The Supreme Court of Montana has affirmed a lower court’s finding that an insurance company was not liable for injuries that a pair of jockeys suffered because there was valid exclusion for such injuries in the contract it had with the race track.
The jockeys, Tim Giacomelli and Don Hamilton, suffered injuries in horse races at MetraPark in Billings, Montana, in September 2003. MetraPark is owned and operated by Yellowstone County. For these particular races, Yellowstone County leased MetraPark to the Yellowstone Horse Racing Alliance Inc. (Alliance). The Jockeys sued Yellowstone County and Alliance for the injuries they suffered, alleging negligence.
Alliance had purchased a CGL policy from Scottsdale Insurance Company. Yellowstone County is listed as an additional insured in the CGL policy. The CGL policy covers bodily injuries arising from “the ownership, maintenance or use” of MetraPark or any operations “necessary or incidental” to MetraPark or the horse racing track. Among the exclusions are a “special event participant exclusion” and an “athletic or sports participants” exclusion. The special event participant exclusion specifies that the CGL policy does not provide coverage “to any ‘participant’ arising out of the practicing for or participation of any person in any athletic event, contest, game, demonstration, exhibition, race or show covered by this policy.” The athletic or sports participants exclusion reads, “With respect to any operations shown in the Schedule, this insurance does not apply to ‘bodily injury’ to any person while participating in any sports or athletic contest or exhibition.”
After the Jockeys sued, Alliance and Yellowstone County contacted Scottsdale about insurance coverage. Scottsdale, citing the special events participant exclusion and athletic and sports participants exclusion, responded that the CGL policy did not cover the Jockeys’ injuries. Consequently, Scottsdale refused to defend or indemnify Alliance and Yellowstone County.
Eventually, the Jockeys settled their suits against Alliance and Yellowstone. Pursuant to the settlements, Alliance and Yellowstone consented to the entry of judgments, the jockeys agreed not to execute on the judgments, and Alliance assigned to the jockeys any claims that it had against Scottsdale.
The Jockeys then filed the present declaratory judgment action, seeking a declaration that the CGL policy covered their claims and that Scottsdale had a duty to indemnify and defend Alliance and Yellowstone County. Eventually, the jockeys moved for summary judgment to invalidate the special events participant and the athletic or sports participants’ exclusions for violating public policy and to enforce the remainder of the CGL policy. Scottsdale opposed the motion. The district court denied the jockeys’ motion, ruling that the exclusions do not violate public policy and are unambiguous, and that Alliance and Yellowstone had no reasonable expectation that the CGL policy would cover the jockeys.
On appeal, the plaintiffs raised the following questions:
• Whether the district court erroneously interpreted the term “exhibitors” from § 23-4-205, MCA, to exclude jockeys;
• Whether the district court erred in holding that the Jockeys were not entitled to recovery from Scottsdale, but stated that the Jockeys had a claim against the Montana board of horseracing;
• Whether the district court erroneously held that the special event participant exclusion and the athletic or sports participants exclusion in the commercial general liability insurance policy (CGL policy) are unambiguous;
• Whether the district court erred in holding that the special event participant exclusion and the athletic or sports participants exclusion did not violate the insureds’ reasonable expectations.
Addressing the first question, the high court agreed with the judge that “jockeys, who race horses at meets where the purpose is … to allow pari-mutuel wagering,” should not be construed as exhibitors.
Turning to the second question, the panel affirmed the lower court, finding that “the plaintiffs have a claim against the board, not the defendants” since the board was supposed to ensure that the insurance contract has adequate coverage.
As for the third question, the court found the exclusion to be clear and concise, providing “With respect to any operations shown in the Schedule, this insurance does not apply to ‘bodily injury’ to any person while participating in any sports or athletic contest or exhibition.”
The high court noted that the jockeys “argue that the athletic or sports participants exclusion is ambiguous because it could also be reasonably interpreted to ‘apply only to injuries arising from the natural or inherent risks of horse racing,’ but not to ‘injuries allegedly caused by an insured’s breach of duty to design, inspect, maintain, or operate the race track in a safe condition before the race.’ We find no support for this interpretation in the language of the exclusion.”
Regarding the final question, the court noted that “Alliance and Yellowstone County expected the CGL policy to cover injuries to jockeys. This expectation, however, was not objectively reasonable. Contrary to the Jockeys’ assertions, we have concluded that the athletic or sports participants exclusion unambiguously expresses an intent to exclude coverage for jockeys injured while participating in horse races. Accordingly, we hold that the District Court did not err.”
Tim Giacomelli et al. v. Scottsdale Insurance Company, et al.; S. Ct. Mon.; DA 09-0035, 2009 MT 418; 2009 Mont. LEXIS 640; 12/8/09
Attorneys of Record: (For Appellants) Allen P. Lanning, Conklin, Nybo & Lanning, P.C.; Great Falls, Montana; David P. Legare, Legare Law Office; Billings, Montana. (For Appellees) Calvin J. Stacey; Stacey & Funyak; Billings, Montana.
