Opinion ID: 774755
Heading Depth: 2
Heading Rank: 1

Heading: Rapid

Text: 12 On appeal, Rapid advances several arguments. Rapid argues that either the SIR endorsement was not a term of the insurance contract, or, if it was, it rendered the policy ambiguous and eviscerated all other provisions and coverage. Rapid also argues that the District Court erred (1) in holding that it had not established the basis for the application of the doctrines of estoppel and reasonable expectations, and (2) in failing to address the issues of waiver, implied warranty, NAICO's bad faith, or whether NAICO had been stubbornly litigious. 13 First, Rapid argues that even though the District Court determined that the SIR endorsement was included in the papers NAICO represented to be the policy, the endorsement was not a term of the insurance contract. Rapid cites Essex Ins. Co. v. Fieldhouse, Inc., 506 N.W. 2d 772, 776 (Iowa 1993), for the proposition that [to] be effective, an endorsement must be made a part of the policy and incorporated by reference. According to Rapid, the SIR endorsement is not referred to on the declarations page, and it has no form number, no edition number, and no dates indicating when it was promulgated. It is not countersigned, and it does not refer to any particular parties. Thus, Rapid argues, the SIR endorsement may be a part of the policy, but it was not incorporated by reference, and therefore it is not a term of the contract. We disagree. 14 The construction and legal effect of a written contract are questions of law we review de novo. United Fire & Cas. Co. v. Gravette, 182 F.3d 649, 654 (8th Cir. 1999). While Essex makes clear that an endorsement is effective when it is made part of the policy and incorporated by reference, it is also clear that an endorsement need not be attached and incorporated by reference to be effective. See Imperial Cas. & Indem. Co. v. Mutual Fire and Auto. Ins. Co., 252 F. Supp. 906, 909 (S.D. Iowa 1966) (interpreting Iowa law) (stating as a general rule an endorsement attached to an insurance policy is a part of that policy); Motor Vehicle Cas. Co. v. LeMars Mut. Ins. Co. of Iowa, 254 Iowa 68, 116 N.W.2d 434, 436 (1962) (same); Hawkeye Clay Works v. Globe & Rutgers Fire Ins. Co., 202 Iowa 1270, 211 N.W. 860 (1927) (holding endorsement attached to face of policy became part of the contract). 15 Here, the District Court held that the SIR endorsement was a provision of the policy. Implicit in this conclusion is the Court's finding that the SIR endorsement was physically attached to the policy and its legal determination that it was a term of the contract. In light of evidence that both in the Veasley suit and in this case in the District Court, Rapid submitted a copy of the insurance policy which contained the SIR endorsement, we hold that the Court's finding that the SIR endorsement was physically attached to the policy was not clearly erroneous. See Duffie v. Deere & Co., 111 F.3d 70, 72 (8th Cir. 1997) (standard of review). 16 Neither is the fact that the SIR endorsement is not countersigned fatal to its inclusion in the policy. 17 If an 'endorsement is physically attached to an insurance policy contemporaneous with its execution, and is delivered to the insured as attached, and sufficient reference is made in either the policy or the attached matter to identify the papers as related, the fact that the matter so attached is without the signature of the insurer or its authorized agents will not preclude its inclusion and construction as a part of the insurance contract.' 18 Essex, 506 N.W.2d at 777 (quoting 13A John Alan Appleman & Jean Appleman, Insurance Law and Practice § 7538, at 163-64 (1976)). 19 A NAICO employee testified that she remembered typing the SIR endorsement as a part of the 1989-90 NAICO policy. CRST's insurance agent testified that he delivered the policy with the SIR endorsement to CRST. What is more, the 1990-91 policy refers to the SIR endorsement. Paragraph 35 of a document titled Common Policy Conditions contains a provision entitled Self-Insured Retention Endorsement. JA 124. This provision expressly provides that In the event of conflict with any provision elsewhere in the policy, the provisions of this Endorsement shall control the Application of Insurance to which the policy applies. Id. Thus, because it was physically attached to and referred to in the policy, we hold that the SIR endorsement was a term of the insurance contract. 20 Next, Rapid contends that the policy is ambiguous, and that the District Court should have considered extrinsic evidence to determine whether or not the policy covered Rapid's claim. An insurance policy is ambiguous if a reasonable person would read more than one meaning into the words. Farm & City Ins. Co. v. Anderson, 509 N.W.2d 487, 491 (Iowa 1993).  'Ambiguity exists if, after the application of pertinent rules of interpretation to the policy, a genuine uncertainty results as to which one of two or more meanings is the proper one.'  Essex, 506 N.W.2d at 776 (quoting A.Y. McDonald Indus., Inc. v. Insurance Co. of North America, 475 N.W.2d 607, 618 (Iowa 1991)). Moreover, mere conflict [between provisions] does not, in and of itself, serve to create uncertainty or ambiguity. Small v. Ogden, 259 Iowa 1126, 1131, 147 N.W.2d 18, 21 (1966). 21 After reviewing the policy, we do not think that it is ambiguous. The Truckers Coverage Form excludes coverage for bodily injury to [a]n employee of the 'insured' arising out of and in the course of employment by the 'insured.'  JA 86 (emphasis added). On the other hand, section IV(C) of the SIR endorsement excludes coverage for bodily injury to any employee of any Insured arising out of and in the course of his employment by any Insured. JA 108 (emphasis added). This exclusion casts, if anything, a broader net than does the exclusion contained in the Truckers Coverage Form. The Truckers Coverage Form serves to exclude claims arising out of and in the course of an employee's employment with his employer/insured. These claims might also be covered under the workers compensation insurance policy provided by NAICO. In contrast, the SIR endorsement excludes coverage of claims arising out of or in the course of an employee's employment even if he is temporarily working for another insured company. Even though the SIR endorsement may redundantly exclude some of the same claims as the Truckers Coverage Form exclusion, that does not render the policy ambiguous. In fact, even if the two exclusions were in direct conflict, the exclusion in the SIR endorsement would prevail. See Motor Vehicle Cas. Co., 254 Iowa at 72, 116 N.W.2d at 437 (holding excess clause in endorsement prevailed over conflicting pro rata clause in policy). Thus, we hold that the policy is unambiguous and the SIR endorsement excludes Rapid's claim. 22 Next, Rapid argues that the SIR exclusion does not control because its application defeats Rapid's reasonable expectations. The reasonable-expectations doctrine applies when the policy is such that an ordinary non-expert would misunderstand the policy's coverage or there are circumstances attributable to the insurer which would foster coverage expectations. Clark-Peterson Co. v. Independent Ins. Assoc., 492 N.W.2d 675, 677 (Iowa 1992). Here, Rapid claims that it reasonably expected to receive a standard Truckers Coverage policy with a standard self-insured retention endorsement unlike the endorsement at issue here. 23 In Iowa the doctrine of reasonable expectations seeks to avoid the frustration of an insured's expectations notwithstanding policy language that appears to negate coverage. Monroe Co. v. International Ins. Co., 609 N.W.2d 522, 526 (Iowa 2000). An insured can use the doctrine to invalidate an exclusion that (1) is bizarre or oppressive, (2) eviscerates a term to which the parties have explicitly agreed, or (3) eliminates a dominant purpose of the policy. LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 311 (Iowa 1998). However, the Iowa Supreme Court has held that the doctrine will not be applied to cases in which an ordinary layman would not misunderstand the extent of the coverage provided from a reading of the policy and there are no circumstances attributable to the insurer that would foster coverage expectations beyond that which is provided. Monroe Co., 609 N.W.2d at 526. Such is the case here. A reading of the policy would have revealed the exclusion in section IV(C) of the SIR endorsement. Moreover, there is no evidence that NAICO led Rapid to believe that the policy provided broader coverage than the policy language specified. Thus, the doctrine of reasonable expectations does not apply. 24 Likewise, Rapid's theories of estoppel and waiver cannot avail. Neither waiver nor estoppel may be used to extend coverage where it is expressly excluded in the policy. See Randolph v. Fireman's Fund Ins. Co., 255 Iowa 943, 950, 124 N.W.2d 528, 531-32 (1963) (holding that implied waiver, based upon the conduct or action of the insurer, cannot bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom) (quoting 29A Am. Jur., Insurance, § 1135, at 289); Richardson v. Iowa State Traveling Men's Ass'n, 228 Iowa 319, 328, 291 N.W. 408, 412 (1940); Pierce v. Homesteaders Life Ass'n, 223 Iowa 211, 272 N.W. 543, 545 (1937). Rapid's brief refers to the doctrine of implied warranty but it does not set forth an argument on the issue. Consequently, we do not consider the doctrine's application, if any, to this case.