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Devine v. Great Divide Ins. Co.

Supreme Court of Alaska

May 15, 2015

KATHERINE DEVINE and THOMAS SINDORF, Appellants,
v.
GREAT DIVIDE INSURANCE COMPANY, PAUL CHATARI, CHRISTOPHER TODD ALLEN, and JOHN DOES I-V, Appellees

Page 783

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Patrick J. McKay, Judge. Superior Court No. 3AN-11-10496 CI.

Michael Cohn, Weidner & Associates, Anchorage, for Appellants.

Timothy Lynch, Lynch & Associates, Anchorage, for Appellee Great Divide Insurance Company.

No appearance by Appellee Paul Chatari.[1]

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.

OPINION

Page 784

STOWERS, Justice.

I. INTRODUCTION

A man who assisted at a concrete-pouring job was assaulted by another worker at the job site. The injured man filed a lawsuit against his assailant as well as both the concrete-pouring company and its owner. Although the company's commercial general liability insurer initially provided a defense attorney in the negligence action, the insurer later brought a declaratory judgment action alleging that the incident fell within the policy's employee-exclusion clause. The superior court granted summary judgment to the insurance company. Finding no error, we affirm.

II. FACTS AND PROCEEDINGS[2]

Thomas Sindorf and Paul Chatari operate separate concrete businesses in the Kenai Peninsula. Chatari does business under the name Complete Concrete. Chatari purchased general commercial liability insurance for Complete Concrete from Great Divide Insurance Company for the policy period from July 29, 2008 to July 29, 2009. Chatari did not purchase workers' compensation coverage.

At the time of the incident giving rise to this lawsuit there was only one concrete-pumping truck available for rent in the Sterling area. Both Sindorf and Chatari needed the truck on July 7, 2009, because they " both had jobs that day requiring the pump truck." Chatari had reserved the truck for his job, so Sindorf offered to help Chatari in order to free the truck up for Sindorf's use sooner. Chatari accepted Sindorf's offer to help; Chatari did not pay Sindorf for his work on the pour job.

Another man whom Chatari had engaged to help with the pour was Christopher Todd Allen. Chatari knew Allen; according to the allegations in Sindorf's complaint, Chatari had " provided a place to stay and a job to . . . Allen, a violent and unstable individual with a history of assaultive behavior and criminal conduct." On the day of the incident Allen told Chatari that he " was agitated by" Sindorf's presence at the job site. Allen told Chatari that he " could not work" in Sindorf's presence. Chatari's response was

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to give Allen two Valium tablets in an effort to calm him down. Chatari did not warn Sindorf that Allen was angry or agitated, nor did he convey any information to Sindorf or other workers about the possibility that Allen might attack Sindorf.

Allen subsequently left the job site, but he then returned in a vehicle driven by Dave Riss. Without warning, Allen " walked unimpeded" to where Sindorf was running the concrete hose " with his back to" Allen. Other employees saw Allen " sneak up" on Sindorf but did not warn Sindorf or stop Allen because they were " unaware of the need to do anything because of the failure" of Chatari to " warn employees" to protect Sindorf. Allen attacked Sindorf, punching him " from behind in the head." Sindorf was " staggering and stunned, but was still on his feet" ; Allen " walked a few feet away" then " walked back unimpeded" and hit Sindorf again, " knocking [him] down onto a concrete stake and into the wet concrete." Sindorf suffered significant injuries, including injuries to his teeth, hip, shoulders, and head. Allen then left the job site again, with Riss driving him away. Allen was charged with assault, and he was a fugitive at the time Sindorf filed suit against him.

Sindorf and his mother Katherine Devine[3] filed a personal injury action against Chatari, Complete Concrete, Allen, Riss, and various John Does. Chatari notified Great Divide of the lawsuit. Great Divide sent Chatari a letter to the effect that it would initially provide him with a defense attorney for the negligence action Sindorf filed but would seek a declaration that its policy did not cover the incident. Great Divide took the position that the incident fell under the employee exclusion of the policy because Sindorf was a " volunteer employee" and the assault happened in the course and scope of employment.

Several weeks later Great Divide filed a declaratory judgment action naming all those involved in the Sindorf litigation (except Riss) and sought a declaration of no coverage. Only Sindorf answered the declaratory judgment complaint. The superior court, in granting default against Chatari, wrote that the default was " [w]ithout prejudice to [d]efendants 'Sindorf' [sic] right to contest judgment."

Great Divide then moved for summary judgment, which Sindorf opposed. Great Divide's motion rested on its contention that Sindorf was Chatari's " employee" because the definition of " employee" in Chatari's general liability policy included volunteers, temporary and casual workers, subcontractors, and independent contractors.[4] Relying on the policy's terms Great Divide asserted that the policy " excludes bodily injury to any employee arising out of the performance of any duties related to the conduct of the insured's business."

The court granted summary judgment for Great Divide after determining that " Sindorf's bodily injuries arose out of and in the course of the performance of job duties." The court concluded that Great Divide had no duty to defend Chatari and no " duty to indemnify [him] for any resulting liability." Sindorf moved for reconsideration, arguing that Great Divide had " failed to even address 'arising out of employment' in briefing and in opening oral argument" and had failed to meet its burden of proof. The court denied reconsideration, reasoning that Sindorf could not allege both that his injuries did not arise out of his employment by Chatari and that Chatari's negligence in the conduct of the business was a legal cause of those injuries. Because coverage under the policy required both of these elements, the court concluded there was no coverage.

Sindorf appeals.

III. STANDARD OF REVIEW

We review a grant of summary judgment de novo.[5] Summary judgment is

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proper if there is no genuine factual dispute and the moving party is entitled to judgment as a matter of law.[6] In reviewing a summary judgment motion, we draw all reasonable inferences in favor of the non-moving party.[7] The party seeking summary judgment " has the initial burden of showing by admissible evidence that there is an absence of genuine factual disputes and that it is entitled to judgment as a matter of law." [8] " Once the moving party satisfies its burden, the non-moving party must produce 'admissible evidence reasonably tending to dispute or contradict the movant's evidence.'" [9]

Interpretation of an insurance contract is a question of law that we review de novo, looking " to the language of the disputed policy provision, other provisions of the policy, and relevant extrinsic evidence." [10] " [B]ecause of inequities in bargaining power, we construe coverage broadly and exclusions narrowly, in favor of insureds." [11] Insurance contracts are construed using the reasonable expectations doctrine, under which the " objectively reasonable expectations" of an insurance applicant about the terms of the insurance contract will be honored " even though painstaking study of the policy provisions would have negated those expectations." [12] " To determine the parties' reasonable expectations, we examine (1) the language of the disputed policy ...


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