Opinion ID: 412675
Heading Depth: 2
Heading Rank: 2

Heading: The Products Hazard Clause

Text: 10 As mentioned, it is stipulated that Landress waived Products Hazard protection. In the definitions section of the policy, Products Hazard is defined as 11 Bodily injury and property damage arising out of the named insured's products or reliance upon a representation or a warranty made any time with respect thereto, but only if the bodily injury or property damage occurs away from the premises owned by or rented to the named insured and after physical possession of such products has been relinquished to others. 12 The only issue regarding this portion of the insurance contract is whether the tow dolly transferred from Landress to Golden Motor Company in 1969 constituted one of the named insured's products. 13 In the same section of the policy, Named Insured's Products is defined as 14 Goods or products manufactured, sold, handled or distributed by the named insured or by others trading in his name, including any container thereof, (other than a vehicle), but Named Insured's Products shall not include a vending machine or any property other than such container, rented to or located for use of others but not sold. 15 Therefore, the determinative question is whether this tow dolly was a good or product manufactured, sold, handled or distributed by [Landress]. 16 In finding the above language ambiguous, the magistrate relied on a pair of Florida cases holding that products hazard exclusions are ambiguous as applied to an insured service company's installation of certain goods. Miller Electric Co. v. Employer's Liability Assoc. Corp., 171 So.2d 40 (Fla.App.1965); New Amsterdam Casualty Co. v. Addison, 169 So.2d 877 (Fla.App.1964). In each of these cases, an insurer was ordered to defend an insured electrical contractor in a suit for negligent installation despite the contractor's express waiver of joint Products-Completed Operations coverage. The magistrate below concluded that Landress' transfer of the dolly to Golden Motor constituted a service function, thereby triggering the application of the above precedents. 17 We find these cases inapplicable to the situation before us. First, in the Miller and New Amsterdam cases, the Products Hazard and Completed Operations clauses were merged into a single clause entitled either Products Hazard or Products-Completed Operations. It would not be unreasonable, wrote the Miller and New Amsterdam courts, for a provider of services to conclude that such a clause provided protection solely for products liability, an unnecessary insurance item for service contractors. 4 But since these clauses also provided insurance for completed operations, an item of insurance vital to an electrical contractor, the failure of the insurers to distinguish these independent lines of coverage was held to create an ambiguity in the policy that was construed against the insurer. 18 In response to Miller, New Amsterdam, and a third case, Nixon v. United States Fidelity & Guaranty, 290 So.2d 26 (Fla.1973), USF&G divorced the Products Hazard and Completed Operations coverage clauses and definitions in its general liability insurance policies. In Sandpiper Construction Co. v. United States Fidelity and Guaranty, 348 So.2d 379 (Fla.App.1977), an action brought under the newly-worded policy by an insured building contractor seeking to compel USF&G to enter and defend the contractor against a charge of negligent construction despite the contractor's waiver of both Products Hazard and Completed Operations coverage, the Florida Court of Appeals distinguished Nixon and its progeny on the grounds that those cases considered a combined Products-Completed Operations clause. 5 The Florida court then expressly stated that the Products Hazard and Completed Operations clauses in the USF&G policy, worded identically to those in the policy before us, were not ambiguous. 6 19 Moreover, we note that the insured in the present case is not a dispenser of services, but a salesman of products. Therefore, even if the Products Hazard and Completed Operations clauses were not separately listed and defined, it might reasonably be argued that a unified clause is not ambiguous as applied to a product salesman since the title of the joint clause provides adequate notice that products liability protection is contained therein. Thus, the conclusion of Sandpiper that these divorced clauses are not ambiguous carries extra force as applied to a seller of products. 20 Given the unambiguous language of the Products Hazard clause, this Court is compelled to accord the words their natural meaning. The insured's argument that the phrase goods or products manufactured, sold, handled or distributed by the named insured includes only items routinely sold and distributed in the ordinary course of business of the insured is unavailing. Landress acquired the dolly and then sold it to Golden Motor. The plain interpretation of these common terms compels the finding that this dolly constituted a good or product and that this good or product was sold or handled by the insured. 21 We therefore find that the sale of the dolly by Landress to Golden Motor fell within the unambiguous exclusionary language of the Products Hazard clause of Policy No. ICC A 83775. It follows that USF&G is not compelled to defend Landress in the civil suit for damages or to pay any liability resulting therefrom. 22 In light of our holding as to the Products Hazard clause, we find it unnecessary to consider questions arising under the Completed Operations clause. 23 The judgment is REVERSED and the case is REMANDED for further proceedings not inconsistent with this opinion.