Evanston Insurance Company v. Westchester Surplus Lines Insu

FILED
NOT FOR PUBLICATION OCT 03 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
EVANSTON INSURANCE COMPANY, No. 10-36133
Plaintiff, D.C. No. CV 07 00923 MJP
and
AMERICAN GUARANTEE & MEMORANDUM *
LIABILITY INSURANCE COMPANY,
Plaintiff - Appellant
v.
WESTCHESTER SURPLUS LINES
INSURANCE COMPANY; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, District Judge, Presiding
Argued and Submitted August 30, 2011
Seattle, Washington
Before: HAWKINS, McKEOWN, and BEA, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
1
American Guarantee & Liability Insurance Company (“American
Guarantee”) appeals from the district court’s judgment, following a bench trial, in
favor of Westchester Surplus Lines Insurance Company (“Westchester”) and Royal
Insurance Company (“Royal”), in this “additional insured” insurance coverage
dispute.1 The district court concluded that Northwest Tower Crane Services
(“Northwest”), a subcontractor at a large construction site, did not enter into a
contract requiring Northwest to add Bellevue Master LLC (“Bellevue Master”) as
an additional insured on Northwest’s liability insurance policies.2 We have
jurisdiction pursuant to 28 U.S.C. § 1291. We reverse.
“We review the district court’s findings of fact after a bench trial for clear
error and review the district court’s conclusions of law de novo.” Bertelsen v.
Harris, 537 F.3d 1047, 1056 (9th Cir. 2008). The interpretation of an insurance
contract is a question of law that is reviewed de novo. Holden v. Farmers Ins. Co.
of Wash., 239 P.3d 344, 347 (Wash. 2010) (citations omitted). The district court
erred when it concluded that Northwest did not agree in a contract to make
1
Because the parties are familiar with the facts of the case, we repeat them
here only as necessary to explain our decision.
2
Both parties agree that if the Westchester policy covers Bellevue Master,
the Royal surplus policy also applies. Thus, this decision principally discusses the
Westchester policy.
2
Bellevue Master an additional insured. “A unilateral contract exists when one
party offers to do a certain thing in exchange for the other’s performance, and
performance by the other party constitutes acceptance.” Cascade Auto Glass, Inc.
v. Progressive Cas. Ins. Co., 145 P.3d 1253, 1258 (Wash. Ct. App. 2006) (citing
Knight v. Seattle First Nat’l Bank, 589 P.2d 1279 (Wash. 1979)). The fax from
Bellevue Master to Northwest on February 22, 2001 was an offer: Northwest
would be able to continue working as a subcontractor at the construction project
provided it complied with Bellevue Master’s insurance requirements. When it
contacted its insurance broker and requested that the broker issue the insurance
certificate to Bellevue Master, Northwest accepted the unilateral contract.
The contract for insurance between Northwest and Bellevue Master was
fully executed prior to loss, as was required for Bellevue Master to be covered
under the Westchester and Royal policies. This is the case regardless of whether
we look to the legal definition or to the plain and ordinary meaning of the term
“executed.” Black’s Law Dictionary provides two meanings for “executed”: a
written and signed contract, or a contract that has been fully performed by both
parties. (9th ed. 2009). Under Washington law, undefined contractual terms must
be given their “plain, ordinary, and popular” meaning. Boeing Co. v. Aetna Cas.
and Sur. Co., 784 P.2d 507, 511 (Wash. 1990) (citing Farmers Ins. Co. v. Miller,
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549 P.2d 9 (Wash. 1976) and Prudential Property & Cas. Ins. Co. v. Lawrence,
724 P.2d 418 (Wash. Ct. App. 1986)). The ordinary meaning of terms should be
determined by looking to standard English dictionaries. Id. The Oxford English
Dictionary defines “executed” as “carried out, performed, practised, inflicted.” (2d
ed. 1989). Bellevue Master made an offer which Northwest accepted through
performance. The contract was executed.
The additional insured coverage of the Westchester policy applies only to
liability arising out of Northwest’s “ongoing operations” performed for Bellevue
Master. Washington courts have interpreted such clauses and have found that “the
endorsement evinces an intent to provide coverage to the additional insured only
for liability that arises while the work is still in progress,” such as in the “course of
construction work site accident involving bodily injury or property damage.”
Hartford Ins. Co. v. Ohio Cas. Ins. Co., 189 P.3d 195, 201–02 (Wash. Ct. App.
2008). The manlift work at issue occurred in the course of Northwest’s work at the
same construction project involved in Northwest’s and Bellevue Master’s earlier
contracted work: the Lincoln Square Project. Thus, the work was covered by the
“ongoing operations” clause.
Appellees argue that Northwest, when it performed the work at issue in this
case, was working pursuant to a contract with another Bellevue Master
4
subcontractor, so any additional insured coverage for Bellevue Master does not
apply. We reject this argument. Bellevue Master contacted Northwest directly to
perform the work at issue. Northwest accepted the offer, performed the work, and
was paid directly by Northwest. Each party to bear its own costs on appeal.
REVERSED.
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