Opinion
No. C9-97-703.
Filed October 28, 1997.
Appeal from the District Court, Dakota County, File No. C7968393.
Mark R. Whitmore, Thomas J. Niemiec, Bassford, Lockhart, Truesdell Briggs, P.A., (for Respondent K-Mart).
Keith J. Kerfeld, Peter H. Berge, Tewksbury, Kerfeld, Zimmer, (for Appellant).
Mark M. Nolan, Stapleton, Nolan McCall, P.A., (for Respondent Wildman).
Considered and decided by Crippen, Presiding Judge, Parker, Judge, and Short, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Milwaukee Mutual, who insured defendant Clean Sweep's snow removal from a K-Mart parking lot, disputes the trial court's summary judgment that this coverage extends to the separate negligence of respondent K-Mart for snow accumulations on the lot. We affirm.
FACTS
As a result of the indemnity provision in the Clean Sweep contract to remove snow for K-Mart, Clean Sweep carried a liability insurance policy written by appellant Milwaukee Mutual. The policy named K-Mart as an additional insured under Clean Sweep's coverage for liability "arising out of" its "ongoing operations performed for [K-Mart]." Respondent Eva Wildman fell on K-Mart's parking lot in the early afternoon of March 5, 1995, a number of hours after the parking lot had been cleaned by Clean Sweep and inspected by K-Mart. Evidence in the record indicates that additional snow had accumulated in the parking lot between the time the snow was removed and the time Wildman fell. Wildman sued Clean Sweep and K-Mart. Claims against Clean Sweep were settled. Wildman then reached a $150,000 Miller-Shugart settlement with K-Mart, K-Mart initiated a declaratory judgment action against Milwaukee, and both parties sought summary judgment.
DECISION
The interpretation of an insurance contract is a question of law that an appellate court reviews de novo. Auto-Owners Ins. Co. v. Todd , 547 N.W.2d 696, 698 (Minn. 1996). The parties do not dispute the facts and agree that this court should decide the case on the merits of competing summary judgment claims.
Appellant Milwaukee Mutual contends that insurance policy language on coverage for K-Mart as an additional insured is unambiguous or should be construed against K-Mart because (a) the indemnification clause that prompted Clean Sweep to obtain the Milwaukee policy does not call for the broad coverage stated in the insurance policy and (b) recognized policy considerations should induce the courts to view coverage restrictively for a contractor as an additional insured in a policy written to satisfy the requirements of a service contractor's indemnity agreement. See Hurlburt v. Northern States Power Co. , 549 N.W.2d 919 (Minn. 1996).
The restrictive language in Clean Sweep's indemnity contract provided that Clean Sweep should obtain an insurance policy for claims arising out of Clean Sweep's operations or in connection with its work but that Clean Sweep not be required to indemnify for damages or injuries "caused solely and exclusively by the negligence of the Owner [K-Mart], its employees, agents, servants and representatives."
Appellant's argument lacks merit. In the circumstances of this case, the policy clearly provides for coverage. The claim against K-Mart, separate from any vicarious liability it has for Clean Sweep's conduct, is based on its "independent negligence." But the claims against both parties concern liability for the accumulation of snow on K-Mart's parking lot. Both claims "arise out of" the snow removal operations contracted to Clean Sweep.
Appellant has cited a number of cases from foreign jurisdictions that might suggest limits on the scope of coverage for liability "arising out of" an activity or connected to "operations performed for" another. But none of these cases deal with claims, like those of respondent Wildman, that arise from the same causative condition, in her case the improper removal of snow from the K-Mart parking lot. Rather, the circumstances here parallel those in Faber v. Roelofs, 311 Minn. 428, 430, 250 N.W.2d 817, 819 (1977), where Faber was injured when struck by a school bus owned by Roelofs. Indisputably, the conduct of Roelofs' driver arose out of the use of the bus, and the supreme court concluded in Faber that the negligence of the school district in establishing bus routes and bus loading procedures also arose out of the use of the bus for transportation purposes. Id. at 436, 250 N.W.2d at 822. Among the foreign cases cited, the most instructive is Dayton Beach Park v. National Union Fire Ins. Co. , 573 N.Y.S.2d 700, 701 (N.Y.App.Div. 1991) (declaring coverage for property owner named as additional insured in policy carried by door and lock maintenance company; upholding coverage on claims arising from access to the owner's property by a criminal assailant) where the New York court determined that an additional insured was covered under a policy comparable to the Milwaukee policy. Similarly, in the present circumstances, Clean Sweep's "operations" were those of Clean Sweep but the claimed liability of both Clean Sweep and K-Mart arose out of the same operations: snow removal that had been contracted to Clean Sweep.
Respondent K-Mart asserts that it is entitled to fees under Morrison v. Swenson , 274 Minn. 127, 137, 142 N.W.2d 640, 647 (1966), but Morrison awarded fees where the insurer had wrongfully refused to defend and its insured's fees in a declaratory judgment action were in the nature of damages resulting from a breach of contract. In contrast, in American Standard Ins. Co. v. Le , 551 N.W.2d 923, 924 (Minn. 1996), the insurer, who had defended its insured in the underlying action pursuant to a reservation of rights, brought a declaratory judgment action to resolve the coverage question. While affirming that the insured was covered, the supreme court denied the insured an award of attorney fees, reiterating that the insured is only entitled to attorney fees in a declaratory judgment action that is permitted by statute or tied to breach of a contractual duty. Id. at 927. Milwaukee defended in this case under a reservation of rights, and the trial court correctly determined that the circumstances do not permit an award of attorney fees.