There was an accident in which three exercise riders were injured while they were breezing horses and collided with a loose horse running in the opposite direction. They sued the race park, which claimed coverage under an umbrella insurance policy that excluded coverage for “practicing or participating in horseracing.” The coverage question presented, then, is whether breezing the horses was practicing for horseracing. While breezing is not racing, whether it is practicing for racing is uncertain. The trial court opinion printed here concludes that since the policy is ambiguous, the issue must be resolved against the insurance company, which drafted the policy and must bear responsibility for the ambiguities in it. Accordingly, it finds in favor of the exercise riders.
Text of Opinion
This action arises out of an incident involving a collision between several horses and riders that occurred on November 5, 1999 at a thoroughbred horse racetrack known as "Delaware Park", located in New Castle County, Delaware. Delaware Park is owned and operated by the Plaintiffs, Delaware Racing Association and Delaware Park, LLC (collectively and hereinafter known as "Delaware Park"). At the time of the aforementioned incident, by statute, 3 Del. C. § 10143, Delaware Park was required to maintain general commercial liability insurance to cover the business and activities conducted at Delaware Park.
In order to comply with the statutory mandate, Delaware Park retained Defendant Lowe‑Tillson Insurance Associates, Inc. ("Lowe‑Tillson"), a broker, to obtain the required coverage. Lowe‑Tillson negotiated for and obtained a primary commercial general liability policy from CNA Insurance Company ("CNA"), that provided coverage for bodily injury suffered by jockeys and other riders at Delaware Park. This CNA policy has a per occurrence limit of $1 million. Lowe‑Tillson also negotiated with Twin City Fire Insurance Company ("Twin City"), an affiliate of the Hartford Insurance Company, to obtain an umbrella liability insurance policy for Delaware Park. The Twin City policy ("Policy") provides a per occurrence limit of $10 million.
On November 5, Leah Waldman (a horse exerciser), Eric Jones (a self‑employed jockey) and Roberto Montiel (a jockey and exercise rider), were "breezing" three racehorses on the Delaware Park track around 8:30 A.M. That day the breezing consisted of the three horses bearing the aforementioned riders lining up in the starting gate and "breaking", or starting to run as soon as the gates opened. [FN1] Although horses are sometimes timed during these breezes for several reasons, including publication in race related periodicals, the record indicates that this breeze was not timed. The horses are then ridden at a very fast pace, albeit not quite as fast as in an actual horse race, once around the race track. According to the breeze riders, the purpose of that activity was to exercise the horses' muscles, and to accustom the horses to running in close proximity to one another without being frightened. They were not racing; they were exercising the horses as a part of a morning workout.
FN1. For purposes of clarity, Ms. Waldman and Messrs. James and Montiel shall hereafter be referred to as "breeze riders".
A short time after the November 5 breeze began, another horse on a different part of the track broke away from its rider and ran toward the three horses being breezed. The breeze riders were injured when their horses collided with the stray horse. A fifth horse carrying an "outrider" [FN4] who'd ridden over in an attempt to head off the horse that had broken away, was also involved. The breeze riders suffered injuries of varying degrees. [FN5]
FN4. An outrider monitors and patrols the racetrack on horseback to ensure the safety of other riders. November 20, 2000 Dep. Tr. of Joseph Shelton at pp. 12‑13.
FN5. It appears that Ms. Waldman was the most seriously injured and left the scene by ambulance.
At Delaware Park, as at most thoroughbred racing parks, it is customary for horses to be exercised during the morning which is generally reserved for the training of horses. The individual trainers would determine what activities each horse would be engaged in on a given morning as well as how it would be done. All live horse races are conducted in the afternoon. However, no races were scheduled for November 5. Nor is there any evidence in the record which indicates that the breeze riders had ever been assigned to race the horses they were riding on that date or that they were scheduled to do so after November 5. Indeed, the record reveals that Ms. Waldman was not even considered to be a jockey.
On January 14, 2000, Ms. Waldman filed a civil suit in the Superior Court of New Jersey against Delaware Park and others, seeking damages for personal injuries suffered during the collision. The Waldman litigation was subsequently removed to the United States District Court for the District of New Jersey. CNA, pursuant to its obligation under its policy with Delaware Park, provided coverage and a defense for Delaware Park in that action. The parties subsequently engaged in mediation and settled the litigation with Delaware Park, agreeing to pay $1,200,000 to Ms. Waldman. CNA paid its policy limits of $1,000,000. Delaware Park then turned to Twin City for the balance after the settlement. Twin City denied coverage, citing an endorsement contained in the policy that it claimed excluded coverage for the activity in which the breeze riders were involved on the date of the incident. That language reads as follows:
Description of Designated Athletic Activity: HORSERACING
The policy does not apply to 'bodily injury' to any person while practicing or participating in any 'Athletic Activity' shown in the above Schedule. For the purposes of this endorsement, 'Athletic Activity' means physical fitness activity including gym classes or similar activities; or a sports or athletic contest or exhibition that you sponsor.
On October 29, 2001, Eric Jones commenced a civil action for personal injuries in this Court, seeking a sum in excess of $100,000. On October 31, 2001, Roberto Montiel commenced a civil action for personal injuries in this Court, also seeking a sum in excess of $100,000. Twin City has denied coverage for the claims asserted in either of these suits for the same reasons as in the Waldman litigation.
Both sides have filed motions for summary judgment. They agree that the sole issue upon which this case, as well as the Jones and Montiel cases, rests is whether the exclusion contained in the Twin City policy excludes coverage for the injuries sustained by the breeze riders. Both agree that the case can be resolved on summary judgment, though each party naturally seeks a different outcome. Oral arguments on those motions were heard on October 16, 2002. The following is the Court's response.
A motion for summary judgment made pursuant to Superior Court Civil Rule 56 may be granted only where, considering the facts in a light most favorable to the nonmoving party, there is no material issue of fact in dispute and the moving party is entitled to judgment as a matter of law. If, after viewing the evidence, the Court finds such issues of material fact, or if it is desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances, then the Court may not grant the motion for summary judgment. In cases involving cross motions for summary judgment, such as presented here, the parties implicitly concede the absence of material factual disputes and acknowledge the sufficiency of the record to support their respective motions.
"Interpreting contract language, while analytically a question of fact, is treated as a question of law by the Court." In the present case, the controversy involves the proper interpretation of language contained in an insurance policy. As such, the issue to be resolved by the Court is one of law. In construing the language of an integrated agreement, the meaning of the written terms is defined in light of the surrounding circumstances. If the language of an insurance contract is clear and unambiguous, the Court will not destroy or twist the words under the guise of construing them. The parties will be bound by the plain meaning of the policy language because creating ambiguity where none exists could, in effect, create a new contract with rights, liabilities, and duties to which the parties have not agreed or consented.
An ambiguity exists when the language of the contract permits two or more reasonable interpretations. When the language of an insurance contract is ambiguous and doubt exists as to coverage, the contract will be interpreted against the insurer who drafted the policy and in favor of the insured. In addition, the insurance contract will be read in accordance with the reasonable expectations of the insured so far as the contract language will permit.
Here, the question to be addressed is whether the breeze riders were "practicing or participating" in horse racing. As indicated above, the parties are in agreement as to the issues to be addressed and the state of the record. If, based upon the record, the Court can answer yes or no to both parts of the question, the controversy ends one way or the other. If, on the other hand, the Court is unable to apply the language of the instant clause to the facts of the case because it is ambiguous, or capable of at least two competing meanings, the Court must apply a different set of rules.
At least one thing is readily apparent upon viewing the record here, and that is that the breeze riders were not engaged in horse racing on November 5, 1999. No races were scheduled or took place on that date. At best, there was a conditioning or exercising, and learning to "ride in company". [FN17] There was no evidence that the breeze riders ever rode the horses in question, in a race or otherwise, prior to that date. Indeed, Ms. Waldman was not considered to be a jockey and presumably couldn't participate in the formal horse racing presented at Delaware Park. That they were not engaged in horse racing, however, does not resolve the controversy, because the question remains whether the breeze riders were "practicing" horse racing.
FN17. It does not matter, for present purposes, that a witness to the event might have thought otherwise based upon their position astride the horses they were riding when that observation is compared with the testimony of the breeze riders themselves as to what they were and were not doing.
Simply put, the Court finds that the language in question is capable of several interpretations in this regard, some favoring an affirmative response, some a negative one. That constitutes "ambiguity" as that term has been previously defined. Both sides point to policy language in cases supportive of their respective positions depending upon whether the language was upheld or rejected. While the examples cited are helpful in terms of illustrating the varying approaches taken in the industry, they are not determinative of the issue. The language here was poorly drafted and the fact that there are other examples of language, some ambiguous, some not, means little other than that the racing and insurance industries have needed to address the problem for some time. Moreover, the Court does not find it necessary, in the present context, to distinguish between the perspective of the rider versus that of the horse. To do so would be to defy logic and common sense since neither the rider nor the horse could be involved, in any sense of the activity, without the other, and they must therefore be viewed as a single entity. Given the finding of ambiguity, the Court must construe the policy against the drafter. Since it was Defendant Twin City which provided the policy to the Plaintiffs and therefore had it drafted for that purpose, the policy must be construed against that defendant and in favor of the Plaintiffs. The Defendant is presumed to know the risks of the industry and the existence of the litigation referred to above. [FN20] Lastly, as noted by the Plaintiffs, the public policy of this state is that exclusions in statutorily required insurance are to be narrowly construed.
FN20. A clear example of the kind of language that could have been employed and existed at the time the instant insurance policy was last renewed, is found in Colson v. Louisiana State Racing Comm'n, 726 So.2d 432, 433‑34 (La.App.1999). It reads:
For purposes of this Endorsement any person 'parcticing [sic] for or participating in' shall include any person riding or driving a horse for the purpose of warm‑up, exercise, practice or race....
The Plaintiffs are, as a result, entitled to coverage for the incident which took place on November 5, 1999 involving the breeze riders. It did involve conditioning or general training, but the Court cannot conclude that such constitutes "practicing or participating in horse racing". Rather, the relevant language of the contract should be construed to exclude activities directly related to the presentation of a scheduled or ongoing race. The events in question did not fall into that category.
Based upon the foregoing, the Court must conclude that the Plaintiffs are entitled to coverage for the incident on November 5, 1999 involving Ms. Waldman, Mr. Jones and Mr. Montiel under the terms of the contract of insurance between Delaware Park and Twin City Fire Insurance Company in effect between April 1, 1999 and April 1, 2000. The Plaintiffs' motion for summary judgment is therefore granted and Defendant Twin City's motion in that regard is denied.
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