This case concerns the extent of insurance coverage provided under an “additional insured” endorsement to a commercial general liability policy. The trial court held the policy covers the additional insured for the factual circumstances presented here as constituting “liability arising out of’ the work of the named insured. At issue are (1) whether the notice of appeal was timely filed and (2) whether Atlantic Richfield Company (ARCO) is covered by the additional insured endorsement obtained by the named insured of Fireman’s Fund Insurance Companies (FFIC), Crider Construction, Inc. (Crider), for liability to a Crider employee who injured his back when a wooden stair on ARCO’s premises gave way as he stepped on it while performing work for his employer. We affirm.
Procedural History
FFIC appeals from a judgment entered in favor of respondent ARCO on October 22, 1999. The judgment was entered after the trial court granted ARCO’s motion for summary judgment on,FFIC’s claims for reimbursement of the costs of settlement and defense it paid on ARCO’s behalf. The notice of entry of judgment was filed on November 2, 1999. FFIC’s notice of appeal was served by regular mail on December 23, 1999, but was not file-stamped by the clerk’s office until January 3, 2000. The trial court ruled notice was presumptively received on December 27, 1999.
Facts
The material facts of this case are undisputed. None of the facts set forth by ARCO in its separate statement of material facts in support of motion for summary judgment were disputed by FFIC. The following summary of relevant facts derives from the trial court’s order granting defendant ARCO’s motion for summary judgment.
“This is an insurance coverage dispute commenced by FFIC to recover settlement and defense costs it paid on ARCO’s behalf in an underlying personal injury action entitled Riddle v. Atlantic Richfield Company, Kern County Superior Court
“The Underlying Action arose from an industrial accident occurring on January 16, 1996, resulting in physical injury to Sylvis Riddle. The accident took place in an annex building at ARCO’s South Coles Levee Plant located in Kern County, California. Sylvis Riddle was employed by Crider Construction, Inc. (Crider), which was under contract to perform maintenance work at ARCO’s South Coles plant. The accident occurred as Riddle was cleaning out an annex building at the ARCO plant. While carrying a pump motor weighing about 40 pounds, Riddle stepped off a 24-inch platform onto a 12-inch wooden step which allegedly collapsed causing serious injury to his back. The wooden step was owned and maintained by ARCO. At deposition, Riddle testified he was carrying the pump motor under the instructions from the Crider foreman.
“On July 18, 1996, Riddle filed a civil complaint for damages against ARCO in the Underlying Action. Among other things, the complaint in the Underlying Action alleged Riddle was employed by Crider as a roustabout: that ARCO was ‘operating under a contract or agreement with Crider Construction Company, requiring and obligating Crider Construction Company employees to perform, among other things, cleanup, maintenance, repair, pipeline laying, ditching and other construction maintenance or repair work under the direct control, instruction and supervision of the Defendants, and each of them, at various locales around the ARCO South Coast Levy [sic], owned, operated and controlled by Defendants . . .’; that ARCO ‘negligently and carelessly owned, operated, maintained, inspected and controlled said Annex Building so as to allow and permit the steps, leading into and out of said building to exist and remain in a dangerous, defective and unsafe condition;’ and that, as a result of said negligence by ARCO, Riddle suffered ‘severe personal injuries, disabilities and damages.’
“At the time of the accident, Crider was insured under commercial general liability insurance policy number S90MXX8062232 (the ‘Policy’) issued by FFIC for the period July 10, 1995 to July 10, 1996. ARCO was an additional insured under the Policy by virtue of a separate endorsement issued by FFIC entitled ‘Additional Insured —Owners, Lessee or Contractors (Form B) CG 20 10 11 85’ (the ‘Endorsement’). When read together, the Policy and the Endorsement provided coverage for ‘those sums that the insured [ARCO] becomes legally obligated to pay as damages because of “bodily injury” . . . to which this insurance applies’ ‘but only with respect to liability arising out of Your Work [Crider’s work] for that insured [ARCO] by or for you.’ The Policy defines Your Work as follows
“ ‘a. Work or operations performed by you or on your behalf; and ft]] b. Materials, parts or equipment furnished in connection with such work or operations. [U] ‘Tour work” includes warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work; and fl[] b. The providing of or failure to provide warnings or instructions.’
“On September 20, 1996, ARCO tendered the defense and indemnity of the Underlying Action to FFIC. On October 31, 1996, FFIC accepted ARCO’s tender of defense under a reservation of rights contending ‘there remains an issue whether or not ARCO was solely negligent for the accident and whether or not the liability of this accident arises out of our insured’s work for ARCO as stated in the Additional Insured Endorsement.’
The trial court granted ARCO summary judgment based on the analysis and holding in
Acceptance Ins. Co.
v.
Syufy Enterprises
(1999)
Discussion
I *
Denial of Motion to Dismiss Appeal
II
Liability Arising out of the Work of Named Insured
The standards applicable to a motion for summary judgment are well established. (See Code Civ. Proc., § 437c.) We review de novo a trial court’s ruling on a motion for summary judgment.
(Northland Ins. Co.
v.
Briones
(2000)
The standards applicable to the interpretation of an insurance policy were recently reiterated by the Supreme Court in
Palmer v. Truck Ins. Exchange
(1999)
“ ‘[Interpretation of an insurance policy is a question of law.’
(Waller
v.
Truck Ins. Exchange, Inc.
(1995)
“When interpreting a policy provision, we must give its terms their ‘ “ordinary and popular sense,” unless “used by the parties in a technical sense or a special meaning is given to them by usage.” ’
(AIU Ins., supra,
“A policy provision is ambiguous only if it is susceptible to two or more reasonable constructions despite the plain meaning of its terms within the context of the policy as a whole. (See
Foster-Gardner, Inc.
v.
National Union Fire Ins. Co.
(1998)
At the heart of this controversy is the meaning of the clause of the additional insured endorsement protecting ARCO against “liability arising out of [Crider’s work] for [ARCO] by or for [Crider].” The same endorsement language was interpreted in
Syufy, supra,
FFIC asserts the holding in Syufy and, by implication, the majority rule 1 which it followed are wrong. First, FFIC argues the proper interpretation of the term “liábility” should not focus on whether the injury arose out of Crider’s work, but whether ARCO’s liability for Riddle’s injury arose out of Crider’s work. Second, FFIC argues the phrase “liability arising out of’ requires a “causal connection between the injury and the event” that exceeds mere “but for” causation. FFIC asserts there is no causal connection between Crider’s work and the liability ARCO incurred to Crider’s employee because the sole cause of the injury to the employee’s back was ARCO’s own negligence in maintaining its premises. 2 Third, FFIC argues additional insured endorsements provide limited coverage as intended in the insurance industry and based upon public policy. Fourth, FFIC briefly argues that even if it has a duty to defend, it has no duty to indemnify.
It is undisputed that the policy and the endorsement provided ARCO with coverage for “those sums that [ARCO] becomes legally obligated to pay as damages because of ‘bodily injury’ ” and then limited this coverage to “liability arising out of’ Crider’s work. The $400,000 paid by FFIC in full settlement of the underlying action clearly was a sum ARCO became legally obligated to pay as damages for bodily injury as a result of the settlement. After reviewing the arguments of the parties and relevant case law, we view FFIC’s position concerning the meaning of the term “liability” as, in effect, an alternative way of arguing about the proper causal connection required by the language of the endorsement. Consequently, we will consider the proper interpretation of the term “liability” and the phrase “arising out of’ as a single issue concerning causation. This issue can be stated as whether ARCO’s legal obligation to pay the $400,000 settlement to Riddle arose out of Crider’s work for ARCO.
A. Causal Connection and “Liability Arising Out Of”
FFIC acknowledges that California courts interpret the phrase “arising out of’ broadly to require only minimal causal
“Furthermore, California courts have consistently given a broad interpretation to the terms ‘arising out of or ‘arising from’ in various kinds of insurance provisions. It is settled that this language does not import any particular standard of causation or theory of liability into an insurance policy. Rather, it broadly links a factual situation with the event creating liability, and connotes only a minimal causal connection or incidental relationship. [Citations.]
“Under this commonsense approach, Weber’s injury clearly ‘arose out of’ the work he was performing on the roof of Syufy’s building. The relationship between the defective hatch and the job was more than incidental, in that Weber could not have done the job without passing through the hatch. The fact that the defect was attributable to Syufy’s negligence is irrelevant, since the policy language does not purport to allocate coverage according to fault.
“This reading of AIC’s additional insured endorsement is consistent with the reasoning adopted in cases from other jurisdictions concerning the effect of additional insured provisions governing liability ‘arising out of “your work” ’ or ‘arising out of operations performed’ by the named insured. [Citations.]” (Syufy, supra, 69 Cal.App.4th at pp. 328-329.)
We agree with FFIC to the extent “arising out of’ requires more than “but for” causation. However, contrary to FFIC’s position, the connection between Crider’s work and ARCO’s obligation to pay for Riddle’s injuries is sufficient to establish the minimal causal connection.
In the present case, Riddle was cleaning out an annex building at the ARCO plant and performing a work-related task at the time of the accident. Thus, the connection between the named insured’s work and the liability-producing event is stronger in this case than it was in
Syufy
because the
accident in
Syufy
occurred while the employee of the named insured was leaving work to take his wife to the airport, not while he was performing a work-related task. In
Syufy,
the insurance company argued there was no coverage because (1) the event causing the injury, i.e., the falling hatch, occurred after the employee stopped working and was leaving the jobsite and (2) the named insured performed no work on the roof hatch. The First District held the “minimal causal connection or incidental relationship” was established because the injured employee of the named insured was performing work on a roof and had to pass through the defective hatch, the only access to the roof, to get to and from the work.
(Syufy, supra,
The present case factually resembles
Structure Tone v. Component Assembly Sys.
(2000)
Similarly, courts applying Texas law recently have joined the majority view and determined that the casual connection required by the phrase “liability arising out of’ work or operations is satisfied when the employee of the named insured was injured (1) while present at the worksite and (2) in connection with performing the named insured’s business. (See
Mid-Continent Cas. Co. v. Swift Energy Co.
(5th Cir. 2000)
In
Marathon Ashland Pipe Line v. Maryland Cas. Co.
(10th Cir. 2001)
In accordance with Syufy and the foregoing cases from other jurisdictions decided after Syufy, we conclude the required causal connection exists between the liability of ARCO and the work of Crider because (1) the accident occurred while Riddle was present at Crider’s worksite and (2) the accident happened while Riddle was performing Crider’s work at that worksite. 3
B. Intent and Public Policy
Nonetheless, FFIC argues intent and public policy support its position. It cites
Pardee Construction Co. v. Insurance Co. of the West
(2000)
Furthermore, FFIC’s position concerning the intent underlying additional insured endorsements is not supported by the undisputed evidence submitted to the trial court. We are satisfied the mutual intent of the parties expressed in the written provisions of the insurance policy is to provide coverage here. Even if extrinsic evidence were necessary to determine the extent of coverage under those written provisions, no such evidence appears in the record before us. Neither party’s papers concerning the motion for summary judgment presented extrinsic evidence to the trial court relating to (1) the negotiations or discussions with the insurance company, if any, about the scope of the coverage for the additional insured or the use of particular terms in a technical sense, (2) any special meaning given to particular phrases by usage, or (3) other matters which might reflect the mutual understanding of the parties concerning the scope of coverage. Accordingly, no extrinsic evidence in the record supports FFIC’s position that the parties mutually intended to limit the liability of FFIC to cover only ARCO’s vicarious liability.
With respect to the words used to express the mutual intent of the parties, several courts have observed an insurance company’s failure to use available language to exclude certain types of liability gives rise to the inference that the parties intended not to so limit coverage. (See
Pardee, supra,
77 Cal.App.4th at pp. 1359-1360;
Syufy, supra, 69
Cal.App.4th at p. 330;
Marathon Ashland Pipe Line v. Maryland Cas. Co., supra,
In this case, FFIC chose not to include limiting language, even though courts have been broadly interpreting the language used in the endorsement, i.e., “liability arising out of,” since at least 1986. (See
Casualty Ins. Co. v. Northbrook Property
(1986)
FFIC’s public policy argument also fails. FFIC argues the endorsement should be interpreted to only provide coverage to ARCO for vicarious or derivative liability as a matter of public policy. The cases which comprise the majority view and are discussed above or in
Syufy
specifically reject an
interpretation that limits the phrase “liability arising out of’ to cover only vicarious liability of the additional insured. For example, in
Marathon Ashland Pipe Line
v.
Maryland Cas. Co., supra,
Consequently, there is no demonstrable public policy favoring a narrow interpretation of additional insured clauses. (See Richmond & Black, Expanding Liability Coverage: Insured Contracts and Additional Insureds (1996) 44 Drake L.Rev. 781, 806 [“public policy may support coverage for liability attributable to the additional insured’s own negligence”].) Rather, the majority view implies a public policy which favors freedom of contract and allows parties, if they so choose, to obtain coverage for the additional insured that goes beyond vicarious liability arising out of the negligence of the named insured.
C. Duty to Indemnify
Finally, FFIC argues that, even if the potential for coverage gave rise to a duty on FFIC’s part to defend ARCO, FFIC had no duty to indemnify ARCO “since the evidence established that ARCO’s liability arose solely from its own negligence and not from Crider’s work or operations.” Our above discussion clearly rejects this argument.
In light of the foregoing, the trial court correctly granted ARCO’s motion for summary judgment.
Disposition
The judgment is affirmed. ARCO is awarded its costs of suit incurred on appeal.
Levy, J., and Cornell, J., concurred.
Notes
See footnote, ante, page 842.
The rule we consider as the majority is derived from cases considering additional insured endorsements; cases interpreting the phrase “liability arising out of’ in automobile insurance policies represent a separate line of ,cases.
Neither FFIC’s nor ARCO’s separate statement of undisputed material facts indicates ARCO’s negligence as the sole cause of the injury to Riddle’s back. Also, FFIC now asserts a dispute exists over whether “the 40-pound pump that Riddle was carrying . . . caused him to lose his balance and stumble and/or caused the wooden step to collapse.” FFIC argues that if these facts were “material,” then summary judgment was not appropriate. Even assuming FFIC preserved this issue for appeal, we hold these facts are not material to our decision.
FFIC cites numerous cases from other jurisdictions expressing a minority view, including
Granite Const. v. Bituminous Ins.
(Tex.App. 1992)