint was applied to louvers and other steel parts which were incorporated into the jalousies. The paint was defective and peeled and flaked. The surfaces were exposed to the elements and rusted and deteriorated. Pittsburgh was sued and it requested its insurer, under a policy containing similar provisions to the one under consideration, to defend. The insurer refused to defend, Pittsburgh *532 settled the suit pending against it and brought an action against the insurance carrier for indemnity. The district court had entered judgment for the insurer. The court of appeals reversed and remanded the case to the district court for further proceedings on the basis there was damage to the jalousies in addition to the defective paint. A footnote appended to the opinion reads:
Appellant next contends that the exclusion clause is ambiguous and should therefore be subjected to the rule that ambiguities in the wording of an insurance contract are to be construed in favor of the insured. Although ambiguities in the wording of an insurance contract are to be construed in favor of the insured, this rule of construction has no application whatever to language that is clear in its meaning. Unless a contrary intention is shown, words used in an insurance contract are to be given a natural and ordinary meaning that they convey to the ordinary mind.
In the more recent case of Smith v. Mutual Benefit Health & Acc. Ass'n, 175 Kan. 68, 258 P.2d 993, this court cited with approval Knouse v. Equitable Life Ins. Co., 163 Kan. 213, 181 P.2d 310. In the Knouse case we said:
See, also, Braly v. Commercial Casualty Ins. Co., 170 Kan. 531, 227 P.2d 571, where, in considering established principles of contractual construction, we made the following statement:
We find nothing ambiguous in the words or phrases used in the exclusion clause and this court should not search for ambiguities where the words used in the contract have a common and well understood meaning.
What has been heretofore stated and held requires that the judgment of the trial court be affirmed and it is so ordered.