2:97-cv-00925 | D. Utah | Sep 18, 2007
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 1 of 34
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
*********
CENTURY INDEMNITY COMPANY, )
) Civil No. 2:97-CV-00925 BSJ
Plaintiff, )
)
vs. ) MEMORANDUM OPINION
) & ORDER
THE HANOVER INSURANCE )
COMPANY, THE HARTFORD )
INSURANCE COMPANY, AND PACIFIC )
INSURANCE, LTD., ) FILED
) CLERK, U.S. DISTRICT COURT
Defendants. ) September 18, 2007 (4:10pm)
DISTRICT OF UTAH
*********
This matter is before the court on plaintiff Century Indemnity Company's (“Century”)
motion for partial summary judgment, in which defendant and cross-claimant Pacific Insurance,
Ltd. (“Pacific”) joins in part, and on defendant The Hartford Insurance Company's (“Hartford”)
cross-motion for summary judgment.1
These motions were previously considered and summary judgment was granted in
Hartford's favor on the basis that Century’s and Pacific’s claims against Hartford were barred by
the doctrine of res judicata.2 On Century’s and Pacific’s appeal of the district court’s decision,
the Tenth Circuit Court of Appeals held that “the district court erred when it concluded that the
state and federal cases involved the same parties or their privies,” reversed the grant of summary
1
(Plaintiff Century Indemnity Company’s Motion for Partial Summary Judgment (dkt. no. 75) (“Century’s
Motion for Partial S.J.”); Pacific Insurance, Ltd.’s Memorandum in Support; In Response to Plaintiff Century
Indemnity Company’s Motion for Summary Judgment (dkt. no. 78) (“Pacific’s Supporting Memo.”); Hartford’s
Cross Motion for Summary Judgment (dkt. no. 81).)
2
(Memorandum Decision and Order, Case No. 2:97-cv-925K (dkt. no. 100).)
1
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 2 of 34
judgment to Hartford on that basis, and remanded the matter to the district court for further
proceedings.3 This matter was then assigned to this court.4
Following the Tenth Circuit's remand, the parties filed supplemental memoranda
regarding the remaining issues presented in their cross-motions for summary judgment.5 The
parties presented their arguments on the remaining issues during hearings on January 10, 2006
and April 18, 2007.6 During the hearings, Paul M. Belnap and Andrew D. Wright of Strong &
Hanni appeared on behalf of Century, Donald L. Dalton of Dalton & Kelley appeared on behalf
of Pacific, and Rebecca L. Hill of Christensen & Jensen, P.C. appeared on behalf of Hartford.7
Having considered the parties’ briefs and arguments, as well as the law and facts relevant to the
cross-motions for summary judgment, the court enters the following Memorandum Opinion &
Order.
I. Background
On January 19, 1994, Voest-Alpine Services and Technologies Corp. (“VAST”) and
3
Century Indem. Co. v. Hanover Ins. Co., 417 F.3d 1156" date_filed="2005-08-05" court="10th Cir." case_name="Century Indemnity Co. v. Hanover Insurance">417 F.3d 1156, 1159-61 (10th Cir. 2005).
4
(Order and Docket Entry (dkt. no. 135).)
5
(Plaintiff Century Indemnity’s Supplemental Brief Regarding Pending Motions for Summary Judgment
(dkt. no. 145) (“Century’s Supplemental Brief re: S.J.”); Supplemental Memorandum in Support of and in Response
to Plaintiff’s Motion for Partial Summary Judgment (dkt. no. 143) (“Pacific’s Supplemental Memo. re: S.J.”);
Defendant Hartford Insurance Company’s Supplemental Briefing Regarding Pending Motions for Summary
Judgment (dkt. no. 146) (“Hartford’s Supplemental Brief re: S.J.”); Memorandum in Reply to Hartford’s
Supplemental Briefing Regarding Pending Motions for Summary Judgment (dkt. no. 147); Supplemental Reply
Memorandum in Support of Plaintiff’s Motion for Summary Judgment (dkt. no. 149); Century Indemnity Company’s
Supplemental Brief Regarding Indemnification and Contribution (dkt. no. 153) (“Century’s Supplemental Memo. re:
Indemnification”); Pacific’s Supplemental Memorandum (Nature of Claims) (dkt. no. 152); Defendant Hartford
Insurance Company’s Supplemental Briefing Regarding the Nature of Century Indemnity’s and Pacific Insurance’s
Claims (dkt. no. 154).)
6
(Minute Entry, dated January 10, 2006 (dkt. no. 150); Minute Entry, dated April 18, 2007 (dkt. no. 164).)
7
(Id.)
2
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 3 of 34
Mountain States Steel, Inc. (“Mountain States”) entered into a lease agreement (the “Lease”)
regarding VAST's lease of certain real estate and facilities (the “premises”) from Mountain
States.8 The Lease specified certain improvements that Mountain States and VAST were each
responsible to complete in order to prepare the premises for VAST’s use and occupancy.
During March of 1994, personnel from both Mountain States and VAST were on the
premises working on the improvements required by the Lease. On March 4, 1994, VAST
employees Alfonse Ramirez (“Ramirez”) and Mark Bakowski (“Bakowski”) were seriously
injured while performing work necessary to “[e]nclose the west wall,” which was one of
Mountain States’ improvement obligations under the Lease.
After the accident, Ramirez and Bakowski asserted claims against Mountain States, but
not VAST. Relying on a provision in the Lease requiring VAST to insure Mountain States
“against any liability arising out of the ownership, use, occupancy or maintenance of the
premises,” Mountain States tendered defense of Ramirez’s and Bakowski’s claims to VAST.
Hartford, VAST’s insurer, refused to defend Mountain States.9 After Hartford’s refusal, Pacific
(Mountain States' primary insurer) defended Mountain States against Ramirez’s claim, which
was ultimately settled for $1,182,500. Pacific contributed its $1,000,000 policy limit to the
8
The facts set forth in this section are undisputed and are taken from Century’s and Hartford’s summary
judgment briefs. (See Memorandum in Support of Motion for Partial Summary Judgment (dkt. no. 76) (“Century’s
Supporting Memo.”), at 3-28; Hartford’s Memorandum in Opposition to Century’s Motion for Partial Summary
Judgment and in in Support of its Cross Motion for Summary [sic] (dkt. no. 82) (“Hartford’s Supporting Memo.”), at
2-20; Century Indemnity’s Reply Memorandum in Support of Motion for Partial Summary Judgment and
Memorandum in Opposition to Hartford’s Motion for Summary Judgment (dkt. no. 91) (“Century’s Reply”), at 3-6;
Hartford’s Reply Memorandum in Support of its Cross Motion for Summary Judgment (dkt. no. 94) (“Hartford’s
Reply”), at 3.) Pacific joined in substantial part in Century’s motion for partial summary judgment and did not
respond to or dispute any of the facts included in this section. (See Pacific’s Supporting Memo., passim.)
9
Hanover Insurance Company (“Hanover”), another insurer of VAST at the time of the Ramirez/Bakowski
accident, also refused to defend Mountain States. When this case began, both Hartford and Hanover were named as
defendants. However, Century and Pacific have since settled their claims with Hanover. (Century's Case Status
Report and Request to Resubmit Plaintiff's Motion for Partial Summary Judgment (dkt. no. 132), at 3-4.)
3
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 4 of 34
Ramirez settlement, and Century (Mountain States’ excess insurer) contributed the remaining
$182,500. Bakowski, unlike Ramirez, filed a lawsuit against Mountain States.10 Bakowski
ultimately agreed to settle with Mountain States, and Century paid the $503,714 settlement
amount.
At the time of the Ramirez/Bakowski accident, VAST was a named insured of two
Hartford insurance policies: a Special Multi-Flex Policy, Policy No. 12 UUN BX7348, which
included a commercial general liability coverage part (Hartford’s “General Liability Policy”),
and the Umbrella Policy, Policy No. 12 RHU CI1510 (Hartford's “Umbrella Policy”). Although
Hartford’s General Liability Policy and Umbrella Policy (collectively the “Policies”) were issued
to VAST’s parent company, Voest-Alpine International Corporation, VAST was designated as a
named insured of the Policies by endorsement. The Policies both included “additional insured”
provisions.
Because it appeared to Century and Pacific that the Lease required VAST to insure
Mountain States against the liability that resulted from the Ramirez/Bakowski accident, that the
Hartford Policies insuring VAST at the time of the accident covered Mountain States as an
additional insured, and that Hartford had wrongfully denied coverage, they filed this action
seeking to recover from Hartford the amounts they paid on Mountain States’ behalf in relation to
Ramirez's and Bakowski's claims.11
10
Bakowski’s complaint against Mountain States was filed in the Fourth Judicial District Court, Utah
County, State of Utah.
11
When this case began, Century and Pacific, who filed the Complaint and the First Amended Complaint in
the name of their insured, Mountain States, were both plaintiffs. (Complaint (dkt. no. 1); First Amended Complaint
and Demand for Jury Trial (dkt. no. 17).) Later, when a dispute arose between Century and Pacific regarding the
remedies that the parties were entitled to and how their claims should be prosecuted, Century moved to be
substituted as the plaintiff in this action (in place of Mountain States) and for permission to file a second amended
(continued...)
4
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 5 of 34
Remaining before the court are Century’s claims that it is entitled to an order from the
court declaring that: (1) Mountain States was an additional insured of the Policies with respect to
the Ramirez/Bakowski accident and Hartford was obligated to contribute to the indemnification
and defense costs associated with Ramirez’s and Bakowski’s claims against Mountain States; (2)
Hartford’s obligation to defend and indemnify Mountain States was primary to Century’s
obligation; (3) the waiver of subrogation provision in the Lease does not bar Century’s claims
against Hartford in this matter; (4) Century is entitled to recover from Hartford the attorney’s
fees and costs it has incurred in this matter as compensatory damages; and (5) to the extent that
the court determines that Century and Pacific were obligated to contribute to the defense and
settlement of the Ramirez/Bakowski claims, Pacific’s obligation was primary to Century’s
obligation.12
Pacific joins in Century’s first four claims.13 With respect to Century’s fifth claim,
Pacific disagrees with Century’s characterization of Pacific’s policy insuring Mountain States as
a primary policy.14 Pacific argues that the Lease required VAST to procure the Policies and that
therefore, despite the language of Pacific’s policy, such policy should not be considered a
11
(...continued)
complaint that included, among other claims, a claim for declaratory relief establishing the priorities between
Century and Pacific. (Motion for Leave to Substitute Parties and to File Second Amended Complaint (dkt. no. 42);
Memorandum in Support of Motion for Leave to Substitute Parties and to File Second Amended Complaint (dkt. no.
43).) The court granted Century's motion and substituted Century as the plaintiff in this action. (Order Granting
Motion for Leave to Substitute Parties and to File Second Amended Complaint (dkt. no. 54).) Century filed the
Second Amended Complaint in its own name. (Second Amended Complaint and Demand for Jury Trial (dkt. no. 53)
(“Second Amended Complaint”).)
12
(Century’s Supplemental Brief re: S.J.).
13
(Pacific’s Supplemental Memo. re: S.J.)
14
(Id. at 2-4.)
5
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 6 of 34
primary policy.15 Pacific also argues that a genuine issue of fact exists regarding an agreement
between Century and Pacific relating to their reimbursements rights and that the court should
reserve judgment on Century’s claim that it is entitled to receive contribution from Hartford
before Pacific receives contribution.16
Remaining before the court with respect to Hartford’s cross-motion for summary
judgment (and related to Century’s first claim) is Hartford’s claim that it is entitled to an order
that, as a matter of law, it was not obligated to indemnify or defend Mountain States with respect
to the Ramirez/Bakowski claims.17 Hartford argues that under the circumstances of the accident,
Mountain States did not qualify as an additional insured of the Hartford Policies.18 Hartford
additionally argues that Mountain States was not covered as an additional insured under the
General Liability Policy because of that policy’s structural alteration exclusion.19 Finally,
Hartford argues that even if the court determines that Mountain States qualified as an additional
insured under the Policies, Century’s and Pacific’s claims are barred in this action by the waiver
of subrogation provision in paragraph 6.4 of the Lease.20
15
(Id.)
16
(Id. at 4-5.)
17
(Hartford’s Supplemental Brief re: S.J., at 4-12.)
18
(Id.)
19
(Id. at 11-12.)
20
(Id. at 12-16.)
6
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 7 of 34
II. ANALYSIS
A. Whether Hartford Had a Duty to Defend and Indemnify Mountain States
with Respect to Ramirez’s and Bakowski’s Claims
An issue raised by the parties’ cross-motions for summary judgment is whether Hartford
had a duty arising under its Policies to participate in the defense and indemnification of
Mountain States with respect to Ramirez’s and Bakowski’s claims. The duty to defend is a
contractual duty, which is determined by comparing the language of the applicable insurance
policy or policies with the allegations in the complaint.21 Like the duty to defend, the duty to
indemnify is also a contractual one, and accordingly, the question is governed by the terms of the
relevant insurance policy or policies.22
In this case, none of the parties have made any distinction between the duty to defend and
the duty to indemnify or have specifically analyzed the questions of Hartford’s duty to defend or
indemnify. Instead, the parties apparently agree that if Mountain States qualified as an
additional insured under the Policies with respect to the Ramirez/Bakowski accident, then
Hartford had the duty to participate in the indemnification and defense of the claims resulting
from the accident.23 Accordingly, like the parties, the court has limited its analysis of whether
21
Benjamin v. Amica Mut. Ins. Co., 140 P.3d 1210" date_filed="2006-07-07" court="Utah" case_name="Benjamin v. Amica Mutual Insurance Co.">140 P.3d 1210, 1214 (Utah 2006).
22
Id. at 1216.
23
For instance, although Hartford generally refers to the duty to defend and discusses the allegations of
Bakowski’s complaint in its supporting memorandum (Hartford’s Supporting Memo., at 34-35), at no point does
Hartford specifically address the question of its duty to indemnify. Instead, Hartford more generally argues that
Mountain States did not qualify as an additional insured and that therefore Hartford did not have a duty to contribute
to the defense or indemnification of Mountain States for the claims asserted by Ramirez and Bakowski. (See, e.g.
Hartford’s Cross Motion for Summary Judgment (“The Hartford owes no coverage to Mountain States, and therefore
owes no duty to contribute to the defense and/or indemnification of Mountain States for personal injury claims made
by Messrs. Ramirez and Bakowski.”); Hartford’s Supplemental Brief re: S.J., at 5 (“In this case to determine whether
Century and Pacific can receive contribution for defense and indemnification they paid to settle the personal injury
claims against Mountain States, the Court must determine whether Hartford’s Additional Insured Provisions provide
(continued...)
7
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 8 of 34
Hartford had a duty to participate in the indemnification and defense of Mountain States to the
question of whether Mountain States qualified as an additional insured under the Hartford
Policies.
1. The Hartford Policies’ Additional Insured Provisions
While the parties agree that, unlike VAST, Mountain States was not a named insured of
the Hartford Policies, the parties dispute whether Mountain States qualified as an additional
insured of the Policies under the circumstances of the Ramirez/Bakowski accident.
In order to determine whether Mountain States qualified as an additional insured with
respect to Ramirez’s and Bakowski’s claims, the court must construe the pertinent language of
the Policies. Because the court is exercising diversity jurisdiction, it “must apply the substantive
law of the forum state,” in this case Utah.24 The court “must ascertain and apply Utah law such
that [it] reach[es] the same result that the Utah courts would reach.”25
An insurance policy, which “‘is merely a contract between the insured and the insurer’”
is interpreted in the same way as other contracts.26 The court should first look “to the contract’s
four corners to determine the parties’ intentions, which are controlling.”27 If the language of the
contract is not ambiguous, “then a court does not resort to extrinsic evidence of the contract’s
23
(...continued)
coverage to Mountain States for the activities and work it was conducting when the accident occurred and for which
it was sued.”).
24
Blanke v. Alexander, 152 F.3d 1224" date_filed="1998-08-05" court="10th Cir." case_name="Blanke v. Alexander">152 F.3d 1224, 1228 (10th Cir. 1998).
25
Utah Power & Light Co. v. Fed. Ins. Co., 983 F.2d 1549" date_filed="1993-01-26" court="1st Cir." case_name="Utah Power & Light Company v. Federal Insurance Company">983 F.2d 1549, 1553 (10th Cir. 1993).
26
Benjamin, 140 P.3d 1210" date_filed="2006-07-07" court="Utah" case_name="Benjamin v. Amica Mutual Insurance Co.">140 P.3d at 1213 (quoting Alf v. State Farm Fire & Cas. Co., 850 P.2d 1272" date_filed="1993-04-08" court="Utah" case_name="Alf v. State Farm Fire & Casualty Co.">850 P.2d 1272, 1274 (Utah
1993)).
27
Bakowski v. Mountain States Steel, Inc., 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d 1179, 1184 (Utah 2002).
8
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 9 of 34
meaning, and a court determines the parties’ intentions from the plain meaning of the contractual
language as a matter of law.”28
The Hartford General Liability Policy provided:
We will pay those sums that the insured becomes legally obligated
to pay as damages because of “bodily injury” or “property damage”
to which this insurance applies. We will have the right and duty
to defend any “suit” seeking those damages. We may at our discretion
investigate any “occurrence” and settle any claim or “suit” that may result.29
The Hartford Umbrella Policy similarly provided:
We will pay those sums that the "insured" must legally pay as
"damages" in excess of the "underlying insurance," or of the
"self-insured retention" when no "underlying insurance" applies,
because of "bodily injury," "property damage," "personal injury"
or "advertising injury" to which this insurance applies caused by
an "occurrence."30
The word “insured” was defined under both the General Liability Policy and the Umbrella Policy
as meaning any person or organization qualifying as an insured in the applicable “WHO IS AN
INSURED” sections of the Policies.31 An additional insured endorsement to the General
Liability Policy further provided that:
a. WHO IS AN INSURED (SECTION II) is amended to include
as an insured any person or organization with whom you agreed,
because of a written contract or agreement or permit, to provide
insurance such as is afforded under this policy, but only with respect
28
Id.
29
(Declaration of Rebecca L. Hill Regarding Insurance Policies Issued by Hartford Fire and Hartford
Casualty Insurance Companies (dkt. no. 161) ("Hill Decl."), Ex. A, CG 00 01 11 88, at 1.)
30
(Id., Ex. B, XL 00 03 03 90, at 1.)
31
(Id., Ex. A, CG 00 01 11 88, at 1; Ex. B, XL 00 03 03 90, at 10.)
9
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 10 of 34
to your operations, “your work” or facilities owned or used by you.32
Hartford's Umbrella Policy similarly provided that “[e]ach of the following is also an ‘insured:’”
2. Any person or organization with whom you agreed, because
of a written contract, agreement or permit, to provide insurance
such as is afforded under this policy, but only with respect to your
operations, "your work" or facilities owned or used by you.33
The terms “you” and “your” referred to named insureds of the Policies, including VAST.34
The court, like other courts that have considered identical or nearly identical language,
determines that the language of the additional insured provisions is not ambiguous.35 Under the
plain meaning of the additional insured language in the Hartford Policies, if VAST was obligated
by written contract or agreement to provide Mountain States with the type of insurance provided
by the Hartford Policies, Mountain States would qualify as an additional insured “but only with
respect to [VAST’s] operations, [VAST’s] ‘work’ or facilities owned or used by [VAST].”
In paragraph 6.1 of the Lease, VAST and Mountain States agreed that:
[VAST] shall, at [VAST’s] expense, obtain and keep in force
during the term of this lease a policy of combined single limit,
bodily injury and property damage public liability insurance
insuring [Mountain States] and [VAST] against any liability
arising out of the ownership, use, occupancy or maintenance of
the premises and all areas appurtenant thereto.36
32
(Id., Ex. A, HC 26 06 11 91.)
33
(Id., Ex. B, XL 00 03 03 90, at 4.)
34
(Id., Ex. A, CG 00 01 11 88, at 1; Ex. B, XL 00 03 03 90, at 1.)
35
See Utah Power & Light Co., 983 F.2d 1549" date_filed="1993-01-26" court="1st Cir." case_name="Utah Power & Light Company v. Federal Insurance Company">983 F.2d at 1553-54 (explaining the “plain meaning” of an additional
insured provision with language substantially similar to that in the Policies); Hartford Cas. Ins. Co. v. Travelers
Indem. Co., 2 Cal. Rptr. 3d 18" date_filed="2003-07-16" court="Cal. Ct. App." case_name="Hartford Casualty Insurance v. Travelers Indemnity Co.">2 Cal. Rptr. 3d 18, 24 (Cal. Ct. App. 2003) (construing identical language and determining that “the
meaning of the Hartford policy language begins and ends with the plain meaning of the unambiguous words used”).
36
(Hartford’s Supporting Memo., at Ex. 1 (Lease).)
10
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 11 of 34
In an attempt to narrow the scope of VAST’s broadly worded insurance obligation under the
Lease, Hartford claims that paragraph 6.1 required VAST to insure Mountain States only for
liability arising out of VAST’s ownership, use, occupancy or maintenance of the premises.37 The
clear language of paragraph 6.1, however, requires VAST to obtain bodily injury and property
damage liability insurance insuring itself and Mountain States against “any liability arising out
of the ownership, use, occupancy or maintenance of the premises.” Paragraph 6.1 does not limit
VAST’s obligation to providing coverage for liability arising only from its own ownership, use,
occupancy or maintenance of the premises. And while Hartford argues that VAST did not agree
to insure Mountain States for liability stemming from Mountain States’ own improvement
obligations, Hartford has not pointed to any language in the Lease that limited VAST’s insurance
obligation set forth in paragraph 6.1.38
VAST, a named insured of the Hartford Policies, was obligated under the Lease to
provide Mountain States with bodily injury and property damage liability coverage – precisely
the type of liability insurance provided by the Hartford Policies. Thus, VAST was contractually
obligated to provide Mountain States with the type of insurance provided by the Hartford
Policies, and the first requirement for Mountain States to be considered an additional insured
under the Hartford Policies is met.
Next, the court must consider whether Mountain States qualified as an additional insured
37
(Hartford’s Supplemental Brief re: S.J., at 6-11.)
38
Hartford argues that the provisions in the Work Letter of the Lease providing that VAST was responsible
for obtaining insurance for its own improvement obligations shows that the parties agreed that Mountain States was
also responsible to procure insurance for liability relating to its improvements. (See Hartford’s Supplemental Brief
re: S.J., at 8-9.) Because Hartford has failed to point to any language in the Lease indicating that Mountain States
was responsible for procuring insurance for liability arising out of its improvement obligations, the court is not
persuaded by Hartford’s position.
11
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 12 of 34
with respect to Ramirez’s and Bakowski’s claims under the language in the Policies providing
that the party with whom VAST agreed to provide insurance, in this case Mountain States, will
be covered as an insured, “but only with respect to [VAST’s] operations, [VAST’s] ‘work’ or
facilities owned or used by [VAST].”
The parties agree that the following facts describe the circumstances of the
Ramirez/Bakowski accident. During March of 1994, personnel from both Mountain States and
VAST were on the leased premises, working on the improvements required by the Lease. At
that time, work was being done in order to “[e]nclose the west wall,” which the Work Letter
attached to the Lease specified was to be completed by Mountain States by January 31, 1994.39
On March 4, 1994, VAST volunteered certain of its employees, including Ramirez and
Bakowski, to assist Mountain States perform the work necessary to enclose the west wall.40
Ramirez and Bakowski, who were in the process of taking down a wood wall that was going to
be replaced with a demising wall, were hoisted in a man basket by a full hydraulic crane that was
owned by Mountain States and was being operated by Craig Evans (“Evans”), an employee of
Mountain States. When Evans, at the signal of a VAST employee working on the project,
extended the telescopic boom on the crane, the cable snapped, the man basket fell to the ground,
and Ramirez and Bakowski were seriously injured.
39
The Work Letter to the Lease provided that “‘Lessor’s Improvements’ shall mean the material, item, or
specification described in Attachment ‘1’. Lessor agrees to furnish, in accordance with the Plan, the improvements
described in Attachment ‘1’ and Attachment ‘3’.” (Hartford’s Supporting Memo., Ex. 1 (Lease), at Ex. C (Work
Letter).) “Attachment ‘1’ to the Work Letter was entitled “Lessor’s Improvements and Completion Schedule” and
provided: “The North Shop improvements will include the following work provided by Lessor (Lessor’s
Improvements) to be completed by the dates indicated.” (Id.) Under item number three, Mountain States was to
“[e]nclose the west wall” by “January 31, 1994.” (Id.)
40
According to Hartford, the VAST employees were volunteered in order “to help out and speed up the
process of getting the west wall done.” (Hartford’s Supporting Memo., at 13 ¶ 9.)
12
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 13 of 34
In support of its argument that the accident arose out of facilities being used by VAST or
out of VAST’s work or operations, Century points to the fact that the Lease commenced on
March 1, 1994, before the Ramirez/Bakowski accident, and to the fact that several VAST
employees were working on the wall when the accident occurred.41 Century further argues that
the work being done at the time of the accident was being done on VAST’s behalf and therefore
qualified as VAST’s work under the Policies, which define “your work” as including “[w]ork or
operations performed . . . on your behalf.”
Hartford, on the other hand, argues that because enclosing the west wall was Mountain
States’ obligation under the Lease, the accident was caused by Mountain States’ operations,
work, and use of the premises, not VAST’s. Relying on the language in the Lease providing that
the purpose of Mountain States’ improvements was “to prepare the Premises for [VAST’s] use
and occupance” and that “[t]he premises shall be used and occupied for steel mill equipment
fabrication, maintenance, repair and related purposes,” Hartford also argues that because the
accident occurred before Mountain States’ improvements were completed and before VAST was
using the premises for steel mill equipment fabrication, VAST was not using or occupying the
premises. For these reasons, Hartford claims that the Ramirez/Bakowski accident did not
involve VAST’s operations, work, or use of the premises and that accordingly, Hartford was not
obligated to provide coverage to Mountain States.
Hartford’s arguments ignore paragraph 2.3 of the Lease, which provided in part:
41
Century suggests that “the issue of whether the Ramirez/Bakowski accident arose out of VAST’s work,
operation or use of the facilities leased to it has been settled by the State court.” (Century’s Reply, at 9.) Bakowski v.
Mountain States Steel, Inc., 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d 1179 (Utah 2002), however, indicates that although the Utah district court and
the Utah Supreme Court analyzed certain provisions of the Lease, their decisions were not based on an analysis of
the Hartford Policies. Thus, the court does not agree with Century that this issue has been decided by the State
courts.
13
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 14 of 34
The parties acknowledge that time is of the essence of this lease,
particularly with respect to completion of improvements and
commencement of occupancy. Lessor agrees to make the
improvements (“Lessor Improvements”) set forth in Exhibit “C”
and its attachments pursuant to the schedule for completion set forth
therein ([“]Completion Schedule”). If Lessor fails to comply in any
respect with the Completion Schedule, Lessee may, at its sole option,
perform or cause to be performed any work or service and purchase or
acquire any materials necessary to keep the Lessor Improvements on
schedule.42
Under this provision, the parties contemplated that Mountain States’ improvements may not be
completed as scheduled. Apparently recognizing VAST’s desire to commence occupancy of the
premises, the parties gave VAST the option to perform “work” on Mountain States’
improvements.
By volunteering the services of Ramirez, Bakowski, and other of its employees to assist
Mountain States with the west wall, VAST exercised its right under the Lease to “perform or
cause to be performed any work or service” necessary to keep Mountain States’ improvements
moving forward. Given the plain meaning of paragraph 2.3 of the Lease and the circumstances
surrounding the accident, the court is not persuaded by Hartford’s argument that because
enclosing the west wall was Mountain States’ obligation, all work done in performing that task –
including construction work that VAST volunteered its employees to perform – was Mountain
States’ work, not VAST’s.
When Ramirez and Bakowski were injured, they were working as VAST employees on a
task that VAST directed them to perform. These facts establish that at a minimum, the accident
that gave rise to Ramirez’s and Bakowski’s claims against Mountain States involved “[VAST’s]
42
(Hartford’s Supporting Memo., Ex. 1 (Lease), at ¶ 2.3 (emphasis added).)
14
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 15 of 34
work,” which is broadly defined in the Policies as including “[w]ork or operations performed by
[VAST] . . . .”43
The court’s conclusion is not changed by Hartford’s position regarding the meaning of
the “but only with respect to” language in the additional insured provisions. According to
Hartford,
Courts around the nation, including the Tenth Circuit, have
construed additional insured provisions similar to the one found
in the Hartford policies and generally recognize and apply the
coverage provisions as limiting coverage to occurrences involving
a named insureds’ conduct and to claims of vicarious liability derived
from conduct of the named insured.44
43
The Policies define “your work” as meaning:
a. Work or operations performed by you or on your behalf; and
b. Materials, parts or equipment furnished in connection with such
work or operations.
“Your work” includes:
a. Warranties or representations made at any time with respect to
the fitness, quality, durability, performance or use of “your work;” and
b. The providing of or failure to provide warnings or instructions.
(Hill Decl., Ex. A, CG 00 01 11 88, at 12; see id., Ex. B, XL 00 03 03 90, at 12.)
44
(Hartford’s Supporting Memo., at 29.) In making its “vicarious liability” argument, Hartford ignores a
number of cases that construe language that is identical or nearly identical to the language at issue in the Hartford
Policies, some of which will be discussed below, and instead cites to cases involving policies with substantially
different language than the language at issue in this case. (Id. at 29-30 (citing National Union Fire Ins. Co. v.
Nationwide Ins. Co., 82 Cal. Rptr. 2d 16" date_filed="1999-01-28" court="Cal. Ct. App." case_name="National Union Fire Insurance Co. of Pittsburgh v. Nationwide Insurance">82 Cal. Rptr. 2d 16, 16 (Cal. Ct. App. 1999) (construing an additional insured endorsement
providing that “Who Is an Insured (Section II) is amended to include [the general contractor] as an insured . . . [but]
only to the extent that [it] is held liable for [the subcontractor’s] acts or omissions arising out of and in the course of
operations performed for [the general contractor] by [the subcontractor] . . . ” (emphasis added)); Liberty Mutual Ins.
Co. v. Capeletti Bros., Inc., 699 So. 2d 736" date_filed="1997-08-06" court="Fla. Dist. Ct. App." case_name="Liberty Mut. Ins. v. Capeletti Bros.">699 So. 2d 736, 737 (Fla. Dist. Ct. App. 1997) (interpreting an additional insured
endorsement that provided coverage to an additional insured “but only with respect to liability arising out of” the
named insured’s work for the additional insured” (emphasis added)); and Village of Hoffman Estates v. Cincinnati
Ins. Co., 670 N.E.2d 874" date_filed="1996-09-25" court="Ill. App. Ct." case_name="Village of Hoffman Estates v. Cincinnati Insurance">670 N.E.2d 874, 875 (Ill. App. Ct. 1996) (involving an additional insured provision providing that “The
‘Persons Insured’ provision is amended to include as an INSURED the person or organization named above but only
with respect to liability incurred solely as a result of some act or omission of the NAMED INSURED” (emphasis
added))). The policies at issue in the cases cited by Hartford define the coverage available to additional insureds in
terms of liability, unlike the additional insured provisions in the Policies.
Hartford’s reliance on Utah Power & Light Co. in support of its position is also misplaced. Nowhere in that
case did the Tenth Circuit determine that coverage was limited to “occurrences involving a named insureds’
conduct” or “to claims of vicarious liability derived from conduct of the named insured,” as Hartford claims.
(continued...)
15
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 16 of 34
Hartford also claims that the “but only with respect to” phrase “plainly and unambiguously”
limits coverage for additional insureds “to occurrences and accidents solely or exclusively
concerning the operations, work or facilities owned or used by VAST.”45 Hartford argues that
because the accident involved a Mountain States employee and Mountain States’ equipment, and
because Ramirez and Bakowski did not assert claims against VAST, the accident did not occur
solely and exclusively as a result of VAST’s operations, work, or use of facilities and the “but
only with respect to” condition for coverage was not met.46
The plain meaning of the additional insured provisions does not support Hartford’s
construction of the phrase “but only with respect to.” There is nothing in the additional insured
language that indicates that coverage is triggered only if the named insured is named as a
defendant in an underlying lawsuit or is alleged to have been negligent. There is also no
language that limits coverage of an additional insured to accidents, injuries, or occurrences
solely attributable to the named insured’s conduct or negligence. Similarly, there is no language
that excludes coverage for liability arising from the conduct of the additional insured. Had
Hartford intended the narrow construction that it proposes in this case, it should have clearly
44
(...continued)
Instead, the court interpreted the phrase “but only with respect” as meaning that the incident that gave rise to the
claim “must have involved either operations by or on behalf of [the named insured], or facilities of or used by [the
named insured].” Utah Power & Light Co., 983 F.2d 1549" date_filed="1993-01-26" court="1st Cir." case_name="Utah Power & Light Company v. Federal Insurance Company">983 F.2d at 1554. The court concluded that the “but only with respect
to” requirement was satisfied where “the fire which gave rise to the [underlying] action occurred at the Wilberg
Mine, a facility used by [the named insured] in the course of its mining operation.” Utah Power & Light Co., 983
F.2d at 1554.
45
(Hartford’s Reply, at 6, 8-9 (emphasis added); see Hartford’s Supporting Memo., at 35 (“[T]he Hartford
Policies clearly and unambigously state that additional insured coverage is limited to occurrences only involving a
named insured’s operations, work or facilities which they own or use. The named insured in the present case is
VAST and therefore the accident must involve or arise only with respect to VAST’s operation, VAST’s work or
facilities used by VAST in order to trigger coverage.”).)
46
(Hartford’s Supporting Memo., at 32-34.)
16
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 17 of 34
drafted such limitations in the Policies. It did not do so.47
Instead, the language of the Policies plainly provides coverage for an additional insured if
the event giving rise to the claim against the additional insured simply involves the named
insured’s operations, work, or use or ownership of the facilities.48
While the court has not found any Utah case exactly on point, similar cases from other
jurisdictions provide support for the court’s conclusion.49 For example, in Hartford Cas. Ins. Co.
v. Travelers Indem. Co., 2 Cal. Rptr. 3d 18" date_filed="2003-07-16" court="Cal. Ct. App." case_name="Hartford Casualty Insurance v. Travelers Indemnity Co.">2 Cal. Rptr. 3d 18 (Cal. Ct. App. 2003), the California Court of Appeals
considered the meaning of an additional insured endorsement with identical language and with
an identical definition of “your work” as that included in the additional insured provisions in the
Policies in this case.50 In that case, the lessee, who was a named insured to a Hartford Casualty
Insurance Company (“Hartford Casualty”) policy, was required under its lease to name the lessor
47
In fact, contrary to Hartford’s position in this case, the definition of “your work” that Hartford included in
the Policies, which includes “[w]ork or operations performed . . . on [the named insured’s] behalf,” plainly
contemplates coverage in situations where the “work” is being performed by someone other than the named insured.
(See Hill Decl., Ex. A, CG 00 01 11 88, at 12; see id., Ex. B, XL 00 03 03 90, at 12.)
48
See Utah Power & Light Co., 983 F.2d 1549" date_filed="1993-01-26" court="1st Cir." case_name="Utah Power & Light Company v. Federal Insurance Company">983 F.2d at 1553-54.
49
The court notes that although the parties cite to and rely on cases outside of Utah involving the
interpretation of policies that included substantially and materially different language than the additional insured
language at issue in this case, none of the parties cite to or rely on any of the several cases wherein courts have
interpreted language that is identical or nearly identical to the language at issue in this case.
50
The court described the endorsement to the policy as follows:
the definition of an “insured” included “any person or organization with
whom you agreed, because of a written contract or agreement or permit, to
provide insurance such as is afforded under this policy, but only with respect
to your operation, ‘your work’ or facilities owned or used by you.” “You,” in
the Hartford policy, refers to [the lessee]. The policy further provides the following
definitions: “‘Your work’ means: [¶] a. Work or operations performed by you or on
your behalf; and [¶] b. Materials, parts or equipment furnished in connection with
such work or operations. [¶] ‘Your work’ includes: [¶] a. Warranties or representations
made at any time with respect to the fitness, quality, durability, performance or use of
‘your work’; and [¶] b. The providing of or failure to provide warnings or instructions.
Hartford Cas. Ins. Co., 2 Cal. Rptr. 3d 18" date_filed="2003-07-16" court="Cal. Ct. App." case_name="Hartford Casualty Insurance v. Travelers Indemnity Co.">2 Cal. Rptr. 3d at 21.
17
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 18 of 34
as an additional insured.51 After an employee of the lessee fell and died on the leased premises,
the employee’s parents filed a lawsuit against the lessor.52 Like the arguments made by Hartford
in this case, Hartford Casualty argued that the lessor was not covered by the lessee’s policy
because the “but only with respect to” language limited coverage to liability directly caused by
the lessee’s operations or use of the premises.53 Hartford Casualty also argued, like Hartford
does in this case, that because the complaint filed by the employee’s parents was directed only at
the lessor, its duty to defend never arose.54
The California court rejected Hartford Casualty’s arguments and determined that
“nothing in the meaning of ‘only with respect to’ hints at a requirement of direct causation.
Looking at the plain meaning of the questioned phrases, we find definitions indicating that ‘only
with respect to’ merely indicates some relationship.”55 The court also indicated:
We find nothing in the reading of the Hartford policy’s broad
inclusion of liabilities related to [the lessee’s] presence as [the
lessor’s] tenant to support the conclusion that [the lessee] must
directly have caused the injury in order for Hartford’s coverage to
be triggered. If Hartford had intended that narrow construction, it
could have drafted clear limitations in its policy.56
The California Court of Appeals concluded that the trial court correctly determined that Hartford
Casualty’s coverage of the lessor was not limited to liability directly caused by the lessee and
51
Id. at 20-21.
52
Id. at 19-20.
53
Id. at 22-25.
54
Id. at 22.
55
Id. at 25.
56
Id.
18
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 19 of 34
that the insurance policy covered the lessor as an additional insured with respect to the claims
asserted against the lessor as a result of the employee’s death.57
The case of J.A. Jones Constr. Co. v. Hartford Fire Ins. Co., 645 N.E.2d 980" date_filed="1995-01-05" court="Ill. App. Ct." case_name="J.A. Jones Construction Co. v. Hartford Fire Insurance">645 N.E.2d 980 (Ill. App.
Ct. 1995), is also instructive. In that case, PPG Industries, Inc. (“PPG”), a subcontractor, was
required to indemnify J.A. Jones Construction Co. (“Jones”), a general contractor, “for third
party bodily injury and property damage claims ‘arising out of PPG’s work.’”58 Accordingly,
PPG’s insurer, Hartford Fire Insurance Company (“Hartford Fire”), named Jones as an additional
insured to a policy containing additional insured language nearly identical to the language at
issue in this case.59
After John McGovern, an employee of PPG, was injured while working at the
construction site, he filed a complaint against Jones for negligence.60 McGovern did not allege
that PPG was negligent and did not assert any claims against PPG.61
After considering the meaning of the language in the additional insured endorsement and
57
Id. at 19, 25.
58
J.A. Jones, 645 N.E.2d 980" date_filed="1995-01-05" court="Ill. App. Ct." case_name="J.A. Jones Construction Co. v. Hartford Fire Insurance">645 N.E.2d at 981.
59
The policy at issue in the J.A. Jones case, like the Policies in this case, provided:
“WHO IS AN INSURED (Section II) is amended to include as an
insured any person or organization with whom you have agreed,
because of a written contract or agreement, to provide insurance
such as is afforded under this policy, but only with respect to your
operations, ‘your work’ or facilities owned or used by you.”
Id. at 982.
60
Id.
61
Id. Jones and its insurer, Aetna, tendered defense of McGovern’s claim to Hartford Fire, PPG’s insurer,
but Hartford Fire refused coverage. Id. As a result, Aetna defended Jones in McGovern’s action and thereafter filed
a declaratory judgment action, seeking a declaration that Hartford Fire should have provided coverage to Jones with
respect to McGovern’s claim. Id. at 981-82.
19
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after finding that “McGovern, when injured, was an employee of PPG performing work PPG had
contracted to do,” the Appellate Court of Illinois affirmed the lower court’s ruling that Hartford
Fire, as PPG’s insurer, owed a duty to defend Jones with respect to McGovern’s claims.62 The
court “specifically rejected the argument by . . . Hartford [Fire], that the additional insured
endorsement limited coverage to injuries attributable to [PPG’s] negligence.”63 In other words,
the court rejected Hartford Fire’s argument, like Hartford’s suggestion in this case, that the “with
respect to” language limited coverage of additional insureds to cases in which vicarious liability
is alleged against the additional insured based on the acts of the named insured.64 Moreover, the
fact that the injured employee did not sue his immediate employer, PPG, and the fact that the
employee’s allegations were premised on the alleged negligence of Jones did not relieve
Hartford Fire from the obligation of defending Jones.65
Hartford Cas. Ins. Co. v. Travelers Indem. Co., J.A. Jones Constr. Co. v. Hartford Fire
Ins. Co., and other cases,66 support the court’s conclusion that because Mountain States was
insured under the Policies “with respect to” VAST’s work, and because Ramirez and Bakowski
were VAST employees, performing work that VAST volunteered them to perform at the time of
the accident, Mountain States was an additional insured with respect to the Ramirez/Bakowski
62
Id. at 981-83.
63
St. Paul Fire & Marine Ins. Co. v. Hanover Ins. Co., No. 5:99-CV-164-BR-3, 2000 U.S. Dist. LEXIS
21792, **18-19 (E.D.N.C. Sept. 18, 2000) (citing J.A. Jones, 645 N.E.2d 980" date_filed="1995-01-05" court="Ill. App. Ct." case_name="J.A. Jones Construction Co. v. Hartford Fire Insurance">645 N.E.2d at 982).
64
See id.; J.A. Jones, 645 N.E.2d 980" date_filed="1995-01-05" court="Ill. App. Ct." case_name="J.A. Jones Construction Co. v. Hartford Fire Insurance">645 N.E.2d at 982.
65
J.A. Jones, 645 N.E.2d 980" date_filed="1995-01-05" court="Ill. App. Ct." case_name="J.A. Jones Construction Co. v. Hartford Fire Insurance">645 N.E.2d at 982; see St. Paul Fire & Marine Ins. Co., 200 U.S. Dist. LEXIS, at *19.
66
See Saavedra v. Murphy Oil U.S.A., Inc., 930 F.2d 1104" date_filed="1991-05-08" court="3rd Cir." case_name="Janet Saavedra Wife Of/And Robert Saavedra v. Murphy Oil U.S.A.">930 F.2d 1104 (5th Cir. 1991); United States Fire Ins. Co. v.
Aetna Life & Cas., 684 N.E.2d 956" date_filed="1997-08-29" court="Ill. App. Ct." case_name="United States Fire Insurance v. Aetna Life & Casualty">684 N.E.2d 956 (Ill. App. Ct. 1997); St. Paul Fire & Marine Ins. Co., 2000 U.S. Dist LEXIS
21792, at **20-21.
20
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 21 of 34
accident and should have been covered by the Hartford Policies.
2. The Structural Alteration Exclusion
Hartford argues that even if Mountain States qualified as an additional insured under the
Policies, Mountain States was not entitled to primary coverage under the Hartford General
Liability Policy because of the following exclusion in the additional insured endorsement:
e. When
(1) Owners or other interests from whom land has been leased; or
(2) Managers or lessors of premises;
Becomes [sic] an insured under [the additional insured endorsement],
the following additional exclusions apply:
...
(ii) Structural alterations, new construction or demolition operations
performed by or on behalf of the manager or lessor.67
Under Utah law, “[i]nsurers ‘may exclude from coverage certain losses by using
language which clearly and unmistakably communicates to the insured the specific
circumstances under which the expected coverage will not be provided.’”68 Insurance exclusions
“are not construed automatically against the insurer, rather, such a construction applies only
when, as for any other policy provision, the language of the exclusion is ambiguous.”69
Language of an exclusion is ambiguous if it is “unclear, omits terms, or is capable of two or
more plausible meanings.”70
In this case, the parties have not presented contrary, tenable interpretations of what the
language in the exclusion means. Instead, Century and Hartford apparently agree that the
67
(Hill Decl., Ex. A., HC 26 06 11 91.)
68
Utah Farm Bureau Ins. Co. v. Crook, 980 P.2d 685" date_filed="1999-05-11" court="Utah" case_name="Utah Farm Bureau Insurance Co. v. Crook">980 P.2d 685, 686 (Utah 1999) (quoting Alf, 850 P.2d 1272" date_filed="1993-04-08" court="Utah" case_name="Alf v. State Farm Fire & Casualty Co.">850 P.2d at 275).
69
S.W. Energy Corp. v. Continental Ins. Co., 974 P.2d 1239" date_filed="1999-03-12" court="Utah" case_name="S.W. Energy Corp. v. Continental Insurance Co.">974 P.2d 1239, 1242 (Utah 1999).
70
Id. (stating that policy terms “‘are not necessarily ambiguous simply because one party seeks to endow
them with a different interpretation according to his or her own interests’” (quoting Alf, 850 P.2d 1272" date_filed="1993-04-08" court="Utah" case_name="Alf v. State Farm Fire & Casualty Co.">850 P.2d at 1274-75)).
21
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 22 of 34
exclusion requires an alteration “that affects a vital and substantial portion of a thing, that
changes its characteristic appearance, the fundamental purpose of its erection, and the uses
contemplated,” that “is extraordinary in scope or expenditure,” and that denotes a “substantial”
“change or substitution.”71
71
(Century’s Reply, at 16; Hartford’s Reply, at 14-15.) In Century’s Reply, Century argues:
Courts which have considered structural alteration exclusions have defined
such exclusions as follows:
one that affects a vital and substantial portion of a thing, that changes
its characteristic appearance, the fundamental purpose of its erection,
and the uses contemplated [and] . . . is extraordinary in scope or expenditure.
BLACKS LAW DICTIONARY 1276 (5th ed. 1979); see also Hardware Mut.
Casualty Co. v. Hilderbrandt, 119 F.2d 291" date_filed="1941-01-13" court="10th Cir." case_name="Hardware Mut. Casualty Co. v. Hilderbrandt">119 F.2d 291, 300 (10th Cir. 1941) (noting that a
structural alteration of a building is one that and [sic] changes or substitutes its
function or appearance in a substantial way).
(Century’s Reply, at 16.) In Hartford’s Reply, Hartford sets forth the same definitions of “structural alteration”
relied on by Century. (Hartford’s Reply, at 14-15.) Hartford then argues that “[a]pplying these definitions of
‘structural alteration’ to the undisputed evidence regarding the accident demonstrates that the work which was being
done was structural alterations [sic] and is precluded from coverage.” (Id. at 15.)
Other courts that have interpreted similar exclusions or language have come to similar conclusions
regarding the meaning of a “structural alteration.” See Hawkeye Cas. Co. v. Frazier, 183 F.2d 465" date_filed="1950-07-06" court="10th Cir." case_name="Hawkeye Casualty Co. v. Frazier">183 F.2d 465, 467 (10th Cir.
1950) (“A structural alteration of a building . . . is one which affects some portion thereof in a vital and substantial
manner, and changes its characteristic appearance. It denotes a change or substitution in a substantial particular.”);
Hardware Mut. Cas. Co. v. Hilderbrandt, 119 F.2d 291" date_filed="1941-01-13" court="10th Cir." case_name="Hardware Mut. Casualty Co. v. Hilderbrandt">119 F.2d 291, 300 (10th Cir. 1940) (same); see also Hartford Cas. Ins. Co.
v. Ribellino Family Ltd. P’ship, No. 04 CV 1594 (SJ), 2005 U.S. Dist. LEXIS 8186, *12 (E.D.N.Y. April 26, 2005)
(“New York state courts have held that ‘[a] structural change or alteration is such a change as affects a vital and
substantial portion of the premises, as changes its characteristic appearance, the fundamental purpose of its erection,
or the uses contemplated, or, a change of such a nature as affects the very realty itself – extraordinary in scope and
effect, or unusual in expenditure.’” (quoting Garrow v. Smith, 603 N.Y.S.2d 635" date_filed="1993-11-10" court="N.Y. App. Div." case_name="Garrow v. Smith">603 N.Y.S.2d 635 (N.Y.A.D. 1993))); Robert
Hawthorne, Inc. v. Liberty Mutual Ins. Co., 150 F. Supp. 829" date_filed="1957-05-07" court="E.D. Pa." case_name="Robert Hawthorne, Inc. v. Liberty Mutual Insurance">150 F. Supp. 829, 835 n.9 (E.D. Pa. 1957) (“Structural change has been
defined as ‘such a change as to affect a vital and substantial portion of the premises, as would change its
characteristic appearance, the fundamental purpose of its erection, or the uses contemplated, or a change of such a
nature as would affect the very realty itself – extraordinary in scope and effect, or unusual in expenditure.’”);
Justine Realty Co. v. American Can Co., 456 N.E.2d 871" date_filed="1983-11-14" court="Ill. App. Ct." case_name="Justine Realty Co. v. American Can Co.">456 N.E.2d 871, 873 (Ill. App. Ct. 1983) (defining a “structural alteration”
as “‘[o]ne that affects a vital and substantial portion of a thing; that changes its characteristic appearance, the
fundamental purpose of its erection, and the uses contemplated [and] *** is extraordinary in scope and effect, or
unusual in expenditure.’” (citing Black’s Law Dictionary 1276 (5th ed. 1979))).
Besides arguing that the exclusion in the General Liability Policy was not met because the work being done
by Ramirez and Bakowski did not substantially change the function or appearance of the building, Century
alternatively argues that the exclusion is ambiguous. The terms in the exclusion are not defined in the policy, and
there is no Utah case interpreting the language used in the exclusion. However, Century has not sufficiently
established that the terms in the exclusion are unclear or that the exclusion omits necessary terms. Given that the
parties in this case agree on the meaning of “structural alteration,” that other cases interpreting the same or similar
(continued...)
22
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 23 of 34
Applying this definition of “structural alteration,” the court determines that the exclusion
does not preclude coverage for the Ramirez/Bakowski accident.72 The parties agree that when
the accident occurred, Ramirez and Bakowski were taking down an existing wood wall that was
going to be replaced by another wall. According to the facts presented by the parties, the west
wall was to be constructed to enclose certain space in the premises and to make the premises
more useful for VAST while it occupied the building. Hartford has not set forth any specific
facts that show that Ramirez’s and Bakowski’s work at the time of the accident changed a “vital
and substantial portion” of the premises, changed the premises’ “characteristic appearance,” or
was extraordinary in scope or expenditure.
In support of its position that Ramirez’s and Bakowski’s work fell under the exclusion in
the General Liability Policy, Hartford relies on various provisions of the Lease. For instance,
Hartford argues that Mountain States was responsible to complete a number of improvements
and that considering those improvements together shows “that the amount and nature of work
identified affected vital and substantial portions of Mountain States’ building and were
71
(...continued)
language have come to the same conclusion without finding the language ambiguous, and that Century has not cited
any case where a court has interpreted substantially similar language and found such language to be ambiguous, the
court is not persuaded that the exclusion is ambiguous.
72
None of the parties discussed the meaning of the terms “new construction” or “demolition operations.”
Although Hartford summarily claimed that “enclosure of the west wall plainly constitutes a ‘structural alteration’
and/or ‘new construction’ to the Lease Premises,” (Hartford’s Supporting Memo., at 36), and that “[t]he facts of the
accident show that structural alteration and demolition was taking place,” (Hartford’s Reply, at 18), Hartford failed
to analyze in any meaningful way what “new construction” or “demolition” mean and whether the work being done
when the accident occurred constituted either “new construction” or “demolition.” Instead, Hartford, as well as
Century, focused on whether the work being done by Ramirez and Bakowski met their agreed upon definition of
“structural alteration.” Since neither Hartford nor Century have analyzed whether the accident involved
“demolition” or “new construction,” the court need not consider that question.
23
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 24 of 34
extraordinary in scope.”73 Hartford, however, does not set forth any evidence that Ramirez and
Bakowski worked on any of the listed improvements besides enclosing the west wall. Hartford
similarly argues that paragraph 3.2 of the Lease, which provided that the total cost of Mountain
States’s improvements could amount to no more than $212,050, and paragraph 8 in the Work
Letter to the Lease, which provided that Mountain States “shall cause to be prepared the final
architectural, mechanical . . . electrical, plumbing, structural plans and specifications (“Working
Drawings”) necessary to complete” certain improvements, including enclosing the west wall, are
evidence of “the magnitude of change which some of the improvements were causing to the
leased premises” and show that Mountain States’ improvements were “extraordinary in scope
and expenditure.”74 Hartford, however, has not provided any evidence of actual work plans or
actual expenditures. Instead, Hartford has only provided general and limited statements of fact
regarding the work that was occurring at the time of the accident.75
Based on the facts uncontroverted by the parties, as set forth in their cross-motions for
summary judgment, the court determines that the work being done at the time of the
Ramirez/Bakowski accident did not rise to the level of being a “structural alteration.”
Accordingly, the structural alteration exclusion does not preclude coverage of Mountain States
as an additional insured under the General Liability Policy.
Because, as discussed above, Mountain States qualified as an additional insured under the
Policies with respect to the Ramirez/Bakowski accident, the court determines as a matter of law
73
(Hartford’s Reply, at 16.)
74
(Hartford’s Reply, at 16-17.)
75
(See Hartford’s Supporting Memo., at 12-14 (describing “The Accident”).)
24
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 25 of 34
that Hartford had the duty to participate in the defense and indemnification of the claims asserted
against Mountain States in relation to the accident.
B. Whether the Waiver of Subrogation Provision Bars Century’s and Pacific’s
Claims Against Hartford
Another issue raised by the pending motions for summary judgment is whether the
waiver of subrogation provision in paragraph 6.4 of the Lease between VAST and Mountain
States bars Century's and Pacific's contribution claims against Hartford. Paragraph 6.4 of the
Lease provided:
[VAST] and [Mountain States] each waive any and all rights
of recovery against the other or against the officers, employees,
agents and representatives of the other, for loss of or damage to
such waiving party or its property or the property of others under
its control where such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage. [VAST]
and [Mountain States] shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers that
the foregoing mutual waiver of subrogation is contained in this
lease, and shall obtain endorsements to the respective policies
recognizing the waiver.76
Hartford argues that Century’s Fourth Claim for Relief against Hartford, which Century has
labeled as a claim for “contribution,” and Pacific’s Fourth Claim for Relief against Hartford, in
which Pacific joins in and repeats the allegations of Century’s contribution claim, are
subrogation claims that are barred by paragraph 6.4 of the Lease. Century, on the other hand,
argues that its claim for contribution (which it interchangeably refers to as its reimbursement or
indemnification claim) is not a subrogation claim and is not barred by the waiver of subrogation
provision in the Lease. Pacific joins in Century’s argument.
76
(Hartford’s Supporting Memo., Ex. 1 (Lease), at ¶ 6.4.)
25
Case 2:97-cv-00925-BSJ Document 166 Filed 09/18/07 Page 26 of 34
After carefully considering Utah law, the court agrees with Hartford’s position that
Century's and Pacific's claims against Hartford in this matter are based on the doctrine of
subrogation.
Subrogation is broadly defined as “‘an equitable doctrine that allows a person or entity
which pays the loss or satisfies the claim of another under a legally cognizable obligation or
interest to step into the shoes of the other person and assert that person's rights.’”77 The purpose
of subrogation “is to ‘work out an equitable adjustment between the parties by securing the
ultimate discharge of a debt by the person who, in equity and in good conscience, ought to pay
it.’”78
In Utah, an “insurer succeeds to the insured's cause of action against a responsible third
party” and can bring a subrogation action in its own name or in the name of its insured.79 While
a “responsible third party” may in some cases be a tortfeasor, as argued by Century,80 in Utah,
the principle of subrogation has explicitly been “extended . . . to an action by an insurer against a
second insurance company which is primarily liable to defend or pay any claims on behalf of its
77
State Farm Mut. Auto. Ins. Co. v. Northwestern Nat'l Ins. Co., 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d 983, 985 (Utah 1996) (quoting
Educators Mutual Ins. Ass’n v. Allied Prop. & Cas. Ins. Co., 890 P.2d 1029" date_filed="1995-03-01" court="Utah" case_name="Educ. Mut. v. Allied Prop. & Cas. Ins.">890 P.2d 1029, 1030 (Utah 1995)); see Bakowski, 52
P.3d at 1185.
78
State Farm, 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d at 985 (quoting Allstate Ins. Co. v. Ivie, 606 P.2d 1197" date_filed="1980-02-07" court="Utah" case_name="Allstate Insurance Co. v. Ivie">606 P.2d 1197, 1202 (Utah 1980));
see National Farmers Union Prop. & Cas. Co. v. Farmers Ins. Group, 377 P.2d 786" date_filed="1963-01-16" court="Utah" case_name="National Farmers Union Property & Casualty Co. v. Farmers Insurance Group">377 P.2d 786, 788 (Utah 1963) (describing
subrogation as “an equitable device to compel the ultimate discharge of a debt or obligation by the one who in good
conscience ought to pay or discharge it”).
79
Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1185; see Utah Code Ann. § 31A-21-108 (2005); Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1182 n.1;
State Farm, 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d at 984; National Farmers, 377 P.2d 786" date_filed="1963-01-16" court="Utah" case_name="National Farmers Union Property & Casualty Co. v. Farmers Insurance Group">377 P.2d at 786.
80
While it is not entirely clear to the court, Century’s position seems to be that a subrogation action or a
subrogation claim can only arise in the limited circumstance where the “responsible third party” is a tortfeasor.
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insured but which has denied coverage.”81 An insurer's subrogation right to recover from a
responsible third party, including another insurer, “derives from the insurance contract between
the insurer and the insured,” not from any relationship, contract or “implied contract,” as argued
by Century.82
Furthermore, after a careful review of Utah law, the court determines that while
contribution or reimbursement from one insurer to another insurer may in certain cases be the
intended outcome of a successful subrogation claim,83 Utah courts have not drawn a distinction
81
State Farm, 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d at 985 (citing National Farmers, 377 P.2d 786" date_filed="1963-01-16" court="Utah" case_name="National Farmers Union Property & Casualty Co. v. Farmers Insurance Group">377 P.2d at 787-88). For instance, where an excess
insurer defends an insured that should have been covered and thus defended by a primary insurer, the excess insurer
can assert a claim against the primary insurer and attempt to recover “by way of subrogation” the attorneys’ fees and
costs incurred in defending the insured. Sharon Steel Corporation v. Aetna Cas. & Surety Co., 931 P.2d 127" date_filed="1997-01-14" court="Utah" case_name="Sharon Steel Corp. v. Aetna Casualty & Surety Co.">931 P.2d 127, 137
(Utah 1997) (citing National Farmers, 377 P.2d 786" date_filed="1963-01-16" court="Utah" case_name="National Farmers Union Property & Casualty Co. v. Farmers Insurance Group">377 P.2d at 786, 787-88). Similarly, where one insurer settles a claim against
an insured that allegedly should have been covered by a second insurance company, the first insurer may assert a
“claim for subrogation” against the second insurer to recover the amount paid in settlement. State Farm, 912 P.2d at
984-87; see Sharon Steel, 931 P.2d 127" date_filed="1997-01-14" court="Utah" case_name="Sharon Steel Corp. v. Aetna Casualty & Surety Co.">931 P.2d at 136-37.
82
Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1185-86. According to Century,
courts . . . have agreed that an excess insurer has a direct right of
indemnification and contribution against another insurer which
should have paid insurance benefits to a mutual insured but failed
to do so. These courts have noted that such claims belong directly
to the excess insurer by virtue of the relationship between the excess
and primary insurer – a relationship of implied contract.
(Century's Supplemental Memo. re: Indemnification, at 5 (emphasis added).) Century, however, has not cited to any
Utah case that supports its position. And while the court is not aware of any Utah case that describes an excess
insurer's claim against another insurer that allegedly should have paid benefits to a mutual insured as a “direct
claim,” Utah courts have clearly indicated that an excess insurer's claim against a primary insurer, as well as an
insurer’s claim against a co-insurer, are considered claims under the doctrine of “subrogation,” which allows an
insurer that pays the loss or satisfies the claim of its insured “to step into the shoes” of the insured and assert the
insured's rights. See Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1185-86; Sharon Steel, 931 P.2d 127" date_filed="1997-01-14" court="Utah" case_name="Sharon Steel Corp. v. Aetna Casualty & Surety Co.">931 P.2d at 137-38; State Farm, 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d at 985-
87; National Farmers, 377 P.2d 786" date_filed="1963-01-16" court="Utah" case_name="National Farmers Union Property & Casualty Co. v. Farmers Insurance Group">377 P.2d at 787-88.
83
See Sharon Steel, 931 P.2d 127" date_filed="1997-01-14" court="Utah" case_name="Sharon Steel Corp. v. Aetna Casualty & Surety Co.">931 P.2d at 137 (“We reasoned that equity allowed an insurer which paid a debt in full
that was owed by another to obtain reimbursement from those who ought to have paid it.”); id. at 137-38 (“We
agree with those jurisdictions that have allowed contribution where one insurer has paid more than its fair share of
the defense costs. . . . We thus conclude that Aetna does have a claim for equitable subrogation to compel Hartford
to contribute its fair share of the defense expenditures.”); State Farm, 912 P.2d 983" date_filed="1996-02-28" court="Utah" case_name="State Farm Mutual Automobile Insurance Co. v. Northwestern National Insurance Co.">912 P.2d at 986 (citing National Farmers, 377
P.2d at 786-87 and indicating that “this court allowed the plaintiff insurance company to obtain reimbursement for
the costs and attorney fees which 'in good conscience' should have been paid by the defendant insurance company”).
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between subrogation claims and contribution claims.
In this case, Century and Pacific argue that under the terms of the Lease and the
additional insured provisions in the Policies Hartford issued to VAST, Hartford was primarily
liable to defend and pay the settlement of the claims asserted against Mountain States as a result
of the Ramirez/Bakowski accident. Century and Pacific seek to be reimbursed for the settlement
and defense costs they incurred in relation to the Ramirez/Bakowski claims, which they argue
they would not have incurred had Hartford provided additional insured coverage for Mountain
States. Based on the principles of Utah law set forth above, the court determines that Century’s
and Pacific’s contribution claims stem from the alleged rights of their insured, Mountain States,
and are based on the equitable doctrine of subrogation.84
However, the court’s conclusion does not resolve the issue. Next, the court must
determine, as a matter of contract interpretation, whether the waiver agreed to by Mountain
States and VAST in paragraph 6.4 of the Lease applies to and/or bars Century’s and Pacific’s
claims against Hartford.
According to the plain language of paragraph 6.4, Mountain States and VAST agreed to a
“mutual waiver of subrogation.”85 Mountain States explicitly waived all of its and its insurers’
“rights of recovery” against VAST and VAST’s “officers, employees, agents and
representatives” if the damage or loss from which such rights derive is covered by “any
84
Even if Century and Pacific were arguing that Hartford was not primarily obligated, but was just equally
obligated to cover the indemnification and defense costs associated with Ramirez’s and Bakowski’s claims against
Mountain States, Sharon Steel, 931 P.2d 127" date_filed="1997-01-14" court="Utah" case_name="Sharon Steel Corp. v. Aetna Casualty & Surety Co.">931 P.2d 127 (Utah 1997) supports the conclusion that Century’s and Pacific’s
claims against Hartford would still be considered subrogation claims.
85
(Hartford’s Supporting Memo., Ex. 1 (Lease), at ¶ 6.4.) See Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1187 (describing the
“plain language” of paragraph 6.4 of the Lease).
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insurance policy in force at the time of such loss or damage.”86
As subrogated insurers, Century and Pacific step into the shoes of their insured,
Mountain States, and are subject to any viable defenses that Hartford could assert against
Mountain States.87 But, Hartford has not made any convincing argument that the waiver in
paragraph 6.4 bars Century’s and Pacific’s claims in this case.
Hartford does not claim to have been VAST’s officer, employee, agent, or representative.
Instead, Hartford’s only argument as to why paragraph 6.4 bars Century’s and Pacific’s claims in
this case is that the court should “follow[] the ruling in Bakowski” and determine that “just as
Century’s and Pacific’s state court claims seeking indemnity against V[AST] are validly waived
by the Lease’s Paragraph 6.4, so too are Century’s and Pacific’s contribution claims seeking
indemnity against Hartford validly waived by Paragraph 6.4.”88
In Bakowski, the Utah Supreme Court determined that “paragraph 6.4 validly waived the
subrogation rights of Mountain States' insurers” to assert claims against VAST.89 However, the
Utah Supreme Court did not consider the question of whether paragraph 6.4 waived the
86
(Hartford’s Supporting Memo., Ex. 1 (Lease), at ¶ 6.4.)
87
Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1186.
88
(Hartford’s Supplemental Brief re: S.J., at 14-15.)
89
In Bakowski, the Utah Supreme Court determined:
According to the plain language, Mountain States waived all causes of action
against V[AST] to recover for damages that were paid under any insurance
policy. Because a subrogee insurer can succeed only to the rights of its insured
and because all defenses available to a third party against the insured can be used
against the subrogee insurer, it necessarily follows that in this case Mountain States’
insurers are also precluded from pursuing a subrogation action in Mountain States’
name to recover for damages against V[AST] that were paid by Mountain States’
insurers.
52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1187 (citations omitted).
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subrogation rights of Mountain States’ insurers to assert claims against VAST’s insurers,
including Hartford.90 The court, therefore, determines that Bakowski is not determinative of the
question before the court, which is whether the waiver of subrogation provision waived the right
of Mountain States, or its subrogated insurers, to assert a claim against Hartford. After
considering Hartford’s limited argument regarding the applicability of paragraph 6.4 of the
Lease, and after its own consideration of the issue, the court is not persuaded that paragraph 6.4
of the Lease is a viable defense for Hartford, who at the time of the Ramirez/Bakowski accident
was an insurer not only of VAST, but also of Mountain States as an additional insured.
Accordingly, Century’s and Pacific’s contribution claims, although based on the theory of
subrogation, are not barred by paragraph 6.4 of the Lease.
C. The Allocation of Coverage Between the Insurers
Also before the court is Century’s request that the court determine the allocation of
coverage between, and the relative priorities of, the insurers: Century asks the court to determine
that Hartford’s and Pacific’s insurance obligations to Mountain States were primary to Century’s
obligation to Mountain States.
Pacific similarly takes the position that Hartford’s insurance obligations were primary to
Pacific’s obligation. Pacific argues that under the facts of this case, the court should not
determine the allocation of coverage between the insurers based on the language of the policies.
Pacific, who indicates that its policy would be considered a primary policy if only the policy
90
Hartford apparently interprets the court’s statement in Bakowski that “paragraph 6.4 validly waived the
subrogation rights of Mountain States’ insurers,” as meaning that any subrogation claim by Mountain States’
insurers is barred by the waiver of subrogation provision. The Bakowski court’s analysis, however, was specifically
focused on the question before the court, which was whether Mountain States’ insurers could assert a claim against
VAST. Bakowski, 52 P.3d 1179" date_filed="2002-07-09" court="Utah" case_name="Bakowski v. Mountain States Steel, Inc.">52 P.3d at 1187-1188.
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language were considered, urges the court to determine that based on VAST’s insurance
obligations under the Lease, the Hartford Policies and the Hanover policy, to which VAST was a
named insured, were the only primary policies.91
Hartford disagrees with Pacific’s position and argues that the proper analysis for
determining priority and allocation of insurance coverage between multiple insurers is based on
an interpretation of the language of the policies. Hartford also argues that the issue of priority
and allocation of coverage is not properly before the court because at the time of the summary
judgment briefing, entire copies of the insurance policies had not yet been produced, which
precluded the parties from properly analyzing the issue.
The court agrees with Hartford that the relative obligations of the insurers is properly
determined by an analysis of the language in the relevant insurance policies, not by the terms of
the Lease between Mountain States and VAST.92 The court also agrees with Hartford that the
parties could not properly analyze the question of the allocation of coverage without complete
copies of the relevant insurance policies. Since the parties have now produced complete copies
of the insurance policies at issue in this case, the court determines that supplemental briefing by
the parties on this issue is appropriate at this time.93 This issue, including any supplemental
briefing, will be considered by the court at a hearing scheduled for Tuesday, November 27, 2007
91
(Pacific’s Supplemental Memo. re: S.J., at 2 (“If nothing more than the policy language were considered,
each of the ‘primary’ insurers [(Hanover, Hartford, and Pacific)] would have been required to contribute by equal
shares to the settlement of the Ramirez and Bakowski claims.” (emphasis in original)).)
92
Carolina Cas. Ins. Co. v. Transport Indem. Co., 488 F.2d 790" date_filed="1973-12-10" court="10th Cir." case_name="Carolina Casualty Insurance Company v. Transport Indemnity Company">488 F.2d 790, 794 (10th Cir. 1973) (“[T]he primary
insurer should be determined by looking to the insurance contracts and not by relying upon terms and provisions
found not in them but in a lease agreement between the named insured.”); Hagans v. Glens Falls Ins. Co., 465 F.2d
1249, 1251-52 (10th Cir. 1972).
93
(See Notice From the Court, dated April 19, 2007 (dkt. no. 159).)
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at 2:30 p.m.
D. Century’s and Pacific’s Requests for Attorney’s Fees
Also before the court are Century’s and Pacific’s claims that they are entitled to recover
from Hartford, as compensatory damages, the attorney’s fees and costs that they have incurred in
this case. Given that the question of the relative obligations of the parties is not properly before
the court at this time, the court finds it appropriate to further reserve decision on the question of
attorney’s fees raised by Century and Pacific. The court will further consider this issue during
the hearing in this matter scheduled for Tuesday, November 27, 2007 at 2:30 p.m.
For the reasons set forth above,
IT IS ORDERED that, as to the remaining issues presented in the parties’ cross-motions
for summary judgment, plaintiff Century’s motion for partial summary judgment (dkt. no. 75), in
which defendant and cross-claimant Pacific joins in part (dkt. no. 78) is GRANTED IN PART
and DENIED IN PART, and defendant Hartford’s cross-motion for summary judgment (dkt. no.
81) is DENIED.
IT IS FURTHER ORDERED that the above-captioned matter is hereby calendared for
a hearing on Tuesday, November 27, 2007 at 2:30 p.m. for argument on the issue of the
insurers’ relative obligations and on Century’s and Pacific’s requests for the attorney’s fees and
costs that they have incurred in this case. With respect to the issue of the insurers’ relative
obligations, Century and Pacific may file supplemental briefing by Wednesday, October 10,
2007; Hartford may file supplemental briefing by Tuesday, October 30, 2007; and Century and
Pacific may file reply memoranda by Friday, November 9, 2007.
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DATED this ___ day of September, 2007.
BY THE COURT:
________________________________
Bruce S. Jenkins
United States Senior District Judge
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