No. 79-1
I N THE SUPREME COURT O F THE STATE O F MONTANA
1980
ANACONDA COMPANY, a Delaware Corp.,
P l a i n t i f f and A p p e l l a n t ,
-vs-
GENERAL ACCIDENT F I R E & L I F E ASSURANCE
C O R P . , -LTD, a B r i t i s h c o r p . , and ARTHUR
G. McKEE & CO., a D e l a w a r e C o r p . ,
D e f e n d a n t s and R e s p o n d e n t s .
A p p e a l From: D i s t r i c t C o u r t of the Second J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of S i l v e r Bow, t h e
H o n o r a b l e J a m e s D. F r e e b o u r n , Judge p r e s i d i n g .
C o u n s e l of R e c o r d :
For A p p e l l a n t :
Corette, Smith,&em, Pohlman & A l l e n , Butte, '.
Montana
R.D. C o r e t - t e argued, B u t t e , M o n t a n a
G r e g o r y C. ~ m - a r g u e d , B u t t e , M o n t a n a
k
For R e s p o n d e n t :
Poore, Roth, Robischon & Robinson, Butte, Montana
J a m e s H a r r i n g t o n argued, B u t t e , M o n t a n a
Submitted: May 28, 1 9 8 0
D e c i d e d : d G 1 3 t ( l ---& k t :&
Filed: SP 8 - 1980
g
Mr. J u s t i c e Gene B. Daly d e l i v e r e d t h e O p i n i o n o f t h e C o u r t .
Appellants General Accident F i r e & L i f e Assurance
C o r p o r a t i o n ( G e n e r a l A c c i d e n t ) and A r t h u r G . M c K e e & Company
(McKee) a p p e a l from t h e o r d e r and judgment of t h e S i l v e r Bow
County D i s t r i c t C o u r t g r a n t i n g r e s p o n d e n t Anaconda Company's
(Anaconda) m o t i o n f o r summary judgment. Anaconda c r o s s -
a p p e a l s from t h e D i s t r i c t C o u r t ' s amended judgment, entered
upon m o t i o n by McKee and G e n e r a l A c c i d e n t which d e l e t e d
r e c o v e r y o f a t t o r n e y f e e s of $3,561.89.
On May 1 5 , 1971, McKee and Anaconda e n t e r e d i n t o a
c o n t r a c t t o expand t h e c a p a c i t y and i n s t a l l f a c i l i t i e s
r e l a t i n g t o e n v i r o n m e n t a l c o n t r o l s a t Anaconda's smelter
f a c i l i t i e s a t Anaconda, Montana. P a r t of t h e c o n t r a c t d e a l t
w i t h i n s u r a n c e c o v e r a g e and r e q u i r e d M c K e e o r any subcon-
t r a c t o r s o f M c K e e t o name Anaconda a s a n a d d i t i o n a l i n s u r e d
u n d e r t h e i r l i a b i l i t y p o l i c i e s , i n s u r i n g a g a i n s t r i s k s of
a n y k i n d r e l a t i n g t o t h e c o n s t r u c t i o n a t t h e smelter f a c i -
l i t i e s u n d e r t a k e n by M c K e e o r i t s s u b c o n t r a c t o r s p u r s u a n t t o
the contract.
M c K e e complied w i t h t h e c o n t r a c t by naming Anaconda a s
a n a d d i t i o n a l i n s u r e d u n d e r p o l i c i e s i s s u e d by G e n e r a l
Accident. These p o l i c i e s p r o v i d e d c o v e r a g e f o r p u b l i c ,
c o n t r a c t o r ' s and a u t o m o b i l e l i a b i l i t y . Some o f t h e sub-
c o n t r a c t i n g work on t h e p r o j e c t was u n d e r t a k e n by Midland
I n d u s t r i a l E l e c t r i c Company ( h e r e i n r e f e r r e d t o a s M i d l a n d ) ,
a w h o l l y owned s u b s i d i a r y o f M c K e e . I n accordance with t h e
c o n t r a c t , Midland named Anaconda a s a n a d d i t i o n a l i n s u r e d
u n d e r a p o l i c y i s s u e d by G e n e r a l A c c i d e n t , a l s o p r o v i d i n g
p u b l i c , c o n t r a c t o r ' s and a u t o m o b i l e l i a b i l i t y c o v e r a g e .
James W . H o r n e r , a n employee o f Midland, was i n j u r e d on
November 1 8 , 1975, w h i l e working a t t h e Anaconda S m e l t e r .
A t t h a t t i m e ò id land was i n s t a l l i n g pumps on o l d s l u r r y
t a n k s i n a b u i l d i n g a t t h e Anaconda S m e l t e r , commonly re-
f e r r e d t o a s t h e " 2 8 ' t a n k house. " G e r a l d K i t c h e n and Ron
M a r s h a l l , Anaconda employees, were p r e p a r i n g t o p a i n t t h e
c e i l i n g o f t h e " 2 8 ' t a n k house" a t t h e t i m e of t h e a c c i d e n t .
They w e r e r i g g i n g a s c a f f o l d i n g n e a r t h e c e i l i n g by l a y i n g
2" x 1 2 " x 1 8 ' p l a n k i n g o v e r 4" x 5" x 1 8 ' t i m b e r s which
w e r e s u p p o r t e d by e x i s t i n g t r u s s e s . The Anaconda employees
l o s t c o n t r o l o f o n e o f t h e t i m b e r s and i t f e l l some 30 f e e t
t o t h e ground below. H o r n e r , w h i l e working i n t h e c o u r s e
a n d s c o p e o f h i s employment f o r Midland, was s t r u c k by t h e
f a l l i n g t i m b e r and was i n j u r e d .
On J a n u a r y 1 9 , 1977, Horner f i l e d a s u i t a g a i n s t Ana-
conda i n S i l v e r Bow County a l l e g i n g t h e n e g l i g e n c e o f Ana-
conda employees. By a l e t t e r of J a n u a r y 24, 1977, Anaconda
made a f o r m a l demand o f G e n e r a l A c c i d e n t t o i n s u r e and
d e f e n d Anaconda i n t h e a c t i o n b r o u g h t a g a i n s t i t by Horner.
By a l e t t e r of A p r i l 8 , 1977, G e n e r a l A c c i d e n t r e j e c t e d
Anaconda's demand on t h e g r o u n d s t h a t t h e i n c i d e n t d i d n o t
f a l l w i t h i n t h e " d e s c r i p t i o n of o p e r a t i o n s c o v e r e d " i n t h e
policy. On A p r i l 20, 1977, Anaconda a g a i n r e q u e s t e d t h a t
G e n e r a l A c c i d e n t i n s u r e and d e f e n d Anaconda i n H o r n e r ' s
s u i t , which G e n e r a l A c c i d e n t a g a i n r e f u s e d t o d o . Anaconda
t h e n h i r e d c o u n s e l t o d e f e n d a g a i n s t H o r n e r ' s s u i t ; and
subsequently, an out-of-court s e t t l e m e n t o f $125,000 was
reached.
Anaconda t h e n f i l e d t h e i n s t a n t a c t i o n a g a i n s t M c K e e
and G e n e r a l A c c i d e n t s e e k i n g a d e c l a r a t i o n t h a t G e n e r a l
A c c i d e n t was o b l i g a t e d t o i n s u r e and d e f e n d Anaconda i n
Horner's lawsuit. Anaconda moved f o r summary judgment and a
h e a r i n g was h e l d . The D i s t r i c t C o u r t e n t e r e d a n o r d e r
a d o p t i n g Anaconda's f i n d i n g s o f f a c t and c o n c l u s i o n s of l a w ;
and judgment was e n t e r e d a g a i n s t M c K e e and General A c c i d e n t
p u r s u a n t t o t h e D i s t r i c t C o u r t ' s g r a n t i n g o f Anaconda's
motion f o r summary judgment.
Judgment was i n t h e amount of $125,000, r e p r e s e n t i n g
t h e amount p a i d by Anaconda i n s e t t l e m e n t w i t h Horner, p l u s
$5,843.23 i n a t t o r n e y f e e s expended by Anaconda i n d e f e n s e
of t h e s e t t l e d c l a i m , and $3,561.89 i n a t t o r n e y f e e s ex-
pended by Anaconda i n t h e i n s t a n t a c t i o n . McKee and G e n e r a l
A c c i d e n t f i l e d a motion t o amend t h e f i n d i n g s of f a c t ,
c o n c l u s i o n s of law and judgment. The D i s t r i c t C o u r t g r a n t e d
t h e motion t o amend, i n p a r t , by d e l e t i n g t h e award of
a t t o r n e y f e e s of $3,561.89, p r e v i o u s l y awarded i n c o n n e c t i o n
w i t h t h e l i t i g a t i o n of t h e i n s t a n t c a s e . T h i s a p p e a l by
McKee and G e n e r a l A c c i d e n t and Anaconda's c r o s s - a p p e a l
followed.
The i s s u e s on a p p e a l a r e a s f o l l o w s :
1. Whether t h e D i s t r i c t C o u r t e r r e d i n g r a n t i n g Ana-
c o n d a ' s motion f o r summary judgment, f i n d i n g t h a t no g e n u i n e
i s s u e of m a t e r i a l f a c t e x i s t e d , and e n t e r i n g judgment f o r
Anaconda.
2. Whether t h e D i s t r i c t C o u r t e r r e d i n denying Ana-
conda a t t o r n e y f e e s i n c u r r e d i n t h e p r o s e c u t i o n of t h i s
case.
G e n e r a l A c c i d e n t and McKee c o n t e n d t h a t t h e ~ i s t r i c t
C o u r t e r r e d i n g r a n t i n g Anaconda's motion f o r summary judg-
ment. They a r g u e t h a t i t was improper f o r t h e c o u r t t o
g r a n t summary judgment b e c a u s e t h e r e remained u n r e s o l v e d
q u e s t i o n s of f a c t . They i n s i s t t h a t l i a b i l i t y of G e n e r a l
A c c i d e n t i n t h i s a c t i o n i s p r e d i c a t e d on t h e q u e s t i o n of
whether o r n o t t h e Anaconda employees were working p u r s u a n t
t o C o n t r a c t No. 2081 a t t h e t i m e of t h e a c c i d e n t : a dis-
puted i s s u e .
Anaconda c o n t e n d s , and t h e D i s t r i c t C o u r t f o u n d , t h a t
i t d o e s n o t m a t t e r w h e t h e r t h e Anaconda employees w e r e
working p u r s u a n t t o t h e c o n t r a c t a t t h e t i m e of t h e i n j u r y ;
what m a t t e r s i s w h e t h e r t h e i n j u r e d employee was working
pursuant t o the contract. A review of t h e record i n d i c a t e s
i t h a s been a d m i t t e d t h a t a t t h e t i m e o f t h e a c c i d e n t t h e
i n j u r e d workman was working w i t h i n t h e s c o p e o f t h e work t o
b e performed u n d e r C o n t r a c t N o . 2081.
Rule 5 6 ( c ) , M.R.Civ.P., s t a t e s t h a t summary judgment
s h a l l be rendered o n l y i f :
". . . t h e pleadings, d e p o s i t i o n s , answers
t o i n t e r r o g a t o r i e s , and a d m i s s i o n s on f i l e
. . . show t h a t t h e r e i s no g e n u i n e i s s u e a s
t o a n y m a t e r i a l f a c t and t h a t t h e moving p a r t y i s
e n t i t l e d t o a judgment a s a m a t t e r o f law."
The q u e s t i o n t o b e d e c i d e d on a m o t i o n f o r summary
judgment i s w h e t h e r t h e r e i s a g e n u i n e i s s u e o f m a t e r i a l
f a c t and n o t how t h a t i s s u e s h o u l d be d e t e r m i n e d ; t h e h e a r -
i n g on t h e m o t i o n i s n o t a t r i a l . Fulton v. Clark (1975),
167 Mont. 399, 538 P.2d1371; M a t t e u c c i ' s S u p e r S a v e Drug v .
Hustad C o r p o r a t i o n ( 1 9 7 1 ) , 158 Mont. 311, 491 P.2d 705.
The p a r t y moving f o r summary judgment h a s t h e b u r d e n o f
showing t h e c o m p l e t e a b s e n c e o f any g e n u i n e i s s u e s a s t o a l l
f a c t s which a r e deemed m a t e r i a l i n l i g h t o f t h o s e s u b s t a n -
t i v e p r i n c i p l e s which e n t i t l e d him t o a judgment a s a m a t t e r
o f law. H a r l a n d v . Anderson ( 1 9 7 6 ) , 169 Mont. 447, 548 P.2d
613.
I n Kober v. S t e w a r t ( 1 9 6 6 ) , 1 4 8 Mont. 1 1 7 , 1 2 1 , 417
P.2d 4 7 6 , t h i s C o u r t c i t e d 6 Moore's F e d e r a l P r a c t i c e ,
" 'The c o u r t s h o l d t h e movant t o a s t r i c t s t a n -
dard. To s a t i s f y h i s burden t h e movant must
make a showing t h a t i s q u i t e c l e a r what t h e
t r u t h i s , and t h a t e x c l u d e s a n y r e a l d o u b t a s
t o t h e e x i s t e n c e o f a n y g e n u i n e i s s u e o f ma-
terial fact.
" ' S i n c e it i s n o t t h e f u n c t i o n of t h e t r i a l
c o u r t t o a d j u d i c a t e genuine f a c t u a l i s s u e s a t
t h e h e a r i n g on t h e m o t i o n f o r summary judgment,
i n r u l i n g on t h e m o t i o n a l l i n f e r e n c e s of f a c t
from t h e p r o o f s p r o f f e r e d a t t h e h e a r i n g must
be drawn a g a i n s t t h e movant and i n f a v o r of
t h e p a r t y o p p o s i n g t h e motion. And t h e p a p e r s
supporting movant's p o s i t i o n a r e c l o s e l y
s c r u t i n i z e d , w h i l e t h e opposing p a p e r s a r e
i n d u l g e n t l y t r e a t e d , i n determining whether
t h e movant h a s s a t i s f i e d h i s b u r d e n . '
11 1
... I f t h e r e i s any doubt a s t o t h e pro-
p r i e t y of a motion, c o u r t s should, w i t h o u t
h e s i t a n c y , deny t h e s a m e . ' " Kober v . S t e w a r t ,
148 Mgnt. a t 122.
The u n d e r l y i n g d i s p u t e between t h e p a r t i e s t o t h i s
a p p e a l r e s t s on a q u e s t i o n o f f o c u s . G e n e r a l A c c i d e n t and
M c K e e i n s i s t t h a t t o d e t e r m i n e l i a b i l i t y o n e must f o c u s on
t h e a c t i o n s o f t h e Anaconda employees who c a u s e d t h e a c c i -
dent. Anaconda, on t h e o t h e r hand, a r g u e s t h a t t h e f o c u s
s h o u l d b e on t h e i n j u r e d workman.
Both p a r t i e s b a s e t h e i r a r g u m e n t s on v a r y i n g i n t e r p r e -
t a t i o n s o f two p r o v i s i o n s i n C o n t r a c t No. 2081:
" A r t i c l e 10. Insurance.
" ( d ) C o n t r a c t o r a g r e e s t o c a u s e owner t o be made a n
a d d i t i o n a l named i n s u r e d u n d e r a l l o f c o n t r a c t o r ' s
l i a b i l i t y p o l i c i e s i n s u r i n g r i s k s o f a n y k i n d re-
l a t i n g t o t h e c o n s t r u c t i o n and t o a r r a n g e , i n
terms a p p r o v e d i n advance by owner, t h a t s u c h po-
licies w i l l c o n s t i t u t e primary coverage i n t h e
e v e n t o f a n y c l a i m s a g a i n s t owner t h a t a r e i n -
s u r a b l e under any of such p o l i c i e s . "
" A r t i c l e 15. Subcontracts.
" ( d ) Contractor s h a l l bring the insurance require-
ments o f P a r a g r a p h 1 0 h e r e o f t o t h e a t t e n t i o n o f
a l l persons i n v i t e d t o submit b i d s f o r s u b c o n t r a c t s ,
a t t h e t i m e o f a n y s u c h i n v i t a t i o n , and t o a l l
p e r s o n s who a r e p r o s p e c t i v e s u b c o n t r a c t o r s f o r sub-
c o n t r a c t s w i t h r e s p e c t t o which t h e s u b m i s s i o n o f
b i d s i s n o t t o be i n v i t e d , a s e a r l y a s p r a c t i c a b l e
i n t h e n e g o t i a t i o n s w i t h r e s p e c t t o s u c h subcon-
t r a c t s , and s h a l l a s s u r e t h a t s u c h r e q u i r e m e n t s
a r e m e t by a n y s u c c e s s f u l s u b c o n t r a c t b i d d e r . "
More s p e c i f i c a l l y , b o t h p a r t i e s f o c u s t h e i r arguments on t h e
c o n s t r u c t i o n t o be g i v e n t o t h e l a n g u a g e " r i s k s of any k i n d
r e l a t i n g t o t h e c o n s t r u c t i o n " which i s c o n t a i n e d i n t h e
above q u o t e d p o r t i o n s of C o n t r a c t No. 2081. N mention i s
o
made by e i t h e r p a r t y of any p r o v i s i o n i n t h e i n s u r a n c e
p o l i c i e s t h e m s e l v e s which would e x c l u d e c o v e r a g e h e r e .
F u r t h e r , a r e v i e w of t h e s e p o l i c i e s d i d n o t b r i n g any such
exclusions t o the surface.
I t a p p e a r s , t h e r e f o r e , t h a t t h e r e s o l u t i o n of t h i s
a p p e a l i s c o n t i n g e n t on t h e c o n s t r u c t i o n w e g i v e t h e above
q u o t e d language. A s s t a t e d e a r l i e r , both p a r t i e s approach
t h e problem from d i f f e r e n t f o c a l p o i n t s . I t a p p e a r s , how-
e v e r , t h a t t h e r e a l i s s u e f a c i n g u s i s what t y p e of r i s k s
d i d t h e p a r t i e s i n t e n d t o c o v e r under t h e i n s u r a n c e p r o v i -
s i o n s of C o n t r a c t No. 2081.
A s w e s t a t e d i n G l a c i e r Campground v . Wild R i v e r s , Inc.
(1978) - Mont. , 597 P.2d 689, 35 St.Rep. 1894, t h e
i n t e n t i o n of p a r t i e s t o a c o n t r a c t i s t o be a s c e r t a i n e d , i f
p o s s i b l e , s o l e l y from l a n g u a g e used i n t h e i n s t r u m e n t , and
r e s o r t may be had t o e x t r i n s i c e v i d e n c e o n l y when t h e con-
t r a c t , on i t s f a c e , a p p e a r s ambiguous o r u n c e r t a i n . See
a l s o s e c k i o n s 28-3-303; 28-3-306 ( 2 ) , MCA. Being t h e s u b j e c t
of t h i s a p p e a l , t h e language " r i s k s of any k i n d r e l a t i n g t o
c o n s t r u c t i o n " a p p e a r s ambiguous o r u n c e r t a i n .
T h i s C o u r t h a s p r e v i o u s l y h e l d t h a t summary judgment i s
u s u a l l y i n a p p r o p r i a t e where t h e i n t e n t of t h e c o n t r a c t i n g
p a r t i e s i s an important consideration. F u l t o n v. C l a r k
( 1 9 7 5 ) , 167 Mont. 399, 403, 538 P.2d 1371, 1373; Kober v .
S t e w a r t ( 1 9 6 6 ) , 148 Mont. 117, 122, 123, 417 P.2d 476, 479;
6 Moore's F e d e r a l P r a c t i c e 7156.17[41.-11.
General Accident admits t h a t t h e c o n t r a c t o r ' s l i a b i l i t y
i n s u r a n c e which named Anaconda as a n a d d i t i o n a l i n s u r e d w a s
i s s u e d t o p r o t e c t p e r s o n s from r i s k s c r e a t e d by t h e n e g l i -
gence of t h e i n s u r e d . T h i s t y p e o f c o v e r a g e h a s been ex-
plained i n general t e r m s :
"A c o n t r a c t o f c o n t r a c t o r ' s l i a b i l i t y i n s u r -
a n c e w i l l g e n e r a l l y r e q u i r e t h a t t h e harm be
work-related o r otherwise s p e c i f y t h a t t h e r e
b e some c a u s a l r e l a t i o n s h i p between t h e n a t u r e
of t h e c o n t r a c t o r ' s [ i n s u r e d ' s ] a c t i v i t y and
t h e harm which i s s u s t a i n e d . " 1 Couch on 1
I n s u r a n c e , S e c . 44:338 , ( 2 d e d . 1 9 6 3 ) .
T h e r e must b e some r e l a t i o n s h i p between t h e r i s k c r e a t e d
by t h e a l l e g e d i n s u r e d t o r t f e a s o r s , t h e Anaconda employees,
and t h e harm s u s t a i n e d . I n determining t h a t r e l a t i o n s h i p it
i s n e c e s s a r y t o l o o k a t t h e employment c o n t r a c t which c r e a t e d
t h e r i s k and t h e work t o be done p u r s u a n t t h e r e u n d e r . Were
w e t o f o c u s m e r e l y on t h e a c t i v i t i e s of t h e i n j u r e d workman
and n o t t h e a c t i v i t i e s o f t h e named i n s u r e d s , w e would
r e n d e r a p p l i c a t i o n o f C o n t r a c t No. 2081 o v e r l y b r o a d and
make G e n e r a l A c c i d e n t t h e i n s u r e r o f a l l Anaconda a c t i v i t i e s
a t t h e S m e l t e r t h a t r e s u l t e d i n i n j u r i e s t o anyone working
p u r s u a n t t o t h e c o n t r a c t , r e g a r d l e s s o f c o n t r o l and b e n e f i t .
T h i s C o u r t w i l l p l a c e no s u c h burden on anyone.
I n t h e r e c o r d t h e r e i s c o n t r o v e r t e d e v i d e n c e a s t o whe-
t h e r t h e work b e i n g performed by t h e Anaconda employees a t
t h e t i m e of t h e a c c i d e n t was u n d e r t a k e n p u r s u a n t t o C o n t r a c t
No. 2081. W e h o l d t h i s i s a g e n u i n e i s s u e of m a t e r i a l f a c t .
The i s s u e o f w h e t h e r t h e D i s t r i c t C o u r t e r r e d i n deny-
i n g Anaconda a t t o r n e y f e e s i n c u r r e d i n t h e p r o s e c u t i o n of
t h i s case i s n o t r i p e f o r review a t t h i s t i m e .
P l a i n t i f f s have n o t m e t t h e i r b u r d e n of e s t a b l i s h i n g
t h e a b s e n c e o f any i s s u e of m a t e r i a l f a c t . The summary
judgment i s v a c a t e d and s e t a s i d e . The c a u s e i s remanded t o
t h e D i s t r i c t Court f o r t r i a l .
We c o n c u r :
Mr. Justice John C. Sheehy, joined by Mr. Chief Justice
Frank I. Haswell, dissent:
The purpose of a motion for summary judgment under
Rule 56, is to eliminate unnecessary trial, delay, and expense.
Silloway v. Jorgenson (1965), 146 Mont. 307, 406 P.2d 167.
Under a motion for summary judgment, the formal issues presented
by the pleadings are not controlling and the court must con-
sider the depositions, answers to interrogatories, admissions
on file, oral te,stimony, and exhibits presented to determine
who should prevail on the motion. Hager v. Tandy (1965), 146
Mont. 531, 410 P.2d 447. When the facts established under the
motion for summary judgment are undisputed, and under those
undisputed facts the plaintiff is not entitled to prevail on
any legal theory, this Court on review should affirm the grant
of summary judgment to the plaintiff.
The salient undisputed facts that should decide this
appeal are these:
1. General Accident and Fire & Life Assurance Corporation
Ltd., issued its liability policy, including comprehensive
general liability, in which policy Arthur G. McKee & Company
is the named insured, and the Anaconda Company by endorsement
is an additional insured.
2. McKee provided the insurance policy to Anaconda by
reason of a contract with Anaconda that recited:
"Contractor [McKee] agrees to cause Owner [Anaconda]
to be made an additional named insured under all of
- -
Contractor's liability policies insuring risks - -
of any
kind relating - - construction and to arrange,
to the
in terms approved in advance by Owner, that such
policies wiil constitute prima;y coverage in the
event of any claims against Owner that are insurable
under any of such policies." (Emphasis added.)
3. The insurance policy defines an "insured" as any person
or organization qualifying as an insured under the policy, and
further provides as to several insureds under the same policy:
". ..The insurance afforded applies separately
to -
- each insured against whom claim is made or suit
is brought, except with respect to the limits of
the company's [the insurance company] liability."
(Emphasis added. )
4. At the time of his injury, McKee's employee was on
the Anaconda premises pursuant to work in progress under
contract no. 2081, the contract between McKee as contractor
and Anaconda as owner.
5. Anaconda's employees were negligent in dropping the
planking that caused the injury to McKee's employee.
In determining the liability of General Accident, if
any, to Anaconda here, we look to the terms of the policy. An
insurance policy, like any other contract, must be given that
interpretation which is reasonable and which is consonant with
the manifest object and intent of the parties. National
Farmers Union Property and Casualty Company v. Colbrese (9th
Cir. 1966), 368 F.2d 405; cert.den. 386 U.S. 991, 87 S.Ct.
G /\,b
18 L.Ed. 2d 336. The general rules of contract law apply
to an insurance policy. Hildebrandt v. Washington National
Insurance Company (1979), - Mont. - 593 P.2d 37, 36 St.Rep.
,
628, (life insurance); Universal Underwriters Insurance
Company v. State Farm Mutual Auto Insurance Company (1975), 166
Mont. 128, 531 P.2d 668, (garage liability policy).
Under McKee's agreement with Anaconda, McKee agreed to make
Anaconda an additional named insured in McKee's policies
"insuring risks of any kind relating to the construction"
which would constitute "primary coverage" in the event of a
claim against Anaconda.
If this policy had been purchased by Anaconda in its
own right, there is no doubt that the injury to McKee's
employee would be a risk that was insurable for Anaconda
under the policy. It makes no difference that here the
insurance contract was purchased by McKee and that Anaconda
is named as an additional insured. By reason of the sev-
erability of the interests clause which we have quoted
above, in fact, here Anaconda and McKee are two separate
insureds under the same policy, the only limitation being
the limits of liability of General Accident under its policy.
Each of the two entities, McKee and Anaconda, are separately
insured under all the terms of the policy. As an example of
the effect of the severability clause, see Caribou Four
Corners, Inc. v. Truck Insurance Exchange (10th Cir. 1971),
443 F.2d 796. See also, Indemnity Insurance Company of
North America v. Pacific Clay Products Company (1970), 13
3d
Cal.App.4304, 91 Cal.Rptr. 52; Liberty Mutual Insurance
Company v. Truck Insurance Exchange (Ore. 1966), 420 P.2d 66
(contribution allowed).
Thus, the policy issued by General Accident comes
within the provisions of contract no. 2081 between McKee and
Anaconda that the policy provided by McKee will constitute
"primary coverage in the event of any claims against [Anaconda]
that are insurable under any of such policies."
The majority opinion makes it "overly broad" that General
Accident should be the insurer of all Anaconda activities at
the Smelter that result in an injury to anyone working pursuant
to the contract, regardless of control and benefit. That state-
ment overlooks the clause of contract no. 2081 that Anaconda
would be an additional named insured with respect to "risks
of any kind relating to the construction".
The endorsement which makes Anaconda an additional
insured under the general liability policy is as follows:
". .
. that the Anaconda Company, Anaconda, Montana,
is an additional insured under this policy in
accordance with provisions of contract no.
2081 with Arthur G. McKee and Company and dated
May 15, 1971."
McKee's employee was not an interloper on Anaconda's
premises at the time of the injury. He was there in further-
ance of contract no. 2081. The risk that he might be injured
by Anaconda's employees was within the "risks of any kind relating
to the construction" for which McKee agreed to provide insurance
to Anaconda.
There is no reason to return this case to the District
Court under the guise of seeking the "intent" of the parties
with respect to the insurance here provided. Where the language
of the insurance policy admits of only one meaning, there is
no basis for the interpretation of policy coverage under the
guise of ambiguity. Universal Underwriters Insurance Company
v. State Farm Mutual Auto Insurance Company (1975), 166 Mont.
128, 531 P.2d 668.
Since the injury to McKee's employee is plainly within the
coverage extended to Anaconda by General Accident under this
policy of insurance, the District Court was correct in awarding
judgment to Anaconda for the amount required to settle the claim
of McKee's employee, plus the cost of defense that Anaconda
incurred in handling the claim against it by McKee's employee.
The District Court in this case should be affirmed.
I concur with the foregoing dissent.
Chief Justice