No. 12636 INTHE SUPREME COURT OF THE STATE OF MONTANA 1974

ARTHUR J. ATCHESON, Plaintiff and Respondent,

SAFECO INSURANCE COMPANY and GENERAL INSURANCE COMPANY OF AMERICA, Defendant and Appellant.

Appeal from: District Court of the Second Judicial District, Honorable John B. McClernan, Judge presiding. Counsel of Record: For Appellant: Loble, Picotte, Loble, Pauly & Sternhagen, Helena, Montana Gene Picotte argued and Carter Picotte argued,

Helena, Montana Henningsen, Purcell and Genzberger, Butte, Montana. For Respondent: Corette, Smith and Dean, Butte, Montana R. D. Corette, 

### Jr argued and Gerald R. Allen argued, Butte, Montana 

### )Ie*sen, Pil- a-FiBGea+zBerger, 3lHxb, WowSubmitted: September 10, 1974 Decided:. 

### OCT

### 22 

### 1974 Filed:

### QCT

### 2

### 2 1974

### Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal by the two appellant insurance companies from a partial summary judgment ordering the two insurance companies to provide a defense for respondentAtcheson in an action pending in the United States District Court for the District of Alaska. The two insurance companies,hereinafter referred to as Safeco, are the insurer of respondentAtcheson on policies issued

on his business of being a taxidermist. The respondent's place of business is located in Butte,Montana. His business operations

are worldwide. His deposition indicates that animals are sent to him from hunters fromvarious parts of the world because of his reputation and expertise as a taxidermist built up over a period of

more than 15 years. He has traveled widely particularly in Africa, and he has established business connectionsand friendshipswith various Safari Companies on that continent and particularly in the country of Zambia. As a result of these business connections in Zambia, a hunter from Alaska, Murray Clark,was referred to him as a taxidermist. Itwould appear from the deposition that one of Clark's lifetime dreams was to go to a warmer climate to hunt and kill, among other animals, a prime, old,heavy-maned trophy lion. In 1970 Clark fulfilled his lifelong ambition and went to Zambia where he killed what is described in his complaint, "aprime, old, heavy-maned, trophy lion". In addition he shot a buffalo, an eland, an oribi, a waterbuck, a leche, a sable, and a warthog. All of these trophy animals were sent to the respondent to be mounted or processed by his taxidermy business. What happened thereafter is described by the appellants

as "bizarre". The various trophy animals were shipped to this country in several shipments,all of which were opened and handledby customsbefore being forwarded to the respondent. Few of the items appeared to have been labekd as Clark's but were assumed to be, by the respondent,due to the fact they came from Zambia and were the type of animals claimed by Clark. By the time some of them were mounted and forwarded to Clark in Alaska, a dispute arose with Clark who claimed,among other things, that he got the wrong lion. He alleged itwas smaller, lesswell maned than the

one he shot. Too, that the eland horns were thewrong horns. The dispute resulted in the filing of a cause of action in Alaska against the respondentand upon being served with a summons and complaint in Butte, the respondent immediately turned to his insurance companies for a defense. Among other allegations of the complaint it was alleged that the respondent did not comply with his agreement to mount nine trophy animals, that they were improperly shipped by him, that some of the trophys were not his and that the respondenthas improperly handled, lost or destroyed some of the trophys.The respondentdid business with appellants through their agents in Butte. The deposition indicated that prior to the difficulty above referred to the respondenthad the appellants' agent come to his place of business where he showed them through the business, explained its operations and that these agents put together a voluminous policy covering what they thought was what

was needed to cover the operationsof the business. The respondent in his deposition stated that he told them: "Don't tell me what 

### Ihave, tellme what I don't have and I'll buy it." The policy sold was a "liability policy" and it contained a "Bailees Customers Laundries and Dry Cleaners Form". We direct our attention to Section I1 of the Policy, which is the liability portion of the policy, and to the above "BaileesCustomers Laundries and Dry Cleaners Form" to ascertain whether or not there was aduty of Safeco under the blanket policy to defend the respondent. The provisions of same are hereinafter set forth: Section 11, the Blanket Liability portion of the policy begins its first paragraph as follows: "The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insuranc

chal1 haxrn thn rirrht and diii-tr tniinfand 

### any suit against the insured seekinq damages on account of such bodily injury or property damaqe even if any of the allegations of the suit are qroundless, false or fraudulent,and may make su Investisationand settlement of any claim or sui as it deems expedient. The cornpan$ shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements." The "BaileesCustomers Laundries and Dry Cleaners Form" reads: "1. COVERAGE: This form covers on all goods or articles accepted by the insured for cleaning, renovating, pressing,dyeing,repairing or laundering, the property of his customers,while contained on the premises occupied by the insured, or in the custody of his agents or branch stores, provided these locations are scheduled or endorsed hereon, and while being transported to and from the premises of his customers or branch stores or agents. "2. ADJUSTMENT AND PAYMENT OF PREMIUMS. The premiums for insurance under this form shall be computed by applying the rates shown in the declarations. Premiums so computed shall be due and payable on or before the tenth day of eachmonth for the preceding month. "3. THIS FORM INSURES, except as hereinafter provided, against direct loss or damage caused by: "(a) Fire, arising from any cause whatsoever, including lightning; "(b) Explosion,whether or not fire ensues; "(c) Accidental collision of the vehicle on which the property is carried, with any other vehicle or object, including the overturning of the vehicle, or collapse of bridges; "(d) Tornado, cyclone or windstorm, including

### any loss or damage thatmay occur from hail, rain, sleet, or snow,whether or not driven by wind;

"

### (e) Earthquake; 

### " (f) Sprinkler leakage; "(g) Flood,meaning thereby the rising of navigable waters; "(h) Theft, burglary and hold-up; "(i) Strikes, riots and civil commotion; (j)

### Water damage (meaning the accidental discharge, leakage or overflow of water or stream from the plumbing system, overhead tanks, steam or hot water heating pipes, including radiators, standpipes for firehose, sprinkler system or by bursting steam or water pipes, boilers or tankswithin the premises); 

### "(k) Smoke damage directly caused by the breakdown or faulty operation of the fuel burning equipment used in connection with steamboilers, hot water boilers, or heating apparatus; "(1) Transportation risks by public carriers or mail service; I'

### (m)Aircraft or vehicles; "(n) 

### Confusion of goods resulting from any of the foregoingperils. G.R. 

### THIS FORM DOES NOT INSURE NON MONEY By (Signaturenot legible) ''(a) Accounts, bills, deeds, currency, evidences of debt,money, notes, securities; "(b) Theft by any person in the service or employment of the insured,whether or not occurring during the hours of such service or employment; "(c) Theft of goods or packages left on delivery vehicles overnight,unless locked in insured's private garage or building occupied by insured; "(d) Loss or damage to goods while in the custody of other dyers, cleanersand pressers, or laundries unless specifically endorsed hereon; "(e) Loss, if at the time of loss or damage there be any other insurance coveringagainst risks assumed by thisform which would attach if this insurance had not been effected; "(f)Loss of ordamage resulting from misdelivery orcarelessdestruction of goods or other unaccountable losswhere there isno evidence that the lossordamage was occasioned by the perils specifically insured against; "The policy or supplemental endorsement exclusions apply inaddition to those listed above. "SPECIAL CONDITIONS:

'I (a) Goods accepted for storage on which a cleaningcharge has been or is tobe made areinsured only while inprocess of cleaning or laundering or while intransportation by the insured between itsplant or branch storesor its agencies or customers. "(b) The company shallbe liable and shallpay tothe insured the customary charges that have been earned on any lostordamaged goods. "(c)The insured agrees that allthefts for which claims aremade under this form willbe reported promptly tothepolice department. "EFFECTIVE: 4-7-70" The appellant denied liability asserting that neither of the two counts of respondent's complaint statesa claimupon which relief could be granted, denied therespondent a defense intheAlaska cause of action and plead sixaffirmativedefenses initsanswer. TLe issue before the Court iswhether or not the lower court erred ingranting a partial summary judgment against the appellantsordering them todefend therespondent inthe Alaska suit. The appellant relieson several contentions stressingtwo inparticular. One, that the insurance companies areentitled to fairconsideration and should not be prejudiced because they

are insurance companies. As tothiscontentionwe findn&erit and willnot further discuss same. Two, while they concede thattheAlaska complaint indicates that certain goods (trophys)

were accepted by respondent for taxidermy purposes, and some were transported by public transportation toClark inAlaska, that nevertheless the coverage is strictly limited by paragraph 3 and that the only risk insured against is some direct lossor damage caused by one of the enumerated perils (a)through (n)

## , and that therewas no allegation in the complaint of any direct lossor damage caused by any of the enumerated perils or risks. We find no merit tothiscontention. Considering the allegationsof the Alaskan complaint and the relevant portions of the Safeco policy we find the trialcourt did not errinits conclusion ordering Safeco todefend inthe Alaska litigation. It isto the allegationsof the Alaskan complaint thatwe look todetermine whether or not there is a duty todefend. The appellant has a duty todefend where the complaint sets forth factswhich are a part of the covered risk. The rule on theduty todefend is set forthin 50 A.L.R.2d 506-7: "Where a complaint alleges facts which represent a risk outside the coverage of the policy but alsoavers factswhich, if proved, represent a riskcovered, the insurer is under a duty to defend. 

## * * * (Casescited.)

### " Here, while theAlaskan complaint isn't a textbook model, it does allege that the respondent breached his agreement with Clark in that it alleges that respondent eithermisplaced, destroyed or otherwise mishandled Clark's trophys. Section I1 of the Safecopolicy provides for liability insurance and must be considered indetermining the duty todefend. This policy was sold covering a 3 year period and was effective

asconcerns thevarious actscomplained of by Clark. Too, Section I1 includes an additional declarationdated April 17, 1970, and thisdeclarationwith the heading "Description and Location ofInsured Property" has typed upon it the words, "Bailees Customer". The first page of the "Bailees Customers Endorsement" contains the following languagewith respect to the coverage. "1. COVERAGE: This form covers on all goods or articles accepted by the insured for cleanin renovating,pressinq,dyeinq, repairinp

# --+I: or laun ering, the property of his customers,while contained on the premises occupied by the insured, or in the custody of his agents or branch stores, provided these locationsare scheduled or endorsed hereon, and while being transported to and from the premises of his customers or branch stores or agents." (Emphasissupplied.) Clark's complaint alleging that the respondent misplaced, destroyed or mishandled the trophys either on the premises or in making improper shipments are risks contemplated in the coverage. In addition, it should be noted that the "Bailee Customers and Laundries and Drycleaners Form" sold to respondentafter consultation with the appellants' agentsprovides: "3. THIS FORM INSURES, except as hereinafter provided, against direct loss or damages caused by:

"(1) Transportation risks by public carriers or mail service; I'(m) Aircraft or vehicles; "(n) Confusion of goods resulting from any of the foregoing perils." Taking these words of the agreement and relating them to the subjectmatter about which the parties contracted it is obvious that they contracted with respect to respondent's business and not some unrelated business. See Park Saddle Horse Co. v. Royal Indem. Co., 81 Mont. 99, 261 P. 880; IndependentM. & C. Co. v. Aetna L. I. Co., 68Mont. 152, 216 P. 1109. Despite appellants' argument to the contrary there are elements of ambiguity in the policy. The additional declaration and Bailee Customers Endorsement relate to the liability section of the policy, but the Bailee Customers Endorsement form relatesto the Laundry and Dry Cleaning business not the taxidermy business. When an ambiguity arises as noted above the insured is entitled to the benefit of any doubt. 

###  his Court in Eby v. Foremost Insurance Co. 141Mont. 62, 66, 374 P.2d 857,provided the rule for the construction of an ambiguous insurance policy: 

### " 

## * * * But if the terms of the policy are ambiguous, obscure, or open to different construction,the construction most favorable to the insured or other beneficiary must prevail. That general rule applies with particular force to an ambiguous or doubtful provision of a policy or in an endorsement attached thereto which attempts to exclude from coverage liability in certain circumstances." See also Johnsonv. Equitable Insurance Co., 142Mont. 128, 381 P.2d 778; St. Paul Fire & Marine Ins. Co. 

### v. Thompson, 150Mont.

The appellant argues several affirmative defenses which

we find are without merit. Despite Safeco's contention to the contrary the Alaska complaint does allege factswithin the perils enumerated entitling the respondent to a defense by the appellants. We are not here concerned, nor was the trial judge with the outcome of the cause in Alaska for it may well be that Safeco is not liable for the alleged losses. The relevant consideration here is that on its face the complaint clearly allegesmatters within Safeco's responsibility;and, the district court properly granted a partial summary judgment directing Safeco to defend. The judgment of the district court is affirmed. 

# {\---,Cq-&& Justice We concur: 

# - k. L-----,---,,----,,---------2-f# Chief ~ustice



## ............................. Justices -9-