MURANE & BOSTWICK, LLC
Attorneys at Law

Note: The following discussion of statutes, administrative
rulings and decisions from the Wyoming Supreme Court or other
courts is not intended as legal advice with respect to any
particular claim or cause of action, but is intended
only as general information. The services of competent
counsel should be obtained with respect to any particular
legal question or problem.

INSURANCE LAW UPDATE

On October 21, 2005, the United States Tenth Circuit Court of Appeals issued its decision in Terra Nova Insurance, Ltd. v. Ft. Bridger Historical Rendezvous Site, Corp. 2005, WL 2671947 (10^th Cir. [Wyo.] 2005). The decision considered an appeal by the insurer from an adverse coverage decision regarding what the Court described as a “Full Rodeo Coverage” insurance policy. Steffani Yarbrough, a minor, was injured in a community rodeo for children under age 12 while participating in an event called “mutton busting.” Steffani Yarbrough’s parents sued Ft. Bridger Historical Rendezvous Site, Corp. and the town of Lyman, Wyoming for negligence.

Relying upon a “Participant Exclusion,” which seemingly excluded Steffani Yarbrough from liability coverage, Terra Nova filed an action for declaratory judgment seeking a determination that Terra Nova had no duty to defend or indemnify the insured. The insured, and the Yarbroughs who were allowed to intervene, argued that an “Additional Insured Endorsement” and a “Participant Legal Liability” form created exceptions to the Participant Exclusion, or at least created an ambiguity requiring that the policy be construed in favor of the insured to provide coverage.

Of note is the Tenth Circuit’s agitation with the insurance policy format, agreeing with the trial court’s description of the policy as a “cobbled together group of endorsements and exclusions.” Finding that the organization of the policy was confusing and contradictory and that the provisions were ambiguous and indefinite in expression with impossible to reconcile provisions, the Court construed the policy against the insurer and found coverage for the insured.

A couple aspects of the decision are noteworthy. First is the fact that the district court allowed the third-party claimant Yarbroughs to intervene in the declaratory judgment action which apparently was not raised by the insurer as an issue on appeal. The Yarbroughs, not being insureds, should not have had standing to intervene in a declaratory judgment suit concerning the rights and obligations between the insurer and insured, and the Tenth Circuit offered no discussion or rationale as to why the Yarbroughs were allowed to intervene.

Second, the Tenth Circuit said that Wyoming courts have suggested they would apply the “doctrine of reasonable expectations” if given the opportunity, citing St. Paul Fire and Marine Insurance Company v. Albany County School District No. 1, 763 P.2d 1255 (Wyo. 1988). While it is true that the Wyoming Supreme Court has indicated in later decisions that in appropriate circumstances the doctrine may apply, it did not do so in the St. Paul decision, at least not in the broad language contained in the Terra Nova decision. One of the members of this firm, Loyd Smith, was a law clerk to then Wyoming Supreme Court Justice Richard Macy, author of the St. Paul Fire and Marine Insurance Company v. Albany County School District No. 1 decision. Mr. Smith can attest that the Tenth Circuit overstates the language from that decision and fails to stress that before the doctrine of reasonable expectations can even be considered, the policy must be determined to be ambiguous. As the Wyoming Supreme Court stated in the St. Paul opinion:

A rule of construction that considers the reasonable expectations of the parties is of no assistance where the policy terms are clear and unambiguous. We will not absolve the parties to an insurance policy from the duty to read the policy.

The Terra Nova Insurance case is an unpublished decision available only on Westlaw. In a footnote to the decision, the Tenth Circuit stated that the decision is not binding precedent and it should not be cited. It also must not be taken to mean that Wyoming has adopted the reasonable expectations doctrine in any matter that involves the interpretation of an insurance policy, whether or not the policy is found to be ambiguous. See, e.g., Darner Motor Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 682 P.2d 388 ( Ariz. 1984). In Wyoming where “[i]nsurance contract terms are clear and unambiguous, the ‘reasonable expectations’ of the contracting parties are irrelevant to contract construction issues.” Pribble v. State Farm Mutual Auto. Ins. Co., 933 P.2d 1108, 1113-14 ( Wyo. 1977). This holding was affirmed in Ahrenholtz, v. Time Insurance Company, 968 P.2d 946, 950 ( Wyo. 1998).

If your company has questions concerning Wyoming insurance issues, call either of our offices for referral to one of our insurance specialists.

PREMISES LIABILITY LAW UPDATE

If you are a landowner or lessee of property – business or personal, but especially business – you need to be aware of your potential liability for injuries to visitors on your premises. Two recent decisions from the Wyoming Supreme Court have clarified potential exposure to claims by visitors on, and possibly even near, your property.

In late 2004 the Court decided the case of Pinnacle Bank v. Villa, involving injuries sustained in a fall on ice on the sidewalk in front of the Worland bank. Ms. Villa claimed that the ice was caused by improper drainage from the facade of the building – that is, an “unnatural accumulation” – while the Bank claimed that the ice was a “natural accumulation.” The law of Wyoming for many years has held that an occupier of premises is not liable for injuries resulting from a slip and fall on a natural accumulation of snow or ice, but would be subject to liability if the occupier created an unnatural accumulation substantially different in volume or course than would naturally occur, where the occupier knew or should have known of the hazard. In addition to the “unnatural” accumulation claim, Ms. Villa also argued that an ordinance of the City of Worland , Wyoming , requiring the occupant of any premises to keep the adjoining sidewalks “safe and clear” for pedestrians, and to remove snow and ice “with all reasonable dispatch,” set the standard of care for the bank. The trial court in Villa certified the question of the effect of the ordinance to the Supreme Court.

Distinguishing the Villa case from prior decisions, the Supreme Court held that the city ordinance sets the standard of care for the premises occupier, and that the issues of natural or unnatural accumulations are irrelevant. That is, did the property owner comply with the ordinance, regardless of how the ice got on the sidewalk? As well, the Court further held that the defense that the accumulation of ice was an open and obvious danger to the plaintiff is not a complete defense and would be applied only for the purposes of arguing the comparative fault of the plaintiff. As for the plaintiff’s knowledge and conduct, the Court held that a pedestrian cannot act recklessly merely because ice or snow has not been properly removed, and that a pedestrian’s duty to remain observant and careful continues to exist.

Following the Supreme Court’s decision, the case was tried in 2005 to verdict, the jury finding the bank 70% at fault and Ms. Villa 30%. The total amount of damages found was just short of $165,000.

Contrast the Villa decision with Landsiedel v. Buffalo Properties, LLC, the most recent case on premises liability involving personal injury. Landsiedel involved a claim against the owner of a Buffalo, Wyoming bar and lounge for serious injuries sustained when the plaintiff put his arm through the bar’s plate glass door when he fell. The jury found in favor of the defendant bar and the plaintiff appealed, alleging, among other errors, that the trial court should have instructed the jury that the standard of care of the premises owner is established by the Uniform Building Code (UBC) and the American National Standards Institute ( ANSI ). Those standards would require the installation of safety glass. The Supreme Court noted that there was conflicting evidence on the question of whether the UBC and ANSI standards had been adopted by the City of Buffalo and even if they had, whether they applied to the premises involved. Because of that conflict, the Court held that the trial court did not err in refusing to submit those standards as establishing the minimum level of care of the premises owner. Instead, the Court found that the jury instruction permitting both sides to argue whether the bar owner acted reasonably or unreasonably under the circumstances was appropriate.

The above decisions turn, at least in major part, on whether there was an adoption of the local governing body of a rule, regulation or standard governing the conduct of property owners and occupiers. It behooves business owners and operators to be aware of any local requirements that may apply to their business premises, and, if necessary, to make the necessary corrections to assure that they are in compliance. If compliance seems onerous, perhaps the property owner should lobby the council or commission for amendment.

If your company has questions concerning insurance issues with respect to premises liability, or applicable requirements affecting the operation of your business and you are unable to get a satisfactory answer from the governmental agency involved, you are invited to confer with attorneys in either of our offices for assistance.

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