Michael and Misty Blankenship v. The City of Charleston, etc.

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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA January 2009 Term __________ No. 34399 __________ FILED June 18, 2009 released at 3:00 p.m. RORY L. PERRY II, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA MICHAEL BLANKENSHIP AND MISTY BLANKENSHIP, Plaintiffs Below, Appellees, v. THE CITY OF CHARLESTON AND BOSTON CULINARY GROUP, INC., d/b/a DISTINCTIVE GOURMET, Defendants/Third-Party Plaintiffs Below, Appellees, v. LAKEWOOD SWIM CLUB, INC., Third Party Defendant/Fourth-Party Plaintiff Below, Appellant, v. EVANSTON INSURANCE COMPANY, Fourth-Party Defendant Below, Appellee __________________________________________________ Appeal from the Circuit Court of Kanawha County The Honorable James C. Stucky, Judge Civil Action No. 06-C-2062 AFFIRMED __________________________________________________ Submitted: April 8, 2009 Filed: June 18, 2009 C. Benjamin Salango Preston & Salango, PLLC Charleston, West Virginia Counsel for the Appellant John F. McCuskey Heather B. Osborn Shuman, McCuskey & Slicer, PLLC Charleston, West Virginia Counsel for the Appellee, Evanston Insurance Company The Opinion of the Court was delivered PER CURIAM. SYLLABUS BY THE COURT 1. A circuit court s entry of summary judgment is reviewed de novo. Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). 2. A circuit court s entry of a declaratory judgm ent is reviewed de novo. Syl. Pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). 3. Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law. Syl. Pt. 1, Tennant v. Smallwood, 211 W. Va. 703, 568 S.E.2d 10 (2002). 4. The interpretation of an insu rance contract, incl uding the question of whether the contract is ambiguous, is a legal determination that, like a lower court s grant of summary judgm ent, shall be reviewed de novo on appeal. Syl. Pt. 2, Riffe v. Home Finders Associates, Inc., 205 W. Va. 216, 517 S.E.2d 313 (1999). 5. Where the provisions of an in surance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect i will be given to the plain meaning intended. Syl. Pt. 1, Christopher v. U.S. Life Ins. Co., 145 W. Va. 707, 116 S.E.2d 864 (1960). 6. Language in an in surance policy should be gi ven its plain, ordinary meaning. Syl. Pt. 1, Soliva v. Shand, Morahan & Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986), overruled on other grounds by Nationwide Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987). ii Per Curiam: This is an appeal of fourth-party plaintiff below, Lakewood Swim Club, Inc. (hereinafter Lakewood ), from the Decem ber 11, 2007, order of the Circuit Court of Kanawha County granting sum mary judgment in favor of fourth-party defendant below, Evanston Insurance Co. (hereinafter Evanston ), in a declaratory judgment action arising in a negligence case.1 The issues decided by the lowercourt involve whether Evanston had a duty to indemnify or a duty to defend under the terms of the commercial general liability insurance policy Lakewood had th rough Evanston. Having consid ered the arguments of the parties, the record accompanying the appeal a the controlling law, we affirm the decision nd of the lower court. I. Factual and Procedural Background The original tort claim from which thisappeal arose wasfiled by Michael and Misty Blankenship after Mr. Blankenship was injured at a concert at the Charleston Civic Center when he slipped and fell near a conc ession stand where some beer had been spilled. The defendants initially named in the complaint were the City of Charleston, as owner and operator of the Civic Center, and Boston Culinary Group, d/b/a Distinctive Gourm et The original underlying tort clai m was brought by Michael and Misty Blankenship against the City of Charle ston and Boston Culinary Group, Inc., d/b/a Distinctive Gourmet. None of the original parties are directly involved in this appeal. 1 1 (hereinafter Boston Culinary ), as the managerof the beverage service at the Civic Center. Boston Culinary joined Lakewood as a third-party defendant on the basis that Lakewood s members were actually operating the concession w hen the accident occurred. 2 In its complaint, Boston Culinary maintained that Lakewood operated the concession pursuant to a contract agreeing to indem nify and hold harmless Boston Culinary forany injury that may occur from negligent operation of the concession by Lakewood.3 Upon being nam ed a party to the suit, Lakewood submitted a claim to Evanston for coverage under a commercial genera liability insurance policy it had with the l company. Finding that the claim was outside the terms of the policy in effect at the time of the accident, Evanston informed Lakewood that would not defend or it indemnify Lakewood with regard to the claim. Lakewood then filed a fourth-party complaint against Evanston, seeking a declaratio n b y the Court that Evanston Insurance Com pany Policy No. c CP4701009094 provides coverage for the in ident at issue. . . . Following discovery related to this issue, Lakewood filed a m otion for summary judgm ent as to its claim against The Blankenships later amended their com plaint nam ing Lakewood as a defendant and asserting that Lakewood negligently operated the concession stand. 2 There remains an unresolved dispute be fore the lower court as to whether Lakewood was a party to the concession operation contract with Boston Culinary. 3 Relevant portions of this policy are set forth section of this opinion. 4 2 infra, wit hin the Discussion Evanston, to which Evanston filed a respons with a cross-motion for summary judgment.5 e After holding a hearing on the motions on Decem ber 6, 2007, the trial court granted summary judgment in favor of Evanston by order entered December 11, 2007. The order relates that summary judgment was granted as a matter of law for the following reasons: 12. Plaintiff s alleged bodily injury did not arise out of the designated project (PRIVATE SWIM CLUB), as required by the clear, plain and unam biguous language of the policy issued to Lakewood Swim Club by Evanston Insurance Company and, therefore, th e Evanston Insurance Company policy does not providecoverage for the claims asserted against the swim club in this action. 13. The Court hereby find s that Evanston Insurance Company has no duty to indemnify Lakewood Swim Club for the claims arising out of plaintiff s alleged bodily injury, based on the clear, plain and unambiguous language of the Evanston Insurance Company policy. 14. The Court further finds that Evanston Insurance Company has no duty to defend Lakewood Swim Club for the claims arising out of plaintiff s alleged bodily injury, based on the clear, plain and unam biguous language of the Evanston Insurance policy. (Emphasis added). It is from this order that Lakewood appealed and for which appellate review was granted by this Court by order of October 9, 2008. The record does not reflect that Lakewood filed a written response to Evanston s cross-motion for summary judgment. 5 3 II. Standard of Review This case is before us from trial court s sum a mary judgment order. A circuit court s entry of summary judgment is reviewed de novo. Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Inasmuch as the summary judgment was entered with regard to a declaratory judgment action, we further note that [a] circuit court s entry of a declaratory judgment is reviewed de novo. Syl. Pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). As we explained in Cox, because the purpose of a declaratory judgment action is to resolve legal questions, a circuit court s ultimate resolution in a declaratory judgment action is reviewed de novo. Id. at 612, 466 S.E.2d at 463. Our review of the specific subject raised on this appeal is likewise plenary. Lakewood is seeking review of the tria l court s ruling th at it w as not entitled to indemnification or a defense under the Evan ston policy. Determ ination of the proper coverage of an insurance contra ct when the facts are not in dispute is a question of law. Syl. Pt. 1, Tennant v. Smallwood, 211 W. Va. 703, 568 S.E.2d 10 (2002). As [t] he interpretation of an insuran ce contract, incl uding the question of whether the contract is ambiguous, is a legal determ ination . . ., like alower court s grant of sum mary judgment, [it] shall be reviewed de novo on appeal. Syl. Pt. 2,Riffe v. Home Finders Associates, Inc., 205 W. Va. 216, 517 S.E.2d 313 (1999). 4 III. Discussion Lakewood raises two assignm ents of error regarding the lower court s determination concerning the insurance policy, one directed to Evanston s duty to defend and the other to the com pany s duty to indem nify.6 In either instance, the duty turns on whether coverage is extended under the insurancepolicy at issue for the type of activity the Lakewood members engaged in on be half of the club and which gave rise to the bodily injury claim . Consequently, we begin our re view with an examination of the pertinent provisions of the insurance policy and relevant endorsements. The general provisions of Lakewood s policy with Evanston reads: COMMERCIAL GENERAL LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. R ead the entire policy carefully to d etermine rights, duties, and what is and is not covered. An insurer s duty to defend is not synonymous with an insurer s duty to indemnify. We recognized the distinction inAetna Casualty & Surety Company v. Pitrolo, 176 W.Va. 190, 194, 342 S.E.2d 156, 160 (1986), as follows: 6 As a general rule, an insurer s duty to defend is tested by whether the allegations in th e plaintiff s complaint are reasonably susceptible of an intepretation that the claim may be r covered b y th e terms of the insu rance policy. . . . [I]t is generally recognized that the duty to defend an insured may be broader than the obligation to pay under a particular policy. This ordinarily aris es by virtue of language in the ordinary liability policy that obligates the insurer to defend even though the suit is groundless, false, or fraudulent. 5 * * * * * SECTION I COVERAGES COVERAGE A BODILY INJURY AND PROPE RTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the in sured becomes legally obligated to pay as dam ages because of bodily inju ry . . . to which this insurance applies. We will have the right and duty to defend the insured against any suit seeking those damages. However, we will have no duty to defend the insured against any suit seeking damages for bodily injury . . . to which this insurance does not apply. . . .[7] b. This insurance applies to bodily injury . . . only if: (1) T he bodily injury . . . is caused by an occurrence that takes place in the coverage territory ; and (2) The bodily injury . . . occurs during the policy period. The coverage territory as defined in the general policy is: a. The United States of Ameri ca (including its territories and possessions), Puerto Rico and Canada; b. International waters or airspace, provided the injury or damage does not occur in the course of travel or transportation to or from any place not included in a. above; or c. All parts of the world [if stated conditions are met]. Item 14 in the Com bination General Endorsement to the policy further states: Where there is no coverage under this policy, there is no duty to defend. 7 6 Two endorsements to the general insura policy which are applicable to our nce review are: (1) M/E 217, entitled Specified /Designated Premises/Project Limitation (hereinafter endorsement M/E 217 ); and (2) M/E 011, entitled Additional Insured Club Members Endorsement (hereinafter endorsement M/E 011 ). Appearing on the face of endorse ment M/E 217 is the statement THIS ENDORSEMENT CHANGES THE POLICY, after which the following appears: Schedule Premises: LAKEWOOD DR. ST. ALBANS WV 25177 Project: PRIVATE SWIM CLUB (Complete above if information different than that shown in the Declarations[8]) The common policy declarations do not address a premises location (it does list the m ailing address of the insure d as 2088 LAKEWOOD DR ., ST ALBANS, WV 25177), nor does it identify a project (it does, however, list a business description as PRIVATE SWIM CLUB. The Supplemental Declarations portion of the policy in the record contains the following statement: 8 Location of all prem ises you own, rent or occupy: LAKEWOOD RD., ST ALBANS WV 25177 It also contains a listing of forms and endorsements made part of the policy which includes both endor sement M/ E 011 a nd e ndorsement M/ E 217. The f inal s tatement on t he Supplemental Declarations page states: (continued...) 7 This insurance applies only to bodily injury , property damage , personal injury , advertising injury and m edical expenses arising out of: 1. The ownership, maintenance or use of the prem ises shown in the Schedule (or Declarations); or 2. The project shown in the Schedule (or Declarations). (Emphasis added.) The same prefatory statement of THIS ENDORSEMENT CHANGES THE POLICY appears on endorsement M/E 011. The body of this endorsement then states: WHO IS AN INSURED (Section II) the Commercial General of Liability coverage part is amended to include as an insured any of your members, but only with respect to their liability for your activities or activities they perform on your behalf. Lakewood maintains that the policy does notrestrict coverage to bodily injury that occurs on Lakewood s premis In support of this positi Lakewood reasons that the es. on, general policy provisions provide coverage for bodily injuries occurring in the coverage (...continued) THIS SUPPLEMENTAL DECLARATIONS AND THE COMMERCIAL LIABILITY DECLARATIONS, T OGETHER WITH THE COM MON POLICY CONDITIONS, COVERAGE FORM (S) AND ENDORSEMENTS COMPLETE THE ABOVE NUMBERED POLICY. 8 8 territory. Lakewood concedes that some re striction is placed on the broad definition of coverage territory in the ge neral policy by the term s of endorsem ent M/E 217 as the Schedule it contains identifies the premises. However, Lakewood maintains that although endorsement M/E 217 ite mizes the Project in the Schedule as PRIVATE SWIM CLUB, it neither defines nor restricts the definition of the term project. Lakewood asserts that affidavits of two Lakewood members which were supplied to the trial court establish that operation of the concession stand by the club on the night of th incident was a fund-raising e project of the private swimclub. Becauserunning the concession was a fund-raising project of the private swim club, Lakewood postulates that the Blankenship claim falls within the coverage of the policy due to the provisions of endorse ment M/E 011. According to Lakewood, the terms of endorsement M/E 011 extends coverage to these type of member activities w herever they occur by expressly providing that as an insured any of your members [are covered], but only with respectto their liability for your activities or activities they perform on your behalf. Evanston contends that the lo court s ruling is correct because endorsement wer M/E 217, not endorsem ent M/E 011, controls the issue of coverage. Evanston first maintains that endorsement M/E 011 is irrelevant because the Blankenship claim is against Lakewood and not its m embers. Evanston then proposes that even if the claim had been made against Lakewood s me mbers individually, coverage would still not be available under 9 the express term of endorsem M/E 217 whichrequires either that th bodily injury arises s ent e from the ownership, maintenance or use of theprivate swim club premises or that the injury results from the project identified in this endorsement as PRIVATE SWIM CLUB. It is well-established that [w]here contract are clear and unam the provisions of an insurance policy biguous they ar e not subject to judi interpretation, but full effect will be given to cial construction or the plain mean ing in tended. Syl. Pt. 1, Christopher v. U.S. Life Ins. Co., 145 W. Va. 707, 116 S.E.2d 864 (1960). The lower court s ultimate conclusion as reflected in the summa ry judgment order is that the alleged bodily injury did not arise out of the designated project of PRIVATE SWIM CLUB as required by the clear, plain and unambiguous language of the policy. We agree. Counsel for Lakewood during oral argument stressed the significance of the expansive definition of coverage territory in the general policy. H owever, an equally important provision of the gene ral policy is the cautionary introductory statem ent that [v]arious provisions in thispolicy restrict coverage [and onehas to] [r]eadthe entire policy carefully to determine rights, duties and what is not covered. There is no dispute that the endorsements are part of the policy and endorement M/E 217 clearly qualifies the types of s bodily injury claim s that are covered under the policy by stating that [t] his insurance applies only to bodily injury . . . arising out of . . . ownership, maintenance or use of the 10 [Lakewood Dr., St. Albans, W.Va.] premises . . .or [t]he project shown in the Schedule [as PRIVATE SWIM CLUB]. (Emphasis added.) Use of the disjunctive or supports Lakewood s position that the injury does not premises. Nevertheless, we do not find have to occur o n th e private swim club that the language of endorsem ent M/E 217 contemplates that any undertaking of the club m embers is a project for which coverage under the policy extends. Endorsement M/E 217 defines the project applicable to the policy as PRIVATE SWIM CLUB. Although endorsement M/E 011 provides that activities of members performed on behalf of the club are covered under the policy, the activities still must conform with the project defined in endorsement M/E 217. This is true because all of these endorsement provisions, declarations and standard cont act provisions comprise the r commercial general liability insurance po licy L akewood had with Evanston as clearly indicated on the Supplemental Declarations page of the contract. It is well-established that the [l] anguage in an insurance policy should be given its plain, ordinary meaning. Syl. Pt. 1, Soliva v. Shand, Morahan & Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986),overruled on other grounds by Nationwide Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987 Applying this standard ). to the facts at hand, we conclude, as did the lower court, that selling beer at a concession stand at a concert open to thepublic in a location other than the private swim club premises is an activity beyond the ordinary m eaning or purpose of a project defi ed as a private swim n 11 club. Where an insurance policy is clear and unambiguous, [t]he court is bound to adhere to the insurance contract as th e authentic expression of the intention of the parties, and it must be enforced as m ade where its language is plain and certain. Keffer v. Prudential Insurance Company of America, 153 W. Va. 813, 816, 172 S. .2d 714, 716 (1970). [T]he E court cannot m ake a new contract for the pa rties where they them selves have em ployed express and unam biguous words. Id. Consequently, it is unne cessary to consider any argument raised regarding the reasonable e xpectation of coverage based on extrinsic evidence of intent of the parties, such as the application for insurance. As we explained in National Mutual Insurance Co. v. McMahon & Sons, Inc., [i]n West Virginia, the doctrine of reasonable expectations is limited to those instances . . . in which the policy language is ambiguous. 177 W.Va. at 742, 356 S.E.2d at 496. Because the policy did not extend insuranc e coverage to the type of project giving rise to the injury in quetion, the lower court was corre in finding that Evanston had s ct no duty to defend or duty to indem nify the Blankens hip claim against Lakewood. Accordingly, we affirm the decision of the lower court. 12 IV. Conclusion Based upon the foregoing reasons, we ffirm the Decem 11, 2007, summary a ber judgment order of the Circuit Court of Kanawha County. Affirmed. 13

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