Court Opinion

ID: 9664217
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:07:46.843875+00
Date Added: 2024-06-11T12:54:03.110080
License: Public Domain

WINANS, Judge
(dissenting).
The trial court held that the claim for property damage asserted against Haugan by Business Aviation, Inc., in a prior action commenced by them was based on the allegation of his failure to perform the contract in a workmanlike manner and, in cause 2, that Haugan was negligent in the performance of the work. In its decision the trial court stated, "If the first cause of action does not specifically allege breach of implied warranty, proof of the allegations made would give rise to a cause of action for breach of implied warranty. A building contractor must perform the work contracted for in a workmanlike manner; a failure to do so constitutes negligence and also a breach of an implied warranty of fitness." This view of the causes of action alleged against Haugan does not appear to be questioned. Haugan in the present declaratory action says that he is covered by certain policies issued to him by Home Indemnity and Iowa National Insurance. The trial court construed the policies and their provisions to mean that he was covered by such policies and that the insurance companies were obligated to defend Haugan in the action by Business Aviation, Inc. This court has determined that the claim in the Business Aviation, Inc. against Haugan is not covered by the policies which Haugan has and therefore there is no obligation to defend the same. In my opinion the trial court's decision was the correct one and this court should sustain it entirely.
It is a general proposition of wide application that in the construction of an insurance policy where ambiguity exists the policy is to be construed liberally in favor of the insured and strictly against the insurer who wrote the policy. This court has said the same thing many, many times and no citations are necessary.
The trial court stated, "The obligation of an insurer to defend is to be determined by the allegations of the complaint in the action against its insured. Black Hills Kennel Club v. Fireman's Fund Indemnity Co., 77 S.D. 503, 94 N.W.2d 90; Anno. 50 A.L.R.2d 465." The above case also holds, "The scope of liability in*416surance is determined from the contractual intent and objectives of the parties as expressed in the policy. Hemmer-Miller Development Co. v. Hudson Ins. Co., 59 S.D. 129, 238 N.W. 342; Binder v. General American Life Ins. Co., 66 S.D. 305, 282 N.W. 521."
The trial court recognized that standing alone, the exclusionary clause (m) in the Comprehensive General Liability Coverage and clause (j) in the Contractual Liability Coverage of the policies would exclude coverage for the liability asserted by Business Aviation, Inc. against Haugan, but they do not stand alone. They are in juxtaposition to other clauses of the policy, and the trial court directed attention to (a) of the policy or policies which provided:
" 'This insurance does not apply:
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality of the named insured's products or a warranty that the work performed by or on behalf of the named insured will be done in a workmanlike manner.'
It then held "Exclusion (a) provides coverage in case of breach of implied warranty that the work will be done in a workmanlike manner. Exclusion (m) excludes coverage 'to property damage to work performed by — the named insured arising out of the work —.' As set out in the policy these provisions appear to be of equal rank and should be construed together, read together the policy does not cover property damage to work performed by insured arising out of the work except damage to the work resulting from breach of warranty that the work will be done in a workmanlike manner. Clause (m) is the general clause; clause (a) is the specific clause."
In case of repugnancy or ambiguity between general and special clauses or provisions of an insurance policy, the special clauses or provisions will control. Aetna Ins. Co. v. Labor et al., 1970, 85 S.D. 192, 179 N.W.2d 271, 273.
*417The trial court's analysis of this casé was correct and I therefore dissent from this court's reversal of its decision.