United Nat'l Ins. Co. v. Frontier Ins. Co.
| Decision Date | 10 November 2004 |
| Docket Number | No. 36888.,36888. |
| Citation | 120 Nev. 678,99 P.3d 1153 |
| Parties | UNITED NATIONAL INSURANCE COMPANY, and ASSICURAZIONI GENERALI S.P.A., Appellants, v. FRONTIER INSURANCE COMPANY, INC., and URIAH ENTERPRISES, INC., Respondents. |
| Court | Nevada Supreme Court |
Georgeson Thompson & Angaran, Chtd., and Jack G. Angaran, Reno, for Appellants.
Dickerson, Dickerson, Consul & Pocker and Richard J. Pocker, Las Vegas, for Respondents.
Before the Court En Banc.
This case arises out of the collapse of the Las Vegas Hilton marquee sign on July 18, 1994. The district court granted summary judgment against appellants United National Insurance Company and Assicurazioni Generali S.P.A., holding that they owed defense and settlement expenses to respondents Frontier Insurance Company, Inc., and Uriah Enterprises, Inc. On appeal, we are asked to determine when the duty to defend and the duty to indemnify an insured arise under a comprehensive general liability (CGL) insurance policy covering "occurrences" during a policy period. To resolve these issues, we must analyze the meaning of the word "occurrence" and the phrase "property damage," as defined by the policy.
We conclude that the plain meaning of the language in the CGL insurance policy is unambiguous. The meaning of the word "occurrence" and the phrase "property damage," read together, require that a tangible, physical injury occur during the policy period in order to trigger coverage under an "occurrence" policy. We also conclude that the duty to defend arises when there is a potential for coverage based on the allegations in a complaint and the duty to indemnify arises when there is actual coverage under an insurance policy. Since the allegations in the complaints against Uriah do not allege that a tangible, physical injury occurred to the sign during the United and Generali CGL insurance policy period and no other evidence suggested that the sign sustained any such injury during the policy period, we conclude that there was both no potential for coverage and no actual coverage under the CGL insurance policy. We therefore conclude that United and Generali owed no duty either to defend or indemnify Uriah from lawsuits arising from the sign's collapse.
On September 8, 1993, John Renton Young Lighting and Sign Company contracted with the Las Vegas Hilton Corporation to erect a 362-foot-tall marquee sign on the hotel's property. The following day, Young Sign Company subcontracted with Uriah to erect prefabricated steel support components for the sign. At the time, Uriah was insured under a CGL insurance policy issued by United and Generali, which provided:
(Emphasis added.)
The CGL insurance agreement provided coverage from April 29, 1993, through April 29, 1994. During this time, Uriah paid $40,500 in insurance premiums to United and Generali and erected the structural steel for the sign, which was completed by December 1993.
On April 29, 1994, the CGL insurance policy issued by United and Generali expired. On that date, Uriah obtained a new CGL insurance policy from Frontier. About three months later, on July 18, 1994, the sign collapsed during a violent windstorm.
As a result of the collapse, lawsuits were filed against Uriah. On April 20, 1995, Fireman's Fund Insurance Company, which was an insurer of Young Sign Company, filed a complaint naming Uriah as a defendant and alleging negligence in the erection of the sign, as well as breach of contract and breach of implied warranty. Specifically, Fireman's Fund alleged that Uriah negligently, carelessly, and improperly modified and welded connections for the sign's support structure, which resulted in the sign's collapse. On March 8, 1996, Hilton also filed a complaint naming Uriah as a defendant and alleging negligence, breach of contract, and breach of implied warranty. Uriah asked both United and Generali to defend and indemnify Uriah through their designated representative, All American Adjusters/Adjusters Corporation of America, in March 1995. However, United and Generali did not formally respond to this request until February 1998, nearly four years after the sign's collapse. They refused to cover or defend Uriah because the collapse occurred after the expiration of the policy period.1
Meanwhile, Frontier defended and indemnified Uriah. Eventually, Frontier settled the lawsuits brought against Uriah by Fireman's Fund and Hilton for $250,000. The costs of investigating, defending, and settling the lawsuits totaled $696,667.35.
On May 15, 1998, Frontier and Uriah filed an insurance subrogation action against United and Generali for indemnification of defense and settlement expenses. Both sides moved for summary judgment. Frontier and Uriah contended that the complaints' allegations of negligence against Uriah were broad enough to encompass an "occurrence" of "property damage," as defined by the CGL insurance policy, triggering United and Generali's duty to defend and indemnify Uriah. In response, United and Generali contended that the property damage resulting from the sign's collapse occurred after the CGL insurance policy expired and, therefore, they were under no obligation to defend or indemnify Uriah.
The district court determined that the CGL policy's language was ambiguous and should be construed against United and Generali. The district court granted partial summary judgment in favor of Frontier and Uriah, holding that United and Generali breached a duty to defend in the lawsuits. Approximately one year later, Frontier and Uriah moved for summary judgment again, and the district court entered a final judgment in their favor. Frontier and Uriah were awarded $431,070.95 in damages for defense and settlement expenses arising from this unfortunate event.
An appeal from an order granting a motion for summary judgment is reviewed de novo.2 Summary judgment is appropriate when a case presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.3 Evidence presented in support of a motion for summary judgment must be construed in a light most favorable to the nonmoving party.4 "`[T]he nonmoving party is entitled to have the evidence and all reasonable inferences accepted as true.'"5 In response to a motion for summary judgment, the nonmoving party may not rest upon mere general allegations to defend its position.6 Rather, the nonmoving party must set forth specific facts demonstrating that the case presents genuine issues of material fact warranting a trial.7
Here, since neither party argues that this case raises an issue involving a disputed material fact, the only issue we must address is whether the district court properly held that Frontier and Uriah were entitled to judgment. Therefore, we must analyze whether United and Generali had a duty to defend or a duty to indemnify Uriah under the CGL insurance policy. Since insurers have separate duties to defend and indemnify an insured,8 each will be discussed separately. However, before we reach these issues, we must first turn to the policy's language and the law of contracts.
Language of the CGL insurance policy
We have previously held that "[a]n insurance policy is a contract of adhesion."9 Accordingly, the language of an insurance policy is broadly interpreted in order to afford "the greatest possible coverage to the insured."10 An insurance policy may restrict coverage only if the policy's language "clearly and distinctly communicates to the insured the nature of the limitation."11 It follows that "any ambiguity or uncertainty in an insurance policy must be construed against the insurer and in favor of the insured."12 However, we have also stated that the language of an insurance policy will be given its plain and ordinary meaning "from the viewpoint of one not trained in law,"13 meaning, we "will not rewrite contract provisions that are otherwise unambiguous ... [or] increase an obligation to the insured where such was intentionally and unambiguously limited by the parties."14 The question of whether an insurance policy is ambiguous turns on whether it creates reasonable expectations of coverage as drafted.15
In the instant case, the CGL insurance policy provides that "[t]he Underwriters will pay on behalf of the Assured all sums which the Assured shall become legally obligated to pay as damages because of ... property damage ... caused by an occurrence" during the policy period. The parties agree that there must be both an "occurrence" and "property damage" during the policy period for coverage to be effective; however, the parties disagree on when the "occurrence" must take place and what constitutes "property damage."
The word "occurrence" is defined in the CGL insurance policy as "an accident, including continuous or repeated exposure to conditions, which results in ... property damage." Although we have held that a similar insuring clause contained broad language,16 this definition is also unambiguous. An ordinary, reasonable person would understand that an "occurrence" under the policy is an accident or exposure to conditions that results in property damage. However, since the definition of the word "occurrence" includes the phrase "property damage," we must read the two definitions together.
Property damage
The phrase "property damage" is defined in the CGL insurance policy as follows:
(1)...
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