DA 08-0491

IN THE SUPREME COURT OF THE STATE OF MONTANA

2009 MT 264

PLUM CREEK MARKETING, INC., PLUM CREEK

NORTHWEST PLYWOOD INC.,

Plaintiffs and Appellants,

v.

AMERICAN ECONOMY INSURANCE COMPANY,

SAFECO CORPORATION, WALSTEN GARAGE

DOORS, INC., a Montana corporation, JED MOSER,

individually, and CHRISTINA MOSER, individually

and as parent and guardian of Jamie Moser and

Samantha Moser, and DOES 1-10,

Defendants, Appellees, and Cross-Appellants.

______________________________________________

JED MOSER, individually and as an assignee of claims from

PLUM CREEK MARKETING, INC., and PLUM CREEK

NW PLYWOOD, INC.,

Plaintiffs and Appellants,

v.

SAFECO CORPORATION; AMERICAN ECONOMY

INSURANCE COMPANY; WALSTEN GARAGE DOORS,

INC., and DOES 1-10,

Defendants, Appellees and Cross-Appellants.

APPEAL FROM: District Court of the Eleventh Judicial District,

In and For the County of Flathead, Cause No. DV 2006-954C

Honorable Stewart E. Stadler, Presiding Judge

COUNSEL OF RECORD:

For Appellants Plum Creek Marketing Inc., Plum Creek Northwest Plywood, Inc.:

Todd A. Hammer, Angela K. Jacobs, Hammer, Hewitt, Jacobs & Floch,

PLLC, Kalispell, Montana

August 11 2009
2

For Appellant Jed Moser:

Kenneth S. Thomas, David M. Sandler, Bothe & Lauridsen, P.C.,

Columbia Falls, Montana

J. David Slovak, Tom L. Lewis, Lewis, Slovak & Kovacich, P.C.,

Great Falls, Montana

For Appellee Walsten Garage Doors, Inc.:

James D. Moore, Attorney at Law, Kalispell, Montana

Robert J. Phillips, Phillips Law Firm, P.C., Missoula, Montana

For Appellees Safeco Corporation and American Economy Insurance Company:

Mark S. Williams, Williams Law Firm, P.C., Missoula, Montana

Submitted on Briefs: July 8, 2009

Decided: August 11, 2009

Filed:

__________________________________________

Clerk
3

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 On September 8, 2008, the Eleventh Judicial District Court issued an order on

summary judgment motions filed by Plum Creek Marketing, Inc. and Plum Creek

Northwest Plywood Inc. (collectively Plum Creek), Jed Moser (Moser), American

Economy Insurance Company (American), Safeco Corporation (Safeco), and Walsten

Garage Doors, Inc. (Garage Doors). The District Court granted summary judgment to

American and Safeco, concluding they did not have a duty to defend and indemnify Plum

Creek against a negligence claim filed by Moser. The District Court also granted

summary judgment to Garage Doors, concluding it could not be held liable for the

negligence claims stated in Moser’s complaint. Plum Creek, Moser, and Garage Doors

now appeal from the District Court’s order. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 On January 2, 2002, Plum Creek and Garage Doors entered into a contract for

services (Contract) to govern work performed by Garage Doors at Plum Creek’s

facilities. A provision in the Contract required Garage Doors to indemnify Plum Creek.

It read as follows:

6. Indemnity. Contractor shall indemnity and save the

Company harmless from any and all personal injuries, damages, claims,

suits, costs and recoveries of every name and nature which may in any

manner arise or grow out of the business conducted by the Contractor on

the premises of the Company, or the use or occupancy thereof by the

Contractor, or by other persons at Contractor’s instance or with

Contractor’s consent or knowledge, or the services to be provided

hereunder, during the term of this Agreement, whether due to the

negligence of the Company, its contractors, officers, agents and

employees; and in the event any suit or action shall be brought against the

Company to recover on account of such loss, damage, injury or
4

destruction hereinbefore agreed to be borne by Contractor, Contractor

shall appear and defend any such suit or action and pay any judgment that

may be obtained against the Company.

¶3 The next provision in the Contract required Garage Doors to obtain a policy of

commercial general liability insurance. This provision read as follows:

7. Insurance.

A. Contractor shall obtain and keep in full force and effect, during

the life of this Agreement (including any extension thereof), at its sole

costs and expense, a policy of public liability and property damage

insurance protecting the Company against loss on account of injuries to or

death of persons and loss of or damage to property which may in any

manner arise or grow out of the business conducted by Contractor on the

premises of the Company, or the use and occupancy thereof by Contractor

or by other persons at Contractor’s instance or with Contractor’s consent

or knowledge, or the services to be provided hereunder, during the term of

this Agreement, whether or not due to the negligence of the Company, its

contractors, officers, agents and employees. Coverage requirements will

be as follows:

(1) A policy of Commercial General Liability Insurance to include

minimum limits of $ 1,000,000 combined single limit Bodily Injury and

Property Damage each occurrence.

. . .

(3) The polices specified above shall include an endorsement which

shall name Plum Creek Timber Company, Inc, and Subsidiaries, and/or

Affiliates, as additional insureds on a primary basis for the duration of the

Contract term. The additional insured endorsement must be ISO CF20 10 

11 85

1

 or other form with like wording.

¶4 Plum Creek claims that Garage Doors forwarded the Contract to Western States

Insurance Agency, Inc. (Western States), and that Western States in turn procured a

commercial general liability policy (Policy) issued by American.

1 According to Plum Creek, the CG 2010 endorsement is often requested by additional insureds

because courts have interpreted it to provide coverage for claims based upon the additional

insured’s own negligence.
5

¶5 In April 2002, Moser suffered serious bodily injury while repairing a garage door

at a Plum Creek mill in Columbia Falls. Moser claims that his employer at the time was

Walsten Enterprises, Inc. (Enterprises), a separate business owned by Craig and Linda

Walsten, who are also the principals of Garage Doors. Moser claims that he subsequently

received workers’ compensation benefits from Enterprises, not Garage Doors.

¶6 In April 2005, Moser filed a negligence action against Plum Creek, alleging that

his injuries were caused by Plum Creek’s negligence and failure to provide a safe work

place as required under § 50-71-101, MCA. On October 3, 2005, Plum Creek tendered

Moser’s claims to American. Plum Creek claimed that it was covered under the Policy

issued by American to Garage Doors, and under the Liability Plus Endorsement

(Endorsement) subsequently issued under Garage Doors’ Policy. The Endorsement reads

in pertinent part as follows:

ADDITIONAL INSURED—BY WRITTEN CONTRACT,

AGREEMENT OR PERMIT, OR SCHEDULE

The following paragraph is added to WHO IS AN INSURED (Section II):

5. Any person or organization shown in the Schedule or for whom you

are required by written contract, agreement or permit to provide insurance

is an insured, subject to the following additional provisions:

. . .

b. The person or organization added as an insured by this

endorsement is an insured only to the extent you are held liable due to:

. . .

(2) Your ongoing operations for that insured, whether the

work is performed by you or for you;

. . .
6

[d.] No coverage will be provided if, in the absence of this

endorsement, no liability would be imposed by law on you. Coverage

shall be limited to the extent of your negligence or fault according to the 

applicable principles of comparative fault. 

¶7 Plum Creek also claimed that it and its subsidiaries had been listed as certificate

holders on the certificate of liability issued in conjunction with the Policy. Plum Creek

demanded that Western States, Garage Doors, and American acknowledge and honor the

Policy’s terms of coverage, and provide a defense to Plum Creek for Moser’s claims.

¶8 On November 15, 2005, Safeco responded to Plum Creek’s demand letter on

behalf of American, and refused to provide a defense for Plum Creek against Moser’s

claims. Safeco acknowledged Plum Creek’s allegations that it was covered under the

Policy and Endorsement pursuant to the indemnity provision in the Contract between

Plum Creek and Garage Doors. Safeco asserted that the Policy and Endorsement

themselves extended coverage to Plum Creek only insofar as Garage Doors was

negligent. In addition, Safeco noted that Garage Doors was covered by § 39-71-411,

MCA, of the Workers’ Compensation Act (Act), which states that the Act’s remedies are

exclusive for any employment-related claims covered by its provisions. Because

pursuant to the Act, no liability could be imposed by law upon Garage Doors, Safeco

asserted that, under the provisions of paragraph 5(2)(d) of the Endorsement (see Opinion,

¶ 6), American was not required to indemnify Plum Creek in any event.

¶9 Safeco’s letter also acknowledged Plum Creek’s claims that Garage Doors had

sent a copy of the Contract to Western States (thereby allegedly providing notice to

Safeco and American of its duty to provide coverage), but disputed whether this was
7

routine practice of Garage Doors and whether in fact such notice was actually provided.

Additionally, Safeco disputed the significance of any certificate of insurance received by

Plum Creek in conjunction with the Policy. Safeco claimed that on the back of the

certificate faxed to Plum Creek, a disclaimer stated that the certificate itself is not an

insurance contract, and does not alter or extend the coverage for the Policy listed on the

certificate. Safeco asserted that since the certificate was sent to Plum Creek and it was

accepted without objection, Plum Creek also accepted that the Policy did not include it as

an additional insured.

¶10 On October 18, 2006, Moser and Plum Creek entered into a settlement agreement

which provided that Plum Creek would pay Moser $350,000 and stipulate to a judgment

in his favor in the sum of $2,050,000. In exchange, Moser agreed to release all claims

against Plum Creek and to file a covenant not to execute. Plum Creek assigned Moser

any claims it may have against American and Safeco, except for attorney fees and costs

and first-party bad faith claims. The District Court subsequently approved the settlement.

¶11 On November 30, 2006, Plum Creek filed the instant suit against American

alleging it had breached the duties of defense and indemnity owed to it under the Policy.

Plum Creek also brought claims for common law bad faith and violations of the Montana

Unfair Trade Practice Act against Safeco and American. Moser filed suit against these

same entities on similar grounds, and also brought an alternative negligence claim against

Garage Doors, asserting that if it did not procure the insurance it contractually agreed to

provide, it was negligent in failing to do so. On May 22, 2007, the District Court

consolidated these actions in Cause No. DV-06-954(C).
8

¶12 The parties moved for summary judgment concerning American and Safeco’s duty

to defend and indemnify Plum Creek, and whether American and Safeco breached those

duties. Garage Doors moved for summary judgment regarding its liability to Plum Creek

and Moser. The District Court held oral argument on the motions on October 1, 2007,

and issued a written order on September 8, 2008.

¶13 The District Court noted that the Contract called for Garage Doors to indemnify

Plum Creek from loss due to any personal injuries arising in any way out of the business

conducted by Garage Doors on Plum Creek’s premises. However, the District Court

interpreted the Policy and Endorsement to read that an additional insured, such as Plum

Creek, was covered by the Policy only to the extent that Garage Doors was found liable

for some form of wrongdoing. We quote the District Court’s reasoning and analysis on

this point below:

Subsection 2.b of the [Policy’s] Section I excludes bodily injury for

which the insured was obligated to pay damages by reason of the

assumption of liability in a contract. However, that exclusion explicitly

does not apply to liability for those damages:

(2) Assumed in a contract or agreement that is an “insured 

contract,” provided the “bodily injury” or “property damage” 

occurs subsequent to the execution of the contract or 

agreement . . . .

An “insured contract” is defined in section V.9.f. of the [Policy] as:

That part of any other contract or agreement pertaining to

your business . . . under which you [i.e., Garage Doors] 

assume the tort liability of another party to pay for “Bodily 

injury” or “property damage” to a third person or

organization.

. . . .
9

In the contract with Plum Creek, [Garage Doors] agreed to shield

Plum Creek from loss due to personal injuries which might in any way

arise out of the business conducted by [Garage Doors] on Plum Creek’s 

premises. The above-quoted provisions, taken on their own, would 

arguably have given rise to a duty to defend Plum Creek against Moser’s 

suit for negligence. However, this ignores the policy’s Liability Plus

Endorsement which modifies explicitly the extent to which a party is an

additional insured by written contract or agreement:

5. Any person or organization . . . for whom you are required

by written contract, agreement or permit to provide insurance

is an insured, subject to the following provisions.

. . .

b. The person or organization added as an

insured by this endorsement is an insured only

to the extent you [Garage Doors] are held

liable due to:

. . .

(2) Your [Garage Doors’] ongoing

operations for that insured, whether the

work is performed by you or for you.

. . . .

(Emphasis added.)

When read as a whole so as to give effect to all parts and avoid

creating ambiguity where there is none, the plain language of the policy

with its modifications indicate that Plum Creek was only insured to the

extent [Garage Doors] was held liable due to [Garage Doors’] operations 

for Plum Creek. The policy does not indemnify Plum Creek absent 

liability arising from [Garage Doors’] own wrongdoing. 

¶14 The District Court determined that Moser’s complaint against Plum Creek did not

state a claim under the Policy because the allegations of negligence and unsafe workplace

were directed towards Plum Creek, not Garage Doors. Thus, American and Safeco had

no duty to defend Plum Creek against those claims. The District Court also rejected the

argument that Garage Doors’ alleged submission of the Contract to Western States

thereby imputed knowledge of that Contract to American, giving rise to a duty to defend.
10

The District Court characterized this argument as an attempt “to insert ambiguity

regarding a point of the policy where it is unambiguous.” Finally, because the District

Court found no duty to defend on the part of American and Safeco, it rejected a

correlative duty to indemnify as well.

¶15 The District Court also granted Garage Doors’ motion for summary judgment

regarding its liability for Moser’s negligence claims, on the grounds that the Act provided

the exclusive remedy for Moser’s injuries and relieved Garage Doors of liability. The

District Court further rejected Moser’s attempt to apply the doctrine of “corporation by

estoppel” to prevent Garage Doors from escaping liability. Moser claimed that Garage

Doors and Enterprises were both owned by Craig and Linda Walsten, but that Craig

Walsten held Garage Doors out as a separate and distinct entity in his business practices

and filings with the Secretary of State’s office. Because Garage Doors was separate and

distinct from Moser’s immediate employer (i.e., Enterprises), Moser argued, Garage

Doors could not invoke the Act’s exclusivity provision to avoid liability for Moser’s

negligence claims.

¶16 The District Court noted that the evidence in the record showed that Craig and

Linda Walsten had in fact loosely referred to their business variously as Walsten Garage

Doors, Walsten’s Garage Doors, Walsten’s Garage Doors, Inc., or Walsten’s Garage

Door, Inc., even though the name Walsten’s Garage Doors was cancelled with the

Montana Secretary of State in 1995, and the business had been officially registered as

Walsten Enterprises, Inc., with the Secretary of State since 1999. However, such loose

references did not establish that the principals behind Garage Doors and Enterprises were
11

posturing as separate and independent corporations under these names. Furthermore, the

District Court determined that Moser failed to show that he assumed Garage Doors was a

separate corporation or that he had any dealings with it as such, nor did he produce any

evidence that there were actually separate corporate entities in existence. Thus, the

District Court concluded that the facts of this case did not fall within the ambit of the

“corporation by estoppel” doctrine.

¶17 Finally, regarding Moser’s alternative negligence claim—wherein he argued that

Garage Doors was negligent in performing its obligation under the Contract to procure

insurance for Plum Creek—the District Court concluded that Moser lacked standing to

bring this claim because he was not a party to the Contract itself, he was not an intended

third-party beneficiary of the Contract, and the purpose of the Contract was to protect

Plum Creek, not Moser, from loss.

¶18 American, Moser, Plum Creek, and Garage Doors now appeal from the District

Court’s order. These parties assert that the District Court erred in granting summary

judgment to American and holding that American had no duty to defend or indemnify

Plum Creek. American urges us to affirm.

¶19 Before proceeding to the issue before us, we note that in its order presently on

appeal, the District Court gratuitously held that Plum Creek would have standing to bring

a breach of contract claim against Garage Doors for its failure to obtain the appropriate

insurance coverage required under the Contract’s insurance provision. In response, the

parties have directed some attention to this holding in their appellate briefs. As Plum

Creek correctly notes, any potential claims against Garage Doors for failure to secure the
12

proper insurance are wholly separate and independent of Plum Creek’s instant defense

and indemnity claims against American. Accordingly, to the extent the District Court’s

decision purports to resolve extraneous issues of standing with respect to claims not

presently before the Court, we vacate such portions of the District Court’s order.

¶20 Thus, we state the issue presented on appeal as follows:

Did the District Court err in granting summary judgment to American and holding

that it did not have a duty to defend or indemnify Plum Creek under the Policy?

STANDARD OF REVIEW

¶21 Summary judgment is proper only when no genuine issues of material fact exist

and the moving party is entitled to judgment as a matter of law. Gudmundsen v. State ex.

rel. Mont. State Hosp. Warm Springs, 2009 MT 56, ¶ 12, 349 Mont. 297, 203 P.3d 813.

We review appeals from a grant of summary judgment de novo. Revelation Industries,

Inc. v. St. Paul Fire & Marine Ins. Co., 2009 MT 123, ¶ 13, 350 Mont. 184, 206 P.3d

919. We review a district court’s conclusions of law for correctness, and its findings of

fact to determine if they are clearly erroneous. Revelation, ¶ 13.

DISCUSSION

¶22 Plum Creek, Moser, and Garage Doors assert that the District Court erred in

granting summary judgment to American regarding its duty to defend and indemnify

Plum Creek against Moser’s claim. Plum Creek argues that the District Court’s

erroneous interpretation of the Policy hinges on its incorrect assumption that the

Endorsement modified and restricted the coverage bestowed by the body of the Policy

itself. Plum Creek argues that, at a minimum, the “insurance contract” provision of the
13

Policy (see Opinion, ¶ 13) obligated American to provide a defense for Plum Creek under

the facts of this case. Plum Creek asserts that its coverage under this provision arises

from American’s promise to assume Plum Creek’s tort liability. Plum Creek, as a party

to the Contract itself, claims that it stands in the same shoes as the insured with respect to

the Policy, thus giving rise to a duty to defend. In this connection, Plum Creek argues

that American could not rely upon the Act’s exclusivity provision in denying a defense,

as it was not Moser’s employer and not a participant in the quid pro quo upon which such

exclusivity is based. Along the same lines Plum Creek asserts that only Enterprises, as

Moser’s direct employer, was entitled to assert the exclusivity defense under the Act, and

that Garage Doors itself could not.

¶23 Alternatively, Plum Creek asserts that the District Court erred in concluding that it

was not a “potential” additional insured under the Policy. Plum Creek asserts the duty to

defend is broad and triggered when facts are presented which arguably fall within the

scope of coverage. Further, Plum Creek maintains that because American was aware of

Craig Walsten’s testimony that he had forwarded the Contract to Western States,

American has either waived or is estopped from reliance upon any exclusions in the

Policy in declining to offer a defense or indemnity to Plum Creek. Plum Creek asserts

that American’s own training manuals and materials show that such contractually-based

indemnification agreements can require it to provide indemnification and defense.

Further, Plum Creek argues that internal emails from American show that its agents knew

it had in fact provided lesser coverage than had been agreed to in the Contract itself. As
14

such, it argues, American has waived any exclusions which would provide for a lesser

amount of coverage.

¶24 Moser’s challenge centers on the proposition that Enterprises and Garage Doors

are separate and distinct entities and do not share the protection of the Act’s exclusive

remedy provision; thus, only the negligence of Enterprises, and not that of Garage Doors,

is covered under the Act’s exclusivity provision. Moser also asserts that American

should be estopped from denying liability on the grounds that Garage Doors and

Enterprises are the “same corporation.” At the very least, Moser argues that the evidence

in the record reflecting that Garage Doors and Enterprises are actually separate entities

created a material issue of fact that precluded summary judgment and triggered

American’s duty to defend. Moser also repeats many of Plum Creek’s arguments, and

asserts that American should have provided a defense to Plum Creek under a reservation

of rights, and then pursued a declaratory judgment action if it did not believe it was

required to indemnify or defend Plum Creek under the Policy.

¶25 For its part, Garage Doors argues that the District Court erred because there was a

genuine issue of material fact precluding summary judgment. Garage Doors notes that

Craig Walsten testified that he transmitted the Contract to Western States and believed

the necessary coverage had been issued. Craig Walsten received no notice that the Policy

would provide less coverage than requested. If such testimony was true, Garage Doors

asserts that American and Safeco would have an “absolute duty” to defend and indemnify

Plum Creek. At the same time, however, Garage Doors argues that the District Court’s

finding that Enterprises and Garage Doors were the same entity was factually and legally
15

correct, and that it was protected from any tort liability under the Act’s exclusivity

provision.

¶26 American urges us to affirm. American argues that it never provided insurance

coverage to Plum Creek for liability due to its own negligence, and that Plum Creek is

not insured as such under the terms of the Policy. American argues that Plum Creek is

not listed as an insured on the certification of insurance, on the declarations page, or the

Endorsement. Thus, it had no duty to defend or indemnify Plum Creek against Moser’s

claims. While American concedes that the Endorsement in the Policy provides some

limited coverage for third parties who entered into contracts with Garage Doors, such

coverage is limited to liability arising from the negligence of Garage Doors itself. In this

case, however, Plum Creek was sued for its own negligence. Further, even if Garage

Doors had been sued for its own negligence, American asserts that it could not be held

liable under the Act’s exclusivity provision. American also asserts that the District Court

did not err in concluding that there were not two separate companies at the time of the

accident (i.e., Garage Doors and Enterprises) as claimed by Moser, but instead only one

business enterprise which employed Moser and covered him under the Act.

¶27 With respect to the significance of the insurance provision of the Contract,

American asserts that such a contractual provision is insufficient to change or alter the

scope of coverage actually provided by the terms of the Policy itself. American also

maintains that whether or not Craig Walsten forwarded the Contract to Western States is
16

irrelevant, because American does not issue the requested “2010 endorsement”2and

Western States would be exceeding the scope of its agency agreement with American if it

issued such coverage.

¶28 The first argument we consider is whether the District Court erred in concluding

that Garage Doors and Enterprises were in actuality the same company, and thereby

covered under the Act’s exclusivity provision. Moser argues that the District Court erred

in refusing to apply the doctrine of “corporation by estoppel.” Moser maintains that the

evidence shows that Garage Doors and Enterprises were considered separate entities by

all parties in this case. As evidence of this fact, Moser notes that Craig Walsten signed

the Contract as president of Garage Doors, and held Garage Doors out as a separate

entity. Furthermore, Moser claims the Policy separately insured both Enterprises and

Garage Doors, and a premium was received by American to insure each of them

separately.

¶29 The doctrine of corporation by estoppel prevents a party from denying the status

of a corporation when to do so would result in inequity. Valley Victory Church v.

Sandon, 2005 MT 72, ¶ 26, 326 Mont. 340, 109 P.3d 273. In Valley Victory Church, we

reaffirmed the vitality of this doctrine in Montana. We noted, however, that this doctrine

“should only be applied when equity requires it.” Valley Victory Church, ¶ 26 (citing

Childs v. Philpot, 487 S.W.2d 637, 641 (Ark. 1972)). In Valley Victory Church we did

not delve into the equity requirements of this doctrine in any detail because the facts of

that case did not require it. However, in Childs, upon which we relied in Valley Victory

2

See Opinion, ¶ 3 n.1.
17

Church, the Arkansas Supreme Court noted that “[t]he doctrine should be applied only

where there are equitable grounds for doing so, but never where it would be inequitable.

It should not be applied unless it would be inequitable not to do so.” Childs, 487 S.W.2d

at 641 (citing 8 Fletcher, Cyclopedia Corporations 194, § 3897 (Cum. Supp. 1971); 18

C.J.S. Corporations § 111d, p. 515; Montoya v. Hubbell, 210 P. 227 (N.M. 1922)). The

Childs court then went on to state:

Before an equitable estoppel may be applied, the party asserting

estoppel must have relied to his detriment or prejudice upon the

representations, acts or conduct of the one against whom estoppel is

invoked. Bowlin v. Keifer, 246 Ark. 693, 440 S.W.2d 232. In other

words, the courts of Arkansas generally will not apply an equitable

estoppel unless the actions or conduct relied upon caused the innocent

party to assume a different position than he would otherwise have or it

would be otherwise inequitable to permit the person estopped to change

his position.

Childs, 487 S.W.2d at 641.

¶30 Even assuming that Plum Creek, Safeco, American, and Moser all thought that

Enterprises and Garage Doors were separate companies and there was arguable evidence

in the record to support these assumptions, Moser has not shown how he relied upon any

distinction between Garage Doors and Enterprises to his detriment at the time he was

employed by Garage Doors, or that he otherwise changed his position based on an

assumption that these two entities were distinct. As the Childs court noted, “[a]

‘corporation by estoppel’ has no real existence but is a fiction for the purpose of a

particular case and can arise only from actions and conduct of parties which place them

in such a position that they will not be permitted to deny the existence of the

corporation.” Childs, 487 S.W.2d at 640-41 (citing 8 Fletcher, Cyclopedia Corporations
18

191, §§ 3889-389l). Here, there is no evidence indicating that Moser was even aware of

any purported distinction between Enterprises and Garage Doors until after his suit was

filed and he was seeking a way to avoid the ambit of the Act’s exclusivity provision.

Since Moser has failed to satisfy the equitable preconditions for invoking this doctrine,

we agree with the District Court that corporation by estoppel does not apply in this case.

¶31 Next, we consider whether the District Court’s interpretation of the Policy and

Endorsement was correct and whether American had a duty to defend and indemnify

Plum Creek. The interpretation of an insurance policy presents a question of law. Town

of Geraldine v. Mont. Mun. Ins. Auth., 2008 MT 411, ¶ 8, 347 Mont. 267, 198 P.3d 796.

An insurer’s duty to defend arises when a complaint alleges facts which present a risk

covered by the terms of the insurance policy. Town of Geraldine, ¶ 11. “The duty to

defend is independent from and broader than the duty to indemnify, and arises when a

complaint alleges facts, which if proven, would result in coverage. An insurer must

defend unless there exists an unequivocal demonstration that the claim against the insured

does not fall under the policy’s coverage.” Farmers Union Mut. Ins. Co. v. Rumph, 2007

MT 249, ¶ 14, 339 Mont. 251, 170 P.3d 934 (citing Farmers Union Mut. Ins. Co. v.

Staples, 2004 MT 108, ¶¶ 20-21, 321 Mont. 99, 90 P.3d 381); Revelation, ¶ 32.

Moreover, insurers who “look at facts beyond the allegations in the complaint do so at

their own risk as they will be required to defend and/or indemnify based on the

information discovered.” Revelation, ¶ 30.

¶32 We agree with the District Court’s interpretation of the Policy and Endorsement

and conclude that they do not cover Plum Creek under the facts of this case. While the
19

Policy by itself would have arguably provided coverage to Plum Creek in this case, the

Endorsement modified and limited such coverage. See Opinion, ¶ 13. Given the

provisions of the Endorsement, Garage Doors could not be held liable in this case

because, as noted by American, Moser’s complaint alleged negligence against Plum

Creek, not Garage Doors. Thus, it is unequivocally clear that American was not required

to defend or indemnify Plum Creek. While Plum Creek and Moser cite many cases

discussing the application and interpretation of insurance policies in various contexts, the

scenario before this Court is straightforward and does not call for an elaborate analysis.

The terms of the Policy and Endorsement taken together are clear and unambiguous, and

do not provide coverage to Plum Creek in this case.

¶33 In this connection, we agree with the District Court that the question of whether

Western States had received the Contract and knew Plum Creek required Garage Doors

to provide a particular insurance policy as a condition of the Contract, is a wholly

separate question from the fundamental meaning of the Policy and Endorsement

themselves. We disagree with Plum Creek’s and Moser’s argument that imputation of

such knowledge to American estops it from relying on the plain language of the Policy

and Endorsement in determining scope of coverage. The question of whether Western

States and/or American had knowledge of the Contract, and nevertheless chose to issue a

policy which was not in compliance with the insurance requirements set forth in the

Contract, are issues that do not bear upon the interpretation of the Policy and

Endorsement actually issued by American. While such alleged omissions may bear on

other claims Plum Creek might choose to bring against Western States and American,
20

they cannot alter the coverage and limits set forth in the Policy and Endorsement

themselves.

CONCLUSION

¶34 The District Court did not err in granting summary judgment to American. Garage

Doors was protected from liability under § 39-71-411, MCA, of the Act. Moreover,

because Garage Doors was not sued for its own negligence nor found liable for any

tortious conduct, American had no duty to defend or indemnify Plum Creek under the

Policy and its Endorsement. Affirmed.

/S/ PATRICIA O. COTTER

We concur:

/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

/S/ JOHN WARNER

/S/ JIM RICE