Conford, Foley and Leonard. The opinion of the court was delivered by Conford, S.j.a.d. Foley, J.A.D. (dissenting in part).
[103 NJSuper Page 204] The plaintiffs West sued MacDonald for negligence in the servicing of their swimming pool resulting in its substantial damage. MacDonald filed a third-party complaint (1) against Glens Falls Insurance Company ("Glens Falls," hereinafter) for indemnification
of his liability to the Wests and for reimbursement of the costs of the defense against the Wests' action, pursuant to an insurance policy held by MacDonald for manufacturers' and contractors' liability; and (2) against Steven W. Barrett, an insurance agent, for negligence in the writing of the Glens Falls policy resulting in disclaimer of liability on the policy and of the obligation of defense against the Wests' claim by Glens Falls.
The pretrial order having intended to provide that the claims of MacDonald against Glens Falls and Barrett should be tried "and disposed of" in advance of the Wests' action against MacDonald,*fn1 this course was followed with these results. The trial judge found as a matter of law that there was no coverage under the policy for "completed operations" and also that the damage here involved occurred after MacDonald's work for the Wests was completed. He consequently held as a matter of law that Glens Falls was under no obligation to MacDonald, either for indemnification or defense, and the first count of the third-party complaint was struck. The issue of Barrett's liability for negligence was submitted to the jury and Barrett was awarded a no cause for action, the jury specifically announcing it found "Steven W. Barrett not negligent."
MacDonald on this appeal challenges the trial court's rulings and the judgment entered on the jury verdict.
We consider first the decision of the trial judge that the policy unambiguously excludes coverage for "completed operations." A brief summary of the facts developed at the trial is necessary.
Beginning in 1961 MacDonald agreed to service the West swimming pool on a regular basis. There was to be a spring service to open the pool and a fall service to close it. The spring service entailed removal of water, cleaning, repainting
if necessary, servicing motors and bearings, installing diving boards, ladders, etc., and placing algacide and chlorine in the water -- generally getting the pool in usable condition for the summer.
In early April 1964, since the Wests were going on vacation and wanted the pool water lowered for the safety of their children, MacDonald sent two men to the premises who decided that the pool was "in pretty bad shape" so that they might as well empty the pool and clean it, in accordance with regular spring practice. They did so, and then started running the water into the pool. As it would take about two days to get an adequate amount of water into the pool, the men left and the Wests were to turn the water off when the deep end of the pool was filled. The remainder of the spring servicing procedure was to await the return of the Wests. This would include, in addition to the other items mentioned above, the repair of a small crack.
About May 1, 1964 West informed MacDonald that in his absence the pool had risen out of the ground. Inspection disclosed a rise of about a foot and a cracking of the pool deck and patio. The complaint filed by the Wests charges the damage was caused by insufficient refilling of the pool in accordance with MacDonald's instructions and a resulting "sub-pool Hydrostatic pressure."
MacDonald's call upon Glens Falls to defend the Wests' suit was rejected on the ground that this was a "completed operation" hazard not covered by the policy issued to MacDonald.
Under "Insuring Agreements," the policy in question deals first with coverages. Hazards in respect of which the company undertakes to reimburse for liability of the insured for bodily injury and property damage are divided into four divisions: 1 -- Premises-Operations; 2 -- Elevators; 3 -- Independent Contractors; and 4 -- Products-Completed Operations. The hazard, "Premises-Operations" is defined as "The ownership, maintenance of premises, and all operations."
The material portion of the definition of "Completed Operations" is as follows:
"(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; * * *" (emphasis added)
There is also an "Interpretive Endorsement" on the policy which states:
"It is understood and agreed that the word 'operations' as used in the Products-Completed Operations Hazard includes any act or omission in connection with operations performed by or on behalf of the named insured on the premises or elsewhere, whether or not goods or products are involved in such operations."
Item 3 of "Declarations" of the policy reads:
"Item 3. The insurance afforded is only with respect to such and so many of the following coverages and divisions thereunder as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage and division shall be as stated ...