Court Opinion

ID: 9551659
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:56:50.291429+00
Date Added: 2024-06-11T15:24:21.021439
License: Public Domain

MATTHEWS, Justice,
with whom RABI-NO WITZ, Chief Justice, joins, dissenting.
The majority opinion observes:
Because “liability assumed by contract” refers to a particular type of contract — a hold harmless or indemnification agreement — and not to the liability that results from breach of contract, the contractual liability exclusion applies only to hold harmless agreements.
I agree with this statement. What it necessarily means is that the contractual liability exclusion clause1 has no application to this case. What we are therefore left with is the general coverage agreement which provides:
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. bodily injury ...
caused by an occurrence....
Alaska General agreed to buy liability insurance in the minimum amount of $300,-000.00 to protect Olympic from loss due to injuries on premises leased by Alaska General from Olympic. A fire occurred on those premises and a man was killed as a result. His personal representative has recovered some $600,000.00 from Olympic. For purposes of this case all parties are assuming that Alaska General is liable to Olympic for $300,000.00 of that $600,000.00. The question in this case is whether this obligation of Alaska General falls within the terms of the general coverage clause quoted above. Stated differently, the question is whether Alaska General’s obligation to pay is “because of bodily injury.” 2
Insurance policies are construed to provide that coverage which a layman would reasonably expect, given a lay interpretation of the language of the policy. United States Fire Insurance Co. v. Colver, 600 P.2d 1, 3 (Alaska 1979); Stordahl v. Government Employees Insurance Co., 564 P.2d 63, 65-66 (Alaska 1977). A lay person would naturally conclude that Alaska General’s obligation to pay $300,000.00 has come about because of the death which occurred on its premises. He might conclude that there is another cause as well, that is, Alas*1015ka General’s failure to procure liability insurance specifically naming Olympic as an insured. That, however, would simply mean that there is more than one cause for Alaska General’s obligation, not that the obligation was not also caused by bodily injury. Reasonable laymen recognize-, as does the law,3 that there may be more than one cause which plays a substantial role in bringing about a result. Nothing in the policy states or implies that bodily injury must be the exclusive or sole cause of the obligation.
The reasonable layman’s view that coverage is afforded is supported by a more legalistic interpretation of the policy. The coverage clause is standard. Tinker, Comprehensive General Liability Insurance— Perspective and Overview, 25 Federation of Insurance Counsel Quarterly 217, 300 (1975). It is generally interpreted to be broad enough to include cases where damages are imposed under contract as well as under tort theories. Thus, in discussing the contractual liability exclusion clause in conjunction with the coverage clause, Tinker states:
That portion of the coverage grant is intentionally broad enough to include the insured’s obligation to pay damages for breach of contract as well as for tort, within limitations imposed by other terms of the coverage agreement (e.g., bodily injury and property damage as defined, caused by an occurrence) and by the exclusions (e.g., this exclusion [assumed contractual liability] CCC, alienated premises, damage to products, etc.). In fact that part of the coverage grant would include the liability of others assumed by the insured under contract (hold harmless agreements).
It is the latter to which this exclusion is addressed. Note that the exclusion does not run to duties assumed by contract, or to liability by reason of contract, but to “liability assumed” by the insured under a contract. The exclusion therefore does not remove coverage simply because a claim is based on contract and not in tort.
Id. at 265 (emphasis added). Similarly, Long states:
The significant words of the bodily injury insuring agreement are “legally obligated to pay as damages.” This language is broad in scope and includes liability assumed by contract unless such liability is specifically excluded.
2 Long, The Law of Liability Insurance § 10.17, at 10-26 (1981). Indeed, the very existence of the contractual exclusion clause implies that without it liability would exist under the terms of the coverage clause for a contract claim the underlying source of which is bodily injury.
For these reasons I would construe Providence Washington’s policy to provide coverage for Alaska General’s obligation to pay a portion of the damages resulting from the firefighter’s death.

. The clause provides:
This insurance does not apply: (a) to liability assumed by the insured under any contract or agreement except an incidental contract.

. The policy expressly defines bodily injury to include death.

. See State v. Abbott, 498 P.2d 712, 726-28 (Alaska 1972).