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Fulton v. Lloyds of London (10/6/95), 903 P 2d 1062
Notice: This opinion is subject to correction
before publication in the Pacific Reporter.
Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907)
264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
CHRISTOPHER FULTON, individually )
and as assignee of Walter E. ) Supreme Court Nos. S-
Appellant and )
Cross-Appellee, ) Superior Court No.
) 3AN-93-1883 CI
LLOYDS and INSTITUTE OF LONDON ) O P I N I O N
UNDERWRITING COMPANIES, including )
JOHN CRAWLEY, individually and as )
representative on behalf of )
certain underwriters at Lloyds of ) [No. 4266 - October 6,
London subscribing to Policy No. )
BH0150TAA, EXCESS INSURANCE )
COMPANY, LTD.; LONDON & HULL )
MARITIME INSURANCE CO., LTD.; )
CORNHILL INSURANCE PLC 'M' A/C; )
INSURANCE COMPANY OF NORTH )
AMERICA 'G' (UK); THE PRUDENTIAL )
GROUP 9; and THE BALTICA (UK) J A; )
and PROPERTY MARINE, )
Appellees and )
Appeal from the Superior Court of the
State of Alaska, Third Judicial
Dana Fabe, Judge.
Appearances: Randall E. Farleigh,
Farleigh & Shamburek, Anchorage, for
Appellant and Cross-Appellee. Brewster
H. Jamieson, Diane L. Wendlandt, Lane
Powell Spears Lubersky, Anchorage, for
Appellees and Cross-Appellants.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton and
This dispute over insurance coverage for an
accident at sea comes to us after the conclusion of suits in
state and federal courts and while liquidation proceedings
for one insurer are underway in the State of Washington.
The findings of the trial court guide us through the maze:
FINDINGS OF FACT
I. THE INJURY
1. In early January 1986, the fishing vessel JAMIE
LYNN set out from Cordova, Alaska, toward the Alaska
Peninsula. On board were captain Christopher Clark and crew
member Christopher Fulton, plaintiff in this action.
2. The vessel stopped in Kodiak to pick up crabbing
gear and to fish for tanner crab, and Clark hired Dennis
Carlsen and Karl Steen to join the crew.
3. The JAMIE LYNN subsequently stopped in Cold Bay,
where welder Brian Shaw came aboard to do some repair work.
When the vessel left Cold Bay, Clark retained Shaw to help
with the crabbing, raising the crew complement to four.
4. Sometime during the beginning of March, 1986, the
JAMIE LYNN passed north through the Aleutian Islands and
headed toward the Pribilof Islands to fish for opilio crab.
5. Along the way, the crew dropped its load of about
100 crab pots in strings between a half mile and ten miles
6. Exactly where the crab pot strings were placed is
unclear from the evidence presented to the court, but the
strings were at depths of 60 to 90 fathoms in areas between
approximately 166 to 169 degrees west longitude, 55 to 56.5
degrees north latitude. This region lies to the south and
east of St. George Island, in the Bering Sea.
7. After the pots were dropped, a storm blew in and
the JAMIE LYNN sought shelter at St. Paul Island, northwest
of the area where the crab pot strings were located. The
vessel remained at St. Paul for several days.
8. When the storm abated somewhat, the JAMIE LYNN set
out to find and check the strings.
9. On March 9, 1986, the vessel was searching for the
strings when plaintiff [Christopher Fulton] slipped and
fell, apparently on a loose pipe fitting that had dropped
from a bin onto the floor of the engine room.
10. At the time, the wind was blowing at approximately
25 to 50 knots and raising eight- to twelve-foot swells.
11. The exact location of the JAMIE LYNN at the time
of plaintiff's injury is an issue of dispute between the
parties, but the crew believed the vessel to be in close
proximity to the crab pot strings, about 14 to 16 hours from
St. Paul Island.
12. Upon determining that plaintiff had injured his
back in the fall, Clark turned the vessel about and headed
back to St. Paul Island, where the Coast Guard took
plaintiff from the JAMIE LYNN to a clinic on shore.
13. The clinic placed a telephone call to Walter
Clark, the owner of the vessel, informing him of the
situation. Walter Clark arranged to have plaintiff
transported by airplane to Anchorage, and then by ambulance
to Providence Hospital. After ten days in the hospital,
plaintiff returned to Cordova.
14. Plaintiff has since undergone other medical
treatment for his injury, and has accrued medical expenses
and other damages that are the basis of this lawsuit.
II. THE POLICY
15. Beginning in 1984, Walter Clark obtained a
$500,000 protection and indemnity (P&I) insurance policy for
the JAMIE LYNN through his broker, Northern Marine Insurance
16. The 1984-1985 policy provided, among other things,
that the warranted vessel would be engaged in "the tendering
and possible halibut longline fishing industry"; that the
vessel would be "confined to the waters of Bristol Bay and
waters surrounding the Alaska Peninsula, and connecting
waters to Cordova"; and that a maximum of three crew members
would be aboard the vessel, with any increase over this
amount to be reported "immediately upon being advised or
aware of same." The policy further provided that the JAMIE
LYNN would be laid up between October 1 and April 1.
17. At the time the policy was entered into, Walter
Clark indicated to Francis Zemp, solicitor for NMI, that he
did not intend for the policy to cover use of crab pot gear.
18. On September 25, 1985, Zemp contacted Walter Clark
about renewing the P&I policy for another year. While
discussing the renewal with Clark, Zemp marked a renewal
application form to indicate no changes to the policy.
19. The actual renewed policy was substantially
identical in its provisions to the 1984-1985 policy, with an
exception being an amendment to allow the JAMIE LYNN to
leave port as of January 1, rather than April 1, although
the crew warranty was limited to the period from January 1
to July 1. Additionally, the renewed policy contained a
clause requiring certain conditions to be met and maintained
during the course of the policy "in the event the vessel
engages in crab fishing."
20. Property Marine, from whom NMI sought to obtain
the necessary endorsements for the Clark policy, arranged
for Pacific Marine Insurance Co. (hereinafter "Pacific
Marine") to cover the first $200,000 of the policy and
defendant in this case Lloyds and Institute of London
Underwriting Companies (hereafter "Lloyds") to provide the
additional $300,000 in excess insurance.
21. The renewed P&I policy extended from November 11,
1985, to November 11, 1986. On January 21, 1986, NMI
received an endorsement to the policy with a new
subscription page stamped with the words "WARRANTED NO
CRABBING." NMI never forwarded the amended subscription
page to Walter Clark.
III. THE COVERAGE DISPUTE
22. Hoping to resolve the matter without recourse to
the insurance policy, Walter Clark did not immediately
report Fulton's injury to NMI.
23. In April 1986, Clark obtained an endorsement from
Pacific Marine, through NMI, reading:
EFFECTIVE 11TH APRIL, THROUGH MAY, IN
CONSIDERATION OF ADDITIONAL PREMIUM $3,450. IT IS
UNDERSTOOD AND AGREED TO PERMIT THE "JAMIE LYNN"
TO ENGAGE IN CRABBING OPERATIONS WITHIN AND AROUND
THE PRIBILOF ISLANDS WITH THREE CREW.
24. Clark had paid $9,600 for the renewed P&I policy,
which covered a period of six months of fishing operations
for the JAMIE LYNN with a crew. Representatives of NMI and
Property Marine testified that the high additional premium
paid by Clark for a crabbing period of approximately a month-
and-a-half reflected the unusual risk attendant with that
particular kind of fishing.
25. On July 24, 1986, Walter Clark provided general
information about Fulton's injury to Zemp at NMI. In a
letter with the same date, NMI alerted Property Marine to
the "possible claim." In a memorandum dated August 4, 1986,
Property Marine notified Pacific Marine of the claim.
26. Pacific Marine assigned adjustor Christine
Bottomley to the claim on August 12, 1986. On August 20,
1986, having recognized a potential coverage problem,
Bottomley prepared but did not send a reservation of rights
letter to Walter and Christopher Clark. On the same day,
Bottomley called Christopher Clark and told him that
coverage could be a problem.
27. On August 26, 1986, Pacific Marine held an
internal meeting at which it was decided that Pacific
Marine's defense should be assigned to Paul Daigle, an
attorney, and that another reservation of rights letter
should be drafted. Also on August 26, 1986, plaintiff in
the present case filed an action in rem against the JAMIE
LYNN and in personam against Christopher Clark, asking for
damages arising from plaintiff's injury.
28. On September 4, 1986, Daigle hired George Barnum
to investigate the claim for Pacific Marine. Barnum
conducted interviews between September 12 and September 19,
1986 with Walter Clark and the crew of the JAMIE LYNN.
29. On September 8, 1986, Walter Clark notified
Pacific Marine that he had retained attorney Michael
Schneider to represent him on the claim. On September 12,
1986, Walter Clark telephoned Linda Pysher, Bottomley's
supervisor at Pacific Marine, and told her that Christopher
Clark had been served with notice of a pre-arrest hearing to
be held on September 16, 1986. When Clark indicated that he
could not reach Schneider, Pysher suggested that Pacific
Marine provide attorney Robert Richmond to represent him at
the hearing. On September 15, 1986, Pacific Marine
contacted Richmond about representing the JAMIE LYNN and the
Clarks on the claim. Beginning the following week, Walter
Clark and Richmond entered into correspondence regarding the
30. Richmond appeared on behalf of the Clarks at the
pre-arrest hearing, after which a warrant for the arrest of
the JAMIE LYNN was issued. To avoid arrest, Christopher
Clark fled with the JAMIE LYNN. The vessel and its crew
were lost at sea during the flight.
31. On September 22, 1986, counsel for Pacific Marine
sent a reservation of rights letter to the Clarks. Lloyds
sent a letter dated October 15, 1986, notifying the Clarks
that Lloyds would provide excess coverage only if Pacific
Marine decided to extend primary coverage.
32. On October 6, 1986, Pacific Marine filed a
declaratory judgment action in the federal district court
against the Clarks, asking for a determination of coverage.
Plaintiff in the present case intervened in the suit.
33. Judge Fitzgerald held a two-week bench trial, at
the conclusion of which he found for Pacific Marine on the
grounds that the JAMIE LYNN had been engaged in crabbing in
the Bering Sea at the time of Fulton's injury, in violation
of policy warranties. Judge Fitzgerald also rejected the
argument that Pacific Marine was estopped from raising the
warranties as a defense by reason of its actions in handling
the claim. Final judgment was entered against the Clarks
and Fulton on September 7, 1988.
34. The defendants appealed the district court's
decision to the United States Court of Appeals for the Ninth
Circuit. During the course of the appeal, Pacific Marine
went into liquidation, approved Fulton's claim despite the
district court's decision, and decided not to file a brief
to the Ninth Circuit.
35. Pacific Marine then inquired whether Lloyds wished
to pay the costs of preparing and filing an appellate brief.
Lloyds chose not to accept Pacific Marine's offer.
36. On September 25, 1991, the Ninth Circuit
determined that the case was moot, vacated the district
court's decision, and remanded with directions to dismiss.
37. Meanwhile, Fulton's suit against the JAMIE LYNN,
Walter Clark, and the estate of Christopher Clark was
resolved in the fall of 1988 when the defendants in that
case assigned to Fulton their causes of action against their
insurers in exchange for a covenant by Fulton not to execute
on a judgment against the Clarks, and subsequently the
Clarks confessed judgment in favor of Fulton in the amount
of $450,000. The assignment provided an exception that
Fulton would be allowed to execute against assets of the
estate of Christopher Clark conveyed to Walter Clark.
38. On March 5, 1992, Fulton filed the present suit
against Lloyds and Institute of London Underwriting
Companies and Property Marine, realleging the same causes of
action raised in Pacific Marine v. Clark.
In the present case, Fulton alleges that Pacific
Marine committed various acts in connection with its defense
of the Clarks which precluded Pacific Marine from denying
coverage for Fulton's accident.2 Fulton filed a motion for
partial summary judgment seeking a determination that if
Pacific Marine would be precluded by its acts in the defense
of the Clarks from denying coverage, Lloyds would likewise
be precluded. Lloyds opposed the motion and the trial court
denied it on the ground that "Pacific Marine cannot be
viewed as the agent of [Lloyds]. . . . Because there has
been no allegation that [Lloyds], through some kind of
consensual arrangement, ever held control over the conduct
of Pacific Marine, plaintiff's motion on this issue is
Both parties agreed to submit the case to the
court on the existing record. At the conclusion of the
trial the court held that Lloyds was not estopped from
denying coverage based on the lack of an agency relationship
between Lloyds and Pacific Marine. The trial court then
turned to the various coverage defenses asserted by Lloyds.
The court concluded that Lloyds' claim that the no
assignment clause in the policy had been breached by Walter
Clark's assignment of his claim against Pacific Marine to
Fulton, its claim that the no crabbing clause had been
violated, and its claim that the crew warranty had been
violated, were unavailing. However, the court held that the
navigational warranty had been violated in that the JAMIE
LYNN was outside of the geographical area described in the
policy and that its presence outside of that area
"significantly increased the risk that plaintiff would be
injured in the way that he was injured" because of the rough
water in the Bering Sea. The court concluded that the
breach of this navigational warranty voided the policy, and
thus entered judgment in favor of Lloyds.
On appeal, Fulton argues that the trial court
erred in concluding
(1) that Lloyds was not precluded from denying
coverage assuming that Pacific Marine would have been so
precluded by its conduct in connection with the defense of
the Clarks; and
(2) that the navigation warranty was breached and,
assuming such a breach, that the breach significantly
increased the risk.
On cross-appeal, Lloyds argues that the trial
court erred in
(1) failing to hold that Fulton was collaterally
estopped from bringing this case by the federal district
court's decision which was subsequently vacated at the
direction of the Court of Appeals for the Ninth Circuit;
(2) refusing to enforce the no assignment clause of
(3) refusing to enforce the no crabbing warranty;
(4) holding that the crew warranty was not breached;
(5) refusing to amend the caption of the case by
deleting Lloyds' name;
(6) refusing to hold that the assignment from Walter
Clark to Fulton was invalid because it was accompanied by a
covenant not to execute;
(7) refusing to admit the statement of Christopher
Clark, who was deceased at the time of trial, made to an
insurance adjuster as to where the boat was at the time of
the accident; and
(8) failing to consider the no crabbing warranty as a
part of the navigational warranty.
Except for the first point raised by Fulton, we
have determined that none of these points is meritorious and
we determine them summarily.3
Fulton argues here, as he did before the trial
court, that Lloyds was bound by Pacific Marine's decisions
and conduct in defending the Clarks under the policy.
Fulton points out that there was only one policy with two
subscribing insurer groups, and the policy language
concerning the defense obligation under the policy makes no
distinction between the subscribing insurer groups. Fulton
argues: "As a matter of contract law, the duty to defend
and related legal consequences flowing from that duty
voluntarily assumed under [the policy] are not divisible
when they were not separately addressed or divided between
[Lloyds] and Pacific Marine under the policy."
Lloyds' response is that it occupied the same
position as would an insurer which issued a policy of excess
insurance because the word excess was used in the policy in
connection with Lloyds in various endorsements.4 Lloyds
also argues that "[a]lthough the excess insurance was
subject to the same terms and conditions as the primary
insurance, it was issued as a separate policy of insurance."
It is our view that Fulton's argument on this
point is correct. Only one policy was issued Walter Clark.
It is policy number 85-PI-O8744 with a limit of $500,000 for
which Clark was charged a single premium of $9,600. The
lead paragraph of the policy makes it clear that all of the
subscribing companies are subject to the terms and
conditions of the policy. The paragraph states:
In consideration of the premium herein
after stated, the various companies
named herein, severally but not jointly,
do hereby insure the assured named
herein, for the amounts and proportions
set opposite their respective names.
All are subject to the terms and
conditions of the forms and endorsements
The attached protection and indemnity endorsement states the
following with respect to rights and obligations concerning
the defense of claims:
In consideration of the premium and
subject to the warranties, terms and
conditions herein mentioned, this
Company hereby undertakes to pay up to
the amount hereby insured . . . .
. . . .
Costs and expenses, incurred
with this Company's approval,
of investigating and/or
defending any claim or suit
against the assured arising
out of a liability or an
alleged liability of the
assured covered by this
. . . .
This Company shall have the option of
naming the attorneys who shall represent
the assured in the prosecution or
defense of any litigation or
negotiations between the assured and
third parties concerning any claim
covered by this policy, and shall have
the direction of such litigation or
negotiations. If the assured shall fail
or refuse to settle any claim as
authorized by this Company, the
liability of this Company shall be
limited to the amount for which
settlement could have been made. The
assured shall at the option of this
Company permit this Company to conduct,
with an attorney of this Company's
selection, at this Company's cost and
expense and under its exclusive control,
a proceeding in the assured's name to
limit the assured's liability to the
extent, and in the manner provided by
the present and any future statutes
relative to the limitation of a ship
As both Pacific Marine and Lloyds are subscribing companies
to the policy, they are both included within the term "this
Company." Under the introductory clause of the policy set
forth above they are both "subject to the terms and
conditions" of the protection and indemnity endorsement.
Policies of insurance are to be construed in
accordance with the reasonable expectations of the assured:
"The objectively reasonably expectations of applicants and
intended beneficiaries regarding the terms of insurance
contracts will be honored even though painstaking study of
the policy provisions would have negated those
expectations." Bering Straits School Dist. v. RLI Ins. Co.,
873 P.2d 1292, 1295 (Alaska 1994) (quoting Robert Keeton,
Basic Text on Insurance Law 6.3(a), at 351 (1971)). To
ascertain reasonable expectations "we look to the language
of the disputed policy provisions, the language of other
provisions of the insurance policy, and to relevant
extrinsic evidence. In addition, we refer to case law
interpreting similar provisions." Bering Straits, 873 P.2d
at 1295 (quoting Stordahl v. Government Employees Ins. Co.,
564 P.2d 63, 66 (Alaska 1977)).
An insured in the position of Walter Clark
reasonably would expect both insurers to be responsible for
and bound by decisions made in "the direction" of
"litigation or negotiations," given the fact that there was
only one policy and that both subscribing insurers had
severally undertaken identical duties under the policy. As
between the subscribing insurers, there doubtless was some
sort of an understanding that Pacific Marine would have
initial defense responsibilities. However, such an
understanding would do nothing to change the impression
conveyed by the language of the policy that there would be
only one defense to which both insurers would be bound since
there was only one policy.
Our conclusion is consistent with the letter
written to the Clarks by Property Marine on behalf of Lloyds
shortly after the litigation was commenced. The letter
expressed and emphasized Lloyds' view that there was only a
single policy rather than separate policies and that Lloyds'
liability was dependent on liability of Pacific Marine first
being established. The letter stated in part as follows:
[I]f Pacific Marine, the primary
carrier, determines that the referenced
loss is covered and the value of the
claim exceeds their primary limit of
$200,000, then London will normally
respond up to their excess limit. On
the other hand, should the primary
carrier prove the loss is not covered,
then London will not respond.
I would point out to you that the
primary and excess coverage are not
separate policies, and there can be no
recovery from London until, and unless,
there is recovery from Pacific Marine.
As noted above, Lloyds argues that it was in the
same position that it would have been had it issued a
separate policy of excess insurance because the word
"excess" was used in connection with Lloyds in various
endorsements in the policy. This argument lacks merit.
While excess insurers under policies separate from those
issued by primary insurers are often not responsible for the
defense of a claim against the insured until the limits of
the primary policy are exhausted, this is by no means a
blanket rule applicable to all of the permutations in which
the primary insurer/excess insurer relationship appears, nor
is it independent of the particular language of the policies
involved. See, e.g., Signal Cos. v. Harbor Ins. Co., 612
P.2d 889, 895 (Cal. 1980) ("We expressly decline to
formulate a definitive rule applicable in every case in
light of varying equitable considerations which may arise,
and which affect the insured and the primary and excess
carriers, and which depend upon the particular policies of
insurance, the nature of the claim made, and the relation of
the insured to the insurers."); Guaranty Nat'l Ins. Co. v.
American Motorists Ins. Co., 758 F. Supp. 1394, 1396 (D.
Montana 1991), aff'd, 981 F.2d 1108 (9th Cir.)
(unconditional promise in excess policy to provide a defense
binds excess carrier to pro rata defense costs; court
"emphasized that the holding in any particular case
addressing the issue of allocation of defense costs between
primary and excess insurers must be considered in light of
the particular facts of each case and the various policies
involved."); cf., Alaska Rural Elec. Co-op. Ass'n v. INSCO
Ltd., 785 P.2d 1193, 1195 (Alaska 1990) (Excess insurer not
required to drop down to provide primary coverage when
primary insurer insolvent "absent policy language to the
In summary, Fulton's argument is that Pacific
Marine violated certain duties owed by an insurer in the
defense of its insured and that both Pacific Marine and
Lloyds were estopped from relying on policy and coverage
defenses. The superior court did not rule on whether any
such violations occurred. Instead it held that the presence
of such violations would be irrelevant because they would
not bind Lloyds. For the reasons expressed above we find
that this conclusion is erroneous. However, we do not
express any view as to whether there were material breaches
of any defense duties under the policy. This point must be
determined on remand.
REVERSED and REMANDED.
1 Footnotes and record citations have been omitted.
2 The allegations of wrongful conduct on the part of
Pacific Marine are that it "elected to deny coverage to the
. . . while failing to notify the Clarks of said intent to
deny coverage until after [Pacific Marine] had obtained
interviews of the Clarks and information therefrom favorable
to [Pacific Marine's] position against the Clarks"; and that
when Pacific Marine notified the Clarks of its decision to
defend under a reservation of rights to later deny coverage,
the Clarks rejected this conditional defense but Pacific
Marine nonetheless proceeded to defend the Clarks.
3 The trial court's factual finding as to the location of
the boat at the time of the accident and its conclusion that
this location was outside of the warranted policy area is
not clearly erroneous. The trial court's conclusion that
breach of the navigational warranty as to location
significantly increased the risk of an accident such as that
suffered by Fulton is likewise not clearly erroneous given
the finding that the waters of the Bering Sea where the
accident occurred are generally rougher than the areas where
navigation was permitted under the policy.
Lloyds' collateral estoppel point lacks merit for
it ignores the requirement that the issue which has been
already litigated must be final. Murray v. Feight, 741 P.2d
1148, 1153 (Alaska 1987). The Ninth Circuit remanded the
district court case "with a direction to dismiss. See
United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950)."
In Munsingwear the United States Supreme Court explained
that reversing or vacating judgments as moot and remanding
with a direction to dismiss
clears the path for future relitigation
of the issues between the parties and
eliminates a judgment, review of which
was prevented through happenstance.
When that procedure is followed, the
rights of all parties are preserved;
none is prejudiced by a decision which
in the statutory scheme was only
Id. at 40. The Ninth Circuit's reference to Munsingwear
makes it plain that this is not an appropriate case for
application of the doctrine of collateral estoppel.
Concerning the policy warranties, the trial court
correctly required that the breach of such warranties
contribute to the injury or increase the risk of the injury.
Highland Ins. Co. v. Koetje, 651 F. Supp. 346, 347 (W.D.
Wash. 1987). Cf., Estes v. Alaska Ins. Guar. Ass'n, 774
P.2d 1315, 1318 (Alaska 1989) ("time limit on commencement
of suit clauses, notice of loss clauses, proof of loss
clauses, and cooperation clauses [in insurance policies]
should all be reviewed on the basis of whether their
application in a particular case advances the purpose for
which they were included").
Lloyds' arguments concerning its policy and
coverage defenses, points 2, 3, 4, 5, 6, & 8, and its
evidentiary argument, point 7, are moot in view of our
determination that the trial court's holding that the
navigational warranty was breached and the breach was
material must be affirmed. The trial court's determination
concerning the navigational warranty will be dispositive
unless on remand the court finds that there was a material
breach in connection with the defense duties owed the
insured which gives rise to an estoppel to rely on policy
and coverage defenses. E.g., Sauer v. Home Indem. Co., 841
P.2d 176, 184 (Alaska 1992) ("[I]nsurance company which
wrongfully refuses to defend is liable for the judgment
which ensues even though the facts may ultimately
demonstrate that no indemnity is due."); Davis v. Criterion
Ins. Co., 754 P.2d 1331, 1332 (Alaska 1988) (unjustified
denial of coverage "put to an end [insurer's] right to
demand compliance by the insured with other terms of the
agreement."). If such a breach is found, the estoppel will
run to all of the policy and coverage defenses asserted. If
not, the insured's breach of the navigational warranty is
alone sufficient to negate coverage.
Lloyds' argument that its name should have been
deleted is erroneous. Lloyds argues that it is "an
association of individual insurance companies," rather than
an individual insurance company. However, an association
may be sued in its common name. Alaska R. Civ. P. 17(b).
Further, Lloyds was named as a subscribing company in the
insurance policy. If the association did not wish to be
treated as an insurance company, it should not have allowed
itself to be named as such. Taggart v. Wachter, 21 A.2d
141, 146 (Md. 1941) ("[C]ourts which have had to deal with
[associations of individuals exchanging contracts among
themselves] have recognized the necessity of treating them
to an extent as entities."); Thomas Canning Co. v. Canners'
Subscribers at Warner Inter-Insurance Bureau, 189 N.W. 214,
219 (Mich. 1922) ("[A]n action at law against defendant in
the associate character and name by which it contracted will
lie."); Mountain Timber Co. v. Manufacturing Wood Workers
Underwriters, 167 P. 93, 94 (Wash. 1917) (nothing in policy
limited right to sue association under name policy issued).
4 For example, the signature lines for endorsements
were written as follows:
PACIFIC MARINE INSURANCE/PROPERTY
LLOYDS AND INSTITUTE OF LONDON
100% EXCESS P&I
As another example, the subscription sheet to the policy was
divided in three columns; in relevant part it read as
$500,000 Protection &
. . . .
Protection & Indemnity $9,600.00
agreed % Policy Number:
$200,000.00 85 PI 08744
LLOYDS AND INSTITUTE
. . . . LONDON UNDERWRITING
Protection & Indemnity Included
agreed % Policy Number
$300,000.00 85 PI 08744
Excess of $200,000.00
5 Lloyds' argument that its undertaking to insure was
issued as a separate policy of insurance can most charitably
be described as puzzling. The record citations furnished by
Lloyds do not demonstrate that a separate policy of
insurance was issued, no such policy appears in the record,
and the existence of a separate policy would be in conflict
with the letter written on behalf of Lloyds set forth above
at page 15.