Court Opinion

ID: 9448324
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:31:26.65138+00
Date Added: 2024-06-11T17:31:22.796541
License: Public Domain

O’SULLIVAN, Circuit Judge
(dissenting) .
I am unable to agree that the words, “damages because of injury to or destruction of property * * * caused by accident” should be held to encompass an insured manufacturer’s liability for the cost of repair or replacement of' its product which failed to function as. expected or warranted. My opinion would be the same whether the liability cast upon the manufacturer was because of its negligence or its breach of warranty. Judge Weick’s opinion ably reviews the cases that have considered this subject. With great respect for his reasoning and the authorities which support it, I find most acceptable the language of the dissenting opinion in the case of Geddes and Smith v. St. Paul Mercury Indemnity Company, 51 Cal.2d 558, 334 P.2d 881, wherein the dissenters (three of seven judges) said:
“Thus, the effect of a majority opinion is to convert a so-called public liability policy, limited to liability imposed for damages and ‘caused by accident’, into an agreement to indemnify the insured against liabil*155ity for the insured’s failure to faithfully perform its contractual obligation regardless of the showing of an ‘accident.’ ”
I agree with the majority opinion here that the consequence of negligence or breach of warranty can be accidental and, therefore, do not rely on Neale Construction Co. v. United States Fidelity & Guaranty, 199 F.2d 591 (C.A.10) to the extent that such decision bottoms its holding upon a contrary conclusion. However, there is a difference between negligence and the consequence of negligence. Negligence may cause an accident, but accident and negligence are not synonymous terms. Albuquerque Gravel Products Co. v. American Employers Insurance Co., 282 F.2d 218 (C.A.10, 1960).
The proofs in this case consisted principally of the pleadings in various cases where Bundy Tubing was charged with damages consisting (except as hereinafter noted) of the cost of replacing various radiant heating installations following deterioration of the tubing supplied by Bundy. The tubing corroded, became pitted and developed leaks. To the extent that water from such leaks damaged property such as rugs, drapes, etc., these damages were caused by accident. The appellee insurance company conceded coverage and paid for such damage. All but two of the suits against Bundy were brought by contractors who had installed its tubing and the damages sought consisted of such contractor’s cost of replacing radiant heating installations. The other two were by homeowners who sued Bundy with others, seéking like damages. None of these pleadings charged facts descriptive of an accidental occurrence or described physical damage to any property other than to the tubing itself, except for the water damage to drapes, etc. The obligation of an insurer to defend an action against an insured is to be determined from the allegations of the complaint. Albuquerque Gravel Products v. American Employers Insurance Co., 282 F.2d 218, 220 (C.A.10, 1960); Lee v. Aetna Casualty & Surety Co., 178 F.2d 750 (C.A.2, 1949); Duval v. Aetna Casualty & Surety Co., 304 Mich. 397, 401, 402, 8 N.W.2d 112.
In Womack v. Employers Mutual Liability Insurance Co., 233 Miss. 110, 101 So.2d 107, a garageman sought to recover from his insurer the cost of defending a suit brought against him by a vehicle owner for defective workmanship in repairing such motor vehicle. The damages sought were for the vehicle owner’s cost of repairs made necessary by such defective workmanship. The garageman’s insurance policy protected him against liability for injury “caused by accident.” In denying coverage, the Mississippi court said:
“Many definitions of ‘accident’ are given in the books. Under none of them are we able to see that the work done by Womack (garageman) on Lotta’s motor vehicle can be classed as an accident.”
If a manufacturer installed a defective steering mechanism in an automobile, and as a consequence, the vehicle left the road and injured a person or property, it would be clear that such injury was caused “by accident.” If, however, the owner of such motor vehicle, without any intervening accident, demanded and obtained replacement of the defective equipment, I would not think that it could be claimed that the manufacturer could recover, under such an accident policy as we are dealing with here, its costs for labor and material in making good to an owner for its defective installation. True, such motor vehicle with unworkable steering equipment is not as good as one with proper steering equipment, but I do not think that it could be claimed that such a vehicle had been damaged “by accident.”
In one of the suits against Bundy, the complaint charged that the defective tubing “caused great damage to the home and contents.” In its bill of particulars, there was an item identified as “decorations.” This could represent damage caused by water. The proofs showed that Bundy settled this case for $500.00, so it may be that Royal was required to defend against such action. This cir*156cumstance was not called to the attention of the District Judge, nor discussed at the trial.
I would remand the cause to the district court to determine what recovery, if any, should be awarded to Bundy because of the last mentioned case (Pacific National Fire Insurance Company, subrogee v. Bundy Tubing Company et al.). In all other respects, I would affirm the district court.