Court: Court of Appeals of Washington; June 8, 1999; Washington; State Appellate Court
Cle Elum Bowl, Inc. leased a building from Robert and Sena Lanphere to operate a bowling alley and obtained general liability insurance from North Pacific Insurance Company. The lease required Cle Elum to remove snow and ice, while the Lanpheres were responsible for maintaining the roof's structural integrity. After the bowling alley's roof collapsed under heavy snow, Mr. Lanphere sued Cle Elum for breach of contract and negligence. North Pacific denied coverage, arguing the incident did not constitute an "occurrence" and excluded damage to rented property. Cle Elum's lawsuit against North Pacific for coverage was dismissed on summary judgment. The appeals raised four main contentions: the roof collapse was an "occurrence," the exclusion for rented property was overridden by a lease-related coverage provision, the policy covered Cle Elum's director, and the claim fell under personal injury liability per a cited case. The summary judgment was affirmed. The lease required Cle Elum to maintain liability insurance of at least $500,000 per occurrence and $1,000,000 for personal injuries, naming the Lanpheres as additional insureds. The insurance policy defined "occurrence" as an accident and included various exclusions, notably for expected damages and damage to property rented by the insured. Following the December 1996 snowstorm and subsequent roof collapse, Cle Elum sought a declaratory judgment against North Pacific, which had counterclaimed, asserting no coverage applied as the damages were not caused by an "occurrence."
Mr. Lanphere and the Washington insurance broker for Cle Elum were added as third-party defendants in a case concerning insurance coverage for a roof collapse. Mr. Lanphere sought summary judgment to affirm coverage under the insurance policy, while North Pacific Insurance filed a cross-motion for summary judgment, asserting that the policy excluded coverage for casualty loss claims. The trial court, interpreting Cle Elum’s motion as a request for summary judgment, ruled that the policy did not cover the roof collapse and granted summary judgment to North Pacific, dismissing the case with prejudice.
On appeal, Mr. Lanphere argues that the trial court incorrectly determined that the roof collapse did not constitute an “occurrence” under the policy and misapplied exclusions related to property rented by the insured. The review of summary judgments regarding insurance coverage proceeds de novo when no facts are in dispute, with the interpretation of insurance contracts being a legal question. The policy must be construed as a whole, ensuring clarity for the average person while not allowing an insured's expectations to override clear contract language.
The analysis focuses on whether an average person would view the roof collapse as a covered occurrence and whether the insured would understand that the policy explicitly denied coverage for damage to rented property. Comprehensive general liability policies are intended to cover tort liability related to third-party injuries and property damage, not the insured's losses or damage to their own or rented property. The term “occurrence” is defined in the policy as an accident, which is typically understood as an unintended event. The court emphasizes that undefined terms should be interpreted based on their plain meaning.
The North Pacific policy excludes coverage for bodily injury or property damage that the insured “expected or intended.” Determining whether the insured expected an event involves a subjective assessment of their state of mind. The trial court ruled that the roof collapse was not unexpected or unforeseen, thus not qualifying as an “occurrence” under the policy. However, there is a material fact dispute regarding the insured’s mindset about the likelihood of the roof collapsing due to snow accumulation. If the ruling relied solely on this, it would necessitate reversal and remand for trial.
Regardless of whether the roof collapse was an occurrence, the policy explicitly excludes damage to property owned or rented by the insured. This exclusion applies to the building leased by Cle Elum, which the corporation acknowledged. Mr. Lanphere argues that an earlier provision creates an ambiguity regarding this exclusion, as it pertains to liability assumed through a lease. However, specific provisions in an insurance contract take precedence over general ones. The policy's clear exclusion of damage to rented property remains unambiguous and relevant to its purpose.
Furthermore, the lease did not obligate Cle Elum to assume liability for damage to the building. While Cle Elum was required to maintain liability insurance and fire insurance, the lease did not assign liability for the roof collapse to Cle Elum. Mr. Lanphere retained responsibility for the building's structural integrity, including the roof.
Cle Elum argues that Mr. Tompkins, its director and officer, is not excluded from coverage for property damage caused by the corporation or its employees. This claim is rejected, as the insurance policy clearly designates officers and directors as insureds, subject to the same exclusions as the corporation. Cle Elum's interpretation—suggesting the absence of explicit exclusion for directors implies coverage—is deemed strained and inconsistent with the policy's language. Mr. Tompkins acted within his corporate authority, and there is no contractual obligation for him to personally clear snow from the bowling alley roof, thus he does not qualify for an exception to the exclusion for contractual liability.
The policy's personal injury liability section covers damages for personal injury or advertising injury arising from offenses related to the insured's business. Personal injury is defined as injuries, excluding bodily injury, from wrongful eviction or invasion of private occupancy. Citing Kitsap County v. Allstate Ins. Co., Mr. Lanphere claims that the destruction of his building violates his right of private occupancy, arguing coverage under the personal liability section. However, he misinterprets the Kitsap County case, which emphasizes that the nature of the underlying claim determines the applicability of personal injury coverage, not merely the injury type. The claims against Cle Elum for breach of contract and negligence do not align with wrongful entry or eviction claims.
Ultimately, the policy is interpreted as providing liability coverage for bodily injury and property damage to third parties, explicitly excluding damage to the premises leased and occupied by Cle Elum. Therefore, North Pacific has no duty to defend, and the trial court's summary judgment dismissing the suit is upheld. Since Cle Elum does not prevail, it is not entitled to attorney fees typically awarded to insured parties pursuing benefits from their insurance. The decision is affirmed, with concurrence from Justices Sweeney and Brown, and review denied by the Washington Supreme Court.
