Certain Interested Underwriters at Lloyd's London v. Stolberg

Decision Date02 September 2011
Docket NumberCIVIL ACTION NO. 09-cv-11279-NMG
PartiesCERTAIN INTERESTED UNDERWRITERS at LLOYD'S LONDON, Plaintiff, v. PERRY STOLBERG and JOSE ROMERO, Defendants.
CourtU.S. District Court — District of Massachusetts

REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (#14), OPPOSITION OF

PERRY STOLBERG TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND

CROSS MOTION OF STOLBERG FOR SUMMARY JUDGMENT (#24), AND

OPPOSITION AND CROSS-MOTION OF JOSE ROMERO TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (#27)

COLLINGS, U.S.M.J.

I. Introduction

This insurance coverage dispute is before this Court on cross-motions for summary judgment. On July 30, 2009, Certain Interested Underwriters at Lloyd's London ("Lloyd's") filed a Complaint for Declaratory Judgment, pursuant to 28 U.S.C. § 2201, seeking a declaration of the rights of the parties under an insurance policy issued to defendant Perry Stolberg ("Stolberg"). (#1) The dispute arises out of a state court action in Suffolk Superior Court ("underlying action") in which Jose Romero ("Romero") filed suit against Stolberg alleging that a construction site accident on a property owned by Stolberg resulted in serious and permanent bodily injuries. (#15-3) Lloyd's seeks a declaration that Stolberg's insurance policy provides no coverage - and thus no duty to defend or indemnify - with respect to the types of claims asserted by Romero against Stolberg in the underlying action. (#1) Stolberg and Romero have been joined as co-defendants in the present action due to Romero's interest in its outcome.

On December 30, 2010, Lloyd's filed a Motion for Summary Judgment (#14), along with a Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment (#15) and a Statement of Material Facts as to WhichPlaintiff Contends There is No Genuine Issue to Be Tried, (#16). On March 22, 2011, Stolberg filed an Opposition to Plaintiff's Motion for Summary Judgment and Cross-Motion for Summary Judgment (#24) along with a Memorandum of Law in Opposition to the Motion for Summary Judgment of Plaintiff and in Support of his Cross Motion for Summary Judgment (#26), and a Statement of Additional Material Facts. (#25) Romero concurrently filed a joinder to Stolberg's Opposition to the Plaintiff's Motion for Summary Judgment and Cross-Motion for Summary Judgment and filed his own separate Opposition and Cross-Motion to Plaintiff's Motion for Summary Judgment on the basis of additional arguments. (##27-29) Lloyd's subsequently submitted an Opposition to Defendants' Cross-Motions for Summary Judgment and/or in Reply to Defendants' Oppositions to Plaintiff's Motion for Summary Judgment. (#31) The motions are thus ripe for disposition.

II. Factual Background
A. The Insurance Policy

Stolberg purchased a commercial general liability ("CGL") insurance policy, policy number QML0509765 ("the policy"), with effective dates between May 20, 2005 and May 20, 2006. (#15-5) The policy containedcoverage limits of $1,000,000 per occurrence and $2,000,000 aggregate with a $500 per claim deductible. (#15-5) Although the policy originally only provided coverage for a property in Somerville, Massachusetts, it was amended on September 29, 2005 to include the property located at 204-206 Norfolk Street, Cambridge, Massachusetts. (#25 ¶ 15) It is on this latter property that the events giving rise to this dispute took place.

The policy issued to Stolberg states that the "insurance applies to 'bodily injury'. . . only if: (1) [t]he 'bodily injury'... is caused by an 'occurrence' that takes place in the 'coverage territory'" and "(2) the 'bodily injury'. . . occurs during the policy period." (#15-5, at 23) "Bodily injury" is defined as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time" (#15-5, at 31); and "occurrence" is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (#15-5, at 32). The policy additionally states that Lloyd's

will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we willhave no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' . . . to which this insurance does not apply. We may, at our discretion, investigate any 'occurrence' and settle any claim or 'suit' that may result.

(#15-5, at 23)

The policy also contains several exclusions, two of which are at issue in the present action. The first exclusion is entitled "EXCLUSION - INDEPENDENT CONTRACTORS" and states:

This insurance does not apply to 'bodily injury', 'property damage', 'personal and advertising injury' or medical payments arising out of operations performed for you by independent contractors or your acts or omissions in connection with your general supervision of such operations.

(#15-5, at 50)

The second exclusion is entitled "EXCLUSION - INDEPENDENT CONTRACTORS' EMPLOYEES OR LEASED WORKERS" and states:

This insurance does not apply to 'bodily injury' . . . to:
1. Any employee or leased worker of independent contractors arising out of operations performed for you by said independent contractors or your acts or omissions in connection with the general supervision of such operations if you have rejected the obligations of anyworkers' compensation or any similar law, or abrogated, waived or otherwise set aside common rights or defences generally accorded an employer under any workers' compensation, disability benefits or unemployment compensation law or any similar law . . . .

(#15-5, at 52)

B. The Underlying Action

At all relevant times, Stolberg was the owner of 204-206 Norfolk Street in Cambridge, Massachusetts. (#1 ¶ 11, #25 ¶¶ 7-8) Stolberg purchased 204206 Norfolk Street in Cambridge to renovate the property into condominiums ("the Project"). (#25 ¶ 7) To this end, Stolberg hired Allen Fox ("Fox") as the general contractor. (#25 ¶ 3) Simply the Best Construction ("STBC") was a subcontractor on the project working under Fox. (#25 ¶ 2)

Romero alleges that he was injured on October 6, 2005, in an accident that occurred on the premises of 204-206 Norfolk Street. (#16 ¶ 1) Romero contends he was working for STBC on the premises when he fell off a defective ladder and suffered serious and permanent injuries. (#16 ¶ 3)1 As discussed in further detail below, the issue of whether Romero was on the 204-206 Norfolk Street premises as an employee of STBC or for some otherpurpose is in some dispute. It is undisputed, however, that Romero previously worked for STBC as a day laborer on a construction project other than the one owned by Stolberg at 204-206 Norfolk Street, referred to as the Queensberry Street project. (#25-1, at 4)

Romero filed suit in Suffolk Superior Court (Civil Action No. 08-2607) on June 3, 2008. (#15-2) A First Amended Complaint was subsequently filed on October 8, 2009. (#15-3) Stolberg is listed as the sole defendant2 from whom Romero seeks redress for claims of negligence and breach of contract. (#15-3 ¶¶ 14-22) Lloyd's has tendered defense of Stolberg in connection with this underlying action. (#1 ¶14, #5 ¶14) As per the terms of the policy, this defense is subject to a reservation of Lloyd's' right to disclaim coverage and withdraw from the defense if an exclusion in the policy excludes coverage for the claims asserted against Stolberg in the underlying action.3 (#1 ¶14, #5 ¶14) The dispute in the present action concerns this right to disclaim coverage and withdraw from the defense.

In this action for declaratory judgment, Lloyd's has moved for summaryjudgment claiming that an exclusion, known as the "Independent Contractors' Exclusion," excludes coverage for the claims Romero makes in the underlying action because he alleges bodily injury that arises from operations performed by STBC, an independent contractor of Stolberg. (#15 at 1) Stolberg and Romero ("the defendants") have opposed Lloyd's' motion for summary judgment arguing that there is a genuine issue of material fact in dispute regarding whether Romero was an employee of STBC at the time of the injury. (#26 at 1, 6; #29 at 1-2) The defendants have also cross-motioned for summary judgment. The defendants argue that the presence of another exclusion, known as the "Independent Contractors' Employees or Leased Workers Exclusion" ("Independent Contractors' Employees Exclusion"), along with the Independent Contractors' Exclusion creates an ambiguity which requires an interpretation of coverage in favor of Stolberg.4 The Court takes up these arguments below.

III. Summary Judgment Standard

The purpose of summary judgment is "to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." Rojas-Ithier v. Sociedad Espanola de Auxilio Mutuo y Beneficiencia de Puerto Rico, 394 F.3d 40, 42 (1 Cir., 2005) (internal quotations marks and citation omitted). When considering a motion for summary judgment, "a court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a).5 The moving party bears the initial burden of asserting the absence of a genuine issue of material fact and "support[ing] that assertion by affidavits, admissions, or other materials of evidentiary quality." Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1 Cir., 2003) (citations omitted). "Once the moving party avers the absence of genuine issues of material fact, the nonmovant must show that a factual dispute does exist, but summary judgment cannot be defeated by relying on improbable inferences, conclusory allegations, or rank speculation." Fontanez-Nunez v. Janssen Orttho LLC, 447 F.3d 50, 54-55 (1 Cir., 2006)(internal quotation marks and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT