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ROBERT HAWTHORNE, INC. v. LIBERTY MUT. INS. CO.

May 7, 1957

ROBERT HAWTHORNE, Inc.
v.
LIBERTY MUTUAL INSURANCE COMPANY



The opinion of the court was delivered by: DUSEN

This is an action against an insurance company for recovery of sums expended in the defense of, and settlement of, damage suits brought against plaintiff, for which damages plaintiff claims the insurance company had contracted to indemnify it.

This matter comes before the court without a jury on a 'Stipulation of Facts' filed February 18, 1957, and a 'Stipulation of Counsel' *fn1" filed April 3, 1957, of which the following is a summary:

 In January of 1953 the plaintiff contracted to demolish the Colonial Theatre building in Philadelphia, Pa. On September 1, 1952, the defendant insurance company had issued to plaintiff a Comprehensive General Liability Policy for a term of one year, indemnifying plaintiff against liability for public liability and property damage, and a rider applying to the Colonial Theatre project (hereinafter called 'No. 21') was attached to this policy as of January 26, 1953. The work commenced on or about January 28 and the plaintiff placed planks on the roof of an adjoining building, owned by Walter Stuempfig, Jr. and William and Rachel T. Stuempfig and occupied by Germantown Fur, Inc., to catch debris should any fall during the course of the demolition. During the demolition, debris fell from time to time upon the aforesaid planks and upon the roof adjoining the area covered by the planks, but caused no damage to the exterior of the roof. Such debris was removed by plaintiff from time to time prior to completion of the demolition work on or about March 21, 1953, and was completely removed on or before May 15, 1953, by which date plaintiff was off the job site.

 The owners of the adjoining building (claiming damage to the interior of the building) and the Germantown Fur, Inc. (claiming damage to its fur storage vault and furs stored in it) both instituted trespass actions in the fall of 1953 against the plaintiff in the state courts. The defendant refused to defend the actions, admitting responsibility only for any damage to the exterior roof surface which occurred while plaintiff was on the job, but not for the falling of the ceiling of the fur vault and other interior damage (including damage to fur coats) which occurred after plaintiff had left the job.

 After waiver by defendant of paragraph 11 of the policy, making the entry of final judgment a prerequisite to liability under the policy, plaintiff settled both suits for $ 2,150 to the owners of the adjoining building and $ 22,500 to the fur company, and brings this action to recover these latter amounts, plus attorney's fees of $ 4,250 and other costs of $ 982.55, in the total amount of $ 29,882.55.

 In construing the defendant's liability under the policy, the law of Pennsylvania governs. *fn2"

 The insuring agreement in the policy covering property damage liability contains this language:

 'Liberty Mutual Insurance Company agrees with the insured * * *

 'Coverage B -- Property Damage Liability

 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property * * * caused by accident.'

 Since the insured became 'legally obligated to pay' the above-mentioned $ 29,882.55, as those words are used in the above clause if the falling of the debris on the planks and the roof is an 'accident,' as that term is used in the above-quoted clause, and such accident caused the damage, the two principal questions for decision are:

 1. Was the falling of the debris on the roof and the planks an 'accident' under the terms of the policy?

 2. Assuming question 1 is answered in the affirmative, do any of the exclusions or conditions in the policy ...


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