Golan Management, LLC v. Hartford Insurance Company

Filing 95

ORDER granting 71 Defendant Hartford Fire Insurance Company's Motion for Summary Judgment; denying 75 Plaintiff's cross-motion for partial summary judgment. Signed by Honorable Robin J. Cauthron on 5/3/12. (lg, )

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
GOLAN MANAGEMENT, LLC,
a Florida Limited Liability Corporation,
Plaintiff,
vs.
THE HARTFORD INSURANCE
COMPANY, a Foreign Corporation,
Defendant.

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Case Number CIV-11-0036-C

MEMORANDUM OPINION AND ORDER
Plaintiff owns a 20-story commercial building in Oklahoma City, Oklahoma. In May
of 2003, Golan engaged JBH Construction, Inc. (“JBH”) to perform repairs to the building,
including washing the concrete, which subcontracted to American Restoration and
Waterproofing, Inc. (“AR&W”), a building maintenance company. Between August and
September 2003, AR&W washed the exterior of the building, using a chemical mix. During
September or October 2003, Plaintiff noticed the building’s exterior glass and glazing system
was damaged. The damage to the glass and glazing system was caused by the application
of a heavy duty cleaner by AR&W during the power washing. Plaintiff sued AR&W and
JBH for negligence in causing the damage to the glass and glazing system. After resolving
that lawsuit, Plaintiff then made a claim against Defendant under the insurance policy issued
by Defendant to Plaintiff on the building. Defendant denied that claim, finding that the loss
was excluded by the provisions of the policy. Plaintiff then filed the present action seeking
damages for breach of contract and bad faith.

Arguing that the undisputed material facts entitle it to judgment, Defendant filed the
present Motion for Summary Judgment. Plaintiff filed a response and, in the same document,
a cross-motion for summary judgment. Typically, Plaintiff’s cross-motion would be stricken
as it fails to comply with LCvR7.1. However, because the Court finds that Defendant is
entitled to judgment, it is unnecessary to consider the merits of Plaintiff’s request for
judgment.
Summary judgment is appropriate if the pleadings and affidavits show there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c). “[A] motion for summary judgment should be granted
only when the moving party has established the absence of any genuine issue as to a material
fact.” Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 561 F.2d 202, 204 (10th Cir.
1977). The movant bears the initial burden of demonstrating the absence of material fact
requiring judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). A fact is material if it is essential to the proper disposition of the claim. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant carries this initial burden,
the nonmovant must then set forth “specific facts” outside the pleadings and admissible into
evidence which would convince a rational trier of fact to find for the nonmovant.
Fed. R. Civ. P. 56(e). These specific facts may be shown “by any of the kinds of evidentiary
materials listed in Rule 56(c), except the mere pleadings themselves.” Celotex, 477 U.S. at
324. Such evidentiary materials include affidavits, deposition transcripts, or specific
exhibits. Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir. 1992).
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“The burden is not an onerous one for the nonmoving party in each case, but does not at any
point shift from the nonmovant to the district court.” Adler v. Wal-Mart Stores, Inc., 144
F.3d 664, 672 (10th Cir. 1998). All facts and reasonable inferences therefrom are construed
in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
The parties are in agreement that the determination of coverage is to be resolved under
Oklahoma law. Under the governing law, “[t]he interpretation of an insurance contract and
whether it is ambiguous is a matter of law for the Court to determine and resolve
accordingly.” Dodson v. St. Paul Ins. Co., 1991 OK 24, ¶ 12, 812 P.2d 372, 376; see also
Harjo Gravel Co. v. Luke-Dick Co., 1944 OK 268, 153 P.2d 112. In a case such as this one,
where the parties are in dispute as to the interpretation of the same term of an insurance
contract, the Court must determine if the insurance contract is still unambiguous despite the
parties’ conflicting interpretations.
Oklahoma’s extant jurisprudence demarcates guidelines for ascribing meaning
to an insurance policy’s terms. Basically, an insurance policy is a contract.
When its terms are unambiguous and clear, the employed language is
accorded its ordinary, plain meaning and enforced so as to carry out the
parties’ intentions. In this process we are mindful that an insured and insurer
are free to contract for that quantum of coverage which one is willing to extend
and the other is willing to purchase. The parties are bound by the terms of
their agreement and the Court will not undertake to rewrite the same nor to
make for either party a better contract than the one which was executed.
Bituminous Cas. Corp. v. Cowen Constr., Inc., 2002 OK 34, ¶ 9, 55 P.3d 1030, 1033
(emphasis in original) (footnotes omitted). See also Idg, Inc. v. Continental Cas. Co., 275
F.3d 916, 921 n.2 (10th Cir. 2001).
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Here, Defendant cites to various provisions of the policy which it argues exclude
coverage for the losses suffered by Plaintiff. After review of the policy, the Court finds that
one particular exclusion is clear and unambiguous and specifically excludes the loss suffered
by Plaintiff. The policy is attached to Defendant’s Motion for Summary Judgment (Dkt. No.
71) and, on Bates-stamped page 096, outlines the exclusions from covered causes of loss.
There are first listed the general exclusions and then specific exclusions, specifically ¶ 28a
which states: “We will not pay for the cost of correcting defects in Covered Property, or loss
or damage to Covered Property that was caused by, resulting from, or arising out of work
done on Covered Property by you, your employees, or others working on your behalf.” It
is undisputed that the damage to Plaintiff’s building was caused by individuals working on
Plaintiff’s behalf. Further, the Court finds that this provision of the policy is clear and
unambiguous and therefore it is to be enforced according to those terms.
Recognizing that the provision as written would prohibit coverage, Plaintiff attempts
to argue around this fact, asserting that the damage was not caused by work being done to
the glass, but by work being done to the building, and therefore the work did not fall within
the scope of this coverage. The Court finds this argument unavailing, as when reviewing a
provision of an insurance contract the Court should not use “a forced or strained
construction,” take “a provision out of context,” or “narrowly focus[] on provision,” Wynn
v. Avemco Ins. Co., 1998 OK 75, ¶ 17, 963 P.2d 572, 575 (citing Dodson v. St. Paul Ins. Co.,
1991 OK 24, ¶ 13, 812 P.2d at 376, “‘so as to import a favorable consideration to either party
than that expressed in the contract.’” State ex rel. Crawford v. Indemnity Underwriters Ins.
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Co., 1997 OK CIV APP 39, ¶ 6, 943 P.2d 1099, 1101 (quoting Dodson, id.). Simply put, the
Court is prohibited from engaging in the narrow and strained construction urged by Plaintiff.
Rather, the clear and unambiguous terms of the contract dictate that when work is being
performed on its building on behalf of Plaintiff, damages resulting from that work are not
covered under Hartford’s policy. Because there is no coverage under the policy, Defendant
did not breach the contract and did not engage in bad faith.
CONCLUSION
For the reasons set forth herein, Defendant Hartford Fire Insurance Company’s
Motion for Summary Judgment (Dkt. No. 71) is GRANTED. Plaintiff’s cross-motion for
partial summary judgment (Dkt. No. 75) is DENIED. A separate Judgment shall enter.
IT IS SO ORDERED this 3rd day of May, 2012.

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