Andover Newton Theological School, Inc. v. Continental Cas. Co.

• Decision Date: 19 February 1991
• Citation: 409 Mass. 350,566 N.E.2d 1117
• Parties: , 55 Fair Empl.Prac.Cas. (BNA) 404, 56 Empl. Prac. Dec. P 40,706, 65 Ed. Law Rep. 882 ANDOVER NEWTON THEOLOGICAL SCHOOL, INC. v. CONTINENTAL CASUALTY COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1117

566 N.E.2d 1117

409 Mass. 350, 55 Fair Empl.Prac.Cas. (BNA) 404,

56 Empl. Prac. Dec. P 40,706, 65 Ed. Law Rep. 882

ANDOVER NEWTON THEOLOGICAL SCHOOL, INC. v. CONTINENTAL CASUALTY COMPANY.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Nov. 7, 1990.

Decided Feb. 19, 1991.

Leonard F. Clarkin (Harry C. Beach, with him), Boston, for plaintiff.

Patricia A. Gotschalk, of the District of Columbia, Washington, D.C., (Joan M. Griffin, Boston, with her), for defendant.

Terence P. O'Malley and William E. Searson, III, Boston, for University of Massachusetts, amicus curiae, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, LYNCH and GREANEY, JJ.

WILKINS, Justice.

The United States Court of Appeals for the First Circuit has certified a question pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981), concerning G.L. c. 175, § 47, Sixth (b ) (1988 ed.). 901 F.2d 1. That statute precludes an insurance company from insuring "any person against legal liability for causing injury, other than bodily injury, by his deliberate or intentional crime or wrongdoing."

A jury sitting in the United States District Court for the District of Massachusetts found that the plaintiff (Andover Newton) had wilfully violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. (1988). The case was considered on appeal in Linn v. Andover Newton Theological School, Inc., 874 F.2d 1 (1st Cir.1989), where liability for the discharge of a sixty-two year old tenured professor was upheld. The trial judge had instructed the jury that an entity acts "willfully if it knows its conduct was prohibited by federal law or if it acts in reckless disregard as to whether its conduct is prohibited by federal law." The jury was not asked to, and did not, indicate whether its finding of wilfulness was based on one or the other, or perhaps even both, of the theories on which it could have found wilfulness.

Thereafter, Andover Newton brought an action in the same court seeking a determination, among other things, that its insurer, the defendant Continental Casualty Company (Continental), is obliged to indemnify it for the loss occasioned by its violation of the ADEA. A District Court judge, who had been the trial judge in the underlying action, ruled that because of the statute (cl. Sixth [b ] ) Continental was not obliged to indemnify Andover Newton for the loss arising from its violation of the ADEA. There is no suggestion that Continental's policy of insurance did not purport by its terms to cover Andover Newton's ADEA liability. ¹ Andover Newton appealed from an order that allowed Continental's motion for summary judgment on Andover Newton's claim for indemnity.

The Court of Appeals for the First Circuit certified a single question to this court: "Does a finding of willfulness under the Age Discrimination in Employment Act (ADEA), if based on a finding of 'reckless disregard as to whether [defendant's] conduct is prohibited by federal law,' constitute 'deliberate or intentional ... wrongdoing' such as to preclude indemnification by an insurer under the public policy of Massachusetts as codified at Mass.Gen.L. ch. 175, § 47 Sixth (b)?" The answer to the question is "no."

Only one opinion of this court (and none of the Appeals Court) has construed cl. Sixth (b ), and that opinion provides only limited assistance in answering the certified question. In J. D'Amico, Inc. v. Boston, 345 Mass. 218, 225-226, 186 N.E.2d 716 (1962), an insurer sought unsuccessfully to rely on cl. Sixth (b ) to avoid any obligation to indemnify an insured against property damage arising from trespass committed by mistake. The insured contractor had allegedly cut down trees outside the area of a taking and without the authorization of the landowner. This court said that, if the contractor cut the trees by mistake, cl. Sixth (b ) did not forbid an insurer from providing coverage against any loss incurred. A trespass by mistake was not a "deliberate or intentional crime or wrongdoing" within the meaning of cl. Sixth (b ). Id. at 226, 186 N.E.2d 716.

Here we deal with conduct that may not have been a deliberate or intentional, and thus knowing, violation of Federal law. The conduct in this case, although a violation of law, may have been undertaken with reckless disregard as to whether it was unlawful. The discharging of a tenured professor was intentional. The cutting of the trees in the D'Amico case was intentional. The fact that a wrongful act was committed intentionally, however, does not alone bar coverage. That bar arises only if an intentionally committed, wrongful act was also done deliberately or intentionally, in the sense that the...