INSURANCE: Fall from Heights exclusion precludes coverage for ladder fall regardless of whether the person fell from or with the ladder or whether 10-15 foot fall measured from head or foot qualifies as “from heights”… no duty to defend roofing contractor vis-à-vis $4.7 million consent judgment… Cavan.
Roofing & Restoration Services of America and Rambur Const. entered into a Marketing Agreement in 5/14 by which they acted together to solicit sales of roofing jobs in the Billings area following a significant hail storm. RRSA contracted with Kelly Porch to sell roofing contracts on several residential buildings. It chose to treat him as a direct seller as defined in 26 USC 3508 and did not elect work comp for him. RRSA and Rambur hired Ochoa’s Const. to tear off and reapply materials to a roof. Porch arrived at the job site with a project manager from RSSA 7/10/14. They went onto the roof to show Ochoa’s foreman how they wanted the materials applied. Porch used a ladder provided by Ochoa’s. While he was on the roof, an Ochoa’s employee moved the ladder and placed it against the rain gutter. As Porch was climbing down the ladder, the gutter broke, causing the ladder and Porch to fall 10-15 feet. He was knocked unconscious and alleges that he injured his right foot, kidneys, lungs, nose, back, right elbow, and right leg. Preferred Contractors Ins. Co. insured Ochoa’s under a CGL policy. Porch and his wife sued Ochoa’s and RRSA in Yellowstone Co. State Court 11/24/14 alleging that he sustained damages “from a fall resulting from a negligently placed ladder on the job site. Neither PCIC, Golden State Claims Adjuster, nor Safebuilt Insurance Services was named. PCIC was notified of the complaint 4/23/15. Golden State responded on its behalf and informed Ochoa’s that no coverage existed for the allegations in the complaint and PCIC would be denying coverage for defense and indemnity. On 2/24/16 Ochoa’s entered into a consent judgment & covenant to execute and assigned to Porches all of its rights against Defendants. Porches then dismissed all Defendants except Ochoa’s.
Judge Gustafson held a reasonableness hearing 3/2/17. Porches presented evidence. Ochoa’s did not appear. On 3/30, Gustafson entered $4.7 million judgment in favor of Porches and against Ochoa’s. Porches subsequently were granted leave to file a 2nd amended complaint adding PCIC and Golden State and asserting claims against them based on their coverage decisions. Defendants removed to this Court and sought dismissal on grounds that Gustafson erred in permitting Porches to amend their complaint after judgment had been entered. The action was ultimately dismissed on procedural grounds with leave to amend, and Porches filed this action against PCIC, RGG, Golden State, and SIS asserting claims for declaratory relief, breach of contract, breach of the implied covenant of good faith & fair dealing, violation of the Montana UTPA, common law bad faith, breach of fiduciary duty, negligence, and punitives. They request partial summary judgment that Defendants breached their duty to defend Ochoa’s and are therefore liable for the $4.7 million judgment, and that Defendants cannot unequivocally demonstrate that there was no coverage. Defendants counter that their claims are explicitly excluded from coverage and thus they had no duty to defend.
Defendants do not dispute that Porches’ underlying claims fall within the scope of the policy’s general coverage provision, but argue that the claims are excluded under the Employer’s Liability, Independent Contractors/Subcontractors, and Fall from Heights exclusions. Defendants correctly conclude that there is no coverage under the Fall from Heights exclusion:
“Bodily injury” sustained by any person at the location of the incident, whether working or not, arising out of, resulting from, caused by, contributed to by, or in any way related to, in whole or in part, from a fall from heights. For purposes of this exclusion, a fall from heights shall include, but not be limited to, a fall from scaffolding, hoists, stays, ladders, slings, hangers, blocks, or any temporary or moveable platform where there is a height differential to the ground.
Even when liberally construing the allegations and resolving all doubts in favor of a finding that the obligation to defend was triggered, it is clear that Porch’s injuries were excluded by this provision.
Focusing on the 2nd sentence, Porches argue that he did not fall from the ladder, but with the ladder. The Court need not even reach the 2nd sentence. His injuries were clearly excluded under the plain language of the 1st sentence. Regardless of whether he rode the ladder to the ground or was separated from the ladder during the fall, the Complaint alleged that his injuries resulted from a fall from a height of 10-15 feet, which is “a fall from heights.”
Even considering the 2nd sentence, there is no ambiguity. Porches’ argument that he sustained an injury in a fall with a ladder rather than from a ladder presents a distinction without any discernable difference. To interpret the exclusion as excluding coverage for a fall where the injured party loses contact with the ladder, but providing coverage if he is able to hang on to the ladder throughout the fall, would plainly distort the contractual language to create an ambiguity where none exists.
Moreover, the 2nd sentence states that a fall from heights “shall include, but not be limited to” falls from various objects. “Include, but not limited to” are terms of enlargement, not limitation. Burgess (US 2008). Thus a fall with a ladder is excluded, just as a fall from a ladder, as long as the fall is “from heights.”
Navarro (ND Tex 2018) reached a similar conclusion as to the same Fall from Heights exclusion in a PCIC policy. Navarro alleged that he suffered severe injuries as a result of falling through an attic floor to the ground 18 feet below and that the exclusion did not prevent coverage because the 2nd sentence limited “fall from heights” to only falls from the objects specifically listed. The court held that:
There is no indication that the second sentence limits the plain meaning of “fall from heights.” The second sentence does not purport to change the generally accepted definition of “fall from heights” or specify from where or how a person must fall to come within the exclusion.
It concluded that the exclusion could be given a clear & definite legal meaning and was therefore unambiguous, and PCIC therefore did not have a duty to defend. Navarro is persuasive. Reading the policy as a whole, and giving its terms their plain meaning, the Fall from Heights exclusion unambiguously applies to more than just falls from the listed objects.
Porches also argue that “from heights” is ambiguous. They assert that it is uncertain whether a 10-15 foot vertical distance is high enough to qualify as “from heights.” However, the exclusion provides that there only has to be a “height differential to the ground.” Porches again strain to create ambiguity by focusing on “a height potential,” implying that “a” is ambiguous and asserting that Defendants could have used “any” to avoid confusion. The Court does not find “a” unclear, and again declines to create an ambiguity where one does not exist. The Complaint alleged that Porch fell 10-15 feet. As such, it alleged that there was a height differential. Further, it is irrelevant whether the 10-15 feet was measured from the top of his head or the bottom of his feet because if there is a height differential to the ground, the exclusion is triggered.
Defendants were justified in relying on the Fall from Heights exclusion. They have unequivocally demonstrated that Porches’ claims did not fall within the policy’s coverage and therefore they had no duty to defend Ochoa’s. Porches’ motion for partial summary judgment is denied.
Because the policy expressly provides that “this insurance does not apply” if an exclusion is applicable, the policy provides no coverage to Porches as to the issues raised in this litigation. Thus it is unclear whether any avenue remains for them to recover against Defendants. It also appears that the motions to dismiss may be moot. However, because Defendants did not cross move for partial summary judgment, it is unclear how the case should proceed. The Court will hold a status conference 3/26 to discuss further proceedings.
Porch v. Preferred Contractors Ins. Co., Golden State Claims Adjusters, and Safebuilt Insurance Services, 44 MFR 199, 3/11/19.
John Morrison (Morrison Sherwood Wilson & Deola), Helena, and Haley Kemmick (Plath Law), Billings, for Porches; Christopher Sweeney & Adam Warren (Moulton Bellingham), Billings, for Defendants.
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