Foremost Insurance Co. v. Putzier

Antonio Guanche (defendant) was one of several people who set up food stands during a spectator event hosted by Evel Knievel and Snake River Canyon Enterprises. To get permits to host the event, Knievel and Snake River negotiated and obtained liability insurance from Foremost Insurance Company (plaintiff). The liability policy excluded damages resulting from a riot, civil commotion, or mob action. When Guanche sought to operate his food stand at the event, a Snake River representative told Guanche that he would need insurance too and he could purchase it from Foremost. Guanche then paid $300 to a Foremost agent who told Guanche that he was “covered.” There was no discussion of what type of insurance Guanche was purchasing, and Guanche never received a written policy. Guanche was added to Knievel and Snake River’s policy as an insured. In the days leading up to the event, groups of spectators broke into several vendors’ trailers, including Guanche’s, damaging the trailers and stealing their contents. Guanche filed a first-party claim with Foremost, believing he was covered for loss due to theft. Two others, Harold Putzier and Bob Crandall, sued Knievel and Snake River to recover their damages. In conjunction with that case, a state trial court issued a declaratory judgment that Putzier and Crandall’s damages were excluded from coverage because the policy’s riot exclusion had been negotiated and was valid. However, regarding Guanche’s damages, the trial court found that because Guanche never got a copy of the insurance policy, the declaration that Guanche was “covered” created a patently ambiguous oral contract for insurance. Therefore, the trial court concluded that the ambiguities had to be resolved against Foremost. Foremost appealed.