Terrie Lewark v. American States Insurance Company ( 2013 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
TERRIE LEWARK, assignee of PUBLIC
STORAGE, INC. No. 68634-8-1
Appellant, ORDER GRANTING
MOTION TO PUBLISH
DAVIS DOOR SERVICES, INC., a
Washington corporation,
Defendant,
AMERICAN STATES INSURANCE
COMPANY, a foreigner insurer,
Respondent.
The respondent, American States Insurance Company, having filed its motion to
publish, and appellant, Terrie Lewark, having filed a response to the respondent's
motion to publish herein, and a panel of the court having reconsidered its prior
determination not to publish the opinion filed for the above entitled matter on February
10, 2014, and finding that it is of precedential value and should be published; now,
therefore it is hereby
ORDERED that the written opinion filed February 10, 2014, shall be published
and printed in the Washington Appellate Reports.
DATED this ^?5 dav of ///WV/l •2014.
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
TERRIE LEWARK, assignee of PUBLIC
STORAGE, INC. No. 68634-8-1
Appellant, DIVISION ONE
PUBLISHED OPINION
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DAVIS DOOR SERVICES, INC., a :so
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Defendant,
AMERICAN STATES INSURANCE arr
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COMPANY, a foreigner insurer, CO
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Respondent. FILED: February 10, 2014
Appelwick, J. — Lewark, as assignee of Public Storage, sued American States
claiming coverage as an additional insured under an umbrella liability policy it issued to
Davis Door. She claimed breach of contract for failure to defend and indemnify and
asserted a variety of extra-contractual claims based on American States' alleged failure
to notify Public Storage of coverage. The trial court dismissed her claims on summary
judgment. The insurance policy did not provide coverage for the underlying claim. We
affirm.
FACTS
Public Storage Inc. contracted with Davis Door Service Inc. to perform work at its
facilities. They signed a master agreement in 2003, and again in 2006. The 2006
No. 68634-8-1/2
master agreement included a provision that required Davis Door to maintain a
commercial general liability policy that insured Public Storage "during the entire
progress of the work."
As required by the agreement, Davis Door took out a commercial general liability
policy and an employer's liability policy with American Economy. It also took out an
umbrella liability policy with American States.
In October 2006, Davis Door performed repair work on a door at a Public Storage
facility in Renton. Then, in December 2006, Terrie Lewark attempted to open the door
and injured her back. She sued Public Storage and Davis Door. Public Storage settled
with Lewark for $299,000. It also paid $150,028 in defense costs, and assigned to
Lewark its rights under the 2006 master agreement. Lewark settled with Davis Door in
September 2010 for $225,000. Then, Lewark sued Davis Door and American States as
assignee of Public Storage. Because she acted as assignee of Public Storage, we refer
to her as simply Public Storage.
Public Storage alleged it was an additional insured under the umbrella liability
policy and that American States breached the contract by failing to defend and
indemnify it. It also pursued extra-contractual claims for negligence, bad faith, and
violation of the Consumer Protection Act, ch. 19.86 RCW, and the Insurance Fair
Conduct Act, ch. 48.30 RCW. The parties filed competing motions for summary
judgment. The trial court dismissed all claims. It found that "Public Storage is not an
additional insured under the American States Insurance Company umbrella policy
issued to Davis Door."
No. 68634-8-1/3
DISCUSSION
Public Storage argues that it is an additional insured, that the umbrella insurance
policy covered the loss in this case, and that American States violated its duty of good
faith by failing to notify Public Storage of its policy benefits. It also claims that the trial
court abused its discretion by denying Public Storage's motion to compel discovery of
documents that American States alleges are protected by the work product doctrine and
attorney-client privilege. American States argues that Public Storage is not an
additional insured, that the policy was not triggered in this case, that it had no duty to
notify Public Storage of potential benefits, and that the trial court correctly denied the
motion to compel.
We review an order granting summary judgment de novo. Weden v. San Juan
Countv, 135 Wash. 2d 678, 689, 958 P.2d 273 (1998). We may affirm the order on any
grounds supported by the record. Allstot v. Edwards. 116 Wash. App. 424, 430, 65 P.3d
696 (2003).
The threshold issue in this case is whether Public Storage is an additional
insured under the umbrella liability policy. This question turns on the additional insured
language in the umbrella liability policy and the insurance requirement in the 2006
master agreement. The master agreement described the type of insurance required:
Contractor shall procure and maintain at its own expense during the entire
progress of the Work, the following insurance coverage from an insurance
company satisfactory to Owner:
Employer's liability insurance of not less than $1,000,000,
and commercial general liability insurance insuring against
claims for personal injury, death or property damage
occurring upon, in or about the Property in limits not less
than $1,000,000 per occurrence. Prior to the start of any
No. 68634-8-1/4
work a certificate of insurance must be received by Owner
naming Public Storage, Inc. and each of its affiliates,
subsidiaries, partners, owners, officers, directors and
employees as additional insureds.
(Emphasis added.) The umbrella liability policy provided that insured persons or entities
include:
Any person or organization for which an insured is reguired by virtue of a
written contract entered into prior to an "occurrence" to provide the kind of
insurance that is afforded by this policy, but only with respect to operations
by or on an insured's behalf, or to facilities an insured owns or uses, and
only to the extent of the limits of insurance reguired by such contract, but
not to exceed the applicable limits of insurance set forth in this policy.
(Emphasis added.) It also provided that the coverage was excess over other coverage:
This insurance is excess over, and shall not contribute with any other insurance,
whether primary, excess, contingent or on any other basis. This condition will not
apply to insurance written specifically as excess over this policy.
Public Storage claims that the language, "the kind of insurance that is afforded by
this policy," is ambiguous. It argues that the policy does not specify whether it is
referring to commercial general liability insurance or commercial umbrella liability
insurance, and does not define either term. Thus, it urges the court to liberally construe
the clause in favor of insurance coverage.
Whether both policies provide commercial liability coverage does not create
ambiguity. The master agreement requires a commercial general liability policy that
covers not less than $1,000,000 per occurrence. It is undisputed that Davis Door
purchased that kind of policy with the limits required by the master agreement. It was
not required to do more. The umbrella insurance policy was by its terms excess
coverage, providing coverage in excess of the limits of the commercial general liability
No. 68634-8-1/5
policy and in excess of the amounts required by the master agreement. Coverage
under the umbrella policy was not required by the master agreement.
The master agreement required Davis Door to maintain insurance "during the
entire progress of the Work." Lewark's underlying claim is based on injury more than
two months after the repairs to the door had been completed. Public Storage agrees
that the commercial general liability did not provide coverage for the claim. However, it
argues that the umbrella coverage should apply if it was the kind of insurance required
by the master agreement. American States argues that the master agreement does not
require coverage of completed operations, only coverage during ongoing operations.
Public Storage counters that the scope of coverage is defined by the umbrella liability
policy, not the master agreement.
The master agreement does not use either the phrase ongoing operations or
completed operations. The meaning of these phrases has been discussed in Hartford
Insurance Company v. Ohio Casualty Insurance Company, 145 Wash. App. 765, 777, 189
P.3d 195 (2008). The issue was whether "ongoing operations" language of an
additional insured endorsement excluded coverage for "completed operations." Id. The
court limited the coverage to damages arising out of the subcontractors' work in
progress only. jd. at 778. Here, the master agreement required insurance "during the
entire progress of the Work." Read in the context of the Hartford decision, that
language does not require completed operations coverage.
The umbrella policy only insures what is "required by virtue of a written contract."
Neither excess coverage nor completed operations coverage were required in the
No. 68634-8-1/6
master agreement. Public Storage is not covered under the umbrella policy as an
additional insured. The remaining issues are moot.
We affirm.
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WE CONCUR:
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