      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

AMERICAN STATES INSURANCE,                      DIVISION ONE
COMPANY, an Indiana corporation,

              Respondent,                       No. 69634-3-1


         v.



DELEAN'S TILE AND MARBLE, LLC,                  UNPUBLISHED OPINION
a Washington limited liability company;
DELEAN CONTRACTING &
LANDSCAPING, LLC, a Washington
limited liability company; TABITA
DELEAN dba DELEAN'S TILE AND
MARBLE, a Washington sole
proprietorship; MIRCEA and TABITA
DELEAN, individually and dba
DELEAN'S TILE & MARBLE, a
Washington sole proprietorship;
and LAWLESS CONSTRUCTION
CORPORATION, INC., a Washington
corporation,

              Appellants.                       FILED: December 9, 2013


       Dwyer, J. — Six townhouse unit owners entered into a construction

contract with Lawless Construction Corporation, Inc. (Lawless). The owners

hired Lawless to repair construction deficiencies at their property that had been

caused by the original developer. Lawless then subcontracted with Delean's Tile

& Marble, LLC (Delean) to assist in repairing some of the damage. Delean was

insured by American States Insurance Company at the time and Lawless was
No. 69634-3-1/2



made an additional insured under Delean's policy. Some of Delean's work was

defective and when Delean refused to return and fix the defective work, Lawless

paid another company to repair and complete the work. Subsequently, Lawless

brought a lawsuit against Delean. Lawless and Delean eventually settled their

dispute. In the meantime, Lawless had tendered a claim to American States, but

American States denied coverage pursuant to its Multi-Unit and Tract Housing

Residential Exclusion (hereinafter Exclusion). Thereafter, American States filed

a declaratory judgment action against Lawless and Delean, seeking a ruling on

coverage. The trial court denied Lawless's and Delean's motion for partial

summary judgment, granted American States' motion for summary judgment,

and ruled, among other things, that the Exclusion precluded coverage for the

claim submitted by Lawless and Delean. Because the work Delean performed

falls within the plain language of the Exclusion, we affirm.

                                          I


       The property at issue was designed, permitted, and built between 2001

and 2002 as "three duplex townhouses with underground parking." It is located

in Seattle at 125-127-129 26th Avenue East. A soils report prepared for the

developer in 2001 stated that "the multi unit residential construction will consist of

three, three-story buildings joined by courtyards."

       In the building permit, each duplex townhouse building was listed as a

"two-family dwelling." Each duplex townhouse has continuous siding, a common

roof, and a continuous guttering system. Pedestrian access to all six units is

available using the public sidewalk on 26th Avenue East, and the stairway leads

                                         -2-
No. 69634-3-1/3



into the inner courtyard area. The inner courtyard area between the three

buildings consists of connected walkways and stairways used by all owners.

Each unit has one entrance, accessible by traversing the common courtyard

walkways. When the property owners exit their front doors, they access the

garage via a stairway from the courtyard area. The garage area is located

underneath the building bearing the address 125 26th Avenue East and it has a

continuous span of siding shared with the upper portions of the building above it.

       On August 25, 2003, the City of Seattle approved a subdivision of the

property into seven parcels, denominated Parcels A to G. The six townhouse

units occupy Parcels A to F. The subdivision's stated purpose, pursuant to the

short plat for the property, was "for the creation of separate lots of record for the

construction and transfer of title of townhouse as authorized under SMC

23.45.006." A Declaration of Covenants, Conditions, Restrictions and

Easements, and Party Wall Agreement (hereinafter CC&Rs) applicable to all six

parcels was recorded in 2003. The CC&Rs refer to Parcels A through F

collectively as the "Property." The CC&Rs establish easements for walkways,

parking, shared storage space, utilities, ingress and egress, mailboxes, and state

that all six parcels are equally responsible for sharing the costs of maintaining the

easement areas. The CC&Rs prohibit owners from making improvements,

alterations, repairs, paint changes, excavations, changes in grade, or other work

which alters the exterior of "any Parcel or the Structures located thereon . . .

without the prior written approval of three-fourths (3/4) of the Owners

Additionally, the CC&Rs prohibit structural alteration of any party walls—the party

                                         -3-
No. 69634-3-1/4



walls are walls that were built as part of the original construction and placed on

the dividing line between the parcels.

       The original construction of the walkways was defective, and the owners

of all six units sued the builder. The owners hired Lawless to repair the defective

work. Although the contract identified "Homeowners Association" as the party

contracting with Lawless, all of the owners signed the contract individually. The

scope of repair under the contract included the main courtyard, the six east

elevation unit decks, the garage, the storage rooms, and the staircase to the

garage.

       On August 8, 2006, Lawless subcontracted with Delean to assist in

repairing the damage. Delean's work included the following: tile work in the deck

areas, courtyard areas, easement areas, and the staircase to the common

garage; lapping membranes against the siding of the building walls; and

waterproofing the penetrations from the buildings' downspouts.

       Delean's work on the exterior walkways was defective, allowing water to

leak into the garage. This, in turn, resulted in rot to the joists, sheathing, and

drywall in the garage. The owners demanded that Lawless return and repair the

damage. Lawless, in turn, asked Delean to repair the shoddy work. Delean

refused to do so.

       Delean's contract with Lawless required Delean to buy insurance, to make

Lawless an additional insured under his liability insurance policy, and to

indemnify and hold Lawless harmless for claims arising from Delean's

performance. Delean was insured by American States Insurance Company at

                                         -4-
No. 69634-3-1/5



the time and Lawless was listed as an additional insured under Delean's policy

pursuant to the subcontract. Delean's policy includes a severability clause:

      7. Separation Of Insured

      Except with respect to the Limits of Insurance, and any rights or
      duties specifically assigned in this Coverage Part fo [sic] the first
       Named Insured, this insurance applies:

       a. As if each Named Insured were the only Named Insured; and
       b. Separately to each insured against whom claim is made or "suit"
       is brought.

       The policy also excludes coverage for property damage arising out of any

"construction operations" that involve a "multi-unit residential building." The

Exclusion provides, in pertinent part, as follows:

       2. Exclusions


       This insurance does not apply to:

       Multi-Unit and Tract Housing

       "Bodily injury", "property damage" or "personal and advertising
       injury liability" arising out of any "construction operations" whether
       ongoing operations or operations included within the products-
       completed operations hazard that involve a "housing tract" or "multi-
       unit residential building".

       This exclusion does not apply to:

           a. Remodeling, maintenance or repair performed for the
           "owner" of a detached single family dwelling provided that the
           work does not involve the repair or replacement of either "your
           work", or the work of any other insured under this policy, that
           was part of the original construction of the building ....

       B. The following definitions are added to the Definitions Section:

       "Construction operations" means pre-construction, construction,
       post-construction, reconstruction, renovation, remodeling,
       conversion of the building to a condominium, townhouse,
No. 69634-3-1/6



       cooperative building or any other type of multiple unit residential
       structure, maintenance or repair.

       "Multi-unit residential building" means condominiums, townhouses,
       apartments, dormitories or similar structures that have more than
       four (4) units built or used for the purpose of residential occupancy,
       at the same location or complex, regardless of the number of
       buildings.

       "Owner" means the person or persons that own the individual
       residential dwelling or unit but does not include a limited liability
       company, sole proprietor, partnership, joint venture, corporation,
       unincorporated association, trust, or the developer of the property
       or real estate manager or any entity related to either.

       On September 16, 2010, Lawless's attorney asked Delean to tender a

claim on its behalf to American States as an additional insured under Delean's

policy. On September 22, 2010, American States' claim representative checked

online permit records of the City of Seattle's Department of Planning and

Development and confirmed that the development at issue involved "three duplex

townhouses with underground parking." She then wrote to Lawless's attorney

formally denying the tender. The letter stated, in pertinent part, "A review of the

public records for this project reveals that this project is a condominium'11
comprised of 6 units in 3 buildings. . .. [Tjhis project fits the definition of Multi-

Unit Residential Building and thus this exclusion would further preclude coverage

for this matter." American States' claim representative also invited Lawless's

attorney to submit documentation that might materially alter American States'

coverage position; however, Lawless's attorney did not submit any such

documentation.


       1 Neither the parties nor the developer contend on appeal that the project is a
condominium.


                                              -6-
No. 69634-3-1/7



       Lawless contracted with Umbrella Construction Company to repair

Delean's defective work and the property damage caused by the defective work.

Lawless then filed suit against Delean. Lawless's claimed damages against

Delean, including attorney fees, totaled $174,198.91. American States provided

Delean with a defense under a reservation of rights and defended Delean

throughout the litigation, including Delean's entry into a stipulated covenant

judgment settlement with Lawless and the entry of judgment against Delean in

the amount of $151,553.05.

       Thereafter, on December 9, 2011, American States filed a declaratory

judgment action against Lawless and Delean, seeking a ruling on coverage.

Subsequently, all parties moved for summary judgment. The trial court denied

Lawless's and Delean's motion for partial summary judgment and granted

American States' motion for summary judgment. The summary judgment order

incorporated four rulings: (1) the Exclusion eliminated coverage for fees, costs,

and damages claimed by the townhouse owners; (2) Delean's policy did not

provide coverage with respect to the April 2, 2012 judgment Lawless obtained

against Delean; (3) American States had no duty to reimburse Lawless with

respect to expenses it incurred in repairing Delean's defective work; and (4)

American States had no contractual duty to defend Lawless under the policy with

respect to requests from the homeowners for Lawless to repair Delean's

defective work. The trial court subsequently granted Lawless's motion to

voluntarily dismiss its counterclaims for breach of contract and bad faith.

       Lawless and Delean appeal, assigning error to the trial court's grant of

                                        -7-
No. 69634-3-1/8



summary judgment in favor of American States and its denial of their motion for

partial summary judgment.

                                                 II


        Lawless and Delean assert that the trial court erred when it ruled that the

Exclusion eliminated coverage for Delean's work on the property at issue.2 This
is so, they aver, because Delean's work did not fall within the Exclusion's clear

language and because Exception a. to the Exclusion prevents its application to

the work performed by Delean. We disagree.

        We review an order of summary judgment de novo, engaging in the same

inquiry as the trial court. Snohomish County v. Ruqq. 115 Wn. App. 218, 224, 61

P.3d 1184 (2002). Summary judgment is proper when there are no genuine

issues of material fact and the moving party is entitled to judgment as a matter of

law. CR 56(c).

        Familiar principles apply to our analysis. We construe insurance policies

as contracts. Am. Nat'l Fire Ins. Co. v. B&L Trucking and Constr. Co., 134

Wn.2d 413, 427, 951 P.2d 250 (1998). Policies should be construed as a whole,

and "'should be given a fair, reasonable, and sensible construction as would be

       2American States contends on appeal that we should conduct our coverage analysis for
Lawless and Delean jointly. This is so, it reasons, because the Exclusion contains an inclusive
term—rather than a restrictive term—that has, in other cases, led to the insureds being treated
jointly. We disagree. Although the Exclusion does contain an inclusive term, the inclusive term is
unrelated to the question of severability and, thus, the policy's severability clause is dispositive.
         Although we analyze coverage for multiple insureds separately when an exclusion refers
to "the insured," we analyze coverage jointly when an exclusion refers to "any insured." Compare
Uniaard Mut. Ins. Co v. Spokane Sch. Dist. No. 81. 20 Wn. App. 261, 266, 579 P.2d 1015 (1978),
abrogated on other grounds by. Rodriguez v. Williams. 107 Wn.2d 381, 385-88, 729 P.2d 627
(1986). with Caroff v. Farmers Ins. Co. of Wash.. 155 Wn. App. 724, 731-32, 261 P.3d 159
(1999). American States contends that the phrase "any construction operations" compels us to
apply Caroff, disregard the severability clause in the contract, and treat the insureds jointly.
Because the word "any" does not modify the word "insured," we decline to do so.

                                                -8-
No. 69634-3-1/9



given to the contract by the average person purchasing insurance.'" Grange Ins.

Co. v. Brosseau, 113 Wn.2d 91, 95, 776 P.2d 123 (1989) (quoting Sears v.

Grange Ins. Ass'n, 111 Wn.2d 636, 638, 762 P.2d 1141 (1988), overruled on

other grounds by Butzberger v. Foster, 151 Wn.2d 396, 89 P.3d 689 (2004)).

"Courts interpreting insurance policies are bound by definitions provided therein."

Austl. Unlimited. Inc. v. Hartford Cas. Ins. Co., 147 Wn. App. 758, 766, 198 P.3d

514 (2008). Where the policy's language does not provide coverage, we may not

rewrite the policy to do so. Brosseau. 113 Wn.2d at 100. Finally, "exclusionary

clauses are to be most strictly construed against the insurer." Phil Schroeder,

Inc. v. Roval Globe Ins. Co., 99 Wn.2d 65, 68, 659 P.2d 509 (1983), opinion

adhered to as modified on reconsideration by 101 Wn.2d 830, 683, P.2d 186

(1984).

       The Exclusion reads, in pertinent part, as follows: "This insurance does

not apply to: . . .'property damage'. . . arising out of any 'construction operations'

. . . that involve a . . . 'multi-unit residential building.'" Exception a. to the

Exclusion reads, in pertinent part, as follows: "This exclusion does not apply to:

Remodeling, maintenance or repair performed for the 'owner' of a detached

single family dwelling . . . ." The three key phrases to examine from the

Exclusion and the Exception are the following: (1) "arising out of any

'construction operations,'" (2) "involve a . . . 'multi-unit residential building,'" and

(3) "detached single family dwelling."

          Lawless and Delean first contend that the claim against Delean did not

"arise out of construction operations." This is so, they assert, because the

                                           -9-
No. 69634-3-1/10



activity giving rise to the claim was Delean's work outside the residential

structure and on the exterior walkways. Their contention lacks merit.

       "Construction operations" is defined as "pre-construction, construction,

post-construction, reconstruction, renovation, remodeling, conversion of the

building to a condominium, townhouse, cooperative building or any other type of

multiple unit residentialstructure, maintenance or repair." (Emphasis added.)

Lawless and Delean selectively cull the phrase "any other type of multiple unit

residential structure" from the definition and then use it to contend that because

Delean's work was performed on the exterior walkways—not literally on a

residential structure—the Exclusion does not apply. This is a gross misreading

of the definition.

        Properly read, the definition captures "conversion of the building to .. . any

other type of multiple unit residential structure." Thus, the phrase "any other type

of multiple unit residential structure" would only be relevant if Delean's work

involved a "conversion" of the property to some other type of structure.

However, Lawless and Delean do not claim that Delean was converting3 the
buildings to a different type of structure, and the record does not support such an

assertion. Indeed, the work that Delean performed could properly be

characterized as "construction," "reconstruction," "remodeling," "maintenance," or

"repair"—but not "conversion." None of these activities, pursuant to the

definition, require the work to be done on a residential structure. Accordingly,

         3 In fact, Lawless and Delean, in contending that Exception a. to the Exclusion applies,
impliedly assert that the work involved "remodeling, maintenance, or repair" as those three are
the only actions that would make Exception a. applicable.

                                              -10-
No. 69634-3-1/11



Lawless and Delean are incorrect insofar as they assert that Delean's work had

to be performed on a residential structure in order for the Exclusion to apply.

       Lawless and Delean next contend that Delean's work did not "involve . ..

a multi-unit residential building." This is so, they reason, because his work only

touched four of the units. Their contention lacks merit. The Exclusion is not

worded so narrowly as to require the work to "touch" more than four units.

       As defined by the policy, "'[m]ulti-unit residential building' means

condominiums, townhouses, apartments, dormitories or similar structures that

have more than four (4) units built or used for the purpose of residential

occupancy, at the same location or complex, regardless of the number of

buildings." In an effortto avoid the Exclusion, Lawless and Delean assert that

Delean's work had to touch more than four units. However, the relevant inquiry,

as evidenced by the policy's plain language, is whether or not the construction

operations involved a complex that meets the definition of "multi-unit residential

building"—not the location at the complexwhere the work occurred. It is clear

that Delean's construction operations did involve a complex that meets this

definition: these units were townhouses, there were more than four units, they

were built for the purpose of residential occupancy, and they were built at the

same complex.

       Lawless and Delean finally contend that Exception a. to the Exclusion

makes the Exclusion inapplicable. This is so, they reason, because none of the

units share a wall with another unit and none of the buildings share a wall with

another building. Again, their contention lacks merit.

                                        -11 -
No. 69634-3-1/12



       Our analysis is again guided by familiar principles. Undefined terms in

insurance policies are assigned their ordinary meaning. Vision One, LLC v.

Phila. Indem. Ins. Co., 174 Wn.2d 501, 512, 276 P.3d 300 (2012). "If a term in a

policy is undefined, courts may look to the dictionary to determine the common

meaning." Black v. Nat'l Merit Ins. Co., 154 Wn. App. 674, 680, 226 P.3d 175

(2010). "However, to be meaningful, dictionary definitions must be regarded in

the context of the particular insurance policy." Black, 154 Wn. App. at 680. "The

contract should be given a practical and reasonable rather than a literal

interpretation; it should not be given a strained or forced construction which

would lead to an extension or restriction of the policy beyond what is fairly within

its terms.'" Black, 154 Wn. App. at 682 (quoting Morgan v. Prudential Ins. Co. of

Am., 86 Wn.2d 432, 434, 545 P.2d 1193 (1976)).

       Exception a. reads as follows:

       This exclusion does not apply to:

           a. Remodeling, maintenance or repair performed for the
           "owner" of a detached single family dwelling provided that the
           work does not involve the repair or replacement of either "your
           work", or the work of any other insured under this policy, that
           was part of the original construction of the building ....

(Emphasis added.)

       Both parties are mistaken in trying to assign a legal meaning to the word

"detached." Webster's defines "detached" as follows: "1: standing by itself:

separate, unconnected, isolated; specif, not sharing any wall with another

building." Webster's Third New International Dictionary 615 (2002).

American States is incorrect in its contention that the presence of a party wall

                                        -12-
No. 69634-3-1/13



which cannot be altered legally binds the units; Lawless and Delean are incorrect

in their contention that the one inch air space between the inner walls of the

buildings legally separates the units. These arguments treat "detached" as a

legal term of art, yet it is not defined in the policy and it does not carry with it an

accepted legal meaning. However, a practical and reasonable interpretation of

the dictionary definition is that these units and buildings are not "detached" as

that word is commonly understood and in the context of this particular policy.

       The units within the townhouse buildings are not detached from each

other because they have continuous siding, a continuous guttering system, a

common roof, and appear to be part of a single building. Notwithstanding the

one inch air space between the units, a practical interpretation of the term

"detached" suggests that the units be noticeably separate from one another, and

these are not.

       The townhouse buildings, on the other hand, are noticeably separate from

one another; however, the townhouse buildings are not "single family dwellings."

Instead, they are duplexes, comprising two units that are part of the same

building. The effect of this is to render the detached state of the buildings

inconsequential in determining whether Exception a. applies. The Exclusion's

plain language already forecloses coverage for duplex townhouses and

Exception a. does not alter that language.

       Ultimately, for Exception a. to apply, Delean's work must have been

performed on a "detached single family dwelling." Although the units are single

family dwellings, they are not detached from the corresponding unit in each

                                          -13-
No. 69634-3-1/14



duplex townhouse, and although the buildings are detached, they do not

constitute single family dwellings because each one contains two units.

Accordingly, Exception a. to the Exclusion does not render the Exclusion

inapplicable.
                  4
       Affirmed


                                                  I
We concur:




^^^ H.U)                                        l>?J^£




        4 Because Lawless and Delean conceded their claim for attorney fees at oral argument,
we do not address it here.


                                            -14-
