Commerce Ins. Co. v. Phila. Indem. Ins. Co.
| Decision Date | 27 April 2023 |
| Docket Number | Civil Action 21-40053-RGS |
| Parties | COMMERCE INSURANCE COMPANY v. PHILADELPHIA INDEMNITY INSURANCE COMPANY |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM & ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
Commerce Insurance Company (CIC) brought this action seeking indemnification from Philadelphia Indemnity Insurance Company (PIIC) with respect to a $6 million settlement with the victim of a rape on an insured commercial premises. The parties cross-move for summary judgment pursuant to Fed.R.Civ.P. 56.
Underlying this dispute is a violent assault that took place while there was arguably overlapping insurance coverage attributable to CIC and PIIC. Heather Rosenquist, a social worker, was employed at South Bay Mental Health Center, Inc. (South Bay). South Bay leases Suite 818 in a building located at 340 Main Street in Worcester, Massachusetts. Commerce Associates Real Estate Management, Commerce Associates LP, 340 & 390 Main Street Associates, Inc. and New Commerce Properties (collectively, the Underlying Defendants) own and manage the building.
On August 9, 2016, Rosenquist was violently raped by Antonio Damon while she was at work in Suite 818. Damon's presence had been reported to building management, but neither building management nor the security guard on duty took steps to remove him from the building. Damon, wielding a knife, entered Suite 818 and raped Rosenquist. Damon was subsequently convicted of rape and several other charges, and sentenced to state prison.
Rosenquist filed suit against the Underlying Defendants, alleging negligence for failure to exercise due care in the management of building security. The Underlying Defendants had purchased primary commercial general liability and umbrella policies from CIC, covering the building. CIC eventually settled the negligence claims against the Underlying Defendants with Rosenquist for $6 million.
While the negligence case was pending, CIC wrote to PIIC, South Bay's insurer. CIC requested that PIIC indemnify CIC with respect to Rosenquist's claims, arguing that the Underlying Defendants were covered under South Bay's commercial general liability and umbrella policies with PIIC through South Bay's lease with the Underlying Defendants. South Bay's lease with the Underlying Defendants required South Bay to name its landlord, Commerce Associates LP, as an additional insured to its commercial general liability insurance policy and to indemnify Commerce Associates for any personal injury claims while on the property. See Ex. L of Pl.'s Mem. in Supp. Mot. for Summ. J. (Lease) [Dkt # 42-12] §§ 12-13. PIIC responded to CIC by asserting that neither South Bay's commercial general liability policy nor its umbrella policy covered the Underlying Defendants. PIIC consequently did not participate in the mediation process that resulted in the settlement with Rosenquist.
CIC now seeks declaratory relief from this court that PIIC had a duty to defend and indemnify the Underlying Defendants in Rosenquist's suit under South Bay's commercial general liability policy. CIC argues that only after PIIC pays its general commercial liability policy limit does CIC's general commercial liability policy attach. CIC also argues that once both general commercial liability policies have been exhausted, CIC and PIIC's umbrella policies are co-primary insurance for the Underlying Defendants, and that the remaining settlement amount should therefore be divided pro-rata based on policy limits.[1]
Summary judgment is appropriate when, based upon the pleadings affidavits, and depositions, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The interpretation of an insurance policy is a matter of law to be decided by the court based on the policy terms' plain meaning in the context of the document as a whole. See Performance Trans., Inc. v. Gen. Star Indem. Co., 983 F.3d 20, 24 (1st Cir. 2020). The court may resolve this matter at the summary judgment stage because, as the parties agree, the dispute is a matter of insurance policy interpretation and the material facts are not in dispute.
Although PIIC denies on several grounds that it is obligated to reimburse CIC, the court will address the Abuse or Molestation Exclusion in PIIC's policy because it is dispositive of the issue. South Bay's commercial general liability insurance policy with PIIC states: “This insurance does not apply to “‘bodily injury' . . . arising out of: . . . [t]he actual or threatened abuse or molestation by anyone of any person while in the care, custody, or control of any insured.” Ex. 11 of Def.'s Statement of Facts (PIIC CGL Policy) [Dkt # 39-11] at 89.
PIIC argues that Rosenquist's rape fits under the plain terms of the exclusion because she was molested while in the care of South Bay as an insured and Commerce Associates LP as an additional insured. CIC argues that the Abuse or Molestation Exclusion does not apply because (1) the rape of Rosenquist was not abuse or molestation within the meaning of the exclusion, and (2) Rosenquist was not in the care of South Bay.
Insurance policy terms must be interpreted “under the general rules of contract interpretation, beginning with the actual language of the policies, given its plain and ordinary meaning.” Easthampton Congregational Church v. Church Mut. Ins. Co., 916 F.3d 86, 81 (1st Cir. 2019), quoting Lind-Hernandez v. Hosp. Episcopal San Lucas Guayama, 898 F.3d 99, 103 (1st Cir. 2018). While CIC urges the court to consider the history of coverage exclusions for abuse or molestation, Pl.'s Supp. Mem. [Dkt # 60] at 2-3, the court need look no further than the plain meaning of the terms because the First Circuit has found that such exclusions are “generally unambiguous in the face of attacks on various parts of the language used.” Valley Forge Ins. Co. v. Field, 670 F.3d 93, 98 (1st Cir. 2012). Under Massachusetts law, the court “err[s] on the side of the narrowest plausible interpretation of the exclusion and resolve doubts about the scope of an exclusion in favor of the insured.” Performance Trans., 983 F.3d at 25.
The plain meaning of “molestation” leaves no such margin of doubt to compel an interpretation of the exclusion in favor of CIC. “Molestation,” while undefined in the policy itself, is plainly understood and defined as “[t]he act of making unwanted and indecent advances to or on someone, esp[ecially] for sexual gratification.” Molestation, Black's Law Dictionary (11th ed. 2019).[2]Rape, typically understood as sexual intercourse forced upon a person without his or her consent, is an epitomical form of molestation under its ordinary definition. The rape of Rosenquist, which the parties do not dispute occurred, see Pl.'s Statement of Facts [Dkt # 44] ¶ 2; Def.'s Statement of Facts [Dkt # 39] ¶¶ 3-4, constitutes molestation under PIIC's exclusion.
Rosenquist was also in the care of Commerce Associates LP at the time of the incident. The First Circuit has held that the ...
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