Court Opinion

ID: 9552095
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:04:42.067557+00
Date Added: 2024-06-11T15:25:38.828940
License: Public Domain

Williams, J.
I dissent. There is no quarrel with the facts. The only question is whether what occurred is "property damage" within the intent of the policy. When the *189meaning of a word or phrase in an insurance policy is not dependent on disputed facts, the construction thereof is a question of law for the court. 1 R. Anderson, Couch Cyclopedia of Insurance Law § 15.3 (2d ed. 1959); Perry v. Inter-Southern Life Ins. Co., 254 Ky. 196, 71 S.W.2d 431 (1934). The majority states that because the condition caused by the delamination of the epoxy could be repaired by removal and replacement of it, the pipe was not damaged. Restoration of the pipe may have required the mere removal of one coating and the application of another, but that does not mean that the pipe was undamaged any more than a vandalized work of art is not damaged when sprayed with removable paint. In Hauenstein v. St. Paul-Mercury Indem. Co., 242 Minn. 354, 65 N.W.2d 122 (1954), a type of plaster failed and had to be replaced after being applied to the walls and ceilings of a building. In finding coverage under a similar indemnity policy, the court said:
Aside from any injury to the plaster itself, was the building injured and damaged by its application? It is undisputed that after this new type of plaster had been applied it shrunk and cracked to such an extent that it was of no value and had to be removed so that the walls and ceilings could be replastered with a different material. No one can reasonably contend that the application of a useless plaster, which has to be removed before the walls can be properly replastered, does not lower the market value of a building. Although the injury to the walls and ceilings can be rectified by removal of the defective plaster, nevertheless, the presence of the defective plaster on the walls and ceilings reduced the value of the building and constituted property damage.
Hauenstein v. St. Paul-Mercury Indem. Co., supra at 357-58.
General Insurance's responsibility to protect International Sales arises from the following assertions in Ameron's complaint in federal court:
The delamination and failure referred to above were the direct and proximate results of the negligence and breaches of warranty of defendants in the sale of said coating and the supplying of instructions therewith.
*190As a proximate result of the failure and delamination referred to above, plaintiff was required to effect repairs to the interior of said pipe, all to its damage in the sum of $267,000.00.
These paragraphs constitute an allegation of property damage.
The majority dismisses International Sales' argument that exclusion (e) does not apply by saying that whether the instructions were oral or written was not delineated in Ameron's complaint and anyway the point was not raised until a motion for reconsideration was filed. Actually, the subject of oral instructions was pleaded, and proved by uncontradicted evidence. In its answer to Genéral Insurance's complaint, International Sales incorporated its answer in the federal case brought by Ameron, which reads in part as follows:
For its second affirmative defense, the defendant International Sales Corporation alleges that the plaintiff, Ameron, Inc. did fail to apply the Tarset C200 epoxy coating in compliance with instructions given to the said plaintiff, Ameron, Inc., by defendant United States Steel Corporation or by the defendant International Sales Corporation for causing the said coating to delaminate and fail on or about November 22, 1971.
A witness, who was not contradicted, testified that personnel of International Sales went to Ameron's job site to demonstrate the process of application. The instructions included the storing, mixing and proper handling of the material. The significance of the oral instructions given at the job site appears in another portion of the witness' testimony when he said:
With coal tar epoxies, I would say that probably 95 percent of the coal tar epoxy failures that we have ever encountered are as a result of overcuring, with the other five percent being made up of contamination, moisture, improper mixing of the product, which I guess is in the application end of it, and to a very remote extent, off-spec material.
*191Thus, the question of damage caused by faulty oral instructions was timely raised and presented for decision by the court.
It is essential, therefore, that the court enter findings on the question of whether there was negligence in the supplying of oral instructions. The judgment should be vacated and the cause remanded with directions to make the necessary findings, followed by appropriate conclusions of law and judgment.
Petition for rehearing denied January 26, 1978.
Review by Supreme Court pending June 2, 1978.