Opinion ID: 741882
Heading Depth: 3
Heading Rank: 1

Heading: Whether the annealing furnace is a furnace.

Text: 25 The word furnace is not defined in the endorsement, nor in the final version of the policy. At oral argument, neither party was able to provide the court with a clear definition of furnace. This is somewhat distressing; both parties seek this court's determination of whether the object that broke down at I/N Kote was part of a furnace but neither can tell us what a furnace is. How one defines furnace in turn defines whether or not this object, called a furnace, was a furnace, and also where that object begins and ends. This in turn defines what is inside and what is outside, and perhaps, we hope, what is part of and not part of the furnace. Steeped in the facts of this controversy as they are, if neither party can define a furnace, it is difficult to imagine how a reasonable person would define it. Or, more accurately, how we can determine a reasonable person might do so. 26 I/N Kote argues that what they refer to as an annealing furnace is not a furnace but rather is an unfired vessel under pressure. Unfired vessels under pressure are covered by Object Definition No. 7, which explicitly includes as an object any unfired vessel normally subject to ... internal pressure. The I/N Kote annealing furnace is an enclosure pressurized with a hydrogen and nitrogen atmosphere in which no combustion occurs, as the term is commonly used. The steel is heated by electric and gas-fired radiant tubes. The gas-fueled fire that makes the radiant tubes hot is isolated from the pressurized enclosure inside the tubes. The heat radiates from the tubes to heat the steel. Thus, I/N Kote maintains, while the tubes are furnaces because they produce heat through combustion, the pressurized enclosure into which that heat radiates and through which the steel passes is not a furnace. Under I/N Kote's construct, only the heat-producing part of the annealing furnace is a furnace. Under this construction, the rolls do not extend through the furnace and thereby risk being considered part of that furnace; they extend only through the unfired vessel under pressure which is not the furnace. 27 So far so good. Hartford is willing to concede that the annealing furnace is an unfired vessel under pressure but it contends that because the annealing furnace is also a furnace it falls under Object Definition No. 7's exclusions. Hartford argues for a broad meaning of the term furnace, generally relating it to function. In other words, an object that performs the function of a furnace is a furnace. By defining a furnace by its function, Hartford seeks to encompass the rolls into the definition, as without them this annealing furnace would be unable to function as it was designed to. But Hartford cannot tell us whether a furnace produces heat or makes use of heat. The distinction is important to the extent that both unfired vessels under pressure and boilers are explicitly included in the Object Definition. If the exclusion for things that are furnaces excludes objects that make use of heat, then it would exclude not only the annealing furnace under I/N Kote's construct, but also boilers. And The Hartford Steam Boiler Inspection and Insurance Company which by its very name is in the business of insuring them, maintains that boilers are clearly covered under the Object Definition. So Hartford's undeveloped definition based on function provides us little guidance. 28 We also have rules of interpretation to contend with. Absent some indication that they are to be understood in a technical sense, we interpret insurance policies using the plain meaning of their words--the meaning to a layperson procuring the insurance. See General Acc. Ins. Co. of America, 86 F.3d at 677 (7th Cir.1996)(applying Indiana law, stating rule); cf. Coley v. State Farm Mut. Ins. Co., 178 Ill.App.3d 1077, 128 Ill.Dec. 200, 202, 534 N.E.2d 220, 222 (1989) (Unless it is obvious that the language in a policy is used in a technical connotation, the language is accorded the meaning which common experience imparts.) A layperson is one not belonging to some particular profession or not expert in some branch of knowledge or art. Hermitage Corp. v. Contractors Adjustment Co., 166 Ill.2d 72, 209 Ill.Dec. 684, 694, 651 N.E.2d 1132, 1142 (1995) (Freeman, J. dissenting) (quoting Webster's Third New International Dictionary 1281 (1993)). But when employing a plain meaning analysis, the meaning must not be reduced to that which would be understood by an uninformed layperson. If it were, it would be impossible to write insurance policies covering technical or complex facilities. We must consider the language as an intelligent layperson would. As the district court noted in Occidental Chemical Corp. v. American Manufacturers Mutual Ins. Co.: Turning to the language of the Policy, an obstacle arises in that a 'layperson' would be unlikely even to know what a 'trunnion assembly' is. It is appropriate to examine the language of the Policy as would a layperson who is knowledgeable about kilns and trunnion assemblies; what is to be guarded against is addressing the issue from the standpoint of one peculiarly knowledgeable about insuring such items or litigating such coverage. 820 F.Supp. 74, 76 (S.D.N.Y.1993) (applying California law). The Supreme Court of Indiana has addressed this problem similarly while citing Black's Law Dictionary for the meaning of a policy term: Black's Law Dictionary is exactly the type of source that an intelligent layperson might rely on when entering into a contract, including an insurance policy. American States Ins. Co. v. Kiger, 662 N.E.2d 945, 948 n. 2 (Ind.1996). 29 In the absence of language in Object Definition No. 7 giving furnace a technical definition, employing this intelligent layperson test we conclude that such a person would make some attempt to understand what the term meant in relation to industry generally if not to metallurgy specifically. Webster's Third New International Dictionary (1981) provides us with some understanding of the term furnace: an apparatus for the production or application of heat, an enclosed structure for ... heat treating metal by the application of intense heat produced typically by full combustion. We derive further understanding from two encyclopedias that are more specialized than a general encyclopedia but nonetheless explain technical words in lay terms. The New Illustrated Science and Invention Encyclopedia explains that a furnace is a closed structure in which heat is applied to a load or charge. 8 H.S. Stuttman, Inc., The New Illustrated Science and Invention Encyclopedia 1066 (1987). The McGraw-Hill Encyclopedia of Science & Technology describes a furnace as an apparatus in which heat is liberated and transferred directly or indirectly to a solid or fluid mass for the purpose of effecting a physical or chemical change. 7 McGraw-Hill Encyclopedia of Science & Technology 503 (7th ed.1992). Either of these explanations describes the annealing furnace at I/N Kote's facility. Even narrowly construed, as are exclusions, the term any furnace covers the pressurized enclosure in which heat is applied by both gas fired and electric radiant tubes to steel substrate. Whatever an unfired vessel under pressure is, and whether or not the annealing furnace is such a vessel, under the plain meaning of Object Definition No. 7, the annealing furnace itself is excluded because it is a furnace. 30