NORFOLK & DEDHAM MUTUAL FIRE INSURANCE CO. v. QUANE; MAHONEY

Decision Date08 September 2004
Citation442 Mass. 704,816 NE 2d 521
PartiesNORFOLK & DEDHAM MUTUAL FIRE INSURANCE COMPANY v. ANNE P. QUANE & others; LORE H. MAHONEY, third-party defendant.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, & SOSMAN, JJ.

Kevin M. Truland (Ralph C. Sullivan with him) for the plaintiff.

David B. Mack for Massachusetts Insurers Insolvency Fund.

SPINA, J.

In these declaratory judgment actions under G. L. c. 231A, we consider the relative obligations of Norfolk & Dedham Mutual Fire Insurance Company (Norfolk & Dedham) and the Massachusetts Insurers Insolvency Fund2 (Fund) to compensate Eugene Quane (Quane), in excess of a settlement that he received from another insurer, for injuries he sustained in a motor vehicle accident. On cross motions for summary judgment, a judge in the Superior Court allowed the Fund's motion and denied Norfolk & Dedham's motion. We granted Norfolk & Dedham's application for direct appellate review. At issue is whether the judge erred in concluding that uninsured motor vehicle benefits were available to Quane under the terms of a Norfolk & Dedham policy, in light of the fact that one tortfeasor's insurer had been declared insolvent, where Quane had already received a settlement from the other tortfeasor's insurer. We affirm.

The facts are not in dispute. On May 28, 1999, Quane was involved in a three-vehicle accident on Route 128 near Dedham. He was a covered household member under a standard Massachusetts automobile liability insurance policy, sixth edition, issued to his wife, Anne P. Quane, by Norfolk & Dedham for the period from October 21, 1998, to October 21, 1999. The second vehicle involved in the accident was operated by Karen Opat and was insured by Hanover Insurance Company (Hanover). The third vehicle was operated by Lore Mahoney and was insured by Trust Insurance Company (Trust). For our purposes, the parties agree that Opat and Mahoney were at fault in the accident and, thus, were jointly responsible for the injuries sustained by Quane.

Quane asserted a claim under the bodily injury provision of the Hanover policy, covering those injuries for which Opat was legally responsible, and was paid the policy limit of $50,000 in settlement of his claim. Because, as alleged by Quane, this settlement did not fully compensate him for his injuries,3 he sought additional payment from the Trust policy, covering those injuries for which Mahoney was legally responsible and having a bodily injury limit of $100,000. However, as of August 2, 2000, Trust was deemed insolvent by the Supreme Judicial Court for Suffolk County, obligating the Fund to pay certain covered claims arising out of and within the coverage of insurance policies issued by Trust, subject to the provisions of G. L. c. 175D. See note 2, supra.

On December 14, 2000, Quane asserted a claim for uninsured motor vehicle benefits as a covered household member under the Norfolk & Dedham policy issued to his wife. Pursuant to that policy, a vehicle responsible for an accident that is insured by an insurer which becomes insolvent is treated as "uninsured," triggering uninsured motor vehicle coverage. The limits for such coverage under the Norfolk & Dedham policy were $20,000 per person and $40,000 per accident. Norfolk & Dedham denied Quane's claim on the ground that his receipt of $50,000 from Hanover precluded his recovery of additional benefits.

On April 20, 2001, Norfolk & Dedham filed an action for declaratory relief in the Superior Court, seeking a determination of its obligation to provide Quane with uninsured motor vehicle benefits pursuant to the terms of its policy. It requested a judgment that no such benefits were available to Quane because he had already received bodily injury liability benefits from Hanover. The Fund filed a motion to intervene in the action, pursuant to Mass. R. Civ. P. 24, 365 Mass. 769 (1974), which was allowed.4 The Fund then filed a counterclaim for declaratory judgment against Norfolk & Dedham, and a cross claim for declaratory judgment against the Quanes, seeking declarations that (1) Norfolk & Dedham had an obligation to pay Quane uninsured motor vehicle benefits under the terms of its policy prior to the Fund's having any obligation to Quane pursuant to G. L. c. 175D; and (2) the Fund was entitled to reduce any amount it paid Quane pursuant to Trust's policy by the amount of the uninsured motor vehicle limit in the Norfolk & Dedham policy.5 Norfolk & Dedham and the Fund filed cross motions for summary judgment. In allowing the Fund's motion and denying Norfolk & Dedham's motion, the judge concluded that Norfolk & Dedham plainly had an obligation to provide uninsured motor vehicle benefits to Quane under the terms of its policy where Trust, the insurer of a responsible party, Mahoney, had been deemed insolvent. The fact that Quane had already recovered $50,000 from Hanover did not relieve Norfolk & Dedham of its responsibility to provide coverage in these circumstances. The judge further opined that the Fund had no obligation to Quane until he had exhausted his rights under the Norfolk & Dedham policy, and that any amount paid to Quane by the Fund should be reduced by the $20,000 uninsured motor vehicle limit of that policy.

The interpretation of an insurance contract is a question of law for the trial judge and the reviewing court. See Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146 (1982). The terms of an insurance policy will be interpreted according to the "fair meaning of the language used, as applied to the subject matter." Davis v. Allstate Ins. Co., 434 Mass. 174, 179 (2001), quoting Bilodeau v. Lumbermens Mut. Cas. Co., 392 Mass. 537, 541 (1984). Because the policy at issue is the standard Massachusetts automobile insurance policy, its language is controlled by the Commissioner of Insurance. See Massachusetts Insurers Insolvency Fund v. Safety Ins. Co., 439 Mass. 309, 312 (2003). Thus, the uninsured motor vehicle provision is not construed against Norfolk & Dedham, but in conformity with the relevant statute, G. L. c. 175, § 113L, which dictates its content. See id.; Goodman v. American Cas. Co., 419 Mass. 138, 140 (1994).

The thrust of Norfolk & Dedham's argument is that, pursuant to the applicable language of G. L. c. 175, § 113L, Quane does not qualify for uninsured motor vehicle coverage under its policy because he already received bodily injury liability insurance from one of the tortfeasors, Opat, through her insurer, Hanover. In other words, Norfolk & Dedham contends that the unavailability of any insurance is a prerequisite to its obligation to provide uninsured motor vehicle benefits to Quane. We conclude that Norfolk & Dedham's position is contrary to the plain language of its policy and G. L. c. 175, § 113L.

Part 3 of the Norfolk & Dedham policy, pertaining to "Bodily Injury Caused By An Uninsured Auto," provides, in relevant part:

"Under this Part, [Norfolk & Dedham] will pay damages for bodily injury to people injured or killed in certain accidents caused by uninsured or hit-and-run autos. We will pay only if the insured person is legally entitled to recover from the owner or operator of the uninsured or hit-and-run auto. . . . Sometimes the company insuring the auto responsible for an accident will deny coverage or become insolvent. We consider such an auto to be uninsured for purposes of this Part."

Because Trust was deemed to be insolvent by a court of competent jurisdiction, Mahoney's vehicle was "uninsured" pursuant to the explicit language of the policy. Thus, the prerequisites to Norfolk & Dedham's obligation to provide Quane with uninsured motor vehicle benefits were satisfied — Quane was a covered household member on his wife's policy, an issue not contested by the parties, and the vehicle driven by a legally responsible person, Mahoney, was insured by a company that became insolvent, thereby rendering such automobile "uninsured." Significantly, although Quane's claim against Hanover was settled for the full policy limit of $50,000, he has alleged that he was still not fully compensated for his injuries. The Norfolk & Dedham policy does not condition a claimant's recovery of uninsured motor vehicle benefits on the absence of any other source of recovery in such circumstances. We will not read into the standard policy additional conditions or restrictions on the recovery of benefits that the Commissioner of Insurance declined to include in the first instance. The language of G. L. c. 175, § 113L, supports our conclusion. Cf. Surrey v. Lumbermens Mut. Cas. Co., 384 Mass. 171, 173 (1981) (where policy language conflicts with statute, provision not enforceable). It states, in relevant part:

"No policy shall be issued or delivered in the commonwealth. . . unless [it] provides coverage [in stated amounts] under provisions approved by the insurance commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles . . . and . . . such coverage shall include an insured motor vehicle where the liability insurer thereof is unable to make payment. . . because of insolvency."

G. L. c. 175, § 113L (1). "The aim of the uninsured motorist statute is to minimize the catastrophic financial loss for victims of automobile accidents caused by the negligence of uninsured tortfeasors." Surrey v. Lumbermens Mut. Cas. Co., supra at 177. This statutory language in no way precludes recovery of uninsured motor vehicle benefits from a second tortfeasor where an injured claimant has been paid the bodily injury liability limit of the first tortfeasor, but not fully compensated for his injuries. If the Legislature had wanted to impose such a restriction in situations where there are joint tortfeasors, it would have inserted appropriate language to that effect. See General Elec. Co. v. Department of...

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