Mountain West Farm Bureau Mut. Ins. Co., Inc. v. Hallmark Ins. Co.

• Decision Date: 10 March 1977
• Docket Number: No. 4621,4621
• Parties: MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, INC., a corporation, Appellant (Plaintiff below), v. HALLAMRK INSURANCE COMPANY, a corporation, Appellee (Defendant below).
• Court: Wyoming Supreme Court

Page 706

561 P.2d 706

MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, INC., a corporation, Appellant (Plaintiff below), v. HALLAMRK INSURANCE COMPANY, a corporation, Appellee (Defendant below).

No. 4621.

Supreme Court of Wyoming.

March 10, 1977.

Paul B. Godfrey, Godfrey & Sundahl, Cheyenne, for appellant.

T. Michael Golden, MacPherson & Golden, Rawlins, for appellee.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

ROSE, Justice.

Sims and Nelson, a partnership, hereinafter designated S & N, owned land upon which were located rodeo facilities-chutes, pens, corrals, etc., known as the Valley Station Rodeo Grounds. Delinger and Stingley planned to stage a one-day rodeo and, for that purpose, rented or leased the Valley Station Rodeo Grounds from S & N. The S & N partners, in an effort to protect themselves and their partnership from liability arising from the rodeo operation, entered into a contract with Delinger and Stingley, in which S & N was party of the first part and Delinger and Stingley were second parties and which contained the following language:

'First parties will not be held responsible or assume any liabilities for any accidents incurred by Second Parties, contestants, spectators, or livestock and/or personal property on the above described properties during the terms of this agreement.' ¹

There is no evidence to indicate Mountain West or Hallmark had any knowledge of the agreement between their respective insureds containing the hereinabove quoted 'hold-harmless' clause until after the day of the rodeo.

After consummating this agreement, Delinger and Stingley purchased insurance from appellee-Hallmark to protect them in the event they were to incur liability resulting from the rodeo activities, and this policy has been made a part of the record. At all times prior to, during, and after the incidents giving rise to the issues in litigation here, S & N was alleged to be covered by appellant-Mountain West's liability insurance policy, but Mountain West, for some unexplained reason, has not made its policy a part of the record.

The complaint purports to frame an action for declaratory judgment, and in an apparent effort to bring itself within the jurisdictional requirements of the Uniform Declaratory Judgments Act (§§ 1-1049 to 1-1064, W.S.1957, 1975 Cum.Supp.), Mountain West alleges:

'An actual controversy exists between the parties hereto and the plaintiff has no adequate remedy at law.' ²

The appellant's prayer for relief is as follows:

'WHEREFORE, the plaintiff respectfully requests that the Court declare the rights and liabilities of the defendant under the terms of each and every policy issued by the defendant relative to the rodeo above described and adjudge that the defendant is liable under its respective policy for the payment of any claim or judgment that might be asserted on or (sic) by Mary Ann Anderson, or any party in privity with her; that the Court further During the rodeo performance May Ann Anderson, one of the spectators, was injured when a fence pole upon which she was sitting gave way. When this action was filed, Mary Ann had not brought suit against either S & N or Delinger and Stingley. However, the plaintiff-appellant, Mountain West, alleges in its complaint that she threatens to.

                find that it is the obligation of the defendant to assume the defense of any lawsuit that might be brought as the result of the described accident; that the Court further declare and determine any other rights of the parties hereto that may be necessary to accomplish a final and equitable adjudication of the rights and interests of the parties hereto with respect to the matters herein set forth; that the Court determine that the plaintiff has no obligation to either defend any claim or to pay any claim or judgment that might be asserted as the result of the accident in question until such time as the defendant has fully exhausted all of its obligations and duties relative to said matters; and for such other relief as to the Court may seem proper in the premises.'  3  (Emphasis supplied)
                

Mountain West urges that since Delinger and Stingley purchased liability insurance coverage from Hallmark, and since they also entered into an agreement with S & N which holds S & N harmless, it follows that Hallmark's policy protects S & N, thereby relieving Mountain West from liability which it would otherwise have under its policy with S & N.

The appellee-Hallmark's defense to this contention is that the language of the contract between S & N and Delinger and Stingley does not structure a 'hold- harmless' agreement and, therefore, does not serve to cause Hallmark's policy to extend liability coverage to S & N.

In granting Hallmark-appellee's motion for summary judgment, the district court held:

'1. There is no genuine issue as to any material fact and the defendant is entitled to judgment as a matter of law.

'2. Paragraph three (3) of that one certain lease agreement dated April 22, 1974, entered into by and between the parties' respective insureds, which recites:

First Parties (plaintiff's insured) will not be held responsible or assume any liabilities for any accidents incurred by Second Parties (Defendant's insured), contestants, spectators, or livestock and/or personal property on the above described properties during the term of this agreement.

is neither by its terms, nor shown to be by the depositions of the parties to the lessee (sic), an indemnity or 'hold harmless' clause.

'3. Each party, that is, the plaintiff and defendant herein, has the obligation to defend its respective insured and to satisfy such judgment, if any, as may be entered against such insured in any proceeding brought against such insured as a result of the accident referred to in the complaint on file herein.

'4. The defendant has no duty or obligation to defend plaintiff's insured or to satisfy such judgment, if any, as may be entered against such insured in any proceeding brought against such insured as a result of the accident referred to in the complaint on file herein.'

We will reverse the judgment.

We hold that the trial court lacked jurisdiction to make and enter a summary judgment under the Declaratory Judgments Act. We reach this conclusion for the reason that we find no justiciable controversy to be present with respect to any issue decided by the trial court.

As we have said before, even where the parties have not raised the jurisdictional question-as is the case here-if jurisdictional defects in fact exist, we have an

obligation to and will raise them ourselves. Pritchard v. State, Div. of Voc. Rehab., Dept. of H. S. S., Wyo., 540 P.2d 523, at page 524, with citations. ⁴

THE JURISDICTIONAL QUESTION

This action was filed under the auspices of the Uniform Declaratory Judgments Act (§§ 1-1049 to 1-1064, W.S.1957, 1975 Cum.Supp.). The right of an interested party to have a determination made under the Act is defined in § 1-1052, W.S.1957, 1975 Cum.Supp., as follows:

'Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder.' (Emphasis supplied)

The appellant seeks to have its 'status' and 'rights' determined as a person 'interested' under the 'hold-harmless' clause of the contract between S & N and Delinger and Stingley, to which neither of the insurance companies were parties, and seeks a further determination of the rights and obligations of the two insurance companies, based only upon the terms of Hallmark's policy, to which Mountain West is not a party.

Before the offices of the courts will be assigned to such a declaratory judgment resolution, it must first appear that the litigant seeking the declaration has an interest (is 'interested') (§ 1-1052, supra). We have said that the declaratory judgment vehicle cannot be called upon to secure advisory opinions ⁵ and thus a controversy must be demonstrated in which the parties have a real as distinguished from a theoretical concern. In 22 Am.Jur.2d, Declaratory Judgments § 10, 'Actual controversy,' p. 848, it is said:

'. . . No proceeding lies under the declaratory judgment acts to obtain a judgment which is merely advisory, or which merely answers a moot or abstract question. In other words, the courts have no jurisdiction to deal with theoretical problems, academic matters, or hypothetical and speculative questions.' (Footnotes omitted and emphasis supplied.)

The statutory mandate to the effect that a party who seeks a declaration of his or her 'rights, status, or other legal relations' (§ 1-1052, supra) under a contract must first show his interest is but an expression of the basic declaratory judgment law requirement, which denies access to the services of the act unless the parties' controversy is real and not merely imagined-in other words, it must be justiciable.

It is said in 22 Am.Jur.2d Declaratory Judgments § 11, 'What constitutes actual controversy; justiciable controversy,' p. 849:

'. . . (I)t is generally held that such a controversy must involve something more than a mere difference of opinion; it must involve persons adversely interested in matters in respect of which a declaration is sought. . . .' (Emphasis supplied)

We have previously held that before the courts of this state may entertain a declaratory judgment action, a 'justiciable controversy' must exist. We said in Anderson, supra, at page 336 of 154 P.2d:

'From these authorities it is fairly to be concluded that in order that the operation of the Declaratory Judgments Act may be invoked it is necessary that there should be a justiciable controversy; . . .'

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