No. 79-1 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1980 

ANACONDA COMPANY, a Delaware Corp., 

Plaintiff and Appellant, 

-vsGENERAL ACCIDENT FIRE & LIFE ASSURANCE 

CORP., -LTD, a British corp., and ARTHUR 

G. McKEE & CO., a Delaware Corp., 

Defendants and Respondents. 

Appeal From: District Court of the Second Judicial District, 

In and for the County of Silver Bow, the 

Honorable James D. Freebourn, Judge presiding. 

Counsel of Record: 

For Appellant: 

Corette, Smith,&em, Pohlman & Allen, Butte, '. 

Montana 

R.D. Coret-te argued, Butte, Montana 

Gregory C. ~m-k argued, Butte, Montana 

For Respondent: 

Poore, Roth, Robischon & Robinson, Butte, Montana 

James Harrington argued, Butte, Montana 

Submitted: May 28, 1980 

Decided : dG13t(l ---& k t &: 

Filed: SgP 8 - 1980 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

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 ò id land 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 enteredagainstMcKee 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 ~istrict 

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.2d1371; 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, 

" '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.' 

11 1 . . . If there is any doubt as to the propriety of a motion, courts should, without 

hesitancy, deny the same.'" Kober v. Stewart, 

148 Mgnt. at 122. 

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 problem from different focal points. It appears, however, that the real issue facing us is what type of risks 

did the parties intend to cover under the insurance provisions of Contract No. 2081. 

As we stated in Glacier Campground v. Wild Rivers, Inc. 

(1978) - Mont. , 597 P.2d 689, 35 St.Rep. 1894, the 

intention of parties to a contract is to be ascertained, if 

possible, solely from language used in the instrument, and 

resort may be had to extrinsic evidence only when the contract, on its face, appears ambiguous or uncertain. See 

also seckions 28-3-303; 28-3-306 (2), MCA. Being the subject 

of this appeal, the language "risks of any kind relating to 

construction" appears ambiguous or uncertain. 

This Court has previously held that summary judgment is 

usually inappropriate where the intent of the contracting 

parties is an important consideration. Fulton v. Clark 

(1975), 167 Mont. 399, 403, 538 P.2d 1371, 1373; Kober v. 

Stewart (1966), 148 Mont. 117, 122, 123, 417 P.2d 476, 479; 

6 Moore's Federal Practice 7156.17[41.-11. 

General Accident admits that the contractor's liability 
insurance which named Anaconda as an additional insured was 

issued to protect persons from risks created by the negligence of the insured. This type of coverage has been explained in general terms: 

"A contract of contractor's liability insurance will generally require that the harm be 

work-related or otherwise specify that there 

be some causal relationship between the nature 

of the contractor' s [insured's] activity and 

the harm which is sustained." 11 Couch on 

Insurance, Sec. 44:338 ,(2d ed. 1963). 

There must be some relationship between the risk created 

by the alleged insured tortfeasors, the Anaconda employees, 

and the harm sustained. In determining that relationship it 

is necessary to look at the employment contract which created 

the risk and the work to be done pursuant thereunder. Were 

we to focus merely on the activities of the injured workman 

and not the activities of the named insureds, we would 

render application of Contract No. 2081 overly broad and 

make General Accident the insurer of all Anaconda activities 

at the Smelter that resulted in injuries to anyone working 

pursuant to the contract, regardless of control and benefit. 

This Court will place no such burden on anyone. 

In the record there is controverted evidence as to whether the work being performed by the Anaconda employees at 

the time of the accident was undertaken pursuant to Contract 

No. 2081. We hold this is a genuine issue of material fact. 

The issue of whether the District Court erred in denying Anaconda attorney fees incurred in the prosecution of 

this case is not ripe for review at this time. 

Plaintiffs have not met their burden of establishing 

the absence of any issue of material fact. The summary 

judgment is vacated and set aside. The cause is remanded to 

the District Court for trial. 
We concur: 
Mr. Justice John C. Sheehy, joined by Mr. Chief Justice 

Frank I. Haswell, dissent: 

The purpose of a motion for summary judgment under 

Rule 56, is to eliminate unnecessary trial, delay, and expense. 

Silloway v. Jorgenson (1965), 146 Mont. 307, 406 P.2d 167. 

Under a motion for summary judgment, the formal issues presented 

by the pleadings are not controlling and the court must consider the depositions, answers to interrogatories, admissions 

on file, oral te,stimony, and exhibits presented to determine 

who should prevail on the motion. Hager v. Tandy (1965), 146 

Mont. 531, 410 P.2d 447. When the facts established under the 

motion for summary judgment are undisputed, and under those 

undisputed facts the plaintiff is not entitled to prevail on 

any legal theory, this Court on review should affirm the grant 

of summary judgment to the plaintiff. 

The salient undisputed facts that should decide this 

appeal are these: 

1. General Accident and Fire & Life Assurance Corporation 

Ltd., issued its liability policy, including comprehensive 

general liability, in which policy Arthur G. McKee & Company 

is the named insured, and the Anaconda Company by endorsement 

is an additional insured. 

2. McKee provided the insurance policy to Anaconda by 

reason of a contract with Anaconda that recited: 

"Contractor [McKee] agrees to cause Owner [Anaconda] 

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 wiil constitute prima;y coverage in the 

event of any claims against Owner that are insurable 

under any of such policies." (Emphasis added.) 

3. The insurance policy defines an "insured" as any person 

or organization qualifying as an insured under the policy, and 

further provides as to several insureds under the same policy: 
". . . The insurance afforded applies separately 

-- to each insured against whom claim is made or suit 

is brought, except with respect to the limits of 

the company's [the insurance company] liability." 

(Emphasis added. ) 

4. At the time of his injury, McKee's employee was on 

the Anaconda premises pursuant to work in progress under 

contract no. 2081, the contract between McKee as contractor 

and Anaconda as owner. 

5. Anaconda's employees were negligent in dropping the 

planking that caused the injury to McKee's employee. 

In determining the liability of General Accident, if 

any, to Anaconda here, we look to the terms of the policy. An 

insurance policy, like any other contract, must be given that 

interpretation which is reasonable and which is consonant with 

the manifest object and intent of the parties. National 

Farmers Union Property and Casualty Company v. Colbrese (9th 

Cir. 1966), 368 F.2d 405; cert.den. 386 U.S. 991, 87 S.Ct. 

G /\,b 

18 L.Ed. 2d 336. The general rules of contract law apply 

to an insurance policy. Hildebrandt v. Washington National 

Insurance Company (1979) , - Mont. - , 593 P.2d 37, 36 St.Rep. 

628, (life insurance); Universal Underwriters Insurance 

Company v. State Farm Mutual Auto Insurance Company (1975), 166 

Mont. 128, 531 P.2d 668, (garage liability policy). 

Under McKee's agreement with Anaconda, McKee agreed to make 

Anaconda an additional named insured in McKee's policies 

"insuring risks of any kind relating to the construction" 

which would constitute "primary coverage" in the event of a 

claim against Anaconda. 

If this policy had been purchased by Anaconda in its 

own right, there is no doubt that the injury to McKee's 

employee would be a risk that was insurable for Anaconda 

under the policy. It makes no difference that here the 

insurance contract was purchased by McKee and that Anaconda 
is named as an additional insured. By reason of the severability of the interests clause which we have quoted 

above, in fact, here Anaconda and McKee are two separate 

insureds under the same policy, the only limitation being 

the limits of liability of General Accident under its policy. 

Each of the two entities, McKee and Anaconda, are separately 

insured under all the terms of the policy. As an example of 

the effect of the severability clause, see Caribou Four 

Corners, Inc. v. Truck Insurance Exchange (10th Cir. 1971), 

443 F.2d 796. See also, Indemnity Insurance Company of 

North America v. Pacific Clay Products Company (1970), 13 

3d 

Cal.App.4304, 91 Cal.Rptr. 52; Liberty Mutual Insurance 

Company v. Truck Insurance Exchange (Ore. 1966), 420 P.2d 66 

(contribution allowed). 

Thus, the policy issued by General Accident comes 

within the provisions of contract no. 2081 between McKee and 

Anaconda that the policy provided by McKee will constitute 

"primary coverage in the event of any claims against [Anaconda] 

that are insurable under any of such policies." 

The majority opinion makes it "overly broad" that General 

Accident should be the insurer of all Anaconda activities at 

the Smelter that result in an injury to anyone working pursuant 

to the contract, regardless of control and benefit. That statement overlooks the clause of contract no. 2081 that Anaconda 

would be an additional named insured with respect to "risks 

of any kind relating to the construction". 

The endorsement which makes Anaconda an additional 

insured under the general liability policy is as follows: 

". . . that the Anaconda Company, Anaconda, Montana, 

is an additional insured under this policy in 

accordance with provisions of contract no. 

2081 with Arthur G. McKee and Company and dated 

May 15, 1971." 
McKee's employee was not an interloper on Anaconda's 

premises at the time of the injury. He was there in furtherance of contract no. 2081. The risk that he might be injured 

by Anaconda's employees was within the "risks of any kind relating 

to the construction" for which McKee agreed to provide insurance 

to Anaconda. 

There is no reason to return this case to the District 

Court under the guise of seeking the "intent" of the parties 

with respect to the insurance here provided. Where the language 

of the insurance policy admits of only one meaning, there is 

no basis for the interpretation of policy coverage under the 

guise of ambiguity. Universal Underwriters Insurance Company 

v. State Farm Mutual Auto Insurance Company (1975), 166 Mont. 

128, 531 P.2d 668. 

Since the injury to McKee's employee is plainly within the 

coverage extended to Anaconda by General Accident under this 

policy of insurance, the District Court was correct in awarding 

judgment to Anaconda for the amount required to settle the claim 

of McKee's employee, plus the cost of defense that Anaconda 

incurred in handling the claim against it by McKee's employee. 

The District Court in this case should be affirmed. 

I concur with the foregoing dissent. 

Chief Justice