United States Elevator Corp. v. Associated International Insurance

Associated International Insurance Company (Associated) appeals from a judgment in favor of United States Elevator Corporation (USEC) on USEC’s complaint for damages and declaratory relief. Associated claims the trial court erred when it held that it was responsible to pay certain claims against USEC under a contract of excess insurance. In reversing, we will hold that ambiguities existing in a primary insurance contract must be construed so as to compel the broadest grant or expansion of insurance coverage thereunder; and that this rule of construction is not vitiated because its application may incidentally curtail or eliminate the coverage of a separate excess insurance contract issued by a separate insurance carrier, which had no responsibility for the ambiguity in the primary insurance contract.

I. Factual and Procedural Background

USEC manufactures, installs, services and maintains elevators. It is a subsidiary of Cubic Corporation (Cubic). Cubic purchased two policies of primary liability insurance extending coverage to USEC from Insurance Company of North America (INA). Coverage thereunder was effective as to the first policy from March 1, 1979, to March 1,…