Contractor's insurer cannot avoid liability obligation by arguing ambiguity
Ernie Morgan was injured when a Menasha Corporation employee accidentally opened a loading platform underneath Morgan while he was delivering wood chips. Morgan secured a verdict against Menasha, however, Menasha argued that Fairhaven Wood Harvesting was obligated to pay the verdict under an indemnification contract. Fairhaven's insurance company, Essex Insurance Company argued that it was not bound by the insurance contract and did not owe a duty to pay the verdict.
Essex argued that the contract terms which obligated Fairhaven's insurer to pay "any and all claims...for damage to property or personal injury...which may arise from actions under this agreement, [for] operations...conducted by themselves or by any subcontractor or anyone...employed by either of them..." did not apply to Morgan's injury because the above terms excluded Menasha. The Court of Appeals rejected this spurious claim, noting that Menasha and Fairhaven were the two parties to the contract and no ambiguity could reasonably be claimed with regard to what the contract intended. It also summarily rejected claims that Menasha had waived this protection by failing to demand documentation of coverage and that Menasha had suffered no injury because it would have been insured by its own carrier if Fairhaven's insurer prevailed.