author: CROTHERS, Justice.

text:
    2005 ND 176
    Lucas CLARK, Plaintiff and Appellee v. Stacy CLARK, Defendant and Appellant.
    No. 20050101.
    Supreme Court of North Dakota.
    Oct. 18, 2005.

      Paul M. Probst (submitted on brief), Probst Law Firm, Minot, N.D., for defendant and appellant.
    Jennifer M. Stanley (submitted on brief), McGee, Hankla, Backes & Dobro-volny, Minot, N.D., for plaintiff and appel-lee.
   CROTHERS, Justice.

[¶ 1] Stacy Clark (“Stacy”) appeals from a judgment denying her spousal support and awarding custody of the parties’ minor daughter to Lucas Clark (“Lucas”), with visitation for Stacy and potential temporary custody to Lucas’ parents. We reverse and remand for proceedings consistent with this opinion.

I

[¶ 2] Lucas and Stacy were married and had a daughter in 2000. At the time of the district court proceedings, Lucas was a Staff Sergeant in the Air Force with six years of service. Stacy’s job history was spotty, but she was approaching completion of her bachelor’s degree and worked part-time. Stacy pays child support to a third person for a child from a previous marriage.

[¶ 3] Lucas and Stacy each allege the other committed immoral or careless acts throughout the marriage. Each party claims to have been subjected to physical abuse from the other. Stacy alleges Lucas has a drinking problem; Lucas accuses Stacy of having at least one affair. Each claims to be the better parent, accusing the other of being lazy, messy, or disinterested. Neither indicates their daughter has been abused or neglected.

[¶ 4] Shortly before retiring, Judge Holum issued a memorandum opinion. His successor, Judge McLees, issued findings of fact, conclusions of law and an order for judgment consistent with that opinion, granting Lucas the care, custody, and control of the child. Stacy was provided visitation. Lucas’ parents were given temporary custody in the event he is sent on temporary duty (“TDY”) or is otherwise unable to care for the child. Stacy’s request for spousal support was denied without explanation.

II

[¶ 5] Stacy argues the district court erred by not making findings of fact regarding custody. Neither the memorandum'opinion nor the findings of fact evaluated the evidence presented to the district court in a “best interests of the child” analysis. See N.D.C.C. § 14-09-06.2. Stacy argues it is impossible to discern why or how the custody determination was made.

[¶ 6] Lucas argues it can be inferred from words used by the district court and evidence within the record that most or all of the “best interests” factors were considered. We decline Lucas’ invitation to scour the record and speculate as to what the district court may have found persuasive; we therefore reverse for appropriate factual findings.

[¶ 7] When making an initial custody determination, a trial court has a duty to serve the best interests of the child. DesLauriers v. DesLauriers, 2002 ND 66, ¶ 5, 642 N.W.2d 892. A court must weigh the “best interests of the child” factors set forth under N.D.C.C. § 14-09-06.2 when making such a decision. DesLauriers, at ¶ 5. The decision is subject to a “clearly erroneous” standard of review. Id. at ¶ 6; N.D.R.Civ.P. 52(a).

[¶ 8] Rule 52(a), N.D.R.Civ.P., requires a court to orally or in writing “find the facts specially and state separately its conclusions of law thereon.” The purpose of Rule 52(a) is to provide the appellate court with an understanding of the factual issues and the basis of the district court’s decision. DeForest v. DeForest, 228 N.W.2d 919, 924 (N.D.1975). A separate finding is not required for each of the “best interests” factors; however, the findings need to be stated with sufficient specificity to enable a reviewing court to understand the decision’s basis. Peek v. Berning, 2001 ND 34, ¶ 6, 622 N.W.2d 186.

[¶ 9] The district court’s memorandum opinion disparages both parents, more or less equally, but fails to evaluate the “best interests” factors or provide justification for the custody decision. Nevertheless, the court directed that Lucas retain the care, custody, and control of the child. When a district court provides no indication of the evidentiary and theoretical basis for its decision, the reviewing court is left to speculate whether factors were properly considered and the law was properly applied. Berg v. Berg, 2000 ND 36, ¶ 10, 606 N.W.2d 895. Our Court cannot perform its appellate court function under such circumstances. Id. We therefore reverse and remand for findings regarding custody.

Ill

[¶ 10] Stacy argues the district court erred in denying her spousal support. There were no findings made regarding spousal support in either the memorandum opinion or the findings of fact. Furthermore, she argues, the evidence would have supported an award in her favor. Lucas argues it can be inferred that the court considered spousal support. He also claims that because there is no finding that Stacy is a “disadvantaged spouse,” she is not eligible for support.

[¶ 11] A spousal support award should be based on consideration of the Ruff-Fischer guidelines, Staley v. Staley, 2004 ND 195, ¶ 8, 688 N.W.2d 182, and will be set aside on appeal only if clearly erroneous. Corbett v. Corbett, 2001 ND 113, ¶ 17, 628 N.W.2d 312. Here, there is no indication that the trial court considered the Ruff-Fischer guidelines.

[¶ 12] Spousal support is addressed in the memorandum opinion, which simply states, “Each party will pay his or her own attorney’s fees and neither will pay spousal support to the other.” The findings of fact and conclusions of law do not address support, and the judgment only indicates “[t]hat neither party shall receive or pay spousal support.”

[¶ 13] We have stated that without an understanding of the basis of a decision, review is not feasible, because it is impossible to know whether a mistake has been made. Berg, 2000 ND 36, ¶ 10, 606 N.W.2d 895. We reverse and remand for further findings regarding spousal support.

IV

[¶ 14] Stacy argues the district court erred in its award of potential temporary custody to Lucas’ parents. No findings of fact were made as to the determination. Conversely, Lucas argues the arrangement is in the child’s best interests and will not interfere with Stacy’s parent-child relationship. Additionally, he directs us to evidence in the record that supports such an arrangement.

[¶ 15] The district court judgment provides, “If Lucas should be ordered TDY or ordered to a situation where family cannot go with him then, in that event, Lucas’ parents shall have temporary custody.” Wfiiether this arrangement was intended by the district court to be “visitation” or “temporary custody” is unclear.

[¶ 16] Grandparent visitation is governed by N.D.C.C. § 14-09-05.1, which “specifically requires the district court to find that grandparent visitation would be in the best interests of the child and would not interfere with the parent-child relationship, as a prerequisite.” Schempp-Cook v. Cook, 455 N.W.2d 216, 217 (N.D.1990). Such findings of fact provide parties with what they are entitled to — a determination by the district court that is based upon a proper application of the law. Id. Furthermore, a motion by the grandparent requesting visitation privileges is required before a court may award grandparent visitation. Alvarez v. Carlson, 474 N.W.2d 79, 83 (N.D.1991). This requirement protects the rights of the parents or others who may oppose the request. Id. Although Lucas’ mother testified at trial, she made no motion for visitation and was not a party to the action.

[¶ 17] If the “grandparents’ care and custody” award is deemed custody rather than visitation, it is similarly improper. Although the rights of parents are not absolute, “ ‘[p]arents generally have a right to the custody and control of their children superior to the right of any other person.’ ” Botnen v. Lukens, 1998 ND 224, ¶ 5, 587 N.W.2d 141 (quoting Goter v. Goter, 1997 ND 28, ¶7, 559 N.W.2d 834). Furthermore, “an award of custody to the grandparents rather than to one or both of the child’s natural parents is clearly erroneous unless exceptional circumstances require that such a custody disposition be made” and it is in the best interests of the child. Botnen, at ¶ 6 (citing Hust v. Hust, 295 N.W.2d 316, 319 (N.D.1980)). Here, no “best interests” analysis was conducted, and we therefore have no way to review whether exceptional circumstances existed. The district court was clearly erroneous in its grandparent visitation/custody award and is reversed.

V

[¶ 18] On remand, the district court will need to make a Rule 63, N.D.R.Civ.P., certification prior to conducting further proceedings or, alternatively, order a new trial. The trial proceedings and hearings surrounding this case were heard by a judge who issued several orders, the final one being a memorandum opinion written in letter form. The case was reassigned following the initial judge’s retirement. The successor judge issued both original and amended findings of fact, conclusions of law, orders for judgment, and judgments.

[¶ 19] Rule 63, N.D.R.CivJP., requires that a successor judge certify he or she is familiar with the record and the case can be completed without prejudice. Additionally, the reasons for a judge’s substitution must be stated on the record. Weigel v. Weigel, 1999 ND 55, ¶ 8, 591 N.W.2d 123. A successor judge “must read and consider all relevant portions of the record” to certify familiarity. Id. at ¶ 9 (citing 12 James Wm. Moore, Moore’s Federal Practice § 63.04[3] (1998)). A new trial must be held if a successor judge lacks confidence in the record to resolve the case fairly and intelligently. Weigel, at ¶ 9.

[¶ 20] We reach no conclusion here whether the successor judge had familiarized himself with the record such that he could have or should have made a Rule 63 certification, nor do we hold that this case was appropriate for Rule 63 certification rather than a new trial. We instead note the lack of such a certification in these proceedings and call for the district court to determine the appropriate course of action on remand.

[¶21] We therefore reverse the judgment of the district court regarding custody, grandparent visitation or custody, and support, and remand for proceedings consistent with this opinion.

[¶ 22] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.


source: Caselaw Access Project

author: VANDE WALLE, Chief Justice.

license: Public Domain

text:
    2005 ND 174
    Karen RUUD, Plaintiff and Appellee v. Dan FRANDSON, Defendant and Appellant Judy Frandson, Jane MacLennan, and Amy Frandson, Defendants.
    No. 20050049.
    Supreme Court of North Dakota.
    Oct. 18, 2005.
    Rehearing Denied Nov. 9, 2005.

      Robert J. Lamont, Lamont Law Firm, P.C., Minot, ND, for plaintiff and appellee.
    Carol K. Larson, Pringle & Herigstad, P.C., Minot, ND, for defendant and appellant.
   VANDE WALLE, Chief Justice.

[¶ 1] Dan Frandson appealed from a declaratory judgment holding he does not farm the cropland he inherited under his mother’s will, thus enabling his sister, Karen Ruud, to exercise her option to purchase the cropland under a clause in the will. We affirm.

I

[¶ 2] Alice Frandson died testate in November of 1987. The last will and testament left certain parcels of real estate to her son Dan Frandson. Alice Frandson placed certain conditions on this bequest. The condition at issue in this case provides:

In the event that Dan chooses not to farm any or all of the cropland during a twenty (20) year period following my death, then my daughters, together or separately, shall have the option to purchase any portion of that cropland at a price of $80.00 per acre through 1991, and at one-third of its appraised value if purchased after 1991, with all of the proceeds to go to my beloved son, Dan.

[¶ 3] Dan Frandson continued to live and work on the cropland from Alice Frandson’s death in 1987 until 1991. In January 1991, Frandson left the farm and moved to Idaho. Frandson returned to the farm in February of 1993. While Frandson was away, he rented his farmland to a third party on a crop share basis. Frandson and the tenant entered into one-year crop share agreements for 1991 and 1992.

[¶ 4] Frandson returned and physically farmed the land until June of 1998. In 1998, Frandson and his wife attempted to obtain an operating loan and a loan to update the farm machinery. After failing to obtain the loan, Frandson entered into a crop share lease with his nephew, Jeffrey Ruud, for the 1998 crop year. Karen Ruud’s husband and her son, Jeffrey Ruud, were involved in negotiating the terms of the crop share lease. At Frand-son’s request, the term of the lease ran through the conclusion of the 20-year clause in the will. The parties entered into a lease and Frandson sold much of his farm equipment to Jeffrey Ruud. Frand-son again moved to Idaho.

[¶ 5] On September 25, 2002, Karen Ruud’s attorney sent a letter to Frandson informing Frandson that Karen Ruud desired to exercise her option to purchase the cropland based on the clause in the will. Frandson did not recognize the letter as a valid exercise of the option and Karen Ruud commenced this action. Ruud requested a declaratory judgment holding Frandson does not farm the cropland, thus allowing Karen Ruud to exercise her option to purchase the cropland in accordance with the terms of the will. The trial court found that Alice Frandson’s intent was for Dan Frandson to cultivate the land, till the soil, and raise the crops himself. The trial court ordered Dan Frand-son to sell the cropland to Karen Ruud in accordance with Alice Frandson’s will.

II

[¶ 6] “We decide for ourselves the construction of an unambiguous will.” Matter of Estate of Zimbleman, 539 N.W.2d 67, 70 (N.D.1995). “The testator’s intent, as expressed in the will, controls the legal effect of the testator’s dispositions.” Id. at 70-71; N.D.C.C. § 30.1-09-03. When we construe a will, our purpose “is to ascertain the testator’s intent as it appears from a complete consideration of the will given the surrounding circumstances.” Zimbleman, 539 N.W.2d at 71. The testator’s intent is determined “from the language of the will” if the language of the will is clear* and unambiguous. Id. “Whether an ambiguity exists in a will is a question of law for this court to decide.” Id. Questions of law are fully renewable, de novo, on appeal. Bladow v. Bladow, 2005 ND 142, ¶ 9, 701 N.W.2d 903. “A will provision is ambiguous if it can be given more than one interpretation or understood in more than one sense.” Zimbleman, 539 N.W.2d at 71.

[¶ 7] If a will is ambiguous, extrinsic evidence may be used to help clarify the ambiguity. Matter of Estate of Brown, 1997 ND 11, ¶ 15, 559 N.W.2d 818. A trial court’s resolution of an ambiguity in a will is a finding of fact that will not be set aside unless it is clearly erroneous. Id. at ¶ 15; Schatz v. Schatz, 419 N.W.2d 903, 907 (N.D.1988). “A competent testator may dispose of his property as he wishes without regard to the desires of prospective beneficiaries or the views of juries or courts so long as the terms of the will are not prohibited by law or opposed to public policy.” Stormon v. Weiss, 65 N.W.2d 475, 505 (N.D.1954). “ ‘An estate may be granted upon a condition, either express or implied, upon performance or breach of which the estate shall either commence, be enlarged, or be defeated.’ ” Blevins v. Pittman, 189 Ga. 789, 7 S.E.2d 662, 664 (1940). When there is a testamentary gift upon a condition that is accepted by the legatee, “the legatee must perform the condition however burdensome.” Crowley v. Nixon, 127 Kan. 178, 272 P. 104, 105 (1928).

[¶ 8] The question in this case is what Alice Frandson meant by the word “farming.” Both parties argue for different interpretations of this provision of the will. We agree this provision of the will is ambiguous. Dan Frandson argues the word farming in the will encompasses the definition of farming used by the United States Internal Revenue Service and the Farm Services Agency. But, the trial court’s determination that farming, as used in the will, requires Frandson to physically farm the land, is supported by the will and by evidence. We are not convinced by a definite and firm conviction that a mistake was made by the trial court.

[¶ 9] In finding that Alice Frandson intended Frandson to physically farm the land, the trial court considered extrinsic evidence. The record clearly indicates Frandson was physically farming the land when Alice Frandson created and signed her will, Frandson sold all of his farm equipment except one tractor, and Frand-son spends forty to fifty hours per year marketing his own grain, purchasing crop insurance, talking with his tenant, and reading farm magazines. We review these findings under the clearly erroneous standard. The trial court’s findings are supported by the evidence. We hold that the trial court’s findings are not clearly erroneous.

Ill

[¶ 10] Frandson argues that waiver and estoppel, although they appear nowhere in the pleadings and no motion to amend the pleadings was made, were impliedly tried through the introduction of evidence at trial. For an effective appeal on a proper issue, the issue must have been raised in the trial court so the trial court could rule on it. Kautzman v. Kautzman, 2003 ND 140, ¶ 10, 668 N.W.2d 59. Issues not raised in the trial court cannot be raised for the first time on appeal. Id. However, when an issue was not pled, N.D.R.Civ.P. 15(b) allows the pleadings to be amended so that they conform with evidence introduced at trial. Tormaschy v. Tormaschy, 1997 ND 2, ¶ 17, 559 N.W.2d 813. “Under N.D.R.Civ.P. 15(b), a pleading may be impliedly amended by the introduction of evidence which varies the theory of the case and which is not objected to on the grounds it is not within the issues in the pleadings.” Lochthowe v. C.F. Peterson Estate, 2005 ND 40, ¶8, 692 N.W.2d 120. “Amendment of pleadings by implication may only arise when the evidence introduced is not relevant to any issue pleaded in the case.” Id. at ¶ 8. This Court has explained:

Consent to try an issue outside the pleadings cannot be implied from evidence which is relevant to the pleadings but which also bears on an unpleaded issue.
“ “When the evidence that is claimed to show that an issue was tried by consent is relevant to an issue already in the case, as well as to the one that is the subject matter of the amendment, and there was no indication at trial that the party who introduced the evidence was seeking to raise a new issue, the pleadings will not be deemed amended under the first portion of Rule 15(b). The reasoning behind this view is sound since if evidence is introduced to support basic issues that already have been pleaded, the opposing party may not be conscious of its relevance to issues not raised by the pleadings unless that fact is specifically brought to his attention.’ ”

Mann v. Zabolotny, 2000 ND 160, ¶ 12, 615 N.W.2d 526 (citation omitted) (quoting Fleck v. Jacques Seed Co., 445 N.W.2d 649, 652 (N.D.1989)).

[¶ 11] Waiver and estoppel first appeared in Frandson’s post-trial brief. Frandson made no motion to amend the pleadings to expand the theory of his case from one of complying with Alice Frand-son’s intent as to the definition of farming to include one of waiver and estoppel. Amendment of the pleadings under these circumstances is not simply a technical requirement; its purpose is to provide notice to the opposing party and the trial court that the theory of the case is being changed or expanded. Neither did Frand-son present any evidence that would sufficiently notify Karen Ruud or the trial court that Frandson was expanding his theory to include waiver and estoppel, nor does it appear on this record that either Ruud or the trial court had notice of the theory until the post-trial brief was filed.

[¶ 12] At trial, Frandson’s counsel questioned Karen Ruud, Steve Ruud, and Dan Frandson about whether Karen Ruud ever gave Frandson notice that he was not complying with the will provision. On appeal, Frandson argues this line of questioning resulted in the trial of the issue of waiver by implied consent. The trial transcript shows questions relating to notice given to Frandson were tucked away in lines of questioning relating to whether Frandson was farming the land in compliance with the will provision. The questions relating to notice were relevant to and consistent with the theory that Frandson was in fact complying with the will provision. Many of these questions were phrased to ask the witnesses whether Karen Ruud expressed to Frandson that she thought he was not complying with the terms of the will. While the questions may arguably relate to whether Frandson was given notice, they most certainly relate to whether Frandson was farming the land as required by the will provision. These questions, including their placement, structure, and tone, were not enough to put Karen Ruud on notice of an expansion in Frandson’s theory of the case. In fact, Karen Ruud’s counsel asked similar questions of witnesses when trying to introduce evidence as to whether Frand-son was farming the land in compliance with the will provision. The evidence did not clearly notify Karen Ruud or the trial court that Frandson was expanding his theory to include one of waiver. The evidence was relevant to the theory of whether Frandson was complying with the terms of the will provision. Therefore, we cannot conclude Karen Ruud impliedly consented to trial of the theory of waiver.

[¶ 13] Frandson’s counsel also questioned Karen Ruud, Steve Ruud, and Dan Frandson about the Ruuds’ involvement in the lease negotiations between Frandson and Jeffrey Ruud. On appeal, Frandson claims this line of questioning resulted in the trial of estoppel by implied consent. The trial transcript shows that these questions are related to whether Frandson was ever told he was not complying with the will provision. While these questions may arguably relate to a theory of estoppel, they also relate to the pled issue of whether Frandson was farming the land in compliance with the will provision. At trial, questions about involvement in lease negotiations were immediately followed by questions asking whether Frand-son was ever told he was not complying with the terms of the will provision. This evidence is relevant to proof of whether Frandson was farming the land in compliance with the will provision. These questions would prove that if Frandson was not farming the land in compliance with the will provision, Karen Ruud would have told him that. It appears Frandson was trying to show that because Karen Ruud never mentioned that a lease was not in compliance with the will provision, she must have thought leasing on a crop-share basis was allowed under the will provision. This evidence, in the form of these questions, did not clearly notify Karen Ruud or the trial court that Frandson was expanding his theory to include one of estoppel. The evidence was relevant to the theory of whether Frandson was complying with the will provision. Therefore, we conclude Karen Ruud did not impliedly consent to trial of estoppel. Because of the lack of evidence at trial to sufficiently notify Karen Ruud or the trial court of the waiver and estoppel theory and the lack of a motion to amend the pleadings, there was no amendment of the pleadings by consent.

IV

[¶ 14] The judgment requiring Dan Frandson to sell Karen Ruud the cropland pursuant to Ruud’s option to purchase under the terms of Alice Frandson’s last will and testament is affirmed.

[¶ 15] DALE V. SANDSTROM, CAROL RONNING KAPSNER, MARY MUEHLEN MARING, and DANIEL J. CROTHERS, JJ., concur.


author: KAPSNER, Justice. VANDE WALLE, Chief Justice, MARING, Justice,

text:
    2005 ND 173
    FARMERS UNION MUTUAL INSURANCE COMPANY, Plaintiff, Appellee and Cross-Appellant v. Martin DECKER, Donald Decker, Gerald Decker, Jamie Iverson, and Rodney Iverson, Defendants, Appellants and Cross-Appellees.
    No. 20040371.
    Supreme Court of North Dakota.
    Oct. 18, 2005.

      William P. Zuger (argued), Bismarck, N.D., for defendants, appellants and cross-appellees.
    Ralph A. Vinje (appeared), Vinje Law Firm, Bismarck, N.D., for defendants, appellants and cross-appellees.
    Lawrence R. Klemin (argued) and David D. Schweigert, Bueklin, Klemin & McBride, Bismarck, N.D., for plaintiff, ap-pellee and cross-appellant.
   KAPSNER, Justice.

[¶ 1] Martin Decker, Donald Decker, Gerald Decker, Jamie Iverson, and Rodney Iverson (“Decker”) appeal the summary judgment denying insurance coverage. Farmers Union Mutual Insurance Co. (“Farmers Union”) cross-appeals portions of the trial court’s order including the award of attorney fees and costs in the underlying action. We affirm the summary judgment and reverse the award of attorney fees and costs in accordance with this opinion.

I

[¶ 2] This action arises from a motorcycle accident on the Decker farm. Jamie Iverson, a minor, was injured in the accident as the sole motorcycle rider. Gerald Decker owned the motorcycle, a 1970 Honda Trail 70. Decker has a general farm liability insurance policy issued by Farmers Union. Decker submitted the claim to Farmers Union. After Farmers Union refused coverage, Jamie Iverson and Rodney Iverson, Jamie’s father, sued Gerald Decker in the underlying lawsuit. Farmers Union again denied coverage. The complaint in the underlying lawsuit was amended. Following the amendment, Farmers Union retained an attorney to provide Decker with a defense in the underlying action. The parties to the underlying lawsuit entered into a Miller-Shu-gart settlement agreement assigning Decker’s claim ■ against Farmers Union to the Iversons. Farmers Union initiated a declaratory judgment action to determine coverage. Both parties filed summary judgment motions asserting their respective positions on whether the general farm liability policy provided coverage for Jamie Iverson’s injury. The trial court granted Farmers Union summary judgment concluding the accident was not covered because the motorcycle did not satisfy the requirements of the exception to the motor vehicle exclusion in the policy. The trial court awarded Decker attorney fees and costs incurred by Decker during his own representation in the underlying action.

II

[¶ 3] Interpretation of an insurance contract is a question of law, fully reviewable on appeal. Hanneman v. Continental Western Ins. Co., 1998 ND 46, ¶ 19, 575 N.W.2d 445. “[0]n appeal we fully review the issues by independently examining the insurance policy to determine if there is coverage.” Nationwide Mut. Ins. Companies v. Lagodinski, 2004 ND 147, ¶ 7, 683 N.W.2d 903.

[¶ 4] We have summarized the standards for construing an insurance policy:

Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract. While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others.

Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 6, 607 N.W.2d 898 (citations omitted).

[¶ 5] The contract provision at issue is the motor vehicle exclusion and the exception to that exclusion.

Exclusions from coverage in an insurance policy must be clear and explicit and are strictly construed against the insurer. Although this Court construes exclusionary provisions strictly, we do not automatically construe every insurance exclusion provision against an insurer and in favor of coverage for the insured. This Court will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. The insured still must prove he falls within an exception to the exclusion in order to benefit from coverage.

Nationwide Mut. Ins. Companies, 2004 ND 147, ¶ 9, 683 N.W.2d 903 (citations omitted). The relevant exclusion and exception provisions in Decker’s policy state: Coverage L — Personal Liability and Coverage M — Medical Payments to Others do not apply to bodily injury or property damage:

f. arising from the ownership, maintenance, operation, use, entrustment to others, loading, or unloading of:
(2) any motor vehicle loaned to an insured or which an insured owns, rents, or operates. Coverage applies on the insured location if the motor vehicle is subject to be licensed for use on public roads and it is unlicensed and it is used exclusively on the insured location, or is kept there in dead storage.
[¶ 6] Motor vehicle is defined as: a. a motorized land vehicle ... designed for travel on public roads or subject to motor vehicle registration; b. a motorized golf cart, snowmobile, all terrain vehicle, or other motorized land vehicle owned by an insured and designed for recreational use off public roads.

A

[¶ 7] Decker argues the motor vehicle exclusion does not apply because the motorcycle was not subject to motor vehicle registration; therefore, it was not a motor vehicle. Decker relies on the director of the North Dakota Motor Vehicle Registration’s affidavit concluding the motorcycle was not eligible for registration and licensure because of equipment violations. Decker incorrectly concludes that whether the motorcycle is a motor vehicle depends on its eligibility for motor vehicle registration. Under a policy containing a similar definition of motor vehicle, we stated, “The [vehicle] was designed for travel on public roads; thus, the vehicle was a motor vehicle as defined by the plain language of the policy.” Nationwide Mut Ins. Companies, 2004 ND 147, ¶ 13, 683 N.W.2d 903. The reference in the definition to a vehicle being “subject to motor vehicle registration” is an alternate basis for qualification as a motor vehicle and is not an additional requirement if the vehicle in question is designed for travel on public roads. The trial court correctly concluded the motorcycle is a motor vehicle under the policy. Therefore, the accident is excluded from coverage under the motor vehicle exclusion unless the exception applies.

B

[¶ 8] Farmers Union argues the accident is not covered because the motorcycle does not satisfy the requirements of the exception to the motor vehicle exclusion. The exception to the exclusion requires that the incident occurred on the insured location, that the motor vehicle is subject to be licensed for use on public roads, that the motor vehicle is unlicensed, and that it is used exclusively on the insured location. The fact the accident occurred on the insured location and the motorcycle was unlicensed are undisputed. To fall within the exception to the motor vehicle exclusion, the evidence must show that the motorcycle was subject to be licensed and was used exclusively on the insured location.

[¶ 9] Similar to Decker’s position that the motor vehicle exclusion does not apply because the motorcycle was not subject -to vehicle registration due to its equipment violations, Farmers Union first argues the exception’s language “subject to” means the motorcycle had to be equipment-ready for licensure on the date of the accident because this is an occurrence policy. The trial court disagreed stating:

The sentence “subject to be licensed for use on public roads” is intended to mean that if the policy-holder wished to use the vehicle on public roads, he could do so only after obtaining a license to do so. The wording does not mean that the vehicle must be fit for registration or licensing at this exact moment in time.

The word “subject,” as used in the policy, means “under the authority or control of.” Webster’s New World Dictionary 1417 (2d ed.1980); see also Kimball v. New England Guar. Ins. Co., 642 A.2d 1347, 1349 (Me.1994). The trial court correctly found the language of the policy does not require the vehicle to be equipment-ready for li-censure on the date of the accident. The plain language of the exception means that if the vehicle were used on public roads, it would be subject to North Dakota license and registration requirements.

[¶ 10] Farmers Union argues the motorcycle did not satisfy the last element of the exception requiring that the motor vehicle is used exclusively on the insured location. Decker admitted to using the motorcycle at a resort off the insured property but argues the resort was a temporary residence under the policy. Under the policy, “insured location” is defined as:

a. all farm locations which you own, rent, or operate or other locations you maintain as a residence premises. “Insured location” also includes
c. locations in which you temporarily reside but do not own;

The policy does not define “temporarily reside.” The issue is whether Decker was “residing” at the resort during his camping trip. “The plain and ordinary meaning of reside is ‘to dwell permanently or for a considerable time.’ ” Ctr. Ins. Co. v. Blake, 370 F.Supp.2d 951, 957 (D.N.D.2005) (quoting Webster’s Unabridged Dictionary (2d ed.1997)). Decker’s brief summer camping trip is not a “considerable time.” “Temporarily reside” clearly contemplates a longer stay than this brief onetime camping trip. If “temporarily reside” were defined as Decker argues, any location an insured stayed overnight would become an “insured location.” This interpretation defies common sense. “We will not strain the definition of an undefined term to provide coverage.” Nationwide Mut. Ins. Companies v. Lagodinski, 2004 ND 147, ¶ 8, 683 N.W.2d 903. Because the motorcycle was not used exclusively on an insured location, it does not satisfy the requirements of the exception to the motor vehicle exclusion and we affirm the trial court’s order denying coverage.

[¶ 11] In response to this holding, the dissent suggests the court should go further and decide whether use of the motorcycle off the farm premises occurred outside the policy term. We decline to do so because the issue was not raised or argued to the trial court. It was first mentioned in Decker’s reply brief on appeal, and then without citation to authority. This Court held reargument and asked for briefing on this issue and on the timeliness of its being raised. At reargument, the parties confirmed the record did not contain crucial evidence connected to the argument such as the identity of the insurer when the motorcycle was used off the insured premises in 2000, whether the policy under which coverage was sought was the same, or a new, or continuation of the policy in effect when off-farm use occurred, or (if in fact there were multiple policies) whether they had identical provisions. Based on this record, we decline to address the argument because issues not timely raised or adequately briefed are deemed waived. Riverside Park Condominiums Unit Owners Association v. Lucas, 2005 ND 26, ¶34, 691 N.W.2d 862; Riemers v. Grand Forks Herald, 2004 ND 192, ¶ 11, 688 N.W.2d 167; State v. Koble, 2000 ND 29, ¶ 5, 606 N.W.2d 521. Consequently, we do not decide whether use of the motorcycle off the insured location outside the policy term impacts the exception to the motor vehicle exclusion.

Ill

[¶ 12] Farmers Union argues the trial court erred by awarding Decker attorney fees for defending the underlying action. Farmers Union argues the duty to defend did not arise until Iverson filed the amended complaint. Farmers Union argues there was no possibility of coverage based on the original complaint’s allegations. After the complaint was amended, Farmers Union provided Decker a defense admitting it contained allegations that could possibly be covered under the policy. Farmers Union paid for the defense of the amended complaint through settlement. The trial court determined Farmers Union duty to defend arose when the claim was originally asserted against Decker.

[¶ 13] Attorney fees are recoverable as damages if the insured can show a breach of the insurer’s duty to defend. State Farm Fire & Cas. Co. v. Sigman, 508 N.W.2d 323, 326 (N.D.1993); Prince v. Universal Underwriters Ins. Co., 143 N.W.2d 708, 717 (N.D.1966); see also Am. Family Ins. Co. v. Dewald, 597 F.2d 1148, 1151 (8th Cir.1979). Although the duty to defend is broader than the duty to indemnify under an insurance policy, the duty to defend is generally determined by the allegations of an injured claimant. Where the claims against the insured potentially come within the coverage provisions of the policy, the insurer has a duty to defend. While the trial court acknowledged our jurisprudence on determining the duty to defend, citing Applegren v. Milbank Mut. Ins. Co., 268 N.W.2d 114, 116 (N.D.1978); Kyllo v. Northland Chem. Co., 209 N.W.2d 629, 634 (N.D.1973); Schultze v. Cont’l Ins. Co., 2000 ND 209, ¶ 8, 619 N.W.2d 510, it nevertheless held Farmers Union’s duty to defend began when the original claim was asserted against Decker. This is inconsistent with its holding that a motorcycle is a motor vehicle excluded from coverage under the terms of the policy.

[¶ 14] An insurer does not have a duty to defend an insured if there is no possibility of coverage under the policy. Schultze, 2000 ND 209, ¶8, 619 N.W.2d 510. We have defined when the duty to defend arises:

A liability insurer’s obligation to defend its insured is ordinarily measured by the terms of the insurance policy and the pleading of the claimant who sues the insured. If the allegations of the claimant’s complaint could support recovery upon a risk covered under the insurer’s policy, a liability insurer has a duty to defend its insured. We have formulated the duty to defend to require a liability insurer to defend an underlying action against its insured if the allegations in the complaint give rise to potential liability or a possibility of coverage under the insurance policy.

Id. (citations omitted).

[¶ 15] The original complaint alleged the accident occurred on a dirt bike motorcycle on the farm and fell within the motor vehicle exclusion. The duty to defend is measured by the terms of the policy and the pleading of the claimant who sues the insured. Applegren, 268 N.W.2d at 116 (citing Kyllo v. Northland Chemical Co., 209 N.W.2d 629, 634 (N.D.1973); Eichler Homes, Inc. v. Underwriters at Lloyd’s, London, 238 Cal.App.2d 532, 47 Cal.Rptr. 843, 847 (1965)). After Farmers Union denied coverage based upon the original complaint, Iverson hired an attorney with experience in insurance litigation to add specific language to the complaint that would bring the allegations within the insurance policy’s coverage. The amended complaint inserted the following language that could possibly bring the accident within the exception to the motor vehicle exclusion.

5
The motorcycle was designed for travel on public roads and was subject by law to licensure if used upon the public roads.
6
The motorcycle was not, however, used on the public roads, but was operated exclusively upon the defendant’s premises, or in other places not owned by the defendant, off the public roads, where the defendant was physically present, residing on a temporary basis.

An insurer does not have a duty to defend unless there is a possibility of coverage contained in the allegations of the claimant’s complaint. Schultze, 2000 ND 209, ¶8, 619 N.W.2d 510. Where an insurer has rightfully denied coverage, the insurer’s duty may be revived by the insured’s new allegations that possibly bring the claim within the scope of the policy’s provisions. Senger v. Minnesota Lawyers Mut. Ins. Co., 415 N.W.2d 364, 370 (Minn.Ct.App.1987). Farmers Union’s duty to defend arose when the complaint was amended.

[¶ 16] This Court has not previously decided when an insurer’s responsibility for attorney fees arises after a complaint is amended to include a possibility of coverage thereby reviving the insurer’s duty to defend. A review of jurisdictions deciding this issue concludes an insurance company is only responsible for the portion of attorney fees incurred from the time the duty to defend arose. See Lafarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d 389, 397 (5th Cir.1995); Auto Owners Ins. Co. v. Tripp Constr., Inc., 821 So.2d 1157, 1159 (Fla.Dist.Ct.App.2002). Therefore, Farmers Union was only obligated to pay Decker’s defense after the amended complaint. We reverse the award of attorney fees incurred before the complaint was amended and the duty to defend arose.

IV

[¶ 17] We affirm the summary judgment denying insurance coverage and reverse the award of attorney fees and costs incurred by Gerald Decker in his own representation in the underlying action.

[¶ 18] DALE V. SANDSTROM and DANIEL J. CROTHERS, JJ., concur.

VANDE WALLE, Chief Justice,

concurring in part and dissenting in part.

[¶ 19] I concur with the majority opinion insofar as it determines the questions raised in Decker’s original brief on appeal. I disagree with the final disposition.

[¶ 20] I would not go as far as the dissent appears to do in placing the entire responsibility on the court to interpret the insurance contract as a whole and enforce it if there is coverage, notwithstanding the issues raised by the parties. But, in this instance, I agree with the dissent to the extent that the issue of the timing of the events under the terms of the policy is so elementary to the issue of coverage that the court should consider the matter even where, as here, the precise argument was not made until the reply brief was filed. Although that procedure might appear to allow an appellant to ignore the appellate rules and case law governing appellate procedure, the court should be in a position to determine when the issue is legitimate and legitimately raised and when it is not.

[¶ 21] I also agree with the dissent insofar as it concludes there was coverage under the terms of the policy because the use upon which Farmers Union denied coverage took place prior to the term of the policy and not during the policy period.

[¶ 22] Gerald W. VandeWalle, C.J.

MARING, Justice,

dissenting.

[¶ 23] I respectfully dissent from the majority opinion.

[¶ 24] Farmers Union issued a Farm Liability Insurance Policy to the Deckers. The term of the policy covering this accident was from November 25, 2001, to November 25, 2002. Our Court has said:

Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. “If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract.” While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others.

Nationwide Mut. Ins. Cos. v. Lagodinski, 2004 ND 147, ¶ 8, 683 N.W.2d 903 (quoting Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 6, 607 N.W.2d 898). The Farm Liability Insurance Policy, under Coverage L — Personal Liability, provides indemnification for damages for which an insured is found hable because of bodily injury. Under the policy, “[bjodily injury” means “physical injury to a person caused by an occurrence.” The policy defines occurrence to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the 'policy period, in a. bodily injury; or b. property damage.” (Emphasis added.) “Generally, an ‘occurrence’ policy provides coverage if the event insured against takes place within the policy period, regardless of when the injured party makes a claim.” Kief Farmers Coop. Elevator Co. v. Farmland and Mut. Ins. Co., 534 N.W.2d 28, 36 (N.D.1995). The policy also contains an exclusion from Coverage L, commonly known as the “motor vehicle” exclusion. The purpose for this exclusion is also commonly known. Insurance companies issuing farm liability policies wish to avoid insuring the risks attendant to motor vehicles driven on public roads. Those are risks covered by automobile or motorcycle policies. Farmers Union in fact stated this very reason in its appellee’s brief:

The reason for the “motor vehicle” exclusion should be obvious. This is a farm liability insurance policy, it is not a motor vehicle insurance policy. Farmers Union Mutual also sells motor vehicle insurance and does not provide insurance coverage for motor vehicles in a farm liability insurance policy, except under the very limited circumstances covered in the exception to the exclusion.

[¶ 25] The exception to the motor vehicle exclusion states:

(2) ... Coverage applies on the insured location if the motor vehicle is subject to be licensed for use on public roads and it is unlicensed and it is used exclusively on the insured location, or is kept there in dead storage.

Exclusions for Coverage L 1(f)(2). The farm liability policy, therefore, does provide coverage for unlicensed motor vehicles used solely on the farm premises.

[¶ 26] The motorcycle involved in this case was never driven on public roads and from July 1999, when it came into Gerald Decker’s possession, to June 23, 2002, the date of the accident, was never registered. The owner, Gerald Decker, decided not to register this motorcycle and never intended to operate it on any public road. The motorcycle was used off the farm premises once at a campsite in the summer of 2000. That was two years before the accident on June 23, 2002, and not during the policy period covering the accident. The policy period was annual and was from November 25, 2001, to November 25, 2002. During that policy period, the motorcycle was used exclusively on the “insured location” or farm premises. The exception to the exclusion, therefore, provides coverage for this accident. This accident, which occurred on the farm premises with an unlicensed motorcycle used exclusively on the farm premises, is the very type of liability risk intended to be covered by the exception to the exclusion of this Farm Liability Insurance Policy. The coverage provided by the exception to the exclusion is for motor vehicles subject to be licensed, but unlicensed. It would not make any sense to exclude this motorcycle forever from coverage because of one use off-premises that occurred outside the policy period. I conclude there is coverage for the motorcycle accident and alleged bodily injury.

[¶ 27] Because it was not specifically raised until Decker’s reply brief, the majority declines to address whether the “exclusive use” of the unregistered motor vehicle on the “insured’s location” must occur during the life of the motor vehicle or only during the policy period. “The construction of a written contract to determine its legal effect is a question of law for the court to decide and, on appeal, we independently examine and construe the contract to determine if the trial court erred in its contract interpretation.” Moen v. Meidinger, 547 N.W.2d 544, 546 (N.D.1996); State ex rel. State Fire and Tornado Fund of North Dakota Ins. Dep’t v. North Dakota State University, 2005 ND 75, ¶ 12, 694 N.W.2d 225. Section 9-07-06, N.D.C.C., requires that a contract be interpreted as a whole. The primary goal is to give effect to the mutual intent of the parties. N.D.C.C. § 9-07-03. “The parties’ intent must be ascertained from the entire instrument, and every clause, sentence, and provision should be given effect consistent with the main purpose of the contract.” U.S. Bank, Nat’l Ass’n v. Koenig, 2002 ND 137, ¶ 8, 650 N.W.2d 820. We have said: “It is an important function of the courts to ‘maintain and enforce contracts, unless it clearly appears they contravene public policy or express law.’ ” Continental Casualty Co. v. Kinsey, 499 N.W.2d 574, 580 (N.D.1993) (quoting Seher v. Woodlawn School Dist. No. 26, 79 N.D. 818, 59 N.W.2d 805, 810 (1953)). I am of the opinion that it is our Court’s responsibility to interpret the insurance contract as a whole and enforce it if there is coverage.

[¶ 28] Further, Farmers Union brought the action as one for declaratory relief under N.D.C.C. ch. 32-28, requesting that the court enter judgment “construing the provisions of the Farm Liability Insurance Policy issued by Farmers Union to Deckers and adjudging that the policy does not provide coverage.” Chapter 32-23, N.D.C.C., is a uniform law adopted in North Dakota in 1923. The following provisions of the Declaratory Judgments Act are relevant in this case:

A court of record within its jurisdiction shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. N.D.C.C. § 32-23-01.

Any person interested under a deed, will, written contract, or other writings constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and may obtain a declaration of rights, status, or other legal relations thereunder.

N.D.C.C. § 32-23-02.

This chapter is remedial. Its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and it is to be construed and administered liberally.

N.D.C.C. § 32-23-12.

[¶ 29] The dispute in this case directly involves the construction of the insurance contract and whether the insured is entitled to coverage under its terms. The purpose of the Declaratory Judgments Act is “to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations” in an underlying justiciable controversy. Riverside Park Condominiums Unit Owners Ass’n v. Lucas, 2005 ND 26, ¶ 25, 691 N.W.2d 862; N.D.C.C. § 32-23-12. “Our declaratory judgment act is by its own terms remedial and is to be construed and administered liberally.” Iverson v. Tweeden, 78 N.D. 132, 48 N.W.2d 367, 371 (1951); N.D.C.C. § 32-23-12. I am of the opinion that when a court undertakes to declare the rights of parties under an insurance contract in a declaratory judgment action, it must review the contract as a whole. The court cannot ignore terms of the contract relevant to the declaration of the rights of the parties.

[¶ 30] Finally, our Court is no stranger to addressing issues on appeal that were not raised or briefed to the trial court or on appeal. See State v. Keller, 2005 ND 86, 695 N.W.2d 703; Tank v. Tank, 2004 ND 15, 673 N.W.2d 622.

[¶ 31] I also am of the opinion that Farmers Union is liable for all the attorney’s fees and costs incurred by the insured for the defense of the tort action. I dissent from that part of the majority’s opinion that concludes Farmers Union is only obligated to pay Decker’s attorney’s fees after the amended complaint.

[¶ 32] Our Court has endorsed the view that “an insured purchases liability insurance for protection from litigation expense.” State Farm Fire and Casualty Co. v. Sigman, 508 N.W.2d 323, 326 (N.D.1993). The insured has a contractual right to have the insurer defend him against actions at the insurer’s expense. The duty to defend is broader than the duty to indemnify. See Hart Constr. Co. v. American Family Mut. Ins. Co., 514 N.W.2d 384, 389 (N.D.1994). We have followed the general rule that an insurer’s duty to defend is measured by the terms of the insurance policy and the allegations of the plaintiffs complaint. Kyllo v. Northland Chemical Company, 209 N.W.2d 629, 634 (N.D.1973); Applegren v. Milbank Mutual Insurance Co., 268 N.W.2d 114, 118 (N.D.1978). Our decisions in Kyllo and Applegren, however, “require an insurer to defend actions against an insured if the allegations in the complaint against the insured give rise to potential liability or a possibility of coverage under the language in the insurance policy.” National Farmers Union Prop, and Cas. Co. v. Kovash, 452 N.W.2d 307, 309 (N.D.1990) (emphasis added). See 14 Couch on Insurance, 3d § 200:12 (1999). “Generally, where there is doubt as to whether the duty to defend exists, such doubt is resolved in favor of the insured.” Kyllo, 209 N.W.2d at 634. Our Court, in Kyllo, quoting Hartford Accident & Indemnity Co. v. Pacific Indemnity Co., 249 Cal.App.2d 432, 57 Cal.Rptr. 492 (1967), embraced the view that when there is doubt as to whether the injured party’s complaint stated facts sufficient to bring the injury within the coverage “the insurer is obligated to undertake the defense of the action and to continue such defense at least until it appears that the claim is not covered by the policy.” Id.

The underlying complaint need not track the policy language for there to be coverage as, under the liberal rules of notice pleading, [the] complaint need only indicate the type of litigation involved so that [the] insurer would have fair notice of the claim and its defenses.

14 Couch on Insurance § 200:18 (1999); Franklin v. Western Nat. Mut. Ins. Co., 574 N.W.2d 405, 407 (Minn.1998) (holding, “the words of the complaint need not precisely match the words of the policy, they must simply put the insurance company on notice of a claim within the policy coverage”). In the present case, the injured party would have had to allege in his complaint that the motorcycle he was riding was “used exclusively” on the “insured location” for a duty to defend to arise according to the majority opinion. Yet the injured party who brings the action against the insured is not ordinarily drafting a pleading to address a question of coverage that may arise between the insured and insurer. An insured’s right to a defense should not be made to depend upon the precision of a third party’s pleading.

[¶ 33] In addition, North Dakota has notice pleading under which a complaint need contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” N.D.R.Civ.P. 8(a); Tibert v. Minto Grain, LLC, 2004 ND 133, ¶ 18, 682 N.W.2d 294. “North Dakota’s rules do not require plaintiffs to ‘allege every element of their claim.’ ” Id. (quoting Kaler v. Kraemer, 1998 ND 56, ¶ 7, 574 N.W.2d 588). The missing fact in the complaint in the present case is one that would likely not even be known by a plaintiff bringing the cause of action. The allegations of the complaint therefore should be reasonably interpreted in determining whether the claims are within the coverage and any doubt or ambiguity resolved in the insured’s favor.

[¶ 34] If we examine the allegations of the complaint, the only fact alleged in the amended complaint and not in the original complaint is that the motorcycle was used exclusively on the insured location. Farmers Union knew from the original complaint that an “occurrence,” an accident resulting in bodily injury, was alleged to have occurred because of the use of a trail bike on its insured’s farm premises. The missing fact that would clearly bring the claim within the coverage of the exception to the exclusion, however, can be inferred from the type of motor vehicle involved, which was an unregistered dirt bike, and from the location of the accident, which was the insured’s farm premises. Here, the allegations of the complaint give rise “to potential liability or a possibility of coverage under the insurance policy.” National Farmers Union Prop, and Cas. Co. v. Kovash, 452 N.W.2d 307, 309 (N.D.1990); see Fisher v. Am. Family Mut. Ins. Co., 1998 ND 109, ¶6, 579 N.W.2d 599.

[¶ 35] Under North Dakota law, an insurer who questions its duty to defend can very quickly obtain an answer by bringing a declaratory judgment action for a decision on its duty to defend. N.D.C.C. § 32-23-06. An insurer has a remedy to resolve issues of doubtful coverage and duty to defend. See Mobile Oil Corporation v. Maryland Cas. Co., 288 Ill.App.3d 743, 224 Ill.Dec. 237, 681 N.E.2d 552, 560 (1997) (holding that “[w]hen an underlying complaint presents an issue of potential insurance coverage, and the insurer believes that the policy does not cover the claim, the insurer may not refuse to defend the insured, but must either defend the suit under a reservation of rights or seek a declaration of no coverage”).

[¶ 36] Considering the purpose of the Farm Liability Insurance Policy, the grant of coverage under the exception to the exclusion, the inferences that can be reasonably drawn from the allegations of the complaint, and the “potential” or “possibility” of coverage for the accident, the duty to defend arose at the time of the original complaint.

[¶ 37] I would reverse the summary judgment and hold that the Farmers Union policy provides coverage, affirm the entire award of attorney’s fees for the defense of the tort action, and remand for an award of attorney’s fees for the defense of the declaratory judgment action.

[¶ 38] Mary Muehlen Maring


author: MARING, Justice.

text:
    2005 ND 179
    Keith A. ERNST & Debra L. Egge, in their own rights and interests and as assignees of Shane Kadoun, d/b/a Kadoun Hardwood Flooring, Plaintiffs and Appellants v. ACUITY, a Mutual Insurance Company as insurer of Shane Kadoun, d/b/a Kadoun Hardwood Flooring, Defendant and Appellee.
    No. 20050128.
    Supreme Court of North Dakota.
    Oct. 24, 2005.

      Bruce A. Schoenwald, Stefanson, Plam-beck, Foss & Fisher, Moorhead, MN, for plaintiffs and appellants.
    Erin M. Conroy (argued) and Richard N. Jeffries (on brief), Jeffries, Olson & Flom, PA, Fargo, ND, for defendant and appellee.
   Opinion of the Court by MARING, Justice.

MARING, Justice.

[¶ 1] Keith Ernst and Debra Egge have appealed from a summary judgment dismissing their action seeking recovery of insurance proceeds. We affirm, concluding coverage was excluded by a business risk exclusion in the policy.

I

[¶ 2] In 2003, Ernst and Egge (collectively “Ernst”) purchased approximately 2,300 square feet of pre-finished maple flooring for their home. They contracted with Shane Kadoun, doing business as Ka-doun Hardwood Flooring, to install the flooring, and paid Kadoun $8,000.

[¶ 3] After Kadoun had installed approximately half of the flooring, Ernst became concerned about the quality of Kadoun’s workmanship and whether he was following the manufacturer’s installation instructions. Ernst alleges Kadoun did not properly prepare the subflooring, failed to properly acclimatize the flooring, did not leave expansion joints, failed to cull out defective boards, and used improper fasteners which caused the installed boards to split and lift. Ernst also contends Kadoun intended to install a portion of the flooring parallel to the floor joists. Ernst claims that, as a result of Kadoun’s failure to follow the manufacturer’s instructions, the flooring was uneven and unstable, with low spots, high spots, loose boards, and uneven boards.

[¶ 4] When Ernst questioned the quality of the work and the deviations from the manufacturer’s instructions, Kadoun walked off the job and abandoned the project. Upon the recommendation of a representative of the flooring manufacturer and other hardwood flooring specialists, Ernst had the flooring Kadoun had installed removed and reinstalled new flooring.

[¶ 5] In March 2003, Ernst sued Kadoun for damages for improper installation of the flooring. Ernst sought recovery for the costs of removal of the improperly installed flooring, purchase of replacement flooring, and installation of the new flooring. Kadoun tendered defense of the claim to Acuity, from whom he had acquired a commercial general liability insurance policy. Acuity denied coverage and refused to accept defense of the claim against Kadoun. Ernst and Kadoun ultimately agreed to a Miller-Shugarb settlement of the claim, whereby Kadoun agreed to pay $10,000 to Ernst and agreed to entry of judgment against him for an additional $18,116.53 plus costs and attorneys fees, with the judgment only to be collected from the proceeds of his insurance policy with Acuity.

[¶ 6] Ernst then commenced garnishment proceedings and served a supplemental complaint upon Acuity, seeking recovery of the judgment from the proceeds of the policy. On cross-motions for summary judgment, the trial court concluded there was no coverage under the policy, because Kadoun’s conduct was not an “occurrence” under the policy and also fell within a policy exclusion. The court granted Acuity’s motion for summary judgment, and judgment was entered dismissing Ernst’s action against Acuity. Ernst appealed, alleging that Kadoun’s conduct constituted an occurrence under the policy and that no policy exclusions apply to defeat coverage.

II

[¶ 7] Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no disputed genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Miller v. Diamond Res., Inc., 2005 ND 150, ¶8 703 N.W.2d 316. Whether the trial court properly granted summary judgment is a question of law that we review de novo on the entire record. Id.

[¶ 8] The interpretation of an insurance contract is a question of law that is fully reviewable on appeal, and we independently examine and construe the contract to determine whether the district court’s interpretation is erroneous. State v. North Dakota State Univ., 2005 ND 75, ¶ 12, 694 N.W.2d 225; Nationwide Mut. Ins. Cos. v. Lagodinski, 2004 ND 147, ¶ 7, 683 N.W.2d 903. When a case involves the legal effect of terms in an insurance contract, we fully review the issues on appeal by independently examining the policy to determine if there is coverage. Nationwide, at ¶ 7.

[If 9] We have summarized our standards for construing an insurance policy:

Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. “If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract.” While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others.

North Dakota State Univ., 2005 ND 75, ¶ 12, 694 N.W.2d 225 (quoting Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 6, 607 N.W.2d 898).

[¶ 10] Exclusions from coverage in an insurance contract must be clear and explicit and are to be strictly construed against the insurer. North Dakota State Univ., 2005 ND 75, ¶ 18, 694 N.W.2d 225; Grinnell Mut. Reinsurance Co. v. Lynne, 2004 ND 166, ¶22, 686 N.W.2d 118. We will not rewrite a contract to impose liability on an insurer if the policy expressly and unambiguously excludes coverage. North Dakota State Univ., at ¶ 13.

Ill

[¶ 11] Ernst contends the trial court erred in concluding that Kadoun’s improper installation of the flooring was not an “occurrence” which would trigger coverage under the policy and in concluding that, even if it was an occurrence, coverage was expressly excluded. Acuity argues that Kadoun’s conduct was not an occurrence under the policy and that coverage is precluded by both intentional act and business risk exclusions to the policy. We conclude that coverage for the damages sought by Ernst is expressly and unambiguously excluded under a business risk exclusion to the policy. For purposes of this appeal, we will assume, without deciding, that Kadoun’s actions constituted an occurrence which would otherwise trigger coverage under the policy.

[¶ 12] The relevant policy provision is exclusion k(5), which provides that coverage does not apply to property damage to:

That particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operations ....

[¶ 13] This Court construed a virtually identical business risk exclusion in Grinnell Mut. Reinsurance Co. v. Lynne, 2004 ND 166, 686 N.W.2d 118. In Grinnell, a homeowner had hired a contractor to raise his house off its foundation, remove the old foundation, and construct a new foundation under the house. While the house was lifted, it fell off of support jacks and dropped approximately three feet into the basement. The homeowner sued the contractor for damages to the house, and the contractor’s insurer, Grinnell, denied coverage based upon the business risk exclusion.

[¶ 14] In concluding that the business risk exclusion precluded coverage for damages to the house, this Court noted that the purpose of such exclusions “is to prevent policyholders from converting liability insurance into protection from foreseeable business risks” and that “[a] commercial liability insurance policy is not meant to act as a warranty of the insured’s work.” Grinnell, 2004 ND 166, ¶¶16, 18, 686 N.W.2d 118. Quoting from Glens Falls Ins. Co. v. Donmac Golf Shaping Co., 203 Ga.App. 508, 417 S.E.2d 197, 200 (1992), the Court distinguished damages occurring to the project itself from damage to property other than the completed project:

The exclusions from coverage for property damage contained in paragraphs j., m. and n. and other similar exclusions in the CGL policy are generally referred to as “business risk” exclusions, and are designed to exclude coverage for defective workmanship by the insured causing damage to the project itself. Gary L. Shaw Builders v. State Auto. Mut. Ins. Co., 182 Ga.App. 220, 223 (355 S.E.2d 130) (1987); Elrod’s Custom Drapery Workshop v. Cincinnati Ins. Co., 187 Ga.App. 670 (371 S.E.2d 144) (1988). The principle behind such exclusions is based on the distinction made between two kinds of risk incurred by a contractor such as Donmac. The first is the business risk borne by the contractor to replace or repair defective work to make the building project conform to the agreed contractual requirements. This type of risk is not covered by the CGL policy, and the “business risk” exclusions in the policy make this clear. Gary L. Shaw, supra at 224, 355 S.E.2d 130. The second is the risk that the defective or faulty workmanship will cause injury to people or damage to other property. Because of the potentially limitless liability associated with this risk, it is the type for which CGL coverage is contemplated. Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788, 791 (N.J.1979). “While it may be true that the same neglectful craftsmanship can be the cause of both a business expense of repair and a loss represented by damage to persons and property, the two consequences are vastly different in relation to sharing the cost of such risks as a matter of insurance underwriting_The risk intended to be insured is the possibility that the goods, products or work of the insured, once relinquished or completed, will cause bodily injury or damage to property other than to the product or completed work itself, and for which the insured may be found liable. The insured, as a source of goods or services, may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable because it is lacking in some capacity. This may even extend to an obligation to completely replace or rebuild the deficient product or work. This liability, however, is not what the coverages in question are designed to protect against. The coverage [applicable under the CGL policy] is for tort liability for ... [injury to persons and damage to other property] and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained .... ”

Grinnell, at ¶ 18.

[¶ 15] Applying this distinction between damage to the project itself and damage to other property, the Court concluded that the “particular part of real property” the contractor was working on was the entire house. Id. at ¶ 25. Accordingly, the Court held that any and all damage to the house resulting from the contractor’s work was not covered because it was excluded under the business risk exclusion. Id.

[¶ 16] The clear holding of Grin-nell is that the business risk exclusion precludes coverage for damages to the project itself and to the cost of repairing defective work. As succinctly stated in 9A Lee R. Russ and Thomas F. Segalla, Couch on Insurance § 129.12 (3d ed.1997), business risk exclusions exclude coverage for “the expense of restoring, repairing, or replacing the insured’s defective work.” All of the damages claimed by Ernst relate to the cost of removing and replacing Ka-doun’s defective work. Although claimed damage to the flooring and baseboards constitutes damage to property, it is damage to the project itself or damage directly related to the repair or replacement of the defective work. Under these circumstances, we conclude the business risk exclusion applies and precludes coverage.

[¶ 17] Ernst argues that, under Fisher v. American Family Mut. Ins. Co., 1998 ND 109, 579 N.W.2d 599, the exclusion should be strictly construed against Acuity and coverage found. In Fisher, the Court considered application of a business risk exclusion similar to the one in this case. The Court interpreted the policy provision to include a temporal element and concluded that it “excludes coverage only for property damage during the time [the contractor] worked upon the property.” Id. at ¶ 10. Because the damages in Fisher did not arise until several months after the contractor had completed the project, the Court concluded the exclusion did not apply. Id.

[¶ 18] The dispositive factor in Fisher was that the problems with the floor did not arise until several months after the project had been completed, and therefore the temporal element was missing. In Grinnell, the Court considered but explained that the holding in Fisher “dealt with whether damages had to occur while work was still in progress.” Grinnell, 2004 ND 166, ¶25, 686 N.W.2d 118. Because the damages to the house in Grin-nell occurred before the contractor had completed the project, the Court held that Fisher did “not affect the result.” Grin-nell, at ¶ 25.

[¶ 19] The damages claimed in this case occurred while Kadoun was still working on the project. Ernst questioned Kadoun about the defective workmanship and failure to follow the manufacturer’s instructions when Kadoun had installed approximately half of the flooring, and Kadoun then abandoned the project without completing it. Accordingly, as in Grinnell, the temporal element under the exclusion is satisfied.

[¶ 20] We conclude that exclusion k(5) expressly and unambiguously precludes coverage for the claimed damages, and summary judgment dismissing Ernst’s claim against Acuity was appropriate. We have considered other issues raised by the parties and find them to be either unnecessary to our decision or without merit. The judgment dismissing the action against Acuity is affirmed.

[¶ 21] GERALD W. VANDE WALLE, C.J., DANIEL J. CROTHERS and DALE V. SANDSTROM, JJ., and DONOVAN J. FOUGHTY, D.J.

[¶ 22] The Honorable DONOVAN JOHN FOUGHTY, D.J., sitting in place of KAPSNER, J., disqualified.