whether the exclusion applies to the accident in the present case or, more specifically, what the parties meant when they said 'care, custody or control of the Insured'.
The policy was countersigned in Illinois and the Illinois law governs. See Ruhlin v. New York Life Ins. Co., 3 Cir., 106 F.2d 921; Hardiman v. Fire Association of Philadelphia, 212 Pa. 383, 61 A. 990. In Welborn v. Illinois Nat. Cas. Co., 347 Ill.App. 65, 106 N.E.2d 142, 143, the Appellate Court of Illinois had before it a policy similar to, although not exactly the same as, the one now before the Court. The Court held that an exclusion of liability for damage to property 'in charge of' the insured did not apply to the case of a car left with the insured and undergoing repairs on the insured's premises. The Court agreed that the automobile was 'in charge of the insured in some sense of the words', but held that the exclusion, together with a number of others, should be treated 'so that they apply to property owned by insured, or which have a status which is logically treated the same as ownership for the purposes of the policy.' One of the exclusions in Hartford's policy applies to property owned, rented or used by the insured and, under the reasoning of the Illinois decision cited, it must be held that the additional exclusion of the property in the care, custody or control of the insured is intended broadly to extend the former exclusion to all kinds of temporary possession of property by the insured having something akin to ownership. Thus, it would apply to property used by the insured in his business under any and every kind of arrangement, regardless of the various shades of interest, running from full ownership to the barest custody. Foster used not only its own equipment but also, from time to time, equipment borrowed from others, e.g., the crane in the present case.
The Court in the Welborn case said 'This reasoning is not limited to a car. It is equally applicable to a machine or other piece of equipment used in the insured's business. If such item is damaged by accident or negligence, it is excluded under the quoted clause, whether insured owns it, or has rented or borrowed it, or is transporting it.'
In the present case it must be admitted that, just before the cables broke, the grinder as it hung, suspended from the crane operated by Foster's employee and attended by Foster's workmen, was physically in Foster's 'control'. Foster was at that moment able to swing it right or left or to lift it or set it down. As a matter of fact, it was not nearly so much in Foster's control as was the automobile in charge of the repairman in the Welborn case. In that case the owner brought the car to the insured's garage and went away, leaving it there to be repaired. In the present case the grinder, from the time it arrived, had been at McLouth's plant, in McLouth's building and under McLouth's general plant protection. On several occasions Foster had moved it from one place to another in the plant, always at the direction of either McLouth or McLouth's general contractor. Foster was merely installing the machine, that is, doing work upon it. Its position was actually closer to that of a repairman who comes into a private house to repair, say a refrigerator, than that of a garage owner having a car left with him for repairs, to be called for by the owner.
In considering the situation of the parties as bearing upon their intention, it may also be noted that Foster was a contractor specializing in the erection of industrial equipment and unquestionably the handling, moving and lifting of large, heavy, expensive pieces of machinery formed a major part of the work which it did. Its risk for liability for damage to property other than that which it was installing would be small compared to that of damaging machinery which it was engaged in handling and lifting. All the circumstances strongly indicate, at the very least, that that was the kind of insurance Foster would want.
I am of the opinion that the policy covers Foster's liability in this case not only because that is the law of Illinois but because it represents a proper construction, in accordance with the intent of the contract.
The foregoing opinion contains findings upon all essential fact issues and it is, therefore, unnecessary to deal with the requests except in a very general way.
It is not contended that Foster did not use the customary and proper methods and procedures in making the various lifts of the grinder.
As to the weight of the grinder, Foster's superintendent, in determining what cable should be used when the grinder was first unloaded, estimated it at between 40 and 45 tons. If 45 tons is the correct figure, then the safety factor, without making any allowance for the angle of the cable, would be only 3.7.
In view of the undeniable fact that the strength of the cables used was seriously impaired by a large number of sheered wires, a condition discoverable upon a thorough inspection, it is not necessary to decide whether Morganthall was mistaken in his testimony that Foster employees hammered out some kinks or whether the slings were the same ones that had been used in earlier lifts.
Most of the other facts not specifically dealt with in the opinion, such as the dimensions of the grinder, the efforts to install it and the various prior lifts which Foster had made are not in dispute, nor are they material.
The conclusions of law, in addition to those contained in the opinion, which follow from the facts, are as follows:
1. McLouth is entitled to judgment against Mesta in the amount of $ 57,430.62, plus interest from May 23, 1950, upon its cause of action for breach of contract.
2. McLouth is entitled to judgment against Foster in the same amount for damage caused by Foster's negligence.
3. Foster is liable to Mesta for any judgment entered against the latter in these proceedings.
4. Landis is entitled to judgment in the third-party action against it by Foster.
5. Foster is entitled to judgment in its third-party action against Hartford.
© 1992-2004 VersusLaw Inc.