Opinion
No. 54187-1-I
Filed: April 18, 2005
Appeal from Superior Court of King County. Docket No: 03-2-37551-9. Judgment or order under review. Date filed: 04/07/2004. Judge signing: Hon. Robert H. Alsdorf.
Counsel for Appellant(s), Brent William Beecher, Hackett Beecher Hart, 1601 5th Ave # 2200, Seattle, WA 98101-1651.
Counsel for Appellant(s), Barbara J. Boyd, Hackett Beecher Hart, 1601 5th Ave Ste 2200, Seattle, WA 98101-1651.
Counsel for Respondent(s), J. William Ashbaugh, Stafford Frey Cooper, 601 Union St Ste 3100, Seattle, WA 98101-1374.
Counsel for Respondent(s), John Edward Duke Powell, Stafford Frey Cooper, 601 Union St Ste 3100, Seattle, WA 98101-1374.
Counsel for Other Parties, Kenneth Scott McEwan, Betts Patterson Mines PS, 701 Pike St Ste 1400, Seattle, WA 98101-3927.
Counsel for Other Parties, Dana Daniel Delue, Ferring Nelson LLP, 600 Stewart St Ste 1920, Seattle, WA 98101-1238
Counsel for Other Parties, Michael H. Ferring, Attorney at Law, Ferring Nelson Llp, 600 Stewart St Ste 1920, Seattle, WA 98101-1238.
Counsel for Other Parties, Brent William Beecher, Hackett Beecher Hart, 1601 5th Ave # 2200, Seattle, WA 98101-1651.
Counsel for Other Parties, Barbara J. Boyd, Hackett Beecher Hart, 1601 5th Ave Ste 2200, Seattle, WA 98101-1651.
Norene Strid (Strid) was seriously injured and Homer Hensley was killed when a semi-truck hit them while they were walking near a construction site. Strid and Evelyn Kay Hoskins, Personal Representative of the Estate of Homer Hensley (Hensley), appeal the trial court's order granting Certain Underwriters at Lloyd's of London (Lloyd's) motion for summary judgment and declaratory judgment. We conclude Lloyd's has no duty to indemnify the insureds, Building Busters, Inc. (Building Busters) and Beacon Coal Mining Company, Inc. (Beacon), or additional assureds, for Hensley's and Strid's claims in their lawsuit because the express terms of the automobile exclusion in the policy precludes coverage. We affirm.
FACTS
Donovan Excavation (Donovan) was the subcontractor hired to excavate a construction site located on Eighth Avenue in Seattle. Donovan hired Building Busters to demolish a building on the site. Building Busters used a semi-truck owned by Beacon to move the heavy equipment it needed to the construction site.
On August 12, 2001, Building Busters transported a mobile excavator to the construction site using Beacon's truck and lowboy trailer. The driver was unable to back the entire semi-truck onto the worksite. Instead of leaving the nose of the truck in the street, the Building Busters driver disconnected the trailer from the truck. The driver parked the truck across the street in the driveway of a parking lot. After the excavator was unloaded from the lowboy trailer, the driver started to back the truck out of the driveway towards the trailer at the construction site. While backing up, the truck driver did not see the two pedestrians walking on the sidewalk behind the truck. The truck struck Norene Strid and Homer Hensley. Hensley died from his injuries and Strid was seriously and permanently injured.
The excavator is also referred to as a track hoe.
Building Busters and Beacon notified their automobile insurance carrier, American Equity Specialty Insurance Company (American Equity), about the accident. American Equity accepted tender of the claim and provided a defense to Building Busters and Beacon.
On April 30, 2002, Strid and Hensley filed a personal injury lawsuit against Building Busters, Beacon, Avalon Bay Communities, Inc., the general contractor and owner of the property being developed, and Donovan. The complaint alleged Building Busters, Avalon and Donovan failed to properly supervise individuals working in the vicinity of the worksite, provide for the safety of pedestrians near the work area, and obtain proper permits for vehicles at the worksite. The complaint also alleged Beacon was negligent in failing to maintain the semi-truck in good working condition because the truck's back-up alarm system did not function properly at the time of the accident.
In October 2003, Lloyd's filed a complaint for declaratory judgment. Lloyd's asked the court to rule that under the terms of the policy, Lloyd's had no duty to defend or indemnify Building Busters, Beacon or additional assured Donovan for claims asserted by Hensley and Strid. Lloyd's argued the liability policy's automobile exclusion applied and precluded coverage for the injuries suffered by Hensley and Strid. Lloyd's also argued coverage was precluded because Building Busters and Beacon breached the cooperation clause in the policy.
On December 19, 2003, Building Busters and Beacon entered into a settlement agreement with Hensley and Strid. Building Busters and Beacon stipulated to a judgment for $2 million and assigned Hensley and Strid their rights under the automobile insurance policy with American Equity and the liability insurance policy with Lloyd's. American Equity agreed to immediately pay its policy limits of $1 million. Lloyd's, Hensley and Strid agreed to limit discovery in the declaratory judgment action and resolve whether Lloyd's policy provided coverage to Building Busters and Beacon by means of summary judgment.
Agreement to Proceedings in Declaratory Action. CP at 62-65. By stipulation, Lloyd's, Hensley and Strid also agreed to dismiss Donovan, Building Busters and Beacon from the law suit.
The trial court granted Lloyd's motion for summary judgment and ruled Lloyd's had no duty to indemnify Building Busters, Beacon or their additional assureds for any claim in Hensley and Strid's lawsuit. Hensley and Strid appeal.
ANALYSIS
On review of summary judgment, this court engages in the same inquiry as the trial court. Reynolds v. Hicks, 134 Wn.2d 491, 495, 951 P.2d 761 (1998). Interpreting an insurance policy is a matter of law that this court reviews de novo. McDonald v. State Farm Fire Cas. Co., 119 Wn.2d 724, 730, 837 P.2d 1000 (1992).
Summary judgment is properly granted when the pleadings and affidavits show there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). The court must view the facts and all reasonable inferences in the light most favorable to the nonmoving party. Right-Price Recreation, L.L.C. v. Connells Prairie Com. Council, 146 Wn.2d 370, 381, 46 P.3d 789 (2002). Only when reasonable minds could reach but one conclusion on the evidence should the court grant summary judgment. Smith v. Safeco Ins. Co., 150 Wn.2d 478, 485, 78 P.3d 1274 (2003).
Determining whether coverage exists is a two-step process: first, the insured must prove the policy covers his loss, and second, to avoid coverage, the insurer must prove specific policy language excludes the insured's loss. McDonald, 119 Wn.2d at 731. We interpret insurance contracts as an average purchaser would understand them and give undefined terms their plain, ordinary, and popular meaning. Daley v. Allstate Ins. Co., 135 Wn.2d 777, 784, 958 P.2d 990 (1998). We consider the contract in its entirety and give effect to each policy provision. Allstate Ins. Co. v. Peasley, 131 Wn.2d 420, 424, 932 P.2d 1244 (1997). If the language in an insurance contract is unambiguous, the court must enforce it as written and may not modify the contract or create an ambiguity where none exists. State Farm Mut. Auto. Ins. Co. v. Ruiz, 134 Wn.2d 713, 721, 952 P.2d 157 (1998). A provision is ambiguous if, on its face, it is fairly susceptible to more than one reasonable interpretation. Daley, 135 Wn.2d at 784. If a policy provision is ambiguous, the interpretation most favorable to the insured applies. Id.
Lloyd's liability policy excludes coverage for bodily injury caused by an automobile operated by the insured. There are four exceptions to the automobile exclusion that can result in coverage. Hensley and Strid contend there is coverage under the liability policy on two separate grounds. First, the fourth exception to the automobile exclusion provides coverage for Building Busters. Second, the terms of the automobile exclusion do not apply to Beacon.
Building Busters
The automobile exclusion in the Lloyd's policy states:
6. EXCLUSIONS: This insurance does not apply to:
. . . .
(h) "bodily injury" or "property damage" arising out of the ownership, maintenance operations, use, control, loading or unloading by the "Assured" of any automobile which is defined as follows: The word "automobile" shall mean a land motor vehicle, trailer, or semi-trailer designed for travel on public roads, but does not include any vehicle
(1) not subject to motor vehicle registration, or
(2) maintained for use exclusively on premises owned by or rented to the "Assured", including the ways immediately adjoining, or
(3) designed for use principally off public roads, or
(4) designed or maintained for the sole purpose of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle: power cranes, shovels, loaders, diggers and drills; concrete mixers (other than mix-in-transit type); graders, scrapers, rollers, and other road construction or repair equipment; air compressors, pumps and generators, including spraying, welding and building cleaning equipment; and geophysical exploration and well servicing equipment.
Clerk's Papers (CP) at 46.
It is undisputed that the semi-truck that struck Hensley and Strid is an "automobile," and that exceptions (1), (2) and (3) do not apply. The question is whether the semi-truck is "designed or maintained for the sole purpose of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle."
CP at 46.
To establish coverage under exception (4), the truck must be designed or maintained to provide mobility to the type of equipment listed and the excavator must form an integral part of the semi-truck or be permanently attached to the semi-truck. According to the undisputed testimony of Joseph Anderson, the owner of Building Busters and Beacon, the semi-truck is used solely to carry heavy equipment, such as the excavator, to worksites because the heavy equipment cannot be driven for significant distances on public roads. The semi-truck consists of the tractor or truck, also referred to as the "power unit," and a lowboy trailer. The trailer can be detached from the tractor for maneuverability and for storage. Tractors and trailers are interchangeable.
Anderson in his declaration states: "My companies maintain the power unit involved in this accident for the sole purpose of transporting excavators and other heavy demolition equipment that cannot be driven for any significant distance on public roads." CP at 122.
Hensley and Strid argue that because the trailer does not serve a function other than to transport heavy equipment, equipment such as the excavator is an integral part of the semi-truck. Hensley and Strid reason that because the excavator is an integral part of the trailer and the trailer is an integral part of the semi-truck, the excavator is an integral part of the semi-truck. Although the average purchaser of insurance would understand that the trailer is an integral part of the semi-truck, the contention that the excavator is an integral part of the trailer is an unreasonable, strained and impermissible interpretation of the policy language.
Instead of giving effect to the language used in the policy, Hensley and Strid's interpretation disregards the language and requirement that the equipment forms "an integral part of" the semi-truck. See Peasley, 131 Wn.2d at 424 (We must give effect to each policy provision.). If, as they argue, the equipment forms an integral part of the semi-truck because the truck is not maintained for any other purpose, then the "integral part of" language is redundant to the language and requirement that the vehicle is maintained for the sole purpose of providing mobility for the types of equipment identified in exception (4). Following this logic, furniture in a moving van would form an integral part of the moving van, as would any item hauled on a trailer. And like the furniture in a moving van, the excavator does not affect the function of the semi-truck.
The cases Hensley and Strid rely on to support their argument that the excavator is an integral part of the truck are inapposite. Each of these cases either involves different policy provisions that expressly include uninstalled equipment, or involves an "integral part" of a vehicle that is necessary to the vehicle's function. In Fidelity Guaranty Ins. Underwriters, Inc. v. Gardner, 471 S.W.2d 449 (Tex.Ct.App. 1971), Zanfagna v. Providence Washington Ins. Co., 415 A.2d 1049 (R.I. 1980), and Alpha Real Estate Dev. Inc. v. Aetna Life Cas. Co., 174 Mont. 301, 570 P.2d 585 (1977), items such as a roll of carpet, uninstalled fixtures and a carpet cleaner were described as "integral parts" of buildings because of specific policy language that provided coverage for uninstalled materials and supplies used in construction and maintenance of covered buildings. In NLRB v. International Longshoremen's Ass'n, 447 U.S. 490, 100 S. Ct. 2305, 65 L. Ed. 2d 289 (1980), Dennler v. Dodge Transfer Corp., 201 F. Supp. 431 (D. Conn. 1962), and Halliburton Co. v. Property Appraisal Dept., 88 N.M. 476, 542 P.2d 56 (N.M.Ct.App. 1975), containers that attached to a semi-truck like a trailer, a trailer, and equipment that was bolted to a trailer were "integral parts" of the vehicles' function in those cases. Here, by contrast, the excavator did not form an integral part of the semi-truck. We conclude exception (4) to the automobile exclusion does not apply to the semi-truck and Lloyd's policy does not provide coverage for Building Busters.
Beacon
Hensley and Strid argue that even if the automobile exclusion precludes coverage in favor of Building Busters, the terms of the automobile exclusion do not apply to Beacon. Hensley's and Strid's claim for liability against Beacon as the owner of the semi-truck is based on Beacon's negligent failure to have a working back-up alarm. Hensley and Strid rely on the language of the policy exclusion for injuries "arising out of the ownership, maintenance operations, use, control, loading or unloading by the `Assured' of any automobile," to argue that their claim for injuries does not arise out of Beacon's maintenance operations of the semi-truck. Hensley and Strid contend "maintenance operations" means "ongoing maintenance operations," and Beacon's negligent failure to have a working back-up alarm is not an ongoing maintenance operation. And while Hensley and Strid admit that the failure of the back-up alarm contributed to the accident, they argue the accident did not "arise out of" that failure.
CP at 46.
Hensley and Strid cite no authority to support their assertion that "maintenance operations" should be interpreted to mean "ongoing maintenance." We will not address arguments that are not supported by citation to authority. RAP 10.3(a)(5); see also Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992). In addition, the phrase "arising out of" is not interpreted as narrowly as Hensley and Strid argue. "Arising out of" has a broad meaning that includes "caused by" or "resulting from." Toll Bridge Auth. v. Aetna Ins. Co., 54 Wn. App. 400, 404, 773 P.2d 906 (1989). We conclude the unambiguous meaning of "arising out of maintenance operations" includes injuries caused by Beacon's negligent failure to have a functioning back-up alarm on the semi-truck. This conclusion is consistent with Williams v. Galliano, 601 So.2d 769 (La.Ct.App. 1992). In Williams, a garbage truck backed into a second truck, pinning a victim between the two and killing him. The owner of the truck had a liability insurance policy that excluded coverage for injuries "arising out of the ownership, maintenance, operation, use, loading or unloading of any automobile." Id. at 770. The court concluded that any liability of the truck owner for failing to equip the truck with an audible back-up alarm was "directly related to the ownership or maintenance of the truck." Id. at 775.
CONCLUSION
The automobile exclusion in Lloyd's policy bars coverage to Building Busters, Beacon and the additional assureds because the excavator did not form an integral part of the semi-truck and the failure of the back-up alarm was a cause of Hensley's and Strid's injuries. We affirm the order granting Lloyd's motion for summary judgment and for declaratory judgment.
Because we conclude the automobile exclusion bars coverage, we need not address Lloyd's alternative argument that it can deny coverage based on Building Busters' and Beacon's breach of their duty to cooperate under the policy.
GROSSE and BAKER, concur.