56 F. Supp. 3d 1194
D. Mont.2014Background
- WBI Energy Transmission, Inc. sues Colony Insurance Co. and National Union Fire Insurance Co. seeking declaration of coverage and duty to defend/indemnify in the underlying Shanks personal injury suit.
- Pro Pipe Services, Inc. contracted with WBI and procured insurance from Colony and National Union for the Project to protect WBI.
- Pro Pipe subcontracted Underground Boring Specialties, Inc. for excavation work related to the Project.
- Shanks alleged injuries from a backhoe hitting a live gas pipeline, naming WBI and Underground Boring as defendants in the underlying suit.
- WBI tendered defense to Pro Pipe and its insurers; Colony denied defense, National Union did not respond; WBI filed this declaratory judgment action.
- Court grants WBI partial summary judgment on insurance coverage and defense duties; Colony and National Union’s summary judgments denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is WBI an additional insured under Colony Policy? | WBI is named as an additional insured by written contract. | Colony contends the endorsement is ambiguous and may not cover WBI. | Yes; WBI is an additional insured under Colony policy. |
| Is WBI an additional insured under National Union Policy through follow-form? | WBI is an additional insured through the umbrella policy that follows underlying coverage. | National Union argues coverage is limited to underlying insureds and does not extend to WBI. | Yes; WBI is also an additional insured under National Union Policy. |
| Does Colony have a duty to defend in the underlying lawsuit? | Because WBI is an additional insured, Colony has a duty to defend if claims could fall within policy coverage. | Colony argues the claims fall outside coverage or are limited by endorsement. | Colony has a duty to defend WBI. |
| Does the contractual liability exclusion defeat coverage for the Shanks claim? | Indemnity/insured contract language should not preclude coverage for an additional insured. | Exclusion bars coverage for bodily injury assumed by contract unless an insured contract applies. | No; the insured contract and endorsement support coverage. |
| Indemnity obligation and allocation of defense costs | Indemnity to be determined; defense costs allocation to be resolved later. | Allocation depends on status of underlying action and exhaustion issues. | Indemnity unresolved; allocation to be addressed in scheduling conference. |
Key Cases Cited
- In re Estate of Burrell, 245 P.3d 1106 (Mont. 2010) (contractual interpretation; ambiguity resolved in insured's favor)
- United Natl. Ins. Co. v. St. Paul Fire & Marine Ins. Co., 214 P.3d 1265 (Mont. 2009) (insurance policy interpretation; duty to defend governed by policy terms)
- Plum Creek Marketing, Inc. v. American Economy Insurance Co., 214 P.3d 1238 (Mont. 2009) (additional insured endorsement interpreting 'caused, in whole or in part' coverage)
- Scentry Biologicals, Inc. v. Mid-Continent Cas. Co., 319 P.3d 1260 (Mont. 2014) (certificate/intent evidence supports existence of additional insured)
- Slater v. Central Plumbing & Heating Co., 912 P.2d 780 (Mont. 1996) (comparative interpretations of insurance endorsements)