No. 12636
I N THE SUPREME C U T O THE STATE O MONTANA
OR F F
1974
ARTHUR J . ATCHESON,
P l a i n t i f f and Respondent,
SAFECO INSURANCE C M A Y and
O PN
GENERAL INSURANCE C M A Y O AMERICA,
O PN F
Defendant and Appellant.
Appeal from: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t ,
Honorable John B. McClernan, Judge p r e s i d i n g .
Counsel of Record:
For Appellant :
Loble, P i c o t t e , Loble, Pauly & Sternhagen, Helena, Montana
Gene P i c o t t e argued and C a r t e r P i c o t t e argued,
Helena, Montana
Henningsen, P u r c e l l and Genzberger, B u t t e , Montana.
For Respondent :
C o r e t t e , Smith and Dean, B u t t e , Montana
R. D. C o r e t t e , Jr argued and Gerald R. A l l e n argued,
B u t t e , Montana
)Ie*sen, Pl
i- a-FiB Gea+zBerger, 3lHxb, Ww
o-
Submitted: September 10, 1974
Decided:. OCT 2 2 1974
F i l e d : QCT 2 2 1974
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is an appeal by the two appellant insurance companies
from a partial summary judgment ordering the two insurance com-
panies to provide a defense for respondent Atcheson in an action
pending in the United States District Court for the District of
Alaska.
The two insurance companies, hereinafter referred to as
Safeco, are the insurer of respondent Atcheson on policies issued
on his business of being a taxidermist. The respondent's place
of business is located in Butte, Montana. His business operations
are worldwide. His deposition indicates that animals are sent
to him from hunters from various parts of the world because of his
reputation and expertise as a taxidermist built up over a period of
more than 15 years. He has traveled widely particularly in Africa,
and he has established business connections and friendships with
various Safari Companies on that continent and particularly in the
country of Zambia.
As a result of these business connections in Zambia, a
hunter from Alaska, Murray Clark, was referred to him as a taxi-
dermist. It would appear from the deposition that one of Clark's
lifetime dreams was to go to a warmer climate to hunt and kill,
among other animals, a prime, old, heavy-maned trophy lion. In
1970 Clark fulfilled his lifelong ambition and went to Zambia
where he killed what is described in his complaint, "a prime, old,
heavy-maned, trophy lion". In addition he shot a buffalo, an
eland, an oribi, a waterbuck, a leche, a sable, and a warthog.
All of these trophy animals were sent to the respondent to be
mounted or processed by his taxidermy business.
What happened thereafter is described by the appellants
as "bizarre". The various trophy animals were shipped to this
country in several shipments, all of which were opened and handled
by customs before being forwarded to the respondent. Few of the
items appeared to have been labekd as Clark's but were assumed
to be, by the respondent, due to the fact they came from Zambia
and were the type of animals claimed by Clark. By the time some
of them were mounted and forwarded to Clark in Alaska, a dispute
arose with Clark who claimed, among other things, that he got the
wrong lion. He alleged it was smaller, less well maned than the
one he shot. Too, that the eland horns were the wrong horns. The
dispute resulted in the filing of a cause of action in Alaska
against the respondent and upon being served with a summons and
complaint in Butte, the respondent immediately turned to his insur-
ance companies for a defense. Among other allegations of the com-
plaint it was alleged that the respondent did not comply with his
agreement to mount nine trophy animals, that they were improperly
shipped by him, that some of the trophys were not his and that the
respondent has improperly handled, lost or destroyed some of the
trophys.
The respondent did business with appellants through their
agents in Butte. The deposition indicated that prior to the
difficulty above referred to the respondent had the appellants'
agent come to his place of business where he showed them through
the business, explained its operations and that these agents put
together a voluminous policy covering what they thought was what
was needed to cover the operations of the business. The respond-
ent in his deposition stated that he told them: "Don't tell me
what I have, tell me what I don't have and I'll buy it." The
policy sold was a "liability policy" and it contained a "Bailees
Customers Laundries and Dry Cleaners Form". We direct our at-
tention to Section I1 of the Policy, which is the liability por-
tion of the policy, and to the above "Bailees Customers Laundries
and Dry Cleaners Form" to ascertain whether or not there was a
duty of Safeco under the blanket policy to defend the respond-
ent. The provisions of same are hereinafter set forth:
Section 11, the Blanket Liability portion of the policy
begins its first paragraph as follows:
"The company will pay on behalf of the insured
all sums which the insured shall become legally
obligated to pay as damages because of bodily
injury or property damage to which this insuranc
c h a l 1 haxrn t h n rirrht and diii-tr t n iinfand
a y
n
suit against the insured seekinq damages on
account of such bodily injury or property damaqe
even if any of the allegations of the suit are
qroundless, false or fraudulent, and may make su
Investisation and settlement of any claim or sui
as it deems expedient. The cornpan$ shall not be
obligated to pay any claim or judgment or to de-
fend any suit after the applicable limit of the
company's liability has been exhausted by payment
of judgments or settlements."
The "Bailees Customers Laundries and Dry Cleaners Form"
reads :
"1. COVERAGE: This form covers on all goods or
articles accepted by the insured for cleaning,
renovating, pressing, dyeing, repairing or
laundering, the property of his customers, while
contained on the premises occupied by the insured,
or in the custody of his agents or branch stores,
provided these locations are scheduled or endorsed
hereon, and while being transported to and from
the premises of his customers or branch stores
or agents.
"2. ADJUSTMENT AND PAYMENT OF PREMIUMS. The prem-
iums for insurance under this form shall be
computed by applying the rates shown in the
declarations. Premiums so computed shall be
due and payable on or before the tenth day of
each month for the preceding month.
"3. THIS FORM INSURES, except as hereinafter provided,
against direct loss or damage caused by:
"(a) Fire, arising from any cause whatsoever,
including lightning;
"(b) Explosion, whether or not fire ensues;
"(c) Accidental collision of the vehicle on which
the property is carried, with any other
vehicle or object, including the overturn-
ing of the vehicle, or collapse of bridges;
"(d) Tornado, cyclone or windstorm, including
any loss or damage that may occur from
hail, rain, sleet, or snow, whether or
not driven by wind;
" (e) Earthquake;
" (f) Sprinkler leakage;
"(g) Flood, meaning thereby the rising of
navigable waters;
"(h) Theft, burglary and hold-up;
"(i) Strikes, riots and civil commotion;
(j) Water damage (meaning the accidental
discharge, leakage or overflow of water
or stream from the plumbing system,
overhead tanks, steam or hot water
heating pipes, including radiators,
standpipes for fire hose, sprinkler
system or by bursting steam or water
pipes, boilers or tanks within the
premises) ;
"(k) Smoke damage directly caused by the
breakdown or faulty operation of the
fuel burning equipment used in connec-
tion with steam boilers, hot water
boilers, or heating apparatus;
"(1) Transportation risks by public carriers
or mail service;
I (m) Aircraft or vehicles;
'
" ( n ) Confusion of goods resulting from any
of the foregoing perils.
G.R.
THIS FORM DOES NOT INSURE NON MONEY
By (Signature not legible)
' ( ) Accounts, bills, deeds, currency, evidences
'a
of debt, money, notes, securities;
"(b) Theft by any person in the service or
employment of the insured, whether or
not occurring during the hours of such
service or employment;
"(c) Theft of goods or packages left on
delivery vehicles overnight, unless
locked in insured's private garage or
building occupied by insured;
"(d) Loss or damage to goods while in the
custody of other dyers, cleaners and
pressers, or laundries unless specifi-
cally endorsed hereon;
"(e) Loss, if at the time of loss or damage
there be any other insurance covering
a g a i n s t r i s k s assumed by t h i s form
which would a t t a c h i f t h i s i n s u r a n c e
had n o t been e f f e c t e d ;
" ( f ) Loss of o r damage r e s u l t i n g from m i s -
d e l i v e r y o r c a r e l e s s d e s t r u c t i o n of goods
o r o t h e r u n a c c o u n t a b l e l o s s where t h e r e
i s no e v i d e n c e t h a t t h e l o s s o r damage
w a s o c c a s i o n e d by t h e p e r i l s s p e c i f i c -
a l l y insured against;
"The p o l i c y o r s u p p l e m e n t a l endorsement e x c l u s i o n s
a p p l y i n a d d i t i o n t o t h o s e l i s t e d above.
"SPECIAL CONDITIONS:
'I ( a ) Goods a c c e p t e d f o r s t o r a g e on which a
c l e a n i n g c h a r g e h a s been o r i s t o b e made
a r e insured only while i n process of
cleaning o r laundering o r while i n t r a n s -
p o r t a t i o n by t h e i n s u r e d between i t s p l a n t
o r branch s t o r e s o r i t s a g e n c i e s o r
customers.
" ( b ) The company s h a l l be l i a b l e and s h a l l pay
t o t h e i n s u r e d t h e customary c h a r g e s t h a t
have been e a r n e d on any l o s t o r damaged
goods.
" ( c ) The i n s u r e d a g r e e s t h a t a l l t h e f t s f o r
which c l a i m s a r e made under t h i s form
w i l l be r e p o r t e d promptly t o t h e p o l i c e
department.
"EFFECTIVE: 4-7-7 0"
The a p p e l l a n t d e n i e d l i a b i l i t y a s s e r t i n g t h a t n e i t h e r o f
t h e two c o u n t s of r e s p o n d e n t ' s c o m p l a i n t s t a t e s a c l a i m upon
which r e l i e f c o u l d be g r a n t e d , d e n i e d t h e r e s p o n d e n t a d e f e n s e
i n t h e A l a s k a c a u s e of a c t i o n and p l e a d s i x a f f i r m a t i v e d e f e n s e s
i n i t s answer.
TLe i s s u e b e f o r e t h e Court i s whether o r n o t t h e lower
c o u r t e r r e d i n g r a n t i n g a p a r t i a l summary judgment a g a i n s t t h e
a p p e l l a n t s o r d e r i n g them t o d e f e n d t h e r e s p o n d e n t i n t h e Alaska
suit.
The a p p e l l a n t r e l i e s on s e v e r a l c o n t e n t i o n s s t r e s s i n g two
in particular. One, t h a t t h e i n s u r a n c e companies a r e e n t i t l e d
t o f a i r c o n s i d e r a t i o n and s h o u l d n o t be p r e j u d i c e d b e c a u s e t h e y
a r e i n s u r a n c e companies. A s t o t h i s c o n t e n t i o n we f i n d n & e r i t
and w i l l n o t f u r t h e r d i s c u s s same. Two, w h i l e t h e y c o n c e d e t h a t
t h e Alaska c o m p l a i n t i n d i c a t e s t h a t c e r t a i n goods ( t r o p h y s )
were a c c e p t e d by r e s p o n d e n t f o r t a x i d e r m y p u r p o s e s , and some were
t r a n s p o r t e d by p u b l i c t r a n s p o r t a t i o n t o C l a r k i n A l a s k a , t h a t
n e v e r t h e l e s s t h e c o v e r a g e i s s t r i c t l y l i m i t e d by p a r a g r a p h 3
and t h a t t h e o n l y r i s k i n s u r e d a g a i n s t i s some d i r e c t l o s s o r
damage c a u s e d by one of t h e enumerated p e r i l s ( a ) t h r o u g h ( n ) ,
and t h a t t h e r e was no a l l e g a t i o n i n t h e c o m p l a i n t of any d i r e c t
l o s s o r damage caused by any of t h e enumerated p e r i l s o r r i s k s .
W e f i n d no m e r i t t o t h i s c o n t e n t i o n .
C o n s i d e r i n g t h e a l l e g a t i o n s of t h e Alaskan c o m p l a i n t and
t h e r e l e v a n t p o r t i o n s of t h e S a f e c o p o l i c y w e f i n d t h e t r i a l c o u r t
d i d n o t e r r i n i t s conclusion o r d e r i n g Safeco t o defend i n t h e
Alaska l i t i g a t i o n .
I t i s t o t h e a l l e g a t i o n s of t h e Alaskan c o m p l a i n t t h a t we
l o o k t o d e t e r m i n e whether o r n o t t h e r e i s a d u t y t o d e f e n d . The
a p p e l l a n t h a s a d u t y t o d e f e n d where t h e c o m p l a i n t sets f o r t h
f a c t s which a r e a p a r t of t h e c o v e r e d r i s k . The r u l e on t h e d u t y
t o d e f e n d i s s e t f o r t h i n 50 A.L.R.2d 506-7:
"Where a c o m p l a i n t a l l e g e s f a c t s which r e p r e s e n t
a r i s k o u t s i d e t h e c o v e r a g e of t h e p o l i c y b u t
a l s o a v e r s f a c t s which, i f proved, r e p r e s e n t a
r i s k c o v e r e d , t h e i n s u r e r i s under a d u t y t o
d e f e n d . * * * (Cases c i t e d . ) "
Here, w h i l e t h e Alaskan c o m p l a i n t i s n ' t a t e x t b o o k model, it d o e s
a l l e g e t h a t t h e r e s p o n d e n t breached h i s agreement w i t h C l a r k i n
t h a t it a l l e g e s t h a t r e s p o n d e n t e i t h e r m i s p l a c e d , d e s t r o y e d o r
o t h e r w i s e mishandled C l a r k ' s t r o p h y s .
S e c t i o n I1 o f t h e S a f e c o p o l i c y p r o v i d e s f o r l i a b i l i t y
i n s u r a n c e and must be c o n s i d e r e d i n d e t e r m i n i n g t h e d u t y t o d e f e n d .
T h i s p o l i c y was s o l d c o v e r i n g a 3 y e a r p e r i o d and w a s e f f e c t i v e
a s c o n c e r n s t h e v a r i o u s a c t s complained o f by C l a r k . Too, S e c t i o n
I1 i n c l u d e s a n a d d i t i o n a l d e c l a r a t i o n d a t e d A p r i l 1 7 , 1970, and
t h i s d e c l a r a t i o n w i t h t h e h e a d i n g " D e s c r i p t i o n and L o c a t i o n of
Insured Property" has typed upon it the words, "Bailees Customer".
The first page of the "Bailees Customers Endorsement" contains
the following language with respect to the coverage.
"1. COVERAGE: This form covers on all goods
or articles accepted by the insured for cleanin
- +:
- I
renovating, pressinq, dyeinq, repairinp or laun
ering, the property of his customers, while con-
tained on the premises occupied by the insured,
or in the custody of his agents or branch stores,
provided these locations are scheduled or endorsed
hereon, and while being transported to and from
the premises of his customers or branch stores
or agents." (Emphasis supplied.)
Clark's complaint alleging that the respondent misplaced,
destroyed or mishandled the trophys either on the premises or in
making improper shipments are risks contemplated in the coverage.
In addition, it should be noted that the "Bailee Customers and
Laundries and Drycleaners Form" sold to respondent after consul-
tation with the appellants' agents provides:
"3. THIS FORM INSURES, except as hereinafter
provided, against direct loss or damages caused
by :
"(1) Transportation risks by public carriers or
mail service;
I (m) Aircraft or vehicles;
'
"(n) Confusion of goods resulting from any of
the foregoing perils."
Taking these words of the agreement and relating them to the sub-
ject matter about which the parties contracted it is obvious that
they contracted with respect to respondent's business and not some
unrelated business. See Park Saddle Horse Co. v. Royal Indem. Co.,
81 Mont. 99, 261 P. 880; Independent M. & C. Co. v. Aetna L. I.
Co., 68 Mont. 152, 216 P. 1109.
Despite appellants' argument to the contrary there are
elements of ambiguity in the policy. The additional declaration
and Bailee Customers Endorsement relate to the liability section
of the policy, but the Bailee Customers Endorsement form relates
to the Laundry and Dry Cleaning business not the taxidermy bus-
iness. When an ambiguity arises as noted above the insured is
entitled to the benefit of any doubt. his Court in Eby v.
Foremost Insurance Co. 141 Mont. 62, 66, 374 P.2d 857, provided
the rule for the construction of an ambiguous insurance policy:
" * * * But if the terms of the policy are
ambiguous, obscure, or open to different con-
struction, the construction most favorable to
the insured or other beneficiary must prevail.
That general rule applies with particular force
to an ambiguous or doubtful provision of a
policy or in an endorsement attached thereto
which attempts to exclude from coverage liability
in certain circumstances."
See also Johnson v. Equitable Insurance Co., 142 Mont. 128, 381
P.2d 778; St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont.
The appellant argues several affirmative defenses which
we find are without merit. Despite Safeco's contention to the
contrary the Alaska complaint does allege facts within the perils
enumerated entitling the respondent to a defense by the appellants.
We are not here concerned, nor was the trial judge with the out-
come of the cause in Alaska for it may well be that Safeco is not
liable for the alleged losses. The relevant consideration here
is that on its face the complaint clearly alleges matters within
Safeco's responsibility; and, the district court properly granted
a partial summary judgment directing Safeco to defend.
The judgment of the district court is affirmed.
{\---,Cq-&& Justice
We concur:
- k .
L-----,---,,----,,---------2-f#
Chief ~ustice
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Justices - 9 -