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contractdefendantdamagesnegligenceliabilityindemnityappealcorporationcase law
contractdamagesliabilityappealcorporation

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McLouth Steel Corp. v. Mesta Mach. Co., 214 F.2d 608

Facts

Mesta Machine Company contracted to install a large roll grinder in McLouth Steel Corporation's Michigan plant and subcontracted the installation to J.M. Foster & Co. While Foster's employees were installing the machine, it fell and was damaged. McLouth Steel sued Mesta, which cross-claimed against Foster. Foster then joined Landis Tool Co., the machine's vendor, and Hartford Accident and Indemnity Co., its insurer, as third-party defendants. The district court found that Mesta was not negligent, Landis was not liable, and the accident was due to Foster's negligence.

Mesta Machine Company contracted to install a large roll grinder in McLouth Steel Corporation's Michigan plant and subcontracted the installation to J.M. Foster & Co. While Foster's employees were installing the machine, it fell and was damaged.

Issue

Whether the exclusionary clause in the liability policy applied to the circumstances of the accident, specifically if the machine was in the care, custody, or control of the subcontractor.

Whether the exclusionary clause in the liability policy applied to the circumstances of the accident, specifically if the machine was in the care, custody, or control of the subcontractor.

Rule

Under Illinois law, an exclusionary clause in an insurance policy applies only to property that is owned, occupied, or in the care, custody, or control of the insured.

Under Illinois law, an exclusionary clause in an insurance policy applies only to property that is owned, occupied, or in the care, custody, or control of the insured.

Analysis

The court analyzed the facts against the exclusionary clause in the insurance policy, determining that the machine was not in the control of the subcontractor at the time of the accident. The court referenced Illinois case law, particularly the Welborn case, which distinguished between temporary possession and proprietary control, concluding that the subcontractor's employees were not in control of the machine in a manner that would invoke the exclusion.

The court analyzed the facts against the exclusionary clause in the insurance policy, determining that the machine was not in the control of the subcontractor at the time of the accident.

Conclusion

The Court of Appeals affirmed the district court's judgment, holding that the exclusionary clause did not apply, and thus the insurer was liable for the damages.

The Court of Appeals affirmed the district court's judgment, holding that the exclusionary clause did not apply, and thus the insurer was liable for the damages.

Who won?

The prevailing party was the subcontractor, J.M. Foster & Co., as the court found that the exclusionary clause in the insurance policy did not apply to the circumstances of the accident.

The prevailing party was the subcontractor, J.M. Foster & Co., as the court found that the exclusionary clause in the insurance policy did not apply to the circumstances of the accident.

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