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Cle Elum Bowl Inc. v. North Pacific Insurance Co.6/8/1999
Judges: Authored by John A. Schultheis Concurring: Dennis J. Sweeney Stephen M. Brown
Panel Three
Cle Elum Bowl, Inc., leased a building from Robert and Sena Lanphere and opened a bowling alley. Pursuant to its lease agreement, Cle Elum bought general liability insurance for its business from North Pacific Insurance Company. Cle Elum also promised to remove ice and snow from the building. When the bowling alley roof collapsed due to a heavy accumulation of snow, Mr. Lanphere sued Cle Elum. North Pacific denied coverage under the liability policy and refused to defend against the claim. Cle Elum's suit against North Pacific for coverage was dismissed on summary Judgement and it and third party defendant Mr. Lanphere now appeal, contending (1) the collapse of the roof was an "occurrence" triggering liability; (2) an exclusion for rented property is trumped by a provision that provides coverage for claims arising from a contract for the lease of premises; (3) the director of Cle Elum is covered by the policy; and (4) the claim is also covered under personal injury liability (citing Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 964 P.2d 1173 (1998)). We affirm the summary Judgement.
Facts
Under the terms of the bowling alley lease entered in May 1993, Cle Elum agreed to carry liability insurance for the premises in amounts of not less than $500,000 per person per occurrence and $1,000,000 for personal injury or death. The Lanpheres were to be named as additional insureds. Cle Elum assumed responsibility under the lease for removing snow and ice from the building, while the Lanpheres agreed to maintain the exterior roof and structural integrity of the building. The lease provided that the Lanpheres would not be liable for any damage sustained by Cle Elum or others due to defects in the premises unless caused by the Lanpheres' own inadvertence or neglect. Finally, each party agreed to indemnify and hold harmless the other from all claims arising out of loss, damage or injury to persons or property resulting from the other's acts of neglect.
Pursuant to the lease agreement, Cle Elum purchased a commercial general liability policy through North Pacific. Under the terms of the policy, North Pacific agreed to pay for the sums Cle Elum becomes legally obligated to pay as damages due to bodily injury or property damage caused by an "occurrence." "Occurrence" is defined by the policy as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. Various exclusions are applicable here. For one, the policy does not cover bodily injury or property damage expected or intended from the standpoint of the insured. It also does not apply to "contractual liability," that is, bodily injury or property damage for which Cle Elum is obligated to pay by reason of a contract, except for liability assumed in an "insured contract." One of the policy's definitions of an insured contract is a "contract for a lease of premises." The policy also excludes coverage for damage to property that is owned, rented or occupied by the insured.
In December 1996, a snowstorm deposited several feet of snow in the Kittitas Valley and the roof of the building leased by Cle Elum collapsed. Mr. Lanphere sued Cle Elum and Francis Tompkins, director, officer and stockholder of Cle Elum, seeking damages for breach of contract and negligence. When North Pacific denied coverage and refused to defend against the lawsuit, Cle Elum filed a petition for declaratory Judgement in September 1997. The petition argued North Pacific breached the insurance contract and violated the Consumer Protection Act. North Pacific's answer included a counte
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