ESCAMBIA CHEMICAL CORPORATION, A CORPORATION AUTHORIZED TO DO BUSINESS IN FLORIDA, APPELLANT,
v.
U. S. FIDELITY AND GUARANTY COMPANY, A CORPORATION AUTHORIZED TO DO BUSINESS IN FLORIDA, APPELLEE

Fla. 1st DCA | 1968-07-18
No. J-501
JOHNSON and SPECTOR, JJ., concur.
212 So. 2d 884 Florida District Court of Appeal, First District (1968) Caution
Cited by 6 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Escambia Chemical sought a declaratory judgment requiring its insurer to defend it against a customer's counterclaim for breach of warranty regarding liquid fertilizer. The court held that the customer's claim for economic loss due to alleged breach of contract does not constitute an insured loss under either the property damage liability clause or the products hazard clause of the insurance policy.


Holding

The court held that the customer's cause of action, based on alleged breach of contract rather than property damage or defect-caused injury, does not constitute a loss or occurrence within the meaning of either the property damage liability clause or the products hazard clause. The claim involves purely economic loss from alleged breach of warranty, not physical injury or destruction of property resulting from an accident.


Key Quotes

“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 real or tangible personal property during the policy period, including the loss of use thereof, resulting from an occurrence.”

This is the property damage liability clause at issue, which requires injury to or destruction of property resulting from an occurrence for coverage to apply.

Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

Escambia Chemical contracted with a customer to apply liquid nitrogen fertilizer to corn acreage, representing it would be as effective as a competing…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
WIGGINTON, Chief Judge.

WIGGINTON, Chief Judge.

Appellant brought suit against appellee under F.S. Chapter 86, F.S.A., seeking a judicial declaration of its rights under a comprehensive liability insurance policy issued to it by appellee. From a final judgment rendered in favor of appellee, this appeal is taken.

From the undisputed facts and pleadings disclosed by the record it affirmatively appears that appellant entered into a contract with a customer, by the terms of which it agreed to furnish and apply to a portion of the customer’s corn acreage a quantity of liquid nitrogen fertilizer for an agreed price. As an inducement, appellant represented and guaranteed that its product was as effective and would produce the same results as a competitive dry fertilizer. Based upon such representation and inducement the customer entered into the contract with appellant, as a result of which appellant furnished and applied to a part of the customer’s farm acreage a liquid fertilizer of the kind called for in the contract. Another portion of the customer’s corn acreage was fertilized by the dry type of fertilizer with which appellant’s product was represented and guaranteed to be equal in effectiveness. The customer’s corn acreage fertilized by appellant’s product produced a yield substantially less than comparable acreage fertilized by the competitive dry product of another manufacturer. The customer refused to pay appellant’s charges for the liquid fertilizer furnished by it as a result of which appellant commenced suit to recover the amount claimed by it. The customer has counterclaimed against appellant and seeks a judgment representing the damages allegedly suffered by him because of appellant’s alleged failure to deliver the product contracted for and capable of fertilizing the customer’s corn to the extent and degree of the representations and guarantees allegedly made by appellant as an inducement for the contract. This action is presently pending insofar as the record before us discloses.

Appellant instituted this action for declaratory relief praying for a judgment requiring appellee to defend it against the counterclaim filed by its customer and claiming that the damages suffered by its customer constituted a loss or damage for which appellant is entitled to indemnity from appellee under the property damage liability clause of the insurance policy issued to it, which provision is as follows:

“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 real or tangible personal property during the policy period, including the loss of use thereof, resulting from an occurrence.”

The word “occurrence” as used in the policy is specified by the terms thereof to mean an unexpected event or happening *886or a continuous or repeated exposure to conditions provided the Insured did not intend or anticipate that injury to or destruction of real or tangible personal property would result. All exposures to substantially the same general conditions shall be considered as arising out of one occurrence.

The trial court, by the declaratory judgment rendered herein, specifically found and concluded that the cause of action alleged by appellant’s customer in its counterclaim filed against appellant is not a loss or occurrence within the meaning and intent of the above-referred-to provision of the liability insurance policy. With this conclusion we agree.

Alternatively, appellant asserts that the loss suffered by its customer for which it is entitled to indemnity falls within the products hazard clause of the insurance policy which is as follows:

“(g) Products Hazard. The term ‘products hazard’ means
“(1) goods or products manufactured, sold, handled or distributed by the Named Insured or by others trading under his name, if the accident occurs after possession of such goods or products has been relinquished to others by the Named Insured or by others trading under his name and if such accident occurs away from premises owned, rented or controlled by the Named Insured or on premises for which the classification stated in Division (a) of the declarations excludes any part of the foregoing; provided, such goods or products shall be deemed to include any container thereof, other than a vehicle, but shall not include any vending machine or any property, other than such container, rented to or located for use of others but not sold;
“(2) operations, including any act or omission in connection with operations performed by or on behalf of the Named Insured on the premises or elsewhere and whether or not goods or products are involved in such operations, if the accident occurs after such operations have been completed or abandoned and occurs 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.” (Italics supplied.)

It is appellant’s contention that the cause of action alleged by its customer in the counterclaim filed against it is based' upon the theory that the liquid fertilizer furnished and applied by it was defective as a result of which it failed to produce the anticipated yield which it normally should and would have except for its defective condition. It is upon this premise that appellant insists that its customer’s loss resulted from an accident and comes within the products liability clause of the insurance policy.

As we read the counterclaim filed by the customer against appellant it is premised upon the allegations that appellant breached its contract by failing to furnish and apply to the customer’s land fertilizer of sufficient strength and potency as to produce the same yield of corn which was produced on comparable acreage fertilized with the competitive type of fertilizer. There is no contention by the customer that the product furnished by appellant was so defective as to injure either the customer’s person or property, or that his loss resulted from an accident

*887of any kind or nature. Under these circumstances we agree with the trial court that appellant has failed to clearly demonstrate that its loss falls within the intent or purpose of the products liability clause of the policy sued upon. For the foregoing reasons the judgment appealed herein is hereby affirmed.

JOHNSON and SPECTOR, JJ., concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • …e of the insured’s ... to meet the level of performance, quality, fitness or durability ... represented by the named insured” and also because of “lack of performance.” No “occurrence” was alleged. See Escambia Chem. Corp. v. U.S. Fid. & Guar. Co., 212 So. 2d 884 (Fla. 1st DCA 1968). The customer’s claim of negligence was simply a claim of poor workmanship, clearly not covered under the terms of the insurance contract. See Ohio Cas. Ins. Co. v. Santos, 465 So. 2d 672 (Fla. 2d DCA 1985) (Risk that employee of…
  • OLD Republic Ins. Co. v. W. Flagler Assocs., Ltd., 419 So. 2d 1174 (Fla. 3d DCA 1982)
    …do not allege facts which show that the plaintiffs’ loss was occasioned by “physical injury to or destruction of tangible property.”4 There is abundant authority to support our conclusion. In Escambia Chemical Corp. v. U.S. Fidelity & Guaranty Co., 212 So. 2d 884 (Fla. 1st DCA 1968), the insured sought to compel its carrier to defend against a claim seeking to recover lost profits. The insured had sold fertilizer to the claimant and guaranteed that crops fertilized with its product would produce as well as c…
  • Betancourt v. Diaz, 296 So. 2d 494 (Fla. 3d DCA 1974)
    …PER CURIAM. Affirmed. See Consolidated Ins. Co. v. Ivy Liquors, Inc., Fla.App.1966, 185 So. 2d 187; Escambia Chemical Corp. v. United States Fidelity & Guaranty Company, Fla. App.1968, 212 So. 2d 884; State Farm Mutual Automobile Insurance Co. v. Worthington, 8 Cir. 1968, 405 F. 2d 683, 687; Terito v. McAndrew, La.App.1971, 246 So. 2d 235.…

Full citator, related cases, and AI research tools

Open in FLexlaw