Case Name: OCEANONICS, INC. and the Rucker Company, Plaintiffs-Appellees, v. PETROLEUM DISTRIBUTING COMPANY and Tesoro Petroleum Corporation, Defendants-Appellants; ALL-STAR INSURANCE CORPORATION and Market Insurance Company, Third-Party Defendants-Appellees, TAYLOR'S WELDING SERVICE, INC., Third-Party Defendant-Appellant
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1973-06-05
Citations: 280 So. 2d 874
Docket Number: No. 4158
Parties: OCEANONICS, INC. and the Rucker Company, Plaintiffs-Appellees, v. PETROLEUM DISTRIBUTING COMPANY and Tesoro Petroleum Corporation, Defendants-Appellants, ALL-STAR INSURANCE CORPORATION and Market Insurance Company, Third-Party Defendants-Appellees, TAYLOR’S WELDING SERVICE, INC., Third-Party Defendant-Appellant.
Judges: Before FRUGÉ, HOOD and CULPEP-PER, JJ.
Reporter: Southern Reporter, Second Series
Volume: 280
Pages: 874–888

Head Matter:
OCEANONICS, INC. and the Rucker Company, Plaintiffs-Appellees, v. PETROLEUM DISTRIBUTING COMPANY and Tesoro Petroleum Corporation, Defendants-Appellants, ALL-STAR INSURANCE CORPORATION and Market Insurance Company, Third-Party Defendants-Appellees, TAYLOR’S WELDING SERVICE, INC., Third-Party Defendant-Appellant.
No. 4158.
Court of Appeal of Louisiana, Third Circuit.
June 5, 1973.
Rehearings Denied Aug. 15, 1973.
Jones & Jones by J. B. Jones, Jr., Cameron, for defendant-appellant, Taylor’s Welding Service, Inc. and H. Ward Fonte-not.
Brame, Stewart & Bergstedt by Joseph A. Brame, Lake Charles, for defendant-ap-pellee, Market Ins. Co.
Plauché, Smith & Hebert by A. Lane Plauché, Lake Charles, for defendant-ap-pellee, All-Star Ins. Corp.
Liskow & Lewis by Kenneth E. Gordon, Jr., Lafayette, for defendants-appellees-ap-pellants.
Before FRUGÉ, HOOD and CULPEP-PER, JJ.

Opinion:
HOOD, Judge.
This is an action for damages instituted by Oceanonics, Inc., and The Rucker Company against Petroleum Distributing Company, Inc., ("Pedco") and Tesoro Petroleum Corporation ("Tesoro"). Both of these defendants answered and filed third party demands against Taylor's Welding Service, Inc., and its alleged insurers, Market Insurance Company ("Market") and All-Star Insurance Corporation ("All-Star").
Market and All-Star filed motions for summary judgment seeking to have the third party actions against them dismissed. After a hearing, a summary judgment was rendered by the trial court on November 17, 1972, dismissing the third party action against All-Star, and a separate summary judgment was rendered on November 30, 1972, dismissing the third party action against Market. Pedco, Tesoro and Taylor's Welding Service have appealed.
The principal question presented is whether the loss sustained by plaintiffs was covered in the policy which was issued by Market to Taylor's Welding Service, effective September 12, 1969, or whether it was covered in the policy which was issued by All-Star to Taylor's, effective September 12, 1970. The trial judge concluded that coverage was not provided by either of those policies. We affirm.
Taylor's Welding Service was engaged in the business of performing general welding work in Cameron Parish during the year 1970. On August 13, 1970, an employee of Taylor's performed a weld on the boom of a crane owned by Pedco. Almost three months later, on November 8, 1970, the boom collapsed while it was being used by Pedco and Tesoro to lift a heavy machine known as a "mole," owned by plaintiff Oceanonics, and as a result of that collapse the mole was damaged or destroyed. The welding operations conducted by Taylor's had been completed before the crane collapsed, and the damage occurred away from the premises owned by Taylor's.
Plaintiffs sued Pedco and Tesoro for the damages they sustained, alleging as the principal ground for that claim that the defendants were negligent in failing to maintain the crane in such a state of repair as to be able to lift the crane's represented capacity. Pedco and Tesoro then filed third party demands against Taylor's Welding Service and its alleged insurers, Market and All-Star, alleging that an employee of Taylor's was negligent in performing a defective weld on the boom of the crane, and that his negligence in that respect was the proximate cause of the loss.
Market had issued a comprehensive general liability insurance policy to Taylor's Welding Service, for a term beginning September 12, 1969, and ending September 12, 1970. The policy specifically provided coverage for "completed operations and products liability."
All-Star issued a comprehensive general liability policy to Taylor's Welding Service, for a term beginning September 12, 1970, and ending September 12, 1971. This policy did not provide completed operations and products liability coverage.
The allegedly defective welding thus was performed by Taylor's Welding Service on August 13, 1970, while the Market policy was in effect. The boom collapsed and plaintiffs' machine was damaged on November 8, 1970, after the term of the Market policy had expired and while the All-Star policy was in effect. There is a dispute as to whether the loss was covered by the Market policy, or by the All-Star policy, or by either of said policies.
We will consider the Market policy first. We have already noted that it provided completed operations coverage. The protection provided in that type coverage is explained in the policy as follows:
" 'Completed operations hazard' includes bodily injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured."
The property damage for which plaintiffs seek to be compensated arose out of "operations" conducted by the insured, and in reliance upon a representation made by the insured with respect thereto. The property damage occurred after such operations had been completed, and it occurred away from the premises owned by or rented to the named insured. The loss sustained by plaintiffs thus is precisely the type loss which is described in the above quoted part of the policy.
In connection with the completed operations coverage, the policy also provides that:
"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . property damage to which this insurance applies, caused by an occurrence''
The word "Occurrence" is defined in the policy as meaning " . . . an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured."
The policy also stipulates that, "This insurance applies only to bodily injury or property damage which occurs during the policy period within the policy territory."
The Market policy thus obligates the insurer to pay on behalf of the insured all sums which the latter shall become legally obligated to pay as property damages caused by an "occurrence." An "occurrence" is defined as an accident which results in property damage "during the policy period." And, the policy then adds that this insurance applies only to property damage "which occurs during the policy period." We interpret the policy as providing completed operations coverage only if the bodily injury or property damage occurs during the policy period.
The property damage which forms the basis for the instant suit occurred almost two months after the term of the Market policy had expired. The Market policy thus provided no coverage for that loss.
Appellants argue, however, that the "occurrence" took place or the loss occurred when the tortious act was committed, that is, when the weld was made on August 13, 1970, and not when the damage was sustained or when it became manifest (on November 8, 1970). They contend that Market is liable because the tortious act was committed during the term of the Market policy. Three cases are cited to support that argument. Kendrick v. Mason, 234 La. 271, 99 So.2d 108 (1958); Taylor Contracting & Supply Company v. American Mutual Liability Ins. Co., 163 So.2d 450 (La.App. 2 Cir. 1964), and Audubon Coin & Stamp Co. v. Alford Safe & Lock Co., 230 So.2d 278 (La.App. 1 Cir. 1969).
The insurance policy involved in each of the cited cases required the insurer to pay on behalf of the insured all sums which the latter become obligated to pay as damages because of destruction of property caused by "accident." Each such policy either provided that it applied only to "accidents" which occurred during the policy period, or it specifically excluded coverage of "accidents" which occurred after completion of the work. There was no provision in any such policy to the effect that the coverage applied only to property damage which occurred durning the policy period.
The courts, in interpreting those policy provisions, held that the term "accident," as used in each policy, referred to the tortious act which eventually caused the property damage, and that the "accident" thus was deemed to have • occurred at the time the tort was committed, and not when the damage was sustained or when it became manifest.
In Taylor Contracting & Supply Company v. American Mutual Liability Ins. Co., supra, for instance, the court stated the rule as follows:
"It is clear to this court that the King [King v. Mason, 234 La. 299, 99 So.2d 117] and Kendrick cases determine that the loss was caused by accident at the time the tort was committed and not the time when the damage was sustained or became manifest."
And, in Audubon Coin & Stamp Co. v. Alford Safe & Lock Co., supra, the court said:
"The rule is now established that loss occurs upon the happening of the event giving rise thereto, that is at the time the tort is committed, and not when the loss is discovered or becomes manifest."
The cited cases are applicable to policies which contain stipulations similar or identical to the provisions in the policies which were involved there.
The policy which was issued by Market and is before us in the instant suit, however, contains provisions which are significantly different from the policy provisions considered in the Kendrick, Taylor and Audubon cases. The Market policy, for instance, binds the insurer to pay sums which the insured may become obligated to pay as damages caused by an "occurrence," instead of an "accident." And, an "occurrence" is described in the policy as an accident which results in property damage during the policy period. The Market policy also contains another provision which states specifically that it applies only to property damage which occurs during the policy period. There were no provisions in the policies involved in Kendrick, Taylor and Audubon to the effect that coverage applied only to property damage which occurred during the policy period.
It appears to us that the language used in the Market policy was designed for the express purpose of avoiding the results of the Kendrick, Taylor and Audubon cases. The policy stipulates in clear, unambiguous language that coverage is provided only for property damage which occurs during the policy period. That policy provision cannot be reconciled with the rule which was applied in the cited cases.
In the absence of a conflict with statutes or with public policy, insurers have the same rights as do individuals to limit their liability and to enforce whatever conditions they please upon their obligations. In such an event unambiguous provisions in the insurance contract limiting liability must be given effect. Niles v. American Bankers Insurance Co., 258 So.2d 705 (La.App. 3 Cir. 1972).
We find that in this instance Market had the right to limit its liability to property damage which occurred during the policy period. Since the provisions in the Market policy are different from those contained in the policies involved in Kendrick, Taylor and Audubon, we hold that those cases are not applicable here. Our conclusion is that no coverage was provided in the Market policy since the property damage did not occur during the policy period.
Appellants contend, alternatively, that Market is liable under the "collapse hazard" coverage provided in the insurance contract which it issued to Taylor's. That type of coverage is defined in the policy as follows:
" 'collapse hazard' includes 'structural property damage' as defined herein and property damage to any other property at any time resulting therefrom. 'Structural property damage' means the collapse of or structural injury to any building or structure due to (1) grading of land, excavating, borrowing, filling, back-filling, tunneling, pile driving, cofferdam work or caisson work or (2) moving, shoring, underpinning, raising or demolition of any building or structure or removal or rebuilding of any structural support thereof. The collapse hazard does not include property damage (1) arising out of operations performed for the named insured by independent contractors, or (2) included within the completed operations hazard or the underground property damage hazard, or (3) for which liability is assumed by the insured under an incidental contract; "
It is argued that the term "structural property damage," as used in the policy, includes the collapse of the boom due to the "rebuilding of any structural support thereof." Appellants contend that Taylor's welded a structural support of the boom, and they argue that if damage occurs to other property "at any time" as a result thereof, coverage is included in the "collapse hazard" provision of the policy.
We have concluded that the collapse hazard feature of the policy does not include coverage of the loss sustained by plaintiffs in this case. The above quoted portion of the policy includes a stipulation that "The collapse hazard does not include property damage . . . included within the completed operations hazard ." We have found that the loss sustained by plaintiffs here is precisely the type of loss which is included in the policy definition of "Completed Operations Hazard." Market, in fact, would have been liable under the Completed Operations Coverage of the policy had the property damage occurred during the policy period.
We interpret the above mentioned exclusionary clause to mean that a loss which falls within the definition of a "completed operations hazard" is excluded from coverage under the "'collapse hazard" provision of the policy. We thus hold that the property damage which occurred on November 8, 1970, is excluded from coverage under the collapse hazard provision of the Market policy.
We turn now to a consideration of the policy issued to Taylor's Welding Service by All-Star. The policy contains several provisions which are similar to those contained in the Market policy, but it does not provide completed operations or products liability coverage. The definitions of "completed operations hazard" and of "collapse hazard" in the All-Star policy are identical to those contained in the Market contract.
Although the property damage sustained by plaintiffs occurred during the term of the All-Star policy, the insurer in that policy is not liable because it did not provide completed operations coverage.
All-Star is not liable under the general liability coverage provided in its policy, because under the heading "Exclusions," the policy provides that "This insurance does not apply: . . . (m) to bodily injury or property damage included within the completed operations hazard or the products hazard." We have held that the loss sustained by plaintiffs falls within the definition of the completed operations hazard. That loss thus is excluded from coverage under the general liability features of the policy.
We find that the loss sustained by plaintiffs, or by third party plaintiffs, is not covered under the "collapse hazard" provisions of the All-Star policy. The All-Star contract, like the Market policy, provides that "The collapse hazard does not include property damage . (2) included within the completed operations hazard." Also, under the general liability provision of the policy there is a specific exclusion of "property damage included within the completed operations hazard." These provisions effectively exclude coverage of, and relieve All-Star from liability for, the loss which was sustained by plaintiffs as a result of the collapse of the Pedco boom.
Appellants contend, finally, that All-Star is obligated to "defend or pay" under its policy, because- of allegations in an amended third-party petition of Pedco to the effect that an employee of Taylor's Welding Service was negligent in having failed to "warn" Pedco that the weld was defective and that the crane would not lift its rated capacity.
The argument is that Taylor's is protected under the general liability provisions of the All-Star policy (Coverage B — Property Damage Liability) in the event it should become legally obligated to pay property damages because of its employee's alleged failure to warn. Appellants contend that the insured's liability on that ground is not excluded from coverage by any other provision of the contract. They concede that completed operations hazards are excluded from general liability coverage, but they take the position that Taylor's failure to warn does not constitute a completed operations hazard, and that there thus is no exclusion of coverage insofar as this cause of action against Taylor's is concerned. They rely on the case of Cooling v. United States Fidelity and Guaranty Co., 269 So.2d 294 (La.App. 3 Cir. 1972).
In the Cooling case the plaintiff sued his general liability insurer to recover the amount which he had paid for attorney's fees in defending two personal injury suits which had been instituted against him. The personal injury suits were based on Col-ing's alleged "failure to warn" the purchaser of a diesel engine of the need of installing adequate safety devices on that engine. The defendant insurer in the cited case denied liability on the ground that completed operations and products liability hazards were specifically excluded from general liability coverage. It contended that the alleged "failure to warn" constituted a completed operations or a products liability hazard, and that coverage thus was excluded.
We held that the personal injury suits against Cooling involved "neither a defec tive product sold nor faulty workmanship," that his alleged failure to warn could not be classified as a completed operations or a products liability hazard, and that the exclusions did not specifically exclude coverage to him under those peculiar factual situations.
We distinguish the Cooling case from the instant suit for two reasons. In the first place, Cooling was seeking only to be reimbursed the amount which he had paid as attorney's fees to defend the personal injury suits against him. The obligation of an insurer to defend its insured is broader than its liability for damage claims. Benoit v. Fuselier, 195 So.2d 679 (La.App. 3 Cir. 1967); American Home Assurance Company v. Czarniecki, 255 La. 251, 230 So.2d 253 (1970). The issues presented in the instant suit relate only to the insurer's liability for the damages which the insured may become obligated to pay. No question has been raised here as to the insurer's duty to provide a defense for its insured. The Cooling case thus did not determine the issues which are presented here.
Secondly, neither the Cooling case nor the personal injury suits which preceded it involved the sale of defective products or the performance of faulty workmanship. There thus was no relationship between Cooling's alleged "failure to warn" and any conceivable completed operations or products liability hazards. That is not true of the instant suit. This suit does involve allegations of faulty workmanship and a representation made with respect thereto. We have held that the' claims against Taylor's are included in the definition of completed operations hazard. There thus is a close relationship between Taylor's alleged "failure to warn" and the completed operations hazard on which the entire claim against Taylor's is based.
We believe that the exclusion of completed operations hazard from the general liability coverage provision in the All-Star policy, had the effect of excluding from coverage the claim asserted against Taylor's based on allegations that its employee had failed to .warn Pedco of the defective weld and of the inability of the crane to lift its rated capacity.
Our ultimate conclusion is that the All-Star policy does not provide coverage for the loss sustained by plaintiffs in this case, and that the trial judge correctly dismissed the third party demands against that insurer.
For the reasons assigned, we hereby affirm both of the judgments appealed from. All costs of this appeal are assessed to appellants.
Affirmed.
FRUGÉ, J., dissents with written reasons.