Ffic v. Atlantic Richfield Co.

• Decision Date: 21 December 2001
• Docket Number: No. F034714.,F034714.
• Citation: 115 Cal.Rptr.2d 26,94 Cal.App.4th 842
• Court: California Court of Appeals Court of Appeals
• Parties: FIREMAN'S FUND INSURANCE COMPANIES, Plaintiff and Appellant, v. ATLANTIC RICHFIELD COMPANY, Defendant and Respondent.

115 Cal.Rptr.2d 26

94 Cal.App.4th 842

FIREMAN'S FUND INSURANCE COMPANIES, Plaintiff and Appellant, v. ATLANTIC RICHFIELD COMPANY, Defendant and Respondent.

No. F034714.

Court of Appeal, Fifth District.

December 21, 2001.

Certified for Partial Publication.^*

McCormick, Barstow, Sheppard, Wayte & Carruth, James P. Wagoner, Lynne Thaxter Brown, Robert K. Landen, Todd W. Baxter, Fresno, and Staci D. Campbell, for Plaintiff and Appellant.

Wild, Carter & Tipton and Russell G. VanRozeboom, Fresno, for Defendant and Respondent.

OPINION

VARTABEDIAN, Acting P.J.

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 case number 231673 RA (the `Underlying Action')....

"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 angerous, 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 [¶] b. Materials, parts or equipment furnished in connection with such work or operations. [¶] "Your work" includes 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.'

"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.' "On or about July 1, 1997, FFIC paid $400,000 in full settlement of the Underlying Action while reserving to itself the right to seek reimbursement of settlement and defense costs from ARCO." (Brackets in original.)

The trial court granted ARCO summary judgment based on the analysis and holding in Acceptance Ins. Co. v. Syufy Enterprises (1999) 69 Cal.App.4th 321, 81 Cal. Rptr.2d 557 (Syufy), which it found "strikingly similar factually to the present action and the policy terms in question are identical."

DISCUSSION

I^**

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) 81 Cal.App.4th 796, 802, 97 Cal.Rptr.2d 127.)

The standards applicable to the interpretation of an insurance policy were recently reiterated by the Supreme Court in Palmer v. Truck Ins. Exchange (1999) 21 Cal.4th 1109, 1115, 90 Cal.Rptr.2d 647, 988 P.2d 568:

"`[I]nterpretation of an insurance policy is a question of law.' (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1 [44 Cal.Rptr.2d 370, 900 P.2d 619].... (Waller).) `While insurance contracts have special features, they are still contracts to which the ordinary rules of contractual interpretation apply.' (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264 [10 Cal.Rptr.2d 538, 833 P.2d 545].... (Bank of the West).) Thus, `the mutual intention of the parties at the time the contract is formed governs interpretation.' (AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 821 [274 Cal.Rptr. 820, 799 P.2d 1253].... (AIU Ins.).) If possible, we infer this intent solely from the written provisions of the insurance policy. (See id. at p. 822 [274 Cal.Rptr. 820, 799 P.2d 1253].) If the policy language `is clear and explicit, it governs.' (Bank of the West, supra, 2 Cal.4th at p. 1264 [10 Cal.Rptr.2d 538, 833 P.2d 545].)

"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, 51 Cal.3d at p. 822 [274 Cal.Rptr. 820, 799 P.2d 1253], quoting Civ.Code, § 1644.) We must also interpret these terms `in context' (Bank of the West, supra, 2 Cal.4th at p. 1265 [10 Cal.Rptr.2d 538, 833 P.2d 545]), and give effect `to every part' of the policy with `each clause helping to interpret the other.' (Civ.Code, § 1641; see also Holz Rubber Co., Inc. v. American Star Ins. Co. (1975) 14 Cal.3d 45, 56 [120 Cal.Rptr. 415, 533 P.2d 1055] ....)

"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) 18 Cal.4th 857, 868 [77 Cal.Rptr.2d 107, 959 P.2d 265].... (Foster-Gardner ).) The court may then `invoke the principle that ambiguities are generally construed against the party who caused the uncertainty to exist (i.e the insurer) in order to protect the insured's reasonable expectation of coverage.' (La Jolla Beach & Tennis Club, Inc. v. Industrial Indemnity Co. (1994) 9 Cal.4th 27, 37 [36 Cal.Rptr.2d 100, 884P.2d 1048] ...."

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, 69 Cal.App.4th 321, 81 Cal.Rptr.2d 557, and the First District held the "additional insured is covered without regard to whether the injury was caused by the named insured or the additional insured." (Id. at p. 330, 81 Cal. Rptr.2d 557.)

FFIC asserts the holding in Syufy and, by implication, the majority rule¹ which it...