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CLAUSS v. AMERICAN INS. CO.

March 4, 1963

Felix CLAUSS, Jr., Thomas R. Clauss and Anna M. Clauss, t/a Felix Clauss and Sons
v.
AMERICAN INSURANCE COMPANY and Paul Rumer and City of Philadelphia



The opinion of the court was delivered by: LORD, III

The court adopts the Stipulation and Supplemental Stipulation of counsel, including references to exhibits, as its Findings of Fact Nos. 1 through 18, and in addition thereto finds:

19. The accident of February 1, 1958, took place after plaintiffs' work at the site of the accident had been completed or abandoned within the meaning of Policy No. K215 0621.

 20. The accident of February 1, 1958, took place away from premises owned, rented or controlled by plaintiffs within the meaning of Policy No. K215 0621.

 DISCUSSION

 Plaintiffs seek a declaratory judgment against defendant insurance company respecting their coverage under a comprehensive liability insurance policy issued by defendant. On August 8, 1956, the City of Philadelphia awarded plaintiffs a contract (No. SD-244-NE) *fn1" for the Byberry Creek project, which included the excavation of a trench across both lanes of the Roosevelt Boulevard, the construction of a sewer within the trench, backfilling and repaving the roadway. That portion of the work was finished on February 7, 1957, and the entire project was finished October 18, 1957.

 On or about October 11, 1957, defendant issued its policy No. K215 0621 to plaintiffs covering liability arising from plaintiff's sewer operations. The policy contained an endorsement entitled 'Exclusion of Products Hazard' which provided that 'It is agreed that the policy does not apply to the products hazard as defined herein.' Products hazard is defined in pertinent part ('Conditions', Section 3(f)(a)):

 '* * * operations, if the accident or occurrence takes place after such operations have been completed or abandoned and take place away from premises owned, rented or controlled by the named insured; provided, operations shall not be deemed incomplete because improperly or defectively performed or because further operations may be required pursuant to an agreement; provided further, the following shall not be deemed to be 'operations' within the meaning of this paragraph: (a) pick-up or delivery, except from or onto a railroad car, (b) the maintenance of vehicles owned or used by or in behalf of the insured, (c) the existence of tools, uninstalled equipment and abandoned or unused materials and (d) operations for which the classification stated in division (a) of the declarations specifically includes completed operations.'

 On February 1, 1958, one Paul Rumer suffered a serious accident at or near the site where the work had been done. Rumer sued the City and the present plaintiffs in the Court of Common Pleas of Philadelphia County and recovered a verdict against both defendants.

 The dispute here is whether plaintiffs are covered under the policy issued October 11, 1957.

 The late Judge Egan has already decided (Opinion, August 14, 1959; Order, September 18, 1959) that the exclusionary clause in Section 3(f) of 'Conditions' is applicable to plaintiffs' operations. Although plaintiffs strongly urged that I reconsider Judge Egan's ruling, I felt myself bound by the law of the case: United States v. Wheeler, 256 F.2d 745 (C.A. 3, 1958). For this reason, although Judge Egan's ruling was interlocutory and not appealable, I express no opinion on this phase of the case. For the same reason, I did not permit the plaintiffs to present evidence on the question of the applicability of the exclusionary clause.

 In this posture of the case, and with regard to Condition 3(f)(2), there are two narrow questions before me: (1) was plaintiffs' work 'completed' within the meaning of the policy on February 1, 1958; (2) did the accident for which coverage is sought happen 'away from premises owned, rented or controlled' by plaintiffs. I cannot escape the conclusion that both questions must be answered in the affirmative.

 The operation involved was the construction of a sewer and the consequent back-filling of the ditch and repaving of the roadway. That work was finished on October 18, 1957, according to plaintiffs' answers to defendant's interrogatories (See also Stipulation paragraphs 3 and 4). This is the operation that was covered by the policy, and this operation was completed before February 1, 1958. It is safe to assume that when plaintiffs laid the last yard of roadway, they expected never to return to Roosevelt Boulevard and Byberry Road because, again assumedly, they must have felt their work was satisfactory. The City felt the same way; the work was approved not later than October 24, 1957, even though this approval was not communicated to plaintiffs until March 11, 1958, by payment.

 Plaintiffs argue that under their contract with the City and its concomitant documents, they had certain continuing obligations and that so long as these obligations remained, the work was not completed. Thus, the contract itself provides:

 'Party of the second part shall have charge and control of the entire work until completion and acceptance of the same by party of the first part. Party of the second part shall be alone liable and responsible for, and shall pay, any and all loss and damage sustained by any person or party either during the performance or subsequent to the completion of the work covered by this agreement, by reason of injuries to person and damage to property, buildings and adjacent work, that may occur either during the performance or subsequent to the completion of the work covered by this agreement, or that may be sustained as a result or consequence thereof, irrespective of whether or not such injuries or damage be due to negligence or to the inherent nature of the work. * * * ...


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