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Goodwin v. Wright3/27/2000
Kenneth Goodwin was injured when a rebuilt hydraulic cylinder failed. Eastside Machine had made the cylinder by disassembling two others and making one. Eastside was insured by Western National Assurance Company under a commercial general liability policy. The only question on appeal is whether Western National properly denied coverage for Goodwin's injuries based on the 'products -- completed operations hazard' exclusion in Eastside's policy. We hold the products -- completed operations hazard exclusion is unambiguous and bars coverage for Goodwin's injuries. We therefore affirm.
Facts
In September 1990, while working for Fruhling, Inc., Kenneth Goodwin was injured while operating an 'end dump trailer,' a dump truck designed to haul and dump heavy dirt loads. The trailer bed is raised and lowered by a hydraulic cylinder ram.
On the day of the accident, a newly-installed hydraulic cylinder ram failed on the way up -- while the truck was fully loaded with wet sand weighing approximately 25 tons. From inside the cab of the truck, Goodwin was operating the levers to raise the bed of the truck. When the bed reached about a 45-degree angle, the hydraulic ram exploded, sending parts of metal and hydraulic oil onto the cab. The unsupported truck bed dropped suddenly, driving the truck into the ground. Goodwin sustained injuries when he was bounced up and down inside the cab.
The cylinder that failed came from the insured, Eastside Machine. Fruhling had sent two non-functioning hydraulic cylinders to Eastside with a request to 'disassemble two cylinders and make one out of the two.' This process involves taking the cylinders apart, cleaning them, taking out gouges, scratches and other defects, and putting on new seals, guides, and sometimes new piston rings. Eastside's owner, George Wright, described this process as 'we remanufactured one rebuilt dump truck cylinder for Fruhling.'
When Eastside's owner delivered the cylinder to Fruhling, he offered a five percent discount for payment on delivery. Fruhling paid Eastside that day. At the time of the accident, Eastside was insured under a commercial general liability (CGL) policy issued by Western National. Eastside paid a $1,215 annual premium for this coverage. The CGL policy excludes coverage for liability arising from products -- completed operations hazards. Eastside's owner deliberately did not purchase coverage for products -- completed operations hazards, which was available separately for an estimated $12,000 annually.
Goodwin filed a negligence suit against Eastside and its owners. An order of default was entered against Eastside, and a default judgment was later entered in favor of Goodwin in the requested amount of $261,924.01. In March 1997, Goodwin served Western National with a writ of garnishment based on the default judgment.
Both parties moved for summary judgment. The trial court granted Western National's cross motion because it was 'convinced the work was completed,' and therefore not covered. The trial court awarded Western National its costs and attorney fees under the garnishment statute.
Discussion
When reviewing a summary judgment, we engage in the same inquiry as the trial court. The interpretation of an insurance policy is an issue of law we review de novo. Policy language is interpreted as an average person would understand it, in a way that gives effect to each provision. Where the language in an insurance policy is clear, we will enforce it as written and will not modify the contract or create ambiguity where none exists. But where an insurance policy provision is fairly susceptible to two different reasonable interp
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