No. 12629 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

ALBERT L. RIEFFLIN et al., 

Plaintiffs and Appellants, 

THE HARTFORD STEAM BOILER 

INSPECTION AND INSURANCE 

COMPANY, a Corporation, 

Defendant and Respondent. 

Appeal from: District Court of the Fourth Judicial District, 

Honorable E. Gardner Brownlee, Judge presiding. 

Counsel of Record: 

For Appellants : 

Julio K. Morales argued, Missoula, Montana 

For Respondent : 

Garlington, Lohn and Robinson, Missoula, Montana 

Gary L. Graham argued, Missoula, Montana 

Submitted: March 21, 1974 

Filed : APR e 5 1974 

Decided : 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Plaintiffs and appellants, Albert L., Robert L., and 

Margaret A. Rief flin, d/b/a The Missoula Motel, hereinafter 

referred to as plaintiffs or Riefflins, bring this appeal 

from a judgment of the district court of Missoula County in 

their favor in the amount of $1,332.48 against defendant and 

respondent, The Hartford Steam Boiler Inspection and Insurance 

Company, a Corporation, hereinafter referred to as Hartford. 

The district court judgment awarded costs of suit amounting to 

$197.24 to defendant Hartford. 

This litigation arises out of a contract of insurance 

existing between these litigants which covered a cast iron 

boiler located in the Missoula Motel, owned by the Rief flins. 

The boiler consisted of ten center sections and two end sections 

and was used to heat the motel. On February 1, 1970, one of 

the end sections cracked. Hartford performed an inspection of 

the boiler and paid a claim in the amount of $440.43 for replacement of the cracked section. By letter dated March 26, 1971, 

Hartford advised the Rief f lins : 

"In view of the amount of scale in the damaged section, 

it can be expected that the remaining sections in the 

boiler may also contain excessive scale and are subject 

to future cracking in a similar fashion. 

"Since this boiler has been in service less than 3 years, 

the amount of internal scale would indicate to us that 

an excessive amount of make up water is being required 

to maintain the water level. Excessive feedwater make 

up will result in rapid scaling; therefore, we strongly 

reconnnend that the entire heating system be investigated 

for leakage or other conditions that are resulting in 

excessive or loss of water in the system. 
"As a safeguard against possible cracking of additional 

sections, we strongly advise that the boiler be opened 

up either by removing wash out plugs or disconnecting 

pipe connections to observe the internal surfaces. We 

are advising our Inspector to contact you with regard 

to such an inspection sometime following the end of the 

present heating season. If excessive scale is detected, 

it may then be necessary to remove the deposits by 

chemical means along with washing and flushing of the 

individual sections . I1 

During the summer of 1971 the Riefflins had the boiler 

chemically cleaned at their expense in the amount of $911.96. 

Neither Hartford nor its inspector specified who would bear 

the cost of this cleaning. 

On or about October 18, 1971, an internal boiler section 

cracked. Again Hartford performed an inspection and acknowledge 

liability in the amount of $818.49 for replacement of the cracked 

section. While the boiler was dismantled for repair, a third 

cracked section was discovered on November 30, 1971. By letter 

dated December 6, 1971, Hartford advised the Riefflins: 

"We are aware that the boiler had been dismantled 

during the Summer and the sections had been chemically 

treated to remove the scale; it is quite evident that 

the cleaning process was not successful and in view 

of the density of the deposits and their location in 

the sections, it is doubtful that the deposits can 

ever be removed. 

"Under the circumstances, we can only recommend the 

replacement of all intermediate sections containing 

scale or that the entire boiler be replaced, depending 

on the expense involved. It has been our experience 

that it will be less expensive to replace the entire 

boiler. 

"The Inspector reports that a new boiler has been placed 

on order and that it will be installed to replace the 

present boiler when delivered. 

"In view of the trouble that has been experienced with 

this boiler in the past year as the result of daily 

internal scaling, we again strongly advise that the 
entire heating system be checked for leakage or loss 

of water from the system. Any leakage found should 

be repaired to minimize trouble of this nature in the 

future. I1 

The new boiler, ordered by the Riefflins prior to receipt 

of the above quoted letter, was installed in late February of 

1972 at a cost to them of $4,815.00. Again neither Hartford 

nor its inspector specified who would bear the cost of this 

replacement. 

While Riefflins were awaiting arrival and installation of 

their new boiler, the old boiler continued in use. It appears 

that during this period additional sections of the old boiler 

cracked, leaving only eight operational sections when the boiler 

was replaced in February. No proofs of loss were received by 

Hartford from Riefflins on any of these additional cracked sections. 

Rief f lins ' complaint claimed damages of $4,500 .OO caused 

by frozen heating pipes and appliances and loss of $3,000 motel 

income during the period from October 1, 1971 to March 1, 1972. 

Riefflins also sought judgment from Hartford for $911.96, the 

cost of cleaning the boiler; $4,815.00, the cost of replacing 

the entire boiler; and $818.49, the cost of replacing the second 

cracked section. 

Hartford made an offer of judgment in the sum of $1,332.48 

representing its liability for replacement costs of the second 

cracked boiler section in the sum of $818.49 and the third 

cracked boiler section in the sum of $513.99, which was based 

on a plumber's estimate. 

The contract of insurance, introduced as plaintiffs' exhibit 

one, required written notfce and proof of loss to Hartford as 
soon as practicable after an accident occurred. The policy 

defined "accident" for purposes of its coverage as: 

"* * * a sudden and accidental breakdown of the 

Object, or a par-r: thereof, which manifests itself 

at the time of its occurrence by physical damage 

to the Object that necessitates repair or replacement of the Object or a part thereof; but Accident 

shall not mean (a) depletion, deterioration, corrosion, or erosion of material * * *." 

The policy specifically excluded: 

"* * * loss from delay or interruption of business 

or manufacturing or process, (f) loss from lack of 

power, light, heat, steam or refrigeration and (g) 

loss from any other indirect result of an Accident." 

Plaintiffs bring this appeal from the judgment and order 

of the district court, and from its denial of their post trial 

motions, assigning the following issues: 

(1) Whether the trial court erred in denying (a larger) 

judgment to the plaintiffs and against the defendant. 

(2) Whether the trial court erred in denying plaintiffs' 

motion to amend and make additional findings of fact and conclusions of law. 

(3) Whether the trial court erred in denying plaintiffs' 

motion for a new trial on the ground the evidence did not justify 

the verdict. 

(4) Whether the trial court erred in failing to grant 

the mtion for a new trial on the grounds that error was committed during trial by denying plaintiffs' presentation of 

evidence regarding cracking of boiler sections which took place 

subsequent to October 31, 1971. 

The arguments propounded by plaintiffs in support of these 
issues concern primarily the legal operation of the insurance 

contract between the litigants and collaterally the effect of 

alleged negligence by Hartford in its performance of the boiler 

inspections and proposed application of the doctrine of equitable 

estoppel against Hartford. 

Regarding the primary argument, the trial court found 

that the buildup of scale within the boiler was not "sudden 

and accidental" and was not a "breakdown of the object" which 

was manifested at the time of the accident "by physical damage 

to the object that necessitates repair or replacement of the 

object" and hence was not an "accident" under the terms of the 

policy. Consequently, the trial court ruled there was no coverage 

under the policy of the Riefflins' expenses of $911.96 for the 

boiler cleaning done during the summer of 1971 or of their 

expenses of $4,815.00 for the boiler replacement done in 

February of 1972. 

Based upon the record before us, we concur with these 

rulings of the trial court. Both these actions were undertaken 

by the Riefflins in an attempt to remedy the internal scaling 

problem. In interpreting and applying insurance contracts, the 

Montana rule has been to use the common rather than some technical 

usage or meaning of definitional terms in the policy, Wills v. 

Midland Nat. L. Ins. Co., 108 Mont. 536, 91 P.2d 695. The 

internal boiler scaling problem was not an accident under the 

usual meaning of the term as defined in the insurance policy 

issued by Hartford. 

Hartford has paid or is now obligated to pay, under the 
district court's judgment, the replacement cost of three cracked 

boiler sections. The trial court found that failure of the 

Riefflins to submit notifications of accident and proof of loss 

as soon as practicable, as required by the policy, barred any 

claims for reimbursement for sections which may have cracked 

subsequent to these first three. Appellants rely on the case 

of Staggers v. U.S.F.& G. Co., 159 Mont. 254, 496 P.2d 1161, in 

which this Court held that "substantial compliancef1 by insured 

in furnishing insurer with proof of loss as required for recovery 

under a fire insurance policy was sufficient. The existence of 

"substantial compliance" in Staggers was predicated upon the fact 

that the insureds filled out and submitted statement of loss forms 

which the insurer did not object to for almost two years. In the 

instant case the insureds filed nothing for nearly two years concerning the cracked boiler sections in question. However, the 

Riefflins contend that their insurer knew of the prior scale 

accumulation problem and of the three boiler sections which had 

cracked previously and therefore should have anticipated the later 

cracking of boiler sections. To interpret the concept of substantial compliance this broadly would eliminate the need for 

any compliance with insurance policy provisions. We find that 

the trial court was correct in its ruling that the Riefflins 

failed to comply with the proof of loss requirements for any 

except the first three cracked boiler sections. 

The trial court also found, and we concur, that the insurance specifically excluded from coverage the incidental damages 
from frozen pipes claimed in the amount of $4,500 and from 

interruption of business losses claimed in the amount of $3,000. 

The record before us does not support appellants' allegations of negligence on the part of Hartford in conducting the 

inspections of the boiler. Under the terms of the insurance 

contract Hartford reserved the right but did not assume the 

duty to inspect. As a general principle of our law of torts, 

however, once Hartford undertook to inspect the boiler and make 

recommendations, they were obliged to do so in a nonnegligent 

manner. The hereinabove quoted passages of letters from 

Hartford to Riefflins recommend the "excessive feedwater" 

problem be remedied in order to correct the scaling. There is 

no evidence in the record that these recommendations were followed 

until it became necessary to replace the entire boiler. The 

plumbing contractor who installed the new boiler testified that 

he used a water softener and chemical additives in the new feedwater system, to help relieve scaling. There is no testimony 

that these installations would have corrected the scaling condition existing in the old boiler, or that a boiler not using 

excessive amounts of feedwater would require them. 

The appellants contention concerning application of equitable 

estoppel is defective in the first instance through their failure 

to raise the issue before the trial court, State Highway Comm. 

v. Voyich, 142 Mont. 355, 384 P.2d 765, and in the second instance 

the record discloses no statement or conduct on the part of 

Hartford anmunting to a misrepresentation, Mundt v. Mallon, 

106Mont. 242, 76 P.2d 326. 
Finally, concerning the trial court ' s ruling assessing 

costs against plaintiffs and appellants Riefflins, Rule 68, 

M.R.Civ.P. provides in pertinent part: 

"* * * If the judgment finally obtained by the of feree 

is not more favorable than the offer (of judgment), 

the offeree must pay the costs incurred after the 

making of the offer. * * *" 

We find Rule 68, M.R.Civ.P. clearly applicable and 

correctly applied by the trial court. 

We find no error in the judgment of the district court, 

and it is hereby affirmed. 

Justice 

We goncur : :. 

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