Bettigole v. American Employers Ins. Co., 89-P-1024

• Citation: 567 N.E.2d 1259,30 Mass.App.Ct. 272
• Decision Date: 29 April 1991
• Docket Number: No. 89-P-1024,89-P-1024
• Parties: Alfred W. BETTIGOLE, trustee, 1 v. AMERICAN EMPLOYERS INSURANCE COMPANY.
• Court: Appeals Court of Massachusetts

Page 1259

567 N.E.2d 1259

30 Mass.App.Ct. 272

Alfred W. BETTIGOLE, trustee, ¹ v. AMERICAN EMPLOYERS INSURANCE COMPANY.

No. 89-P-1024.

Appeals Court of Massachusetts Hampden.

Argued Jan. 17, 1991.

Decided March 21, 1991.

Further Appellate Review

Denied April 29, 1991.

William K. Danaher, Jr., Springfield, for plaintiff.

Paul S. Weinberg, Springfield, for defendant.

Before KASS, KAPLAN and PORADA, JJ.

KAPLAN, Justice.

We have to deal with a claim under a "Special Multi-Peril Policy," which in less literal times might have been called an "all risk" policy.

Medical Center Realty Trust, of which the plaintiff Bettigole is trustee, owns at 130 Maple Street, Springfield, a hospital complex of real estate and structures including a parking deck. The parking deck with other structures was built in 1955. About June 6, 1986, the plaintiff had reason to believe that the deck was in poor, potentially dangerous condition. Subsequent reports of investigation by a consulting engineer, retained by the plaintiff, disclosed the following. The deck is made of concrete with steel reinforcing rods and other steel supporting elements. The steel at various places was suffering from corrosion (so called by the engineer), and the concrete had also deteriorated. There was little doubt about the reason. Over the years, roughly 100 cars have used the deck daily. In the colder months of the year, the cars have brought in on their wheels ice, water, and de-icing salts. The chloride ions have penetrated the concrete, filtered through the cracks, and attacked the steel. As the corrosion has progressed, the products of the process have pressed against the concrete lying above and enlarged cracks in the concrete, thereby allowing easier transit of the chloride ions. The effects mentioned could not be accounted for by any ingredients in the composition of the concrete itself, nor by the salts that might have been used from time to time by maintenance personnel in swabbing the deck to clean it.

The plaintiff duly submitted proof of loss under the policy, whose term extended for one year from September 26, 1985. As amended, the proof of loss claimed $130,000 or more in damages. When the company refused the claim, the plaintiff on June 3, 1987, commenced the present action against it.

Both parties appear to accept the substance of the facts and expert analysis as briefly stated above. Resting upon its interpretation of the relevant policy language, the defendant moved for summary judgment; the plaintiff cross-moved for partial summary judgment determining liability. A judge of the Superior Court allowed the defendant's motion and denied the plaintiff's motion. The plaintiff appeals from the adverse judgment.

Here are the policy provisions in dispute:

"VI. PERILS INSURED AGAINST

"This policy insures against risks of direct physical loss unless the loss is excluded in VII. Exclusions below, subject to the provisions and stipulations herein and in the policy of which this form is made a part.

"VII. EXCLUSIONS

. . . . .

"2. This policy does not insure under this form against loss caused by:

"A. wear and tear, deterioration, rust or corrosion, mould, wet or dry rot; inherent or latent defect; smog; smoke, vapor or gas from agricultural or industrial operations; mechanical breakdown, including rupture or bursting caused by centrifugal force; settling, cracking, shrinkage, bulging or expansion of pavements, foundations, walls, floors, roofs or ceilings, animals, birds, vermin, termites or other insects; unless loss by a peril not otherwise excluded ensues and then the Company shall be liable for only such ensuing loss...."

One possible aspect of the case may first be put at rest. It is commonly said that, to be compensable under a policy of the present type, a loss must have come about by "fortuity." See Standard Elec. Supply Co. v. Norfolk & Dedham Mut. Fire Ins. Co., 1 Mass.App.Ct. 762, 763, 307 N.E.2d 11 (1973); HRG Dev. Corp. v. Graphic Arts Mut. Ins. Co., 26 Mass.App.Ct. 374, 376, 527 N.E.2d 1179 (1988). Lately, fortuity has been taken by some courts to mean no more than that the occurrence of the loss must have appeared to the parties (or perhaps to the insured alone) as a surprise rather than an expectation or certainty. See Compagnie des Bauxites de Guinee v. Insurance Co. of North America, 724 F.2d 369, 372-374 (3d Cir.1983), rev'g 554 F.Supp. 1080 (W.D.Pa.1983); Adams-Arapahoe Joint Sch. Dist. No. 28-J v. Continental Ins. Co., 891 F.2d 772, 778 (10th Cir.1989). The engineer's report suggests that persons knowledgeable in such matters might have had an understanding by the 1970's or 1980's of how the dripping of chloride from de-icing salts might affect a parking deck of concrete and steel. The parties, however, are not shown to belong to the cognoscenti, and at all events the defendant does not seriously press any issue regarding fortuity.

The defendant simply points to "corrosion" in the article VII exclusions, and says that the loss was so caused, giving corrosion a common meaning of a gradual wearing away of a substance by chemical action (here over a period of thirty-one years). ² The defendant sees no reason--nor do we--for confining the term corrosion in the context of the policy to a wearing away by "natural" means of weather or the like, or in consequence of conduct of the insured rather than an outsider. Cf. Arkwright-Boston Mfrs. Mut. Ins. Co. v. Wausau Paper Mills Co., 818 F.2d 591, 595 (7th Cir.1987).

The plaintiff's main contention is that the corrosion was only a secondary cause of the loss; the primary or effective cause, says the plaintiff, was the release of chloride ions, which was not named as an excluded risk, with the corrosion following as a consequence. The paradigm of this kind of contention can be found in such a case as Franklin Packaging Co. v. California Union Ins. Co., 171 N.J.Super. 188, 408 A.2d 448 (App.Div.1979). The policy covered direct loss by vandalism, but there was an...