Opinion ID: 1896055
Heading Depth: 1
Heading Rank: 6

Heading: insurance provisions of contract

Text: As noted above, subparagraph 11.4.1 of the parties' contract required Hearst to purchase and maintain builder's all-risk insurance without optional deductibles. Subparagraph 11.4.1.2 required Hearst to notify Entrex Communication Services (hereinafter Entrex) if it did not intend to purchase the required insurance with all of the coverages in the amount described above, permitting Entrex to obtain such insurance and charge the cost to Hearst. But instead, Hearst obtained insurance with a $250,000 deductible. And subparagraph 11.4.1.3 provides that if Hearst obtained property insurance with deductibles, Hearst shall pay costs not covered because of such deductibles. Nonetheless, Hearst argues that the contract does not preclude it from seeking indemnification for the deductible from the defendants. Hearst first points to subparagraph 11.4.7 of the contract, the Waivers of Subrogation provision, under which Hearst and Entrex waive all rights against ... each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other ... for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Paragraph 11.4. (Emphasis supplied.) Hearst argues that because subparagraph 11.4.7 operates only as a waiver of liability to the extent covered by property insurance, the recovery of any amount not covered by insurancei.e., the deductibleis not waived by this provision. With that much, we agree. Subparagraph 11.4.7 does not preclude Hearst from recovering the deductible amount. But subparagraph 11.4.1.3 does require Hearst to pay the costs not covered because of the deductible. Hearst argues that it is simply required to pay the costs not covered by the deductible, but that it can still seek indemnification for those costs. Hearst's construction of subparagraph 11.4.1.3, however, makes little sense when read in the context of the entire contract. A contract must receive a reasonable construction, and a court must construe it as a whole and, if possible, give effect to every part of the contract. [9] And a contract is viewed as a whole in order to construe it. [10] Whatever the construction of a particular clause of a contract, standing alone, may be, it must be read in connection with other clauses. [11] Here, subparagraph 11.4.1 required Hearst to obtain property insurance without optional deductibles. Subparagraph 11.4.1.2 required Hearst to notify Entrex in writing if Hearst did not purchase insurance meeting that requirement, and provided that if Hearst chose not to do so, it would bear any resulting costs if Entrex was damaged. The only construction of subparagraph 11.4.1.3 consistent with the preceding provisions is that if Hearst neither obtained the required no-deductible insurance nor informed Entrex of that fact, Hearst would bear any resulting costs. To conclude otherwise would leave Entrex with no way to enforce its rights under paragraph 11.4. Hearst also argues, briefly, that it was required only to obtain insurance without optional deductibles and that there is no proof in this case that the deductible was optional. But subparagraph 11.4.1.3 more plainly states that [i]f the property insurance requires deductibles, [Hearst] shall pay costs not covered because of such deductibles. We reject Hearst's argument that the deductible in this case does not fall within the scope of subparagraph 11.4.1.3. We conclude that the district court correctly read the parties' contract to require Hearst to bear the risk associated with its insurance deductible. We find no merit to Hearst's first assignment of error.