No. 13776 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

ALPHA REAL ESTATE DEVELOPMENT, INC., 

Plaintiff and Appellant, 

-vsAETNA LIFE & CASUALTY COMPAPTY, 

Defendant and Respondent. 

Appeal from: District Court of the Fourth Judicial 

District, 

Honorable Edward T. Dussault, Judge presiding. 

Counsel of Record: 

For Appellant: 

Jordan, Sullivan and Baldassin, Missoula, Kontana 

Lee Jordan argued, Missoula, Montana 

For Respondent : 

Garlington, Lohn and Robinson, Missoula, Montana 

Gary Graham argued, Missoula, Montana 

Submitted: September 22, 1977 

Decided: oci 1371 

rl - G * VJq Filed: bLi 6% I,, 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court: 

This is an appeal from an order of the district court, 

Missoula County, granting summary judgment to defendant. 

Plaintiff Alpha Real Estate Development, Inc . (Alpha) 

brought an action against its insurance carrier, Aetna Life 

and Casualty Company (Aetna) to recover on a certain insurance 

policy for the theft of a commercial carpet cleaner. Aetna 

moved for summary judgment on the ground the policy expressly 

excluded coverage for theft of such equipment. By its order 

of February 3, 1977, the district court granted Aetna's motion. 

Alpha appeals. 

A commercial carpet cleaner valued at $1400 to $1500, 

owned and utilized by Alpha in the maintenance of its apartment 

building, was stolen on or about June 7, 1975. The carpet 

cleaner was used exclusively to clean and maintain the hallway 

carpet in the apartment building. At that time, Alpha was 

covered by a property insurance policy issued by Aetna. 

Following the loss, Alpha submitted a claim to Aetna for 

reimbursement due to the loss of the carpet cleaner. The claim 

was denied on the ground the cleaner was not an "integral part 

of a building or structure" covered by the policy, and as such, 

was expressly excluded from theft coverage by the terms of the 

policy. The pertinent portion of the policy, Form MLB-101, 

provided : 

"I. INSURING AGREEMENT 

"This policy insures against all risks of direct 

physical loss to Coverage A - Building(s) , subject 

to the provisions and stipulations herein and in the 

policy of which this,- form is made a part. 
"11. PROPERTY COVERED 

"When the insurance under this policy covers 

buildings, such insurance shall also cover all 

additions and extensions attached thereto; all 

fixtures, machinery and equipment constituting a 

permanent part of and pertaining to the service of 

the building; materials and supplies intended for 

use in construction, alteration or repair of the 

buildings, yard fixtures; personal property of the 

insured as landlord used for the maintenance or 

service of the described buildings * * *. 

"VI . EXCLUSIONS 

''This policy does not insure under this form 

against : 

"D. Loss caused by: 

5 theft (including but not limited to burglary 

and robbery) of any property which at the time of 

loss is not an integral part of a building or structure * * *." 

At the hearing on the motion for summary judgment, Aetna 

argued the carpet cleaner was not an "integral part of a 

building or structure1' such that its theft was expressly 

excluded by Clause VI , D. , 5 of Aetna' s Form MLB-101. The 

district court granted summary judgment for defendant Aetna. 

Thus, the determinative inquiry is whether the district 

court was correct in granting summary judgment to defendant 

on the basis of the language of the insuring agreement. 

Alpha's position is that the carpet cleaning machine was 

an "integral part" of the structure of the insured apartment 

building, and is expressly covered under the general provision, 

Clause 11. PROPERTY COVERED as "personal property of the insured 
as landlord used for the maintenance or service of the described buildings':. The policy, it is contended, is ambiguous in 

its terms as, on the one hand, it provides for wide coverage, 

including fixtures and nonf ixture maintenance equipment, but 

on the other hand negates such coverage in the case of the 

loss of such items due to theft. When a contract is thus 

ambiguous, the ambiguity should be resolved in the insured's 

favor. 

Aetna' s argument refutes the positions taken by Alpha 

and asserts, in essence, that the contract is plain and clear 

upon its face in excluding nonintegral items of personal property, 

such as a commercial carpet cleaner, from theft coverage. An 

"integral part" it is maintained, is something akin to a fixture, 

such as a heating device, a door, a water pump, etc. There being 

nothing for the court to construe, the district court was correct 

in granting summary judgment. 

We do not cite, nor have we been able to find, any case 

authority which precisely defines the term "integral part" in 

the context of the dilemma presented by this case. The insurance 

contract itself nowhere defines the term. The situation is 

further clouded by the fact the clause of general coverage 

refers to "fixtures" and various items of personalty, such as 

construction, service, and maintenance equipment. The sole 

reference to the phrase "integral part" appears in the exclusionary clause. The general and exclusionary clauses, read 

together, 9ield a contractual ambiguity necessitating judicial 

construction. Indeed, the district court appears to have 

recognized the ambiguity engendered by the contractual language 

in its mder granting summary judgment. 

-4- 
Therefore our discussion starts with the proposition 

the contract in question contains a patent ambiguity. We 

focus on the language of the exclusionary clause in the light 

of the general provisions. In Terry v. National Farmers Union 

Life Ins. Co., 138 Mont. 333, 356 P.2d 975 (1960), the Court 

stated: 

"We keep in mind that in construing an exclusion 

policy, in case of uncertainty, every doubt should 

be resolved in favor of the insured, and the policy 

should be construed strictly against the insurer 

company. * * * Otherwise stated a contract of insurance will be cons trued strictly against the insurer 

and liberally in favor of the insured. * * *I1 

138 Mont. 339. 

See also: Johnson v. Equitable Insurance Co., 142 Mont. 128, 

381 P.2d 778 (1963) ; Holmstrom v. Mutual Benefit Health & 

Accident Ass'n., 139 Mont. 426, 364 P.2d 1065 (1961). 

Further, it is uncontroverted that in construction of 

a contract a particular clause of a contract is subordinate 

to the general intent of the contract. Section 13-716, R.C.M. 

1947. For a general discussion of this rule see: 17A C.J.S. 

Contracts, 59 294(b), 295 (f) . 

Both of the rules find applicability here. The conclusion 

to be drawn from a reading of the general provision is that 

service and maintenance equipment, including an item such as 

a commercial carpet cleaner, is to be grouped together with 

fixtures and the buildings themselves for purposes of coverage. 

We find such language governs the interpretation and defines 

the parameters of the term "integral part" in the exclusionary 

clause. Hence, the carpet cleaner was covered as an "integral 

part1' of the apartment building. To ratify defendant Aetna's 

position would be to limit theft coverage to items virtually 

incapable of being stolen. 
This Court in the case of St. Paul Fire & Marine Ins. 

Co. v. Thompson, 150 Mont. 182, 187, 433 P.2d 795, adopted 

the test for interpreting this contract: 

"* * * Again, looking to the Kansas rule which we 

have adopted, we find that, 'the test is not what the 

insurer intended the words of the policy to mean but 

what a reasonable person in the position of an insured 

would understand them to mean. ' " 

If an insurer desires to limit its coverage in certain 

areas, it should employ language clearly and precisely outlining such restrictions . Johnson v. Equitable Insurance Co . , 

supra. 

The order granting summary judgment is reversed and 

the cause is remanded for proceedings in accordance with 

this opinion. 

We Concur: 
Mr. Justice Frank I. Haswell, dissenting: 

I would affirm the district court judgment. 

The theme of the majority opinion is that the insurance 

policy is ambiguous and doubts concerning its meaning must 

be resolved in favor of the insured. In my view the policy 

coverage is unambiguous, clear and certain leaving no room 

for judicial construction of its terms. 

The policy contains a specific exclusion for theft. 

The operative language of this exclusion reads: 

"EXCLUSIONS. This policy does not insure * * * 

against * * * loss caused by * * *theft * * * of 

any property which * * * is not an integral part 

of a building or structure * * *.It 

As I see it, a carpet cleaner simply cannot be considered 

a part of a building or structure without doing violence to 

the plain meaning of the English language. The descriptive 

adjective "integral" further expands the exclusion, but in no 

sense transforms a carpet cleaner into an "integral part of 

a building or structure". In common usage, the language 

cannot be tortured to achk such meaning in my opinion. 

Nor can an ambiguity be created by reading together the 

general coverage clause and the specific exclusion in my 

judgment. As in all insurance policies excluding certain 

perils, the general coverage clause is stated in broad terms 

and the exclusionary clause specifically excludes those perils 

for which insurance is not purchased. Thus the insurance policy 

here is neither internally inconsistent nor ambiguous in its 

terms, and there is no basis in law for interpreting the contract 

against the insurer. 
This Court cannot rewrite a new policy under the guise 

of judicial construction contrary to that expressed in the 

policy agreed upon and purchased by the insured. Johnson v. 

Metropolitan Life Insurance Co., 107 Mont. 133, 83 P.2d 922 

For these reasons, I respectfully dissent. 

Justice. 

Mr. Justice Daniel J. Shea dissenting: 

I agree with the foregoing dissent of Mr. Justice 

Frank I. Haswell.