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International Derrick & Equipment Co. v. Buxbaum

decided: January 9, 1957.

INTERNATIONAL DERRICK & EQUIPMENT COMPANY, APPELLANT,
v.
HENRY R. BUXBAUM, INDIVIDUALLY AND TRADING AS TOWER ERECTION COMPANY, DEFENDANT, AND COAL OPERATIONS CASUALTY CO., GARNISHEE.



Author: Kalodner

Before MARIS and KALODNER, Circuit Judges, and WORTENDYKE, District Judge.

KALODNER, Circuit Judge.

This is an appeal from the judgment of the District Court for the Eastern District of Pennsylvania in favor of Coal Operators Casualty Company ("insurer"), based on the District Court's determination that it was not liable under a property damage policy by reason of an exclusion clause therein.*fn1

The facts may be summarized as follows:

The plaintiff, International Derrick & Equipment Company ("International Derrick"), an Ohio corporation, contracted to procure and install a metal tower and antenna mast at Station WTOA for the Mercer Broadcasting Company of Trenton, New Jersey. International Derrick erected the 265-foot supporting tower and contracted with the defendant, Henry R. Buxbaum, of Philadelphia, Pennsylvania, to raise the mast. Buxbaum furnished his own equipment, including the gin pole which he mounted on top of the tower to support the mast during the lift.

The mast had been partially raised when the gin pole suddently bent and caused the mast to fall to the ground damaging the mast beyond repair. International Derrick, under its contract to complete the operation for the owners of the broadcasting station, purchased a new mast at a net loss to it of $4,365.48. It sought to recover that sum from Buxbaum in a suit in the United States District Court for the Eastern District of Pennsylvania. Judgment was first entered for Buxbaum*fn2 on the ground that International Derrick had failed to meet its burden of proof that it was damaged through Buxbaum's negligence. We reversed*fn3 on the ground that the District Court "failed to take into account the inference of negligence permissible under the Pennsylvania doctrine of 'exclusive control'" and "That the defendant [Buxbaum] had exclusive control as to the choice of equipment and its use, the timing, and the various details incident to the actual erection of the antenna mast is shown by the undisputed testimony." On remand the District Court entered judgment for International Derrick,*fn4 pursuant to its making the following findings of fact:

No. 18. "Although at the time of the accident defendant [Buxbaum] did not have a proprietary type of control of the antenna, it did have a control in the nature of a possessory handling of the antenna for the purpose of its erection in accordance with the terms of the contract.

No. 19."Defendant had exclusive control as to the choice of equipment and its use, the timing, and the various details incident to the actual erection of the antenna mast. The broadcasting company's engineer and general manager were present to control possible damage to the equipment during the lifting operation, but neither took any part in the actual supervision."

The fact that the District Court in Fact-Finding No. 18 found that Buxbaum had "possessory control" and not "proprietary control" of the antenna mast when it fell and was damaged is the nub of the controversy between the parties on this appeal.That is so because following the District Court's entry of judgment against Buxbaum, International Derrick instituted attachment sur judgment against the insurer garnishee by reason of the fact that it had issued to Buxbaum a property damage liability policy in connection with "Iron or Steel Erection", and the policy contained a clause (Exclusion G) which excluded liability with respect to "property in the care, custody or control of the insured."

The insurer invoked the provisions of the exclusion clause in answers filed to plaintiff's interrogatories and plaintiff moved for judgment on the ground that the District Court had not found (in the suit by International Derrick against Buxbaum) that Buxbaum had "care, custody or control" of the antenna mast at the time of the accident and consequently the exclusion clause is inoperative. The District Court denied the motion on the ground that Buxbaum did have "care, custody or control" within the meaning of the exclusion clause of the policy and entered the judgment in favor of insurer which led to this appeal.

International Derrick here contends that the word "control" in the policy exclusion clause contemplates "proprietary control" rather than "possessory handling" so that the exclusion clause does not apply. Insurer urges Buxbaum's "exclusive control" is within the meaning of the word "control" as used in the exclusion clause and that it consequently applies.

The distinction suggested by International Derrick is not persuasive, and a finding of lack of control in this case would be "contrary to the fact, contrary to the ordinary definition of control quoted by appellee*fn5 and contrary to the settled decisional law." McLouth Steel Corp. v. Mesta Machine Co., 3 Cir., 1954, 214 F.2d 608, 612, certiorari denied Hartford Acc. & Indem. Co. v. Foster, 348 U.S. 873, 75 S. Ct. 109, 99 L. Ed. 687.

That the mast was in Buxbaum's care, custody or control for the purposes of its erection is established by the District Court's factual finding and for purposes of the policy exclusion it should be no less true that the mast was in Buxbaum's "care, custody or control."

The scope of the "care, custody or control" exclusion and the coverage afforded by policies of insurance containing such an exclusion are clarified in the decided cases. Where the property damaged is merly incidental to the property upon which the work is being performed by the insured, the exclusion is not applicable. Cohen v. Keystone Mutual Casualty Co., 1943, 151 Pa.Super. 211, 30 A.2d 203; Rex Roofing Co. v. Lumber Mut. Cas. Ins. Co. of New York, 1952, 280 App.Div. 665, 116 N.Y.S.2d 876, appeal denied, 1953, 281 App.Div. 744, 118 N.Y.S.2d 732, 305 N.Y. 932, 112 N.E.2d 288; Maryland Casualty Co. v. Hopper, Tex.Civ.App., 1950, 237 S.W.2d 411; A. T. Morris & Co. v. Lumber Mut. Casualty Ins. Co. of New York, 1937, 163 Misc. 715, 298 N.Y.S. 227. However, where the property damaged is under the supervision of the insured and is a necessary element of the work involved, the property is in the "care, custody, or control" of the insured. Hardware Mut. Cas. Co. v. Mason-Moore-Tracy, Inc., 2 Cir., 1952, 194 F.2d 173; L. L. Jarrell Construction Co. v. Columbia Casualty Co., D.C.S.D.Ala.1955, 130 F.Supp. 436; Root Motor Co. v. Massachusetts Bonding & Ins. Co., 1932, 187 Minn. 559, 246 N.W. 118; Maryland Casualty Co. v. Holmsgaard, 1956, 10 Ill.App.2d 1, 133 N.E.2d 910; John G. Speirs & Co. v. Underwriters at Lloyd's London, 1948, 84 Cal.App.2d 603, 191 P.2d 124.*fn6 In McLouth Steel Corp. v. Mesta Machine Co., supra [214 F.2d 611], we held that where the insured had negligently dropped a large roll grinder which it was in the process of installing in the plaintiff's plant, the "care, custody or control" exclusion was not applicable. In that case we were compelled to rely upon Welborn v. Illinois National Casualty Co., 1952, 347 Ill.App. ...


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