UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

WOMEN IN MILITARY SERVICE FOR

AMERICA MEMORIAL FOUNDATION,

Plaintiff,

v.

HARTFORD FIRE INSURANCE COMPANY,

Defendant-Appellee,

and

THE CLARK CONSTRUCTION GROUP,

INCORPORATED,

Defendant,

No. 99-1670

v.

MONTGOMERY MUTUAL INSURANCE

COMPANY,

Third Party Defendant-Appellant,

and

KALOS CONSTRUCTION COMPANY,

INCORPORATED; WEISS/MANFREDI

ARCHITECTS; PROFESSIONAL

RESTORATION, INCORPORATED,

Third Party Defendants.

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Claude M. Hilton, Chief District Judge.

(CA-98-916-A)

Argued: April 4, 2000

Decided: May 23, 2000
Before HAMILTON, Senior Judge, John C. GODBOLD,

Senior Circuit Judge of the United States Court of Appeals

for the Eleventh Circuit, sitting by designation,

and David A. FABER, United States District Judge for the

Southern District of West Virginia, sitting by designation.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Stephen Anthony Horvath, TRICHILO, BANCROFT,

MCGAVIN, HORVATH & JUDKINS, Fairfax, Virginia, for Appellant. Brian Louis Moffet, NILES, BARTON & WILMER, Baltimore,

Maryland, for Appellee. ON BRIEF: Michael J. Carita, TRICHILO,

BANCROFT, MCGAVIN, HORVATH & JUDKINS, Fairfax, Virginia, for Appellant. Craig David Roswell, NILES, BARTON &

WILMER, Baltimore, Maryland, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This is a dispute between two insurance companies over coverage.

The Women in the Military Service for America Memorial Foundation, Inc. (WIMSA) undertook to construct a memorial on land of

Arlington National Cemetery, to honor the involvement of women in

military service. The National Parks Service issued to WIMSA a permit to construct the memorial. The permit required WIMSA to be

responsible for management, performance, use and safety within the

park area involved until the work is completed, inspected and

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accepted and thereafter as long as the facility is in place. WIMSA was

responsible to pay the United States for all damages to lands or other

property of the United States caused by the permittee or by the permittee's employees, contractors, or employees of the contractors, and

for costs and repairs for any structures, facilities, sod, soils or landscape vegetation on park land damaged by the work.

WIMSA contracted with Clark Construction Group, Inc. to do the

work. Hartford issued to Clark a Builder's Risk Policy and Commercial General Liability Policy. WIMSA was named as an additional

insured.

Clark subcontracted excavation work to Kalos Construction Co.,

Inc. Kalos was insured by Montgomery Mutual Insurance Company

under a commercial general liability policy.

The project consisted of a semi-circular building around an open

circular plaza with a large fountain. Preexisting pylons completed the

plaza circle. The pylons are approximately 60 feet in height and are

made of stone-clad concrete. They supported some lighting already in

place and were to support new lighting for the memorial. WIMSA

barricaded the area of the work, including the area on which the

pylons were located.

During construction Kalos excavated a trench near one of the

pylons. The weight of the pylon either collapsed or compromised the

trench and the pylon collapsed, damaging it to the extent of more than

$1,000,000.

WIMSA called on Clark and Hartford to cover the damages. Hartford denied coverage. WIMSA sued. Montgomery Mutual was

brought in as a third party. It settled and was assigned WIMSA's

rights against Hartford. Numerous crossclaims were filed between the

various parties and were settled. Remaining before the court were the

claims of Montgomery Mutual, as assignee, against Hartford. Count

II sought a declaratory judgment against Hartford, Count V alleged

breach of contract of the Builder's Risk Policy, and Count VI alleged

bad faith against Hartford.

The coverage provisions of the Builder's Risk Policy provided:

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A. COVERAGE.

1. We will pay for ALL RISKS OF DIRECT PHYSICAL

"LOSS" to covered property (including the cost of labor

expended therewith, for which a premium charge is

made) caused by any of the covered causes of loss.

(Including general average & salvage charges for which

insured is legally liable.) Covered property is defined

as:

a. Structures (including foundations, additions,

attachments, permanent fixtures, and materials

and supplies) fixtures, equipment, machinery

and similar property which will become a permanent part of the structure described in the

declarations or schedule, while under construction, reconstruction/erection, fabrication

or repair at the premises described in the declarations of schedule;

 . . .

d. Property of others, used or to be used in, or

incidental to the construction operations, for

which you may be responsible or shall, prior

to any "loss" for which you make a claim,

have assumed responsibility."

II PROPERTY NOT COVERED.

Covered property does not include:

a. Machinery, tools, equipment or other property which

will not become a permanent part of the structure(s)

described in the declarations or schedule unless the

replacement cost of such property is included in the

contract price and reported to us . . . .

By letter Hartford denied coverage. We set out that letter in full:

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Dear Mr. Johnson [Claim manager of Clark] and Ms. Van

Voast [Project manager]:

This letter is a response to a claim from Lehr McGovern

Bovis Inc., and their representative, Goodman Gable Gould,

for costs associated with re-erection, and repairs to a pylon

which fell over at Arlington National Cemetary on July 3,

1996.

The policy's Builder's Risk Project Certificate describes the

project as "Construction of cast-in-place museum and

memorial. One floor above grade and one floor below grade.

Approximately 30,000 squ.ft. structure." There is no reference to insuring pylons.

The Builders Risk Coverage Form, page 1. A. Coverage

states, "We will pay for ALL RISKS OF DIRECT PHYSICAL "LOSS" TO Covered Property (including the cost of

labor expended therewith, for which a premium charge is

made) caused by any of the Covered Causes of Loss.

(Including General Average and Salvage charges for which

the insured is legally liable.) Covered Property is defined as:

a. Structures (including foundations, additions, attachments, permanent fixtures, and materials and supplies)

fixtures, equipment machinery, and similar property

which will become a permanent part of the structure

described in the Declarations or schedule while under

construction, reconstruction/erection fabrication, or

repair at the premise described in the Declarations or

schedule.

Since we did not insure the pylon itself, it is not covered

under the policy. The site plans include costs for repairing,

cleaning, and pointing up the pylons. These costs are

included in the work we insure. Had the pylon undergone

this work, prior to this loss, we would have covered the cost

of repairing the work performed, but not the erection or any

damages sustained to the pylon. Since work to the pylon had

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not commenced at the time the pylon fell, our coverage will

not apply.

Since the pylon itself was not covered under the policy, and

since none of the scheduled work was performed on the

pylon at the time of the loss, we must respectfully deny this

claim.

By denying this claim, we are not waiving any other rights,

or defenses afforded us under the terms of our policy with

The Clark Construction Group.

Very Truly Yours,

/s/ Thomas E. Curtin, Jr.

Thomas E. Curtin, Jr.

Claim Consultant

0335g/2-3

sym

Hartford moved to dismiss under Rule 12(b)(6), and the court

granted the motion on the basis that the exclusion provision of II controlled because, it found, there was no indication that the pylon property was to become a permanent part of the memorial or that Clark

or plaintiff ever disclosed to Hartford the replacement cost of the

pylons to include such cost in the contract. And, the court concluded,

for property to be covered it must not only satisfy the definition of

Coverage but also not be specifically excluded. It recognized that

there might be ambiguities in the policy but declined to address them

because it found that the plain and unambiguous language of the

exclusion clause made it unnecessary.

The court erred. This case could not be decided on 12(b)(6)

grounds. It is unclear whether the pylons were to be a permanent part

of the memorial. They supported the lighting, existent and new, that

would be used to illuminate the memorial. Hartford acknowledges

that it was obligated to repair, clean, and point up the pylons. It is not

clear that the court had before it all of the site plans, including the

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work on the pylon that was damaged, or that it had before it the project's declarations and schedules.

Hartford's letter denying coverage is internally inconsistent and, by

itself, casts doubt on Hartford's position. It asserts without explanation that the pylons are not covered at all. But then it goes on to

acknowledge that Clark is obligated to repair, point up and paint the

pylons. That obligation appears in subsection I(a), which defines

structures that will become a permanent part of the structure described

in the Declarations or schedule. Thus with respect to repairs, Hartford

did not assert that the pylons to be repaired are not "a permanent part

of the structure," but rather relies upon the assertion that repairs had

not been commenced.

In addition to these inconsistencies it is at least arguable that under

subsection I(d) the pylons are property of others incidental to the construction operations, for which Hartford may be responsible.

Additionally, it appears to us uncertain whether the phrase "while

under construction, reconstruction, erection, fabrication or repair" in

subsection I(a) refers to repair (etc.) of the particular item or repair

(etc.) of any item of the project.

There are also ambiguities in the policy as the court recognized.

The court as fact finder must resolve them.

The decision of the district court is vacated and the case is

remanded for consideration on a fully developed record.

VACATED AND REMANDED

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