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Karadontes v. Continental Insurance Co.

February 17, 1976


Troast, J.J.D.R.C., Temporarily Assigned.


Plaintiff and defendant have both moved for summary judgment. The issue is whether plaintiff's "Standard Fire Insurance Policy" affords coverage for damage to plaintiff's boiler. There is no dispute as to the facts. Plaintiff's oil-fired, cast iron boiler located in a frame and brick building used for store and dwelling purposes was damaged as the result of a failure or faulty operation of a low-water cut-off valve in the boiler. When the cut-off valve malfunctioned the water level in the boiler dropped below a safe level, the boiler continued to operate without sufficient water and the boiler cracked from excessive heat.

Plaintiff's standard fire insurance policy does not make express provision for the type of loss involved in this case. It refers to the peril insured against as "fire coverage." N.J.S.A. 17:36-5.19, which is concerned with the perils insured against under standard fire insurance policies in this State, provides:

Every such fire insurance policy shall insure, limited to the amounts of insurance specified therein, the named insured and legal representatives, to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair and without compensation for loss resulting from interruption of business or manufacture, nor in any event for more than the interest of the insured, against all direct loss (footnote 1 [omitted]) by fire, lightning, and by removal

from premises endangered by the perils insured against in such policy, except as thereinafter provided, to the property described therein while located or contained as described in such policy, or pro rata for 5 days at each proper place to which any of the property shall necessarily be removed for preservation from the perils insured against in such policy, but not elsewhere. Every such fire insurance policy shall contain a provision that its assignment shall not be valid except with the written consent of the insurer." (Emphasis added).

Defendant contends that because of the common law distinction between "hostile" and "friendly" fires plaintiff cannot recover. Generally, when a fire burns where it is intended to burn the fire is considered friendly, however, when a fire becomes uncontrollable or breaks out from where it was intended to be it is considered hostile. 45 C.J.S. Insurance § 809. Although there are no cases in this State which are controlling, there are cases in other jurisdictions holding that where a failure or faulty operation of a thermostat or other control device within heating equipment causes excessive heat and results in damage, the loss is covered under a standard fire insurance policy.

In Fiorito v. California Ins. Co. , 262 Minn. 340, 114 N.W. 2d 661 (Sup. Ct. 1962) when a fire within a furnace burned so excessively and was so uncontrolled that it damaged the inside of the furnace, the court stated:

The doctrine of "friendly" and "hostile" fires has, for many years, been accepted as a judicial addendum to policies of fire insurance. The basic principle is that a "friendly" fire, one which is intentionally kindled for beneficial purposes and which thereafter is confined to the place intended, does not support recovery under insurance against any loss or damage by fire, unless there is some spreading of the flame with injury outside the fire's proper place. This, at least, is the prevailing rule. See 29A Am. Jur., Insurance, § 1287.

In Fiorito the court found that the evidence supported a finding that the fire was a "hostile" fire and stated:

When the nature of present-day heating devices and equipment is borne in mind, it does not seem warranted to encumber the court-made doctrine originally announced in Austin v. Drew [4 Campb. 360], supra , with the requirement that there must be some actual ignition or some burning outside the heating device, even though an excessive fire destroys the device itself. An excessive or uncontrolled fire, sufficient to melt parts of a furnace, surely is included in the intended meaning of the words "loss or damage by fire."

In Barcalo Mfg. Co. v. Firemen's Mut. Ins. Co. , 24 A.D. 2d 55, 263 N.Y.S. 2d 807, 17 A.L.R. 3d 1150 (App. Div. 1965), automatic controls on a furnace failed to operate properly and as a result the furnace and forgings being annealed within the furnace were destroyed. The court permitted recovery under a fire insurance policy, holding that this was a direct loss by fire and stated that even though a fire may remain entirely within its proper place, it may become hostile if by accident ...

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