Title: Helm v. Board of County Com'rs, Teton County, Wyo.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Helm v. Board of County Com'rs, Teton County, Wyo.1999 WY 147989 P.2d 1273Case Number: 98-121Decided: 11/10/1999Supreme Court of Wyoming
 
P. 
RALPH HELM and ROBERTA HELM, Appellants (Plaintiffs),

v.

BOARD OF COUNTY 
COMMISSIONERS, TETON COUNTY, WYOMING, Appellee 
(Defendant).

 

Appeal from the District 
Court of Teton County, the Honorable Nancy J. Guthrie, 
Judge.

Joseph F. Moore, 
Jr. and Glenn W. Myers of Moore & Myers, Jackson, Wyoming, representing 
appellants.

Mark L. Carman 
of Williams, Porter, Day and Neville, P.C., Casper, Wyoming, Representing 
Appellee.

Before 
LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and TAYLOR,* 
JJ.

* Retired November 2, 
1998.

TAYLOR, Justice, 
Retired.

[¶1]      Appellants, P. 
Ralph and Roberta Helm (the Helms), challenge the order granting summary 
judgment in favor of appellee, Board of County Commissioners of Teton County 
(the Board), resolving their claim that the Board negligently failed to identify 
structural defects during the construction of their residence. Specifically, the 
Helms claim the district court erred in finding that the insurance contract 
purchased by the Board excluded the Helms' claim. Finding no error in the 
district court's interpretation of the insurance contract, we 
affirm.

I. 
ISSUES

[¶2]      The Helms present 
the following issue on appeal:

A. Whether the 
District Court erred when it found that Plaintiffs/Appellants' claims for 
damages were properly excluded under exclusions (a) and (k) of 
Defendant/Appellee's Hartford Insurance policy and granted summary judgment in 
favor of Defendant/Appellee based on Wyo. Stat. §§ 1-39-101, et 
seq.

The Board 
rephrases the issue as:

Does Teton 
County's Hartford Insurance policy provide coverage for the claims described in 
the complaint of P. Ralph and Roberta Helm * * * and thereby waive the immunity 
granted to Teton County pursuant to Wyo. Stat. §§ 1-39-101, et 
seq?

II. 
FACTS

[¶3]      The Helms' 
residence was originally built by Alan Jensen (Jensen), who applied for a 
building permit in 1985. During the construction of the house, Jensen submitted 
plans and drawings for approval by the Teton County Building Department. The 
Teton County Building Department, through Dennis Johnson, reviewed the plans and 
responded with a detailed Plans Correction List, noting a number of concerns, 
including requirements for changes in the foundation and electrical system of 
the home.

[¶4]      Jensen sold the 
home to another party, who eventually sold the home to the Helms in 1994. While 
inspecting the home for the purpose of building an addition, the Helms found 
allegedly serious defects in the construction. After their notice of claim to 
Teton County was denied, the Helms filed suit against the Board and Jensen, 
claiming Teton County had breached its duty in inspecting the home, and raising 
two claims against Jensen which are irrelevant to this appeal. The Board 
responded with a motion for summary judgment based on governmental immunity. 
After a hearing, the district court determined that the relevant insurance 
policy purchased by the Board did not cover the Helms' claim, and, therefore, 
the Board had not waived its governmental immunity. Accordingly, the district 
court granted summary judgment in favor of the Board. This timely appeal 
followed.

III. STANDARD OF 
REVIEW

[¶5]      Summary judgment 
will be affirmed on appeal if there is no genuine issue of material fact and the 
prevailing party is entitled to judgment as a matter of law. W.R.C.P. 56(c). In 
this case, summary judgment was based on the district court's determination that 
the Board's insurance policy precluded coverage for the claim brought by the 
Helms. "As with any contract, interpretation of an unambiguous insurance 
contract presents an issue of law which may be appropriately considered by 
summary judgment." Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 
1023 (Wyo. 1993).

IV. 
DISCUSSION

[¶6]      The general 
immunity afforded by the Wyoming Governmental Claims Act, Wyo. Stat. Ann. §§ 
1-39-101 through 1-39-120 (Lexis 1999), will not apply when a governmental 
agency has purchased insurance coverage for the liability which is the subject 
of the suit. Wyo. Stat. Ann. § 1-39-118(b) (Lexis 1999). The sole issue on 
appeal is whether the district court correctly determined that the Board's 
Hartford Insurance Policy excluded the Helms' claim from coverage under that 
insurance policy, consequently leaving governmental immunity applicable to that 
claim. Because we find that the insurance policy precluded coverage of the 
Helms' claim under exclusion (a) of the insurance policy, we need not determine 
the issues arising under the second exclusion addressed by the district 
court.

[¶7]      An insurance 
policy is a contract subject to the general rules of contract construction. 
Kirkwood v. CUNA Mut. Ins. Soc., 937 P.2d 206, 208 (Wyo. 1997). A contract is 
interpreted and considered as a whole to discern the plain and ordinary meaning 
of the words used therein. Squillace v. Wyoming State Employees' and Officials' 
Group Ins. Bd. of Admin., 933 P.2d 488, 491 (Wyo. 1997) (quoting Martin v. 
Farmers Ins. Exch., 894 P.2d 618, 620 (Wyo. 1995)). The plain meaning is the 
meaning that would be given by a reasonable person in the position of the 
insured. Doctors' Co., 864 P.2d  at 1023.

[¶8]      The Hartford 
Insurance Policy defined coverage as follows:

We will pay on 
behalf of the insured all sums which the insured should become legally obligated 
to pay as damages because of errors or omissions injury to which this policy 
applies.

(Emphasis in 
original.) The insurance policy lists a number of specific exclusions, but we 
restate only the exclusion dispositive of this appeal:

This policy does 
not apply to:

a. Bodily 
injury, property damage, personal injury, advertising injury or employee 
benefits injury.

(Emphasis in 
original.) The insurance policy defined property damage 
as:

"Property 
damage" means:

a. Physical 
injury to tangible property, including all resulting loss of use of that 
property; or

b. Loss of use 
of tangible property that is not physically injured.

(Emphasis in 
original.)

[¶9]      The Helms claim 
that the exclusion for property damage does not apply in this case because they 
are seeking damages for diminution in the value of their home rather than 
damages for "[p]hysical injury to tangible property * * *." The Helms fail to 
recognize, however, that the property damage exclusion is not triggered by how 
they choose to characterize their damages, but by the substance of their claim. 
The operative facts here are similar to those in Ricci v. New Hampshire Ins. 
Co., 721 P.2d 1081, 1085-86 (Wyo. 1986), where we had occasion to address the 
term "property damage" as it applied to homes with defective 
construction.

[¶10]   In Ricci, homeowners who discovered 
water seepage in the basements of their respective homes filed an action against 
the builders, and the several homeowners were awarded damages for the diminution 
in value of their homes. Id. at 1083. Unable to procure payment from the 
defendants, the homeowners filed an action for recovery against the defendants' 
insurance companies. Id. at 1084. The district court granted summary judgment to 
the insurance companies, finding the policies did not provide coverage for the 
claim which gave rise to the homeowners' initial award. 
Id.

[¶11]   On appeal, we affirmed the district 
court, noting the relevant policies provided "separately for exclusions of 
property damage to the insured's products arising out of the products or any 
part of the products and, in addition, to property damage to work performed by 
or on behalf of the insured arising out of the work or any portion thereof, or 
out of materials, parts, or equipment furnished in connection therewith." Id. at 
1085 (emphasis added). We concluded that this policy language "plainly excludes 
those events which gave rise to the claims for damages by the homeowners 
against" the builders. Id.

[¶12]   It is well recognized that the 
installation of a defect into a building is physical injury as defined in 
insurance policies. See Eljer Mfg., Inc. v. Liberty Mut. Ins. Co., 972 F.2d 805, 
814 (7th Cir. 1992), cert. denied, 507 U.S. 1005 (1993); United States Fidelity 
and Guar. Co. v. Wilkin Insulation Co., 193 Ill. App.3d 1087, 140 Ill. Dec. 907, 
550 N.E.2d 1032, 1038 (1989), aff'd, 144 Ill. 2d 64, 161 Ill.Dec. 280, 578 N.E.2d 926 (1991); and Village of Camden v. National Fire Ins. Co. of Hartford, 155 
Misc.2d 607, 589 N.Y.S.2d 293, 295-96 (1992), aff'd, 195 A.D.2d 1091, 603 N 
YS.2d 781 (1993). Here, the Helms' complaint charged that the county's breach of 
duty resulted in a home with serious defects rendering the home unsafe and 
virtually uninhabitable. Thus, the diminution in value stems directly from the 
damage to the property occasioned by the builders' installation of a defect 
and/or from the loss of use of the property. This injury falls squarely within 
the plain language of the insurance policy exclusion. The district court 
correctly found that governmental immunity was not waived and properly granted 
summary judgment in favor of the Board.

V. 
CONCLUSION

[¶13]   The Helms' claim for injury 
resulting from the defective construction of their home falls within the 
property damage exclusion in the Hartford Insurance Policy purchased by the 
Board. Because the insurance policy does not cover the Board's liability in this 
instance, there is no waiver of governmental immunity. Summary judgment in favor 
of the Board is affirmed.