Title: Fidelity & Cas. Co. of NY v. Halibut Producers Cooperative
Citation: 437 P.2d 182, 73 Wash. 2d 153
Docket Number: 38876
State: Washington
Issuer: Washington Supreme Court
Date: February 8, 1968

73 Wn.2d 153 (1968) 437 P.2d 182 FIDELITY AND CASUALTY COMPANY OF NEW YORK, Respondent and Cross-appellant, v. HALIBUT PRODUCERS COOPERATIVE, Appellant.[*] No. 38876. The Supreme Court of Washington, Department Two. February 8, 1968. EVANS, J.[] The defendant, Halibut Producers Cooperative, herein referred to as Halibut Producers, appeals from a judgment entered upon the verdict of a jury denying coverage under an insurance policy issued by the plaintiff, Fidelity and Casualty Company of New York. On Good Friday, March 27, 1964, an earthquake struck Seward, Alaska, at 5:36 p.m. This earthquake was rated as one of the "great earthquakes." It had a Richter magnitude of 8.4 to 8.6 and released 400 to 500 times the energy of the Seattle earthquakes of 1949 and 1960. It was of far greater magnitude than the San Francisco earthquake of 1906. The shaking lasted approximately 4 minutes and caused *154 massive submarine slides of earth along the shores of Resurrection Bay on Seward's waterfront. There is no evidence in the record to establish where the slides started, or what their sequence was. Seward was in the maximum damage area, and in this area the slides began within about half a minute after the quake came, and generated seismic waves of tremendous size and speed. The plant of Halibut Producers stood partly on shore and partly on a dock on the Seward waterfront. This plant received, processed, froze, and stored halibut, salmon, and shrimp, and was commonly known as the "San Juan Dock." The principal machines used in the operation of this plant were in a building with a concrete foundation on solid ground. The plant was annihilated during or just after the earthquake, and its site is now approximately 40 feet under water. The new shoreline is approximately 300 feet from the old one. Heavy equipment from the plant was found scattered both inland above the new shoreline and three quarters of a mile distant in the water near the new shoreline. This case arose out of claims made by Halibut Producers under its boiler and machinery insurance policy issued by the Fidelity and Casualty Company of New York, and was brought to issue by an action commenced by the respondent insurance company to obtain a judgment declaring that it was not obligated to pay for the losses. Halibut Producers counterclaimed for its losses alleged to have been suffered by reason of an accident insured under the policy. The policy defines "accident" as follows: .... The "objects" referred to are certain designated pieces of equipment installed on the San Juan Dock and used in the *155 operation of appellant's business. These insured objects, which were destroyed by the earthquake, are the subject of this lawsuit. The insurance company claimed noncoverage upon two grounds. First, it was its contention that the damage to the insured equipment was not an "accidental breakdown" of the machinery and equipment as that term is used in the policy, and that the court should so rule as a matter of law. This the court refused to do. Respondent cross-appeals from this ruling. Second, it was respondent's contention that, if the San Juan Dock collapsed before the seismic wave struck, the loss resulted from a "breakdown of the structure or foundation supporting the objects," and, therefore, fell within the exclusionary clause of subparagraph (e), above quoted. It was the contention of Halibut Producers that if the earthquake was the proximate cause of the loss, there would be coverage under the terms of the policy. Since it was conceded by respondent that the earthquake was, in terms of traditional tort thinking, the proximate cause of the loss, this contention did not raise any issue of fact, and, if sustained, would have allowed recovery as a matter of law. This the court refused to do, because of the holding of Bruener v. Twin City Fire Ins. Co., 37 Wn.2d 181, 222 P.2d 833, 23 A.L.R.2d 385 (1950). Bruener holds in effect that in insurance cases of this type the issue of "cause of damages" is limited to the last direct cause of damage, and that the rule of proximate cause in actions for torts has no application. Accordingly, the court presented to the jury the factual issue of what the last direct cause of damage was. Instruction No. 3, to which no exception was taken, provides as follows: The jury, by its verdict, found that the damage was caused by the earthslides before, not after, and not simultaneously with, a seismic wave. Halibut Producers timely moved the court for judgment n.o.v. or, in the alternative, for a new trial. Both motions were denied, and judgment was entered upon the verdict of the jury declaring that the insurance policy did not provide coverage for the losses. Appellant assigns as error the refusal of the court to grant Halibut Producers' motion for judgment notwithstanding the verdict of the jury on the grounds that there was neither evidence nor reasonable inferences therefrom to support the verdict of nonliability of the insurance company. With this, the court cannot agree. The witness Edmund Endresen, a police officer, was in a boathouse near the waterfront when the quake started. While the shaking progressed, he ran about 700 feet upland from the shore, stopped, and looked back in the direction of the San Juan Dock. He testified, in part, as follows: Mr. William Shannon, a consulting engineer, and soil expert, whose firm was assigned by the Army Corps of Engineers to conduct an investigation of the landslides which resulted from the earthquake, concluded that the earthslide caused the water disturbance that appellants contend destroyed the San Juan Dock, and, accordingly, the jury was justified in believing the earthslide preceded the wave: Mr. Shannon also testified that the earthslide started very shortly, "perhaps some 30 seconds," after the start of *158 the strong earth movement. Again Mr. Shannon gave as his opinion: On the other hand, the plant manager for Halibut Producers testified that he saw the San Juan Dock standing many seconds after the quake started, at the same time that he took a picture of the incoming wave. Also, Dr. Robert Dean, a wave expert, testified that there was a high degree of probability that the San Juan Dock was still standing when it was struck by the seismic wave. He saw no other way in which the debris, and especially a particular pump which weighed 250 pounds, could have been thrown 100 yards inland. Thus there was evidence, as well as inferences from that evidence, sufficient to support the contention of either the respondent or the appellant. The jury chose to accept the testimony of the witnesses supporting the contention of respondent. The court cannot disturb this finding. [1, 2] The appellant also assigns as error the court's giving of instruction No. 3, to which it did not except at the time of trial. Appellant recognizes the necessity for excepting to an instruction before it may be questioned on appeal, but argues that a sufficient exception cannot be taken to an instruction which correctly states the case law of Washington but the validity of which the appellant attacks. No authority is cited in support of this contention. The record discloses that, at a conference held in chambers to discuss instructions, the court indicated agreement with counsel for appellant that the Bruener case, supra, was incorrect, and expressed a willingness to rule accordingly. Counsel for respondent informed the court that if it were to hold that the test for liability under the policy in question is proximate cause, a verdict for Halibut Producers should be directed, as such a determination would establish a clear issue for appeal. By not excepting to instruction *159 No. 3, appellant made a choice to proceed to the jury on the contested fact issues rather than risk a reversal on appeal on an issue which placed upon appellant the burden of convincing this court that the Bruener decision should be overruled. While that appears to have been a reasonable choice to make at the time, it, nevertheless, precludes the appellant, having lost on one issue, from trying out a new issue on appeal. In Rank v. Alaska S.S. Co., 45 Wn.2d 337, 339, 274 P.2d 583 (1954), the appellant failed to make an exception which would properly apprise the court of its position, and the Supreme Court refused to consider the appellant's contention on appeal. The court set out the reasons for requiring a proper exception: An issue very similar to that raised by appellant was dealt with in Unemployment Compensation Dep't v. Hunt, 17 Wn.2d 228, 135 P.2d 89 (1943). In that case the question whether a statute was constitutional or not was raised for the first time on appeal. The court held: .... *160 The rule of the Hunt case, supra, was again applied in Long v. Odell, 60 Wn.2d 151, 372 P.2d 548 (1962). Since the appellant did not except to what it now claims to be an erroneous statement of the law, it has invited any resulting error. As stated in Graham v. Graham, 41 Wn.2d 845, 851, 252 P.2d 313 (1953): Appellant having taken no exception to the trial court's instruction No. 3, that instruction became the law of the case. Seattle v. Harclaon, 56 Wn.2d 596, 354 P.2d 928 (1960). See, also, Anderson v. Blossom, 63 Wn.2d 330, 387 P.2d 507 (1963); Wright v. Kennewick, 62 Wn.2d 163, 381 P.2d 620 (1963); Crippen v. Pulliam, 61 Wn.2d 725, 380 P.2d 475 (1963). The judgment of the trial court is affirmed. FINLEY, C.J., HILL, HUNTER, and HAMILTON, JJ., concur. [*] Reported in 437 P.2d 182. [] Judge Evans is serving as a judge pro tempore of the Supreme Court pursuant to Art. 4, § 2(a) (amendment 38), state constitution.