Court Opinion

ID: 2714970
Source: CourtListenerOpinion
Date Created: 2014-08-06 17:09:37.472255+00
Date Added: 2024-06-11T15:12:13.856149
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                                   DIVISION ONE

TERRIE LEWARK, assignee of PUBLIC
STORAGE, INC.                                      No. 68634-8-1

                     Appellant,                    ORDER GRANTING
                                                   MOTION TO PUBLISH

DAVIS DOOR SERVICES, INC., a
Washington corporation,

                     Defendant,

AMERICAN STATES INSURANCE
COMPANY, a foreigner insurer,

                     Respondent.

       The respondent, American States Insurance Company, having filed its motion to

publish, and appellant, Terrie Lewark, having filed a response to the respondent's
motion to publish herein, and a panel of the court having reconsidered its prior
determination not to publish the opinion filed for the above entitled matter on February

10, 2014, and finding that it is of precedential value and should be published; now,

therefore it is hereby

       ORDERED that the written opinion filed February 10, 2014, shall be published

and printed in the Washington Appellate Reports.

       DATED this ^?5 dav of ///WV/l                    •2014.
     IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

TERRIE LEWARK, assignee of PUBLIC
STORAGE, INC.                                            No. 68634-8-1

                       Appellant,                        DIVISION ONE

                                                             PUBLISHED OPINION
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DAVIS DOOR SERVICES, INC., a                                                                           :so
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                       Defendant,

AMERICAN STATES INSURANCE                                                                         arr
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COMPANY, a foreigner insurer,                                                         CO
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                       Respondent.                       FILED: February 10, 2014

          Appelwick, J. — Lewark, as assignee of Public Storage, sued American States

claiming coverage as an additional insured under an umbrella liability policy it issued to

Davis Door.      She claimed breach of contract for failure to defend and indemnify and

asserted a variety of extra-contractual claims based on American States' alleged failure

to notify Public Storage of coverage. The trial court dismissed her claims on summary

judgment. The insurance policy did not provide coverage for the underlying claim. We

affirm.

                                           FACTS

          Public Storage Inc. contracted with Davis Door Service Inc. to perform work at its

facilities.   They signed a master agreement in 2003, and again in 2006. The 2006
No. 68634-8-1/2

master agreement included a provision that required Davis Door to maintain a

commercial general liability policy that insured Public Storage "during the entire

progress of the work."

       As required by the agreement, Davis Door took out a commercial general liability

policy and an employer's liability policy with American Economy.    It also took out an

umbrella liability policy with American States.

       In October 2006, Davis Door performed repair work on a door at a Public Storage

facility in Renton. Then, in December 2006, Terrie Lewark attempted to open the door

and injured her back. She sued Public Storage and Davis Door. Public Storage settled

with Lewark for $299,000.     It also paid $150,028 in defense costs, and assigned to

Lewark its rights under the 2006 master agreement. Lewark settled with Davis Door in

September 2010 for $225,000. Then, Lewark sued Davis Door and American States as

assignee of Public Storage. Because she acted as assignee of Public Storage, we refer

to her as simply Public Storage.

       Public Storage alleged it was an additional insured under the umbrella liability

policy and that American States breached the contract by failing to defend and

indemnify it.   It also pursued extra-contractual claims for negligence, bad faith, and

violation of the Consumer Protection Act, ch. 19.86 RCW, and the Insurance Fair

Conduct Act, ch. 48.30 RCW.         The parties filed competing motions for summary

judgment. The trial court dismissed all claims. It found that "Public Storage is not an

additional insured under the American States Insurance Company umbrella policy

issued to Davis Door."
No. 68634-8-1/3

                                        DISCUSSION

       Public Storage argues that it is an additional insured, that the umbrella insurance

policy covered the loss in this case, and that American States violated its duty of good

faith by failing to notify Public Storage of its policy benefits. It also claims that the trial

court abused its discretion by denying Public Storage's motion to compel discovery of

documents that American States alleges are protected by the work product doctrine and

attorney-client privilege.   American States argues that Public Storage is not an

additional insured, that the policy was not triggered in this case, that it had no duty to

notify Public Storage of potential benefits, and that the trial court correctly denied the

motion to compel.

       We review an order granting summary judgment de novo. Weden v. San Juan

Countv, 135 Wash. 2d 678, 689, 958 P.2d 273 (1998). We may affirm the order on any

grounds supported by the record. Allstot v. Edwards. 116 Wash. App. 424, 430, 65 P.3d
696 (2003).

       The threshold issue in this case is whether Public Storage is an additional

insured under the umbrella liability policy. This question turns on the additional insured

language in the umbrella liability policy and the insurance requirement in the 2006

master agreement. The master agreement described the type of insurance required:

       Contractor shall procure and maintain at its own expense during the entire
       progress of the Work, the following insurance coverage from an insurance
       company satisfactory to Owner:

              Employer's liability insurance of not less than $1,000,000,
              and commercial general liability insurance insuring against
              claims for personal injury, death or property damage
              occurring upon, in or about the Property in limits not less
              than $1,000,000 per occurrence. Prior to the start of any
No. 68634-8-1/4

              work a certificate of insurance must be received by Owner
              naming Public Storage, Inc. and each of its affiliates,
              subsidiaries, partners, owners, officers, directors and
              employees as additional insureds.

(Emphasis added.) The umbrella liability policy provided that insured persons or entities

include:

       Any person or organization for which an insured is reguired by virtue of a
       written contract entered into prior to an "occurrence" to provide the kind of
       insurance that is afforded by this policy, but only with respect to operations
       by or on an insured's behalf, or to facilities an insured owns or uses, and
       only to the extent of the limits of insurance reguired by such contract, but
       not to exceed the applicable limits of insurance set forth in this policy.

(Emphasis added.) It also provided that the coverage was excess over other coverage:

       This insurance is excess over, and shall not contribute with any other insurance,
       whether primary, excess, contingent or on any other basis. This condition will not
       apply to insurance written specifically as excess over this policy.

       Public Storage claims that the language, "the kind of insurance that is afforded by

this policy," is ambiguous.    It argues that the policy does not specify whether it is

referring to commercial general liability insurance or commercial umbrella liability

insurance, and does not define either term. Thus, it urges the court to liberally construe

the clause in favor of insurance coverage.

       Whether both policies provide commercial liability coverage does not create

ambiguity.   The master agreement requires a commercial general liability policy that

covers not less than $1,000,000 per occurrence.          It is undisputed that Davis Door

purchased that kind of policy with the limits required by the master agreement. It was

not required to do more.      The umbrella insurance policy was by its terms excess

coverage, providing coverage in excess of the limits of the commercial general liability
No. 68634-8-1/5

policy and in excess of the amounts required by the master agreement.           Coverage

under the umbrella policy was not required by the master agreement.

      The master agreement required Davis Door to maintain insurance "during the

entire progress of the Work." Lewark's underlying claim is based on injury more than

two months after the repairs to the door had been completed. Public Storage agrees

that the commercial general liability did not provide coverage for the claim. However, it

argues that the umbrella coverage should apply if it was the kind of insurance required

by the master agreement. American States argues that the master agreement does not

require coverage of completed operations, only coverage during ongoing operations.

Public Storage counters that the scope of coverage is defined by the umbrella liability

policy, not the master agreement.

      The master agreement does not use either the phrase ongoing operations or

completed operations. The meaning of these phrases has been discussed in Hartford

Insurance Company v. Ohio Casualty Insurance Company, 145 Wash. App. 765, 777, 189
P.3d 195 (2008).     The issue was whether "ongoing operations" language of an

additional insured endorsement excluded coverage for "completed operations." Id. The

court limited the coverage to damages arising out of the subcontractors' work in

progress only. jd. at 778. Here, the master agreement required insurance "during the

entire progress of the Work."       Read in the context of the Hartford decision, that

language does not require completed operations coverage.

      The umbrella policy only insures what is "required by virtue of a written contract."

Neither excess coverage nor completed operations coverage were required in the
No. 68634-8-1/6

master agreement.    Public Storage is not covered under the umbrella policy as an

additional insured. The remaining issues are moot.

      We affirm.

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WE CONCUR:

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