Central Mut. Ins. Co. v. Boston Telephone, Inc.

• Decision Date: 10 May 2007
• Docket Number: Civil Action No. 06-10386-WGY.
• Citation: 486 F.Supp.2d 180
• Parties: CENTRAL MUTUAL INSURANCE COMPANY, Plaintiff, v. BOSTON TELEPHONE, INC., Defendant.
• Court: U.S. District Court — District of Massachusetts

486 F.Supp.2d 180

CENTRAL MUTUAL INSURANCE COMPANY, Plaintiff, v. BOSTON TELEPHONE, INC., Defendant.

Civil Action No. 06-10386-WGY.

United States District Court, D. Massachusetts.

May 10, 2007.

Justin M. Fabella, Edwin F. Landers, Jr., Morrison Mahoney LLP, Boston, MA, for Central Mutual Insurance Company (Plaintiff).

Stephen J. Delamere, Delamere & Cohen, LLC, Stoughton, MA, Carlin J. Phillips, Phillips & Garcia, LLP, North Dartmouth, MA, for Boston Telephone, Inc. (Defendant).

MEMORANDUM AND ORDER

YOUNG, District Judge.

I. INTRODUCTION

The parties frame the issues in this case as requiring this Court to determine how far a general liability insurance policy may be stretched before it overlaps the obligations of a more specific motor vehicle insurance policy. In particular, they ask for line drawing — how far does general liability insurance extend to indemnify for that most ubiquitous of American misfortunes, the automobile accident? An altogether different issue, however, will ultimately prove dispositive.

The plaintiff, Central Mutual Insurance Company ("Central Mutual"), seeks a declaratory judgment holding it free from liability. Central Mutual asks this Court to rule that a collision between two automobiles, on its face, must necessarily be covered by auto insurance, a more specific underwriting line, and not through general liability insurance. To advance its claim for indemnification, the defendant, Boston Telephone, Inc. ("Boston Telephone"), argues for a ruling that focuses on the cause of the accident rather than the presence of an automobile: The correct interpretation of the law lies between these two positions.

A. Undisputed Facts

The parties do not dispute the tragic events of September 29, 2003. On that day, two Boston Telephone employees and a Stoughton police officer, Warren Harris ("Officer Harris"), were performing cable maintenance on telephone poles in a "bucket truck" adjacent to Route 27 in Stoughton, Massachusetts. Pl.'s Statement of Facts [Doc. No. 28] ("PI.Stat.") ¶¶ 11-12, 14.¹ One employee was in the driver's seat of the bucket truck, and the other was in a cherry picker raised to the height of the wires. Id. ¶ 14. Officer Harris came along as a detail police officer, as required by the Massachusetts Highway Department ("Mass Highway") when doing roadside work. Id. ¶ 11. Because the truck had to move to a new pole every few minutes, Officer Harris decided to forego riding behind the bucket truck in his own car. Instead, he decided to ride on the back of the truck. Def.'s Statement of Facts [Doc. No. 32] ("Def.'s Stat."), Ex. 5 at 85:5-17 (deposition of Warren N. Harris). While the truck was stationary and Boston Telephone employees worked on the wires, Officer Harris would stand on the back of the truck to observe approaching traffic. Id. at 86:12-87:2.

At some point late in the morning, Stephen O'Connor ("O'Connor") struck the rear of the Boston Telephone bucket truck with his own van while the bucket truck was pulled over and working on telephone wires. Pl.'s Stat. ¶ 13. Officer Harris suffered several severe injuries as a result of the collision. Id.; Def.'s Stat. at 8, ¶ 20.² Officer Harris and his wife filed suit against Boston Telephone in the Massachusetts Superior Court sitting in and for the County of Suffolk, demanding damages for present and future medical expenses, as well as future economic loss and pain and suffering. Pl. Stat., Ex. G.

Boston Telephone turned to its insurer, Central Mutual, for the defense of and indemnification from this suit. See Def.'s Stat. at 9, ¶¶ 26-27. Boston Telephone had a Commercial General Liability Policy ("Policy") with Central Mutual, which purported to insure Boston Telephone for any property damage or bodily injury suffered at the work site that was not otherwise excluded from coverage. See Pl.'s Mot. for Summ. J. [Docket No. 29] ("Pl.Mot."), Ex. E at 5-6. Central Mutual refused to defend or indemnify, claiming that the accident was outside the scope of coverage because the accident fell within the compass of the Policy's auto exclusion clause. Def.'s Stat. at 11, ¶ 32.

In addition, in its amended complaint, Central Mutual asks this Court to allow it to rescind the Policy in its entirety. Pl.'s Am. Compl. [Doc. No. 22] at 1, 6-7. Central Mutual claims that the Policy was originally granted to cover inside telephone work, not outside "pole" work. Id.; Pl.'s Mem. in Supp. of Summ. J. [Doc. No. 30] ("Pl.'s Mem.") at 12-16. Central Mutual argues that the failure of Boston Telephone properly to delineate the expansion in the scope of its business constitutes a material misrepresentation that allows for rescission. Pl.'s Mem. at 12-16.

After appropriate discovery, Central Mutual moved for summary judgment. Pl.'s Mot. at 6. Boston Telephone opposed this motion, but did not file a cross-motion for summary judgment. See Def.'s Mem. in Opp'n to Mot. for Summ. J. [Doc. No. 31] ("Def.'s Mem."). On March 29, 2007 the Court heard oral argument and took this matter under advisement to determine the breadth of the Policy.

II. ANALYSIS

A. Controlling Legal Principles

Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A "genuine" issue of fact exists when a reasonable jury could resolve it for either party. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A fact is material when it could affect the outcome of the suit under the governing law. Id.

Although Boston Telephone did not move for summary judgment, if no genuine issue of material fact exists and all matters of law ought be decided in its favor, summary judgment can be granted for Boston Telephone sua sponte. Jardines Bacata, Ltd. v. Diaz-Marquez, 878 F.2d 1555, 1560 (1st Cir.1989), superseded on other grounds by local rule, D.P.R.R. 313.1(B), as recognized in Chamorro v. Puerto Rican Cars, Inc., 304 F.3d 1, 6 (1st Cir.2002). The Court must, however, exercise "great care ... to assure that the original movant has had an adequate opportunity to show that there is a genuine issue and that his opponent is not entitled to judgment as matter of law." Andrews v. DuBois, 888 F.Supp. 213, 220 (D.Mass.1995) (quoting 10A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure Civil 2d § 2720, at 29-34 (2d ed. 1983 & Supp. 1994)).

In a diversity case such as this, where the claim concerns a contract written and delivered in the Commonwealth of Massachusetts, Massachusetts law governs. Erie v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Shapiro v. American Home Assurance Co., 584 F.Supp. 1245, 1248 (D.Mass.1984) (Keeton, J.). Interpretation of an insurance contract is matter of law. Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146, 439 N.E.2d 234 (1982). In interpreting the provisions of an insurance policy, the Court must construe and enforce unambiguous terms according to their plain meaning. Thomas v. Hartford Accident & Indem. Co., 398 Mass. 782, 784, 500 N.E.2d 810 (1986). Where there is more than one rational interpretation of policy language, however, "the insured is entitled, to the benefit of the one that is more favorable to it." Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 849, 616 N.E.2d 68 (1993) (quoting Hazen Paper Co. v. United States Fid. and Guar. Co., 407 Mass. 689, 700, 555 N.E.2d 576 (1990)). "[W]hen construing language in an insurance policy, [a court] considers what an objectively reasonable insured, reading the relevant policy language, would expect to be covered." Atlantic Mut. Ins. Co. v. McFadden, 413 Mass. 90, 92, 595 N.E.2d 762 (1992) (internal citation omitted). This rule of construction applies with particular force to exclusionary provisions. Hakim v. Massachusetts Insurers' Insolvency Fund, 424 Mass. 275, 281-282, 675 N.E.2d 1161 (1997).

B. Auto Exclusion Clause

With these principles in mind, the Court turns to the question of whether the auto exclusion clause in the Policy applies to the accident at hand. The auto exclusion clause reads as follows:

This insurance does not apply to:

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured.

Pl. Mot., Ex. E at 6-7. The parties agree that the bucket truck is an "auto" under the contract's definition. Consequently, the portions of the clause that are ripe for interpretation are whether the accident "arose out of" the "use" of the bucket truck.

The courts of the Commonwealth have examined extensively the terms "arising out of" the "use" of an auto. This task has generally involved determining whether an incident is covered by an auto insurance policy, rather than, as here, whether, it is not covered by a general liability policy. Because the language of the clause is often identical in the two types of policies, however, the analysis ought, as a general matter, be the same.³

Massachusetts law requires that there be a "reasonably apparent" causal connection between the use of the auto and the injury for the incident to "arise out of" its use. Ruggerio Ambulance Serv., Inc. v. National Grange Mut. Ins. Co., 430 Mass. 794, 798, 724 N.E.2d 295 (2000). This implies a range of causation that is wider than the traditional "proximate cause" of tort law, but narrower than a simple "but for" connection. Id. at 797, 724 N.E.2d 295 (quoting Rischitelli v. Safety Ins. Co., 423 Mass. 703, 704, 671 N.E.2d 1243 (1996)). Whether a particular injury is sufficiently related to an automobile's use must be decided on a case-by-case basis and requires "a...