Anaconda Co. v. General Acc. Fire & Life Assur. Corp., Ltd.

• Decision Date: 29 September 1980
• Docket Number: No. 79-1,79-1
• Citation: 189 Mont. 447,616 P.2d 363,37 St.Rep. 1589
• Parties: ANACONDA COMPANY, a Delaware Corp., Plaintiff and Appellant, v. GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORP., LTD., a British Corp., and Arthur G. McKee & Co., a Delaware Corp., Defendants and Respondents.
• Court: Montana Supreme Court

Page 363

616 P.2d 363

189 Mont. 447

ANACONDA COMPANY, a Delaware Corp., Plaintiff and Appellant, v. GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORP., LTD., a

British Corp., and Arthur G. McKee & Co., a

Delaware Corp., Defendants and Respondents.

No. 79-1.

Supreme Court of Montana.

Submitted May 28, 1980.

Decided Sept. 8, 1980.

Rehearing Denied Sept. 29, 1980.

Corette Smith Pohlman & Allen, Butte, R. D. Corette, argued, Butte, Gregory C. Black, argued, Butte, for plaintiff and appellant.

Poore, Roth, Robischon & Robinson, Butte, James P. Harrington, argued, Butte, for defendants and respondents.

DALY, Justice.

Appellants General Accident Fire & Life Assurance Corporation (General Accident) and Arthur G. McKee & Company (McKee) appeal from the order and judgment of the Silver Bow County District Court granting respondent Anaconda Company's (Anaconda) motion for summary judgment. Anaconda crossappeals from the District Court's amended judgment, entered upon motion by McKee and General Accident which deleted recovery of attorney fees of $3,561.89.

On May 15, 1971, McKee and Anaconda entered into a contract to expand the capacity and install facilities relating to environmental controls at Anaconda's smelter facilities at Anaconda, Montana. Part of the contract dealt with insurance coverage and required McKee or any subcontractors of McKee to name Anaconda as an additional insured under their liability policies, insuring against risks of any kind relating to the construction at the smelter facilities undertaken by McKee or its subcontractors pursuant to the contract.

McKee complied with the contract by naming Anaconda as an additional insured under policies issued by General Accident. These policies provided coverage for public, contractor's and automobile liability. Some of the subcontracting work on the project was undertaken by Midland Industrial Electric Company (herein referred to as Midland), a wholly owned subsidiary of McKee. In accordance with the contract, Midland named Anaconda as an additional insured under a policy issued by General Accident, also providing public, contractor's and automobile liability coverage.

James W. Horner, an employee of Midland, was injured on November 18, 1975, while working at the Anaconda Smelter. At that time Midland was installing pumps on old slurry tanks in a building at the Anaconda Smelter, commonly referred to as the "28' tank house." Gerald Kitchen and Ron Marshall, Anaconda employees, were preparing to paint the ceiling of the "28' tank house" at the time of the accident. They were rigging a scaffolding near the ceiling by laying 2 X 12 X 18' planking over 4 X 5 X 18' timbers which were supported by existing trusses. The Anaconda employees lost control of one of the timbers and it fell some 30 feet to the ground below. Horner, while working in the course and scope of his employment for Midland, was struck by the falling timber and was injured.

On January 19, 1977, Horner filed a suit against Anaconda in Silver Bow County alleging the negligence of Anaconda employees. By a letter of January 24, 1977, Anaconda made a formal demand of General Accident to insure and defend Anaconda in the action brought against it by Horner. By a letter of April 8, 1977, General Accident rejected Anaconda's demand on the grounds that the incident did not fall within the "description of operations covered" in the policy. On April 20, 1977, Anaconda again requested that General Accident insure and defend Anaconda in Horner's suit, which General Accident again refused to do. Anaconda then hired counsel to defend against Horner's suit; and subsequently, an out-of-court settlement of $125,000 was reached.

Anaconda then filed the instant action against McKee and General Accident seeking a declaration that General Accident was obligated to insure and defend Anaconda in Horner's lawsuit. Anaconda moved for summary judgment and a hearing was held. The District Court entered an order adopting Anaconda's findings of fact and conclusions of law; and judgment was entered against McKee and General Accident pursuant to the District Court's granting of Anaconda's motion for summary judgment.

Judgment was in the amount of $125,000, representing the amount paid by Anaconda in settlement with Horner, plus $5,843.23 in attorney fees expended by Anaconda in defense of the settled claim, and $3,561.89 in attorney fees expended by Anaconda in the instant action. McKee and General Accident filed a motion to amend the findings of fact, conclusions of law and judgment. The District Court granted the motion to amend, in part, by deleting the award of attorney fees of $3,561.89, previously awarded in connection with the litigation of the instant case. This appeal by McKee and General Accident and Anaconda's cross-appeal followed.

The issues on appeal are as follows:

1. Whether the District Court erred in granting Anaconda's motion for summary judgment, finding that no genuine issue of material fact existed, and entering judgment for Anaconda.

2. Whether the District Court erred in denying Anaconda attorney fees incurred in the prosecution of this case.

General Accident and McKee contend that the District Court erred in granting Anaconda's motion for summary judgment. They argue that it was improper for the court to grant summary judgment because there remained unresolved questions of fact. They insist that liability of General Accident in this action is predicated on the question of whether or not the Anaconda employees were working pursuant to Contract No. 2081 at the time of the accident: a disputed issue.

Anaconda contends, and the District Court found, that it does not matter whether the Anaconda employees were working pursuant to the contract at the time of the injury; what matters is whether the injured employee was working pursuant to the contract. A review of the record indicates it has been admitted that at the time of the accident the injured workman was working within the scope of the work to be performed under Contract No. 2081.

Rule 56(c), M.R.Civ.P., states that summary judgment shall be rendered only if:

". . . the pleadings, depositions, answers to interrogatories, and admissions on file . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

The question to be decided on a motion for summary judgment is whether there is a genuine issue of material fact and not how that issue should be determined; the hearing on the motion is not a trial. Fulton v. Clark (1975), 167 Mont. 399, 538 P.2d 1371; Matteucci's Super Save Drug v. Hustad Corporation (1971), 158 Mont. 311, 491 P.2d 705.

The party moving for summary judgment has the burden of showing the complete absence of any genuine issues as to all facts which are deemed material in light of those substantive principles which entitled him to a judgment as a matter of law. Harland v. Anderson (1976), 169 Mont. 447, 548 P.2d 613.

In Kober v. Stewart (1966), 148 Mont. 117, 121, 417 P.2d 476, this Court cited 6 Moore's Federal Practice, P 56.15(3):

" 'The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.

" 'Since it is not the function of the trial court to adjudicate genuine factual issues at the hearing on the motion for summary judgment, in ruling on the motion all inferences of fact from the proofs proffered at the hearing must be drawn against the movant and in favor of the party opposing the motion. And the papers supporting movant's position are closely scrutinized, while the opposing papers are indulgently treated, in determining whether the movant has satisfied his burden.'

" '. . . If there is any doubt as to the propriety of (a) motion, courts should, without hesitancy, deny the same.' " Kober v. Stewart, 148 Mont. at 122, 417 P.2d at 478.

The underlying dispute between the parties to this appeal rests on a question of focus. General Accident and McKee insist that to determine liability one must focus on the actions of the Anaconda employees who caused the accident. Anaconda, on the other hand, argues that the focus should be on the injured workman.

Both parties base their arguments on varying interpretations of two provisions in Contract No. 2081:

"Article 10. Insurance.

". . .

"(d) Contractor agrees to cause owner to be made an additional named insured under all of contractor's liability policies insuring risks of any kind relating to the construction and to arrange, in terms approved in advance by owner, that such policies will constitute primary coverage in the event of any claims against owner that are insurable under any of such policies."

"Article 15. Subcontracts.

". . .

"(d) Contractor shall bring the insurance requirements of Paragraph 10 hereof to the attention of all persons invited to submit bids for subcontracts, at the time of any such invitation, and to all persons who are prospective subcontractors for subcontracts with respect to which the submission of bids is not to be invited, as early as practicable in the negotiations with respect to such subcontracts, and shall assure that such requirements are met by any successful subcontract bidder."

More specifically, both parties focus their arguments on the construction to be given to the language "risks of any kind relating to the construction" which is contained in the above quoted portions of Contract No. 2081. No mention is made by either party of any provision in the insurance policies themselves which would exclude coverage here. Further, a review of these policies did not bring any such exclusions to the surface.

It appears, therefore, that the resolution of this appeal is contingent on the construction we give the above quoted language. As stated earlier, both parties approach the...