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Mountain West Farm Bureau Mutual Insurance Co. v. Jackson

United States District Court, E.D. Washington

November 21, 2019

J. TIM JACKSON and ROBERTA JACKSON, husband and wife; IBEX CONSTRUCTION, INC., a Washington corporation; STEVEN O. ANDERSON as personal representative of the ESTATE OF EDWARD K. DUMAW, on behalf of the Estate and surviving family members, CARRIE DUMAW, KRISTEN DUMAW, MEGAN DUMAW, and ANNA DUMAW, individually; RICHARD WAGONER and VALERIE WAGONER, husband and wife; THEODORE LISTER; DALE RANDALL HILL; JACK STEGALL, JR.; FELIX W. SCHUCK; INLAND NORTHWEST EQUIPMENT AUCTION, INC., d/b/a REINLAND AUCTIONEERS, a Washington corporation; REINLAND, INC., d/b/a REINLAND EQUIPMENT AUCTION, an Idaho corporation; REINLAND PROPERTIES, LLC, an Idaho limited liability company; THOMAS REINLAND and KUNYA REINLAND, husband and wife; ASHLY REINLAND and JOHN DOE REINLAND, husband and wife; PACIFIC HIDE & FUR DEPOT, d/b/a PACIFIC STEEL & RECYCLING, a Montana corporation; PACIFIC HIDE & FUR DEPOT, INC., a Washington corporation; GORDON BECK and JANE DOE BECK, husband and wife, Defendants.


          Stanley A. Bastian, United States District Judge.

         Before the Court are Plaintiff's Motion for Summary Judgment, ECF No. 26, and the parties' Stipulation for Entry of Declaratory Judgment in Favor of Plaintiff, ECF No. 33. The motions were heard without oral argument.

         This is an action for declaratory judgment brought by the insurance company that insured Defendants J. Tim and Roberta Jackson. This lawsuit arises out of the explosion at a recycling facility of a 55-gallon unmarked metal tank that contained chlorine gas, causing significant and injuries and death to persons who were working at the recycling facility.

         Motion Standard

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). There is no genuine issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The moving party has the initial burden of showing the absence of a genuine issue of fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party meets its initial burden, the non-moving party must go beyond the pleadings and “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248.

         In addition to showing there are no questions of material fact, the moving party must also show it is entitled to judgment as a matter of law. Smith v. Univ. of Wash. Law Sch., 233 F.3d 1188, 1193 (9th Cir. 2000). The moving party is entitled to judgment as a matter of law when the non-moving party fails to make a sufficient showing on an essential element of a claim on which the non-moving party has the burden of proof. Celotex, 477 U.S. at 323. The non-moving party cannot rely on conclusory allegations alone to create an issue of material fact. Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993).

         When considering a motion for summary judgment, a court may neither weigh the evidence nor assess credibility; instead, “the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.

         Background Facts

         This case is a companion case to three cases proceeding in Spokane County Superior Court. Plaintiff Mount West Farm Bureau Mutual Insurance Company comes to federal court seeking a declaratory judgment that it does not have a duty to defend or otherwise provide coverage for any claims asserted against its insured, Defendant J. Tim and Roberta Jackson.

         The Jackson Defendants own Defendant Ibex Construction, which is located in Spokane, Washington. The Jackson Defendants contracted with Defendant Reinland Auctioneers to clear the Ibex Construction property of scrap metal and old equipment. Defendant Reinland Auctioneers contracted with Defendant Gordon Beck to remove certain pieces of scrap metal off the property. Defendant Beck loaded the bigger pieces of the scrap metal, including a 55-gallon unmarked metal tank, into a dump truck owned by Defendant Pacific Steel & Recycling. (“PS&R”). An employee of Defendant PS&R drove the truck to its recycling facility. The metal, including the unmarked tank, was loaded into a crusher. When the tank was crushed, it exploded and chlorine gas was released, causing considerable injuries and death to nearby employees.

         Interpreting Insurance Contracts

         Montana law applies to the interpretation of the insurance contract.[1] The interpretation of an insurance contract is a question of law. Fisher v. State Farm Mut. Auto. Ins. Co., 305 P.3d 861, 865 (Mont. 2013). When interpreting an insurance contract, Montana courts accord the usual meaning to the terms and the words used and construe them using common sense. Id. An insurance contract is ambiguous if it is “reasonably subjected to two different interpretations.” Id. (citation omitted). Whether a provision of an insurance contract is “reasonably susceptible to two different interpretations, ” is determined from “the viewpoint of a consumer with average intelligence, but untrained in the law or the insurance business.” Id. (citation omitted). That said, a provision is not ambiguous “just because a claimant says so or just because the parties disagree as to its meeting.” Id. (citation omitted). Id. at 866. “Courts should not ... ‘seize upon certain and definite covenants expressed in plain English with violent hands, and distort them so as to include a risk clearly excluded by the insurance contract.'” Id. (citation omitted). Because insurers draft the language of insurance contracts and the object of an insurance contract is to give protection to the insured, Montana courts construe ambiguous provisions “against the insurer and in favor of extending coverage.” Id.

         “Exclusions from coverage will be narrowly and strictly construed because they are contrary to the fundamental protective purpose of an insurance policy.” Revelation Indus., Inc. v. St. Paul Fire & Marine Ins. Co., 206 P.3d 919, 929 (Mont. 2009).

         Insurance Policy at Issue

         The Jackson Defendants purchased an insurance policy from Plaintiff. ECF No. 1, Ex. 1. The policy included property coverage, liability coverage, automobile coverage, and an umbrella coverage, although only the scope of the liability coverage and umbrella coverage are at issue in this case. Id. at 23.[2] The policy declarations indicate the Insured Location was S20, T3S, R1W, Madison County, MT--330 Sterling Rd., Norris MT 59745. Id. Under Additional Policy Declaration Schedule of Coverage - Section II - Liability Coverages, it lists the “Insured Location” as s20, T3S, R1W, Madison County, Montana. Id. at 28.

         The policy provided:

Farm Liability
Under Section II- “Farm” Liability Coverage, the policy states:
“We” will pay all sums for which an “insured” is legally liable because of “bodily injury” or “property damages” caused by an “occurrence” to which this coverage applies.

Id. at 58.

         Under the Exclusions section, damages for bodily injury or property damages are not ...

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