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January 10, 1973


Weber, J.

The opinion of the court was delivered by: WEBER

This is a suit under a boiler and machinery policy including business interruption provisions. There is no dispute as to essential facts, the policy was in force at the time of the incident giving rise to the claim, and the parties have agreed as to the loss sustained. The sole dispute between the parties is whether the circumstances surrounding the incident are sufficient to meet the requirement of an accident as that term is defined in the policy.

 The plaintiff has moved for summary judgment.

 The insuring clause in effect on January 20, 1969, the time of the incident reads:

"To pay the insured the amount of Actual Loss Sustained which results from a total or partial prevention of Business . . . provided the prevention of Business is caused solely by an Accident, which occurs while this endorsement is in effect, to an object designated and described in any Schedule specified . . .".

 The electric motor in question in this case is a machine covered by the policy. It is agreed that a business interruption loss was suffered.

 The dispute then centers around the application of the policy definition of "accident" to the incident in question.

 The policy definition of accident is contained in Endorsement No. 7 of the insurance policy, in effect at the time of the incident, as follows:

"Condition 1 -- Definition of Accident:
A. Depletion, deterioration, corrosion or erosion of material;
B. Wear and tear; . . ."

 It is significant to note that this was not the original definition of "accident" under the policy. The original definition read:

"Condition 1 -- Definition of Accident:
"As respects any object designated and described in the Schedules 'accident' shall mean, unless otherwise stated in a Schedule or Endorsement, a sudden and accidental breakdown of the Object, or a part thereof, which manifests itself at the time of its occurrence by physical damage to the object that necessitates repair or replacement to the object or part thereof . . ."

 This definition was deleted by Endorsement No. 7 which was procured by the insured on the payment of an additional premium. However, it is significant in the interpretation of the Endorsement in effect to consider the change of language from the prior endorsement. This is what the parties bargained for. Because of this the usual presumption of construing the terms of an insurance policy most strongly against the insurer will not apply. But because a prior endorsement contained requirements that were excluded, we are better informed as to what was intended by the new endorsement. The prior endorsement required a "breakdown" while the effective endorsement required only "damage". Secondly, the prior definition required that the breakdown "manifest itself at the time of its occurrence by physical damage to the object". The effective endorsement posed no similar requirement. Both definitions require repair.

 The parties have filed extensive evidentiary material in support of and in opposition to the motion for summary judgment. Reviewing them reveals that there is general agreement as to the general operative facts of this occurrence.

 The machine involved in this claim was a 8,500 h.p. electric motor, manufactured by Allis-Chalmers Manufacturing Company, and installed new in 1967 by Fischbach and Moore, Inc. in the Mansfield, Ohio, plant of plaintiff corporation. It forms part of the steel-making facilities of plaintiff corporation. The normal operating life of this motor would have been approximately 20 years.

 The motor performed satisfactorily from the time of installation until January 20, 1969. It was rendered periodic maintenance by an independent maintenance contractor whose last periodic maintenance was performed on January 3, 1969.

 The policy covering this motor was issued effective January 15, 1968, for a term of three years. The policy was issued after an inspection of the equipment by defendant which revealed that the equipment was in an insurable condition.

 On its start-up on January 20, 1969, the motor went into severe vibrations which necessitated a shut-down for fear that it would destroy itself, and dismantling to determine the cause of the vibration.

 The contract maintenance company inspected the machine at the plant site and found that the key on the shaft (axle) to which the spider (wheel) was affixed so that the two would rotate together was loose and therefore the connection between shaft and spider was loose.

 Allis-Chalmers Manufacturing Company, the manufacturer, was called in to review the machine and after their inspection the motor was dismantled and shipped to Milwaukee, Wisconsin for repairs. The repaired machine was returned to plaintiff's plant and placed back into operation on January 29, 1969. This business interruption is the basis of the loss claimed.

 Defendant's evidentiary material is concerned with expert engineering opinion as to the cause of the malfunction and the summary of their conclusions is that the initial fit of the shaft to the spider was inadequate and below industry standards for the proper design, and that this was a defect which existed from the time that the motor was manufactured. The opinion also concluded that the failure was not due to control or operation of the motor by plaintiff.

 If we accept the truth of the defendant's contentions for the purpose of this motion, is there any dispute as to a material fact essential to the resolution of the question of coverage for "sudden and accidental damage?"

 It is also not disputed that there was no external physical evidence of damage to the machine in the form of breaking, gouging or scraping of its parts.

 The question of whether these two elements present genuine issues of material fact rests, in our opinion, on whether the definition of "accident" requires a consideration of either of them. In other words, is it necessary to a determination of the meaning of "sudden and accidental damage" that we know the cause thereof? Furthermore, it is necessary that the machine show external physical damage to itself to be included under the definition.

 Defendant's expert opposing the motion expressed the opinion that the incident of January 20, 1969, was caused by an improper fit at the time of manufacture and installation of the motor and continuing gradually throughout the operation of the motor. He stated that this was progressive wear and tear between the spider and the shaft which gradually increased the vibrations until the time of the shut-down. And that such vibration could have been discovered by the use of sophisticated scientific equipment.

 The policy definitions exclude from the term "accident" such terms as "depletion, deterioration, corrosion, or erosion of ...

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