Opinion ID: 2418829
Heading Depth: 1
Heading Rank: 5

Heading: comprehensive general liability insurance

Text: This endorsement    forms a part of policy No. 7762-74-81   . It is agreed that such insurance as is afforded by the Bodily Injury Liability Coverage and the Property Damage Liability Coverage does not apply to bodily injury or property damage included within the Completed Operations Hazard or the Products Hazard. All necessary components of the standby facility were assembled, connected and installed at Doane's plant in August, 1971. It was checked and the determination made that everything was hooked up   , that there was a source of fuel, and that it was operable   . It was ready to be adjusted and tested under cold weather conditions. In October, it was checked and tested again, this time by Abco turning off the natural gas supply and starting up the standby system. From this, it was determined that all components were functioning. Adjustments were made at this time, but it was still too warm to make such adjustments, if any, as would be necessary for wintertime operation. In November or December, 1971, before the facility could be tested and adjusted under cold weather conditions, the supplier curtailed the use of natural gas for industrial purposes. The standby system was turned on and, after brief use, it failed. Abco made several adjustments in an attempt to locate the difficulty and correct it, all to no avail. After many tests and experiments, it was determined by Abco that the problem was in the vaporizer; that the vaporizer was defective and not functioning as required in that it was not converting into vapor all the liquid propane supplied to it but was permitting a liquid carryover to come through into the mixer. Natco, informed that its vaporizer was not meeting the requirements specified by Abco, said that it was. Nevertheless, it inspected the system and with Abco attempted to keep it operating (before and after the fire) through periods when the natural gas supply was curtailed, but each time it would fail after brief use. On February 4, 1972, during the period of time when Natco was attempting to adjust or correct the vaporizer, an explosion and fire, apparently caused by the standby facility, occurred at Doane's and caused considerable damage to its plant, but none to the standby facility. Some time after the fire, Natco replaced the vaporizer with another and from that point on the facility functioned as required without mishap. The requirements and capacity specified by Abco for the vaporizer were never changed or altered either for the original, which was deficient, or for its replacement; the specifications remained the same from beginning to end. After the fire, Doane sued Abco and others (suppliers of components) to recover for the damages caused by the fire, alleging negligence (count I) and breach of warranty (count II). Abco requested Federal to defend it against Doane's suit pursuant to the policy, but Federal refused. Grounds for its refusal were that, under the policy, the damage sustained by Doane occurred after Abco had completed its operation of installing the standby facility and the policy issued to Abco did not afford coverage for this occurrence, because Abco did not purchase coverage for the hazards of completed operations. This, in substance, is Federal's defense to this declaratory judgment action. Abco's pleaded theory of recovery is, in substance, that the fire at Doane's plant and any damage thereto occurred during installation of the facility and before completion. [2] In other words, Abco's position is that the operation was not completed until all adjustments and testing had been made and the defective vaporizer replaced with one which would function so that the facility could operate in the manner and be used for the purpose for which it was designed. The case was tried before the court without a jury. The evidence consisted of various admissions, letters and documents, and the deposition testimony of three witnesses, one of whom (the president of Abco) also testified briefly in person. We review the case upon both the law and the evidence as in suits of an equitable nature. Rule 73.01, subd. 3(a). In Murphy v. Carron, 536 S.W.2d 30[1] (Mo. banc 1976) the court held that this means that the decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. 536 S.W.2d at 32. The trial court made and filed findings of fact and conclusions of law. The facts stated above, found by us on our review of the evidence, are essentially the same as those found by the trial court. In addition, the trial court found and concluded (1) that the provisions of the policy as to when operations shall be deemed completed are clear and unambiguous; and (2) that the installation of the standby facility had been completed in August, 1971, leaving as the only operations to be performed those involving further service, such as adjustments and corrections, and replacement of the defective vaporizer. Abco contends on appeal, as it did in the trial court, that the terms of the policy are ambiguous and, therefore, should be construed most favorably to the insured. Central Surety and Insurance Corporation v. New Amsterdam Casualty Company, 359 Mo. 430, 222 S.W.2d 76, 78[1] (1949). It asserts that the policy is ambiguous in that it provides coverage for property damage under the exceptions to the exclusions of paragraphs (a) and (k) emphasized by italics in the above quotations of those paragraphs; and, that these exceptions, when considered with the endorsement excluding coverage for the hazards of completed operations, created an ambiguity in the exclusions intended which must be resolved against Federal and in favor of coverage by the policy for this occurrence. This contention is without merit. The policy of insurance and an endorsement must be read together where there is a dispute as to its meaning, and they should be construed together unless they are in such conflict they cannot be reconciled. Cain v. Robinson Lumber Co., 295 S.W.2d 388, 390-391[1-3] (Mo. banc 1956). If the language of the endorsement and the general provisions of the policy conflict, the endorsement will prevail, and the policy remains in effect as altered by the endorsement. Linenschmidt v. Continental Casualty Co., 356 Mo. 914, 204 S.W.2d 295, 300[3] (1947); Empire Fire and Marine Insurance Co. v. Brake, 472 S.W.2d 18, 23[3] (Mo.App.1971). It is clear from the endorsement to this policy that the intention was to modify its provisions relating to comprehensive general liability insurance by excluding from the property damage liability coverage, property damage included within the completed operations hazard. The fact that some of the coverage for the completed operations hazard is provided for in an exception to an exclusion rather than in the general coverage provisions makes no difference under the wording of the endorsement; so long as the coverage appears in the comprehensive general liability insurance portion of the policy, it is to be excluded by this endorsement. There is no reason why coverage saved by an exception to an exclusion of the policy should be any more exempt from exclusion by the endorsement than are the general coverage provisions themselves. The effect of the endorsement was, therefore, to exclude property damage included within the completed operations hazard regardless of whether coverage for that hazard was provided for by the general coverage provisions of the comprehensive general liability insurance portion of the policy or by an exception to an exclusion from the general coverage provisions. No ambiguity is created by the wording of the endorsement or by the wording of the exceptions to exclusions (a) and (k). The trial court did not err in concluding that the provisions of the policy are clear and unambiguous. Abco also contends that the endorsement excluding from coverage liability for any damage which occurred after its operations had been completed did not relieve Federal of its obligations under the policy, because there is no substantial evidence that the installation had been completed for its intended use before February 4, 1972, the date of the loss; that the evidence is that the loss occurred before completion of the operations it had contracted to perform. Under the definition of completed operations hazard the earliest time at which it could be said that the operations shall be deemed completed is stated in paragraph numbered (1) to be: when all operations under the contract between Abco and Doane have been completed. Another part of the definition to be considered in connection with paragraph (1) is the following unnumbered paragraph: Operations which may require further service or maintenance work, or correction, repair or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed completed. What are the operations required by the contract to be completed by Abco? Was Abco's contract to install a standby facility which, when completed, should be capable of providing Doane with heat of a quantity and quality sufficient to permit its plant to continue to operate while the natural gas supply was curtailed? Or, was it to install a facility which, when completed, would be capable of supplying such heat? If Abco's obligation was the former, then its operations were completed in August, before the fire, because at that time all necessary components had been assembled and installed and, according to design, should have been capable of functioning as required. And the work performed thereafter by Abco was mere further service   , or correction    or replacement because of    deficiency    in the vaporizer. If however, Abco's obligation was the latter, then the operations to be performed by it were not completed until after the fire, because at no time before the fire was the facility installed capable of supplying sufficient heat to permit Doane's plant to continue to operate after the natural gas supply had been curtailed. It failed after brief use each time it was called upon to function. It was not until after another vaporizer was installed that the facility could be used; and, it was not until then that Abco's operations were completed within the meaning of the policy. The judgment is reversed and the cause is remanded for further proceedings consistent with this opinion. SEILER, C. J., and MORGAN, BARDGETT, FINCH and DONNELLY, JJ., concur. RENDLEN, J., not participating because not a member of the court when cause submitted.