John Beaudette, Inc. v. Sentry Ins. a Mut. Co.
| Decision Date | 02 November 1999 |
| Docket Number | No. CIV.A. 96-10963-MBB.,CIV.A. 96-10963-MBB. |
| Citation | 94 F.Supp.2d 77 |
| Parties | JOHN BEAUDETTE, INC., John Beaudette, John Beaudette, Inc. and John Beaudette as Assignees of Suburban Construction Company, Inc., Plaintiffs, v. SENTRY INSURANCE A MUTUAL COMPANY, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Mark W. Roberts MC Roberts & Roberts, LLP, Boston, MA, Leonard H. Kesten, Boston, MA, for Plaintiffs.
John T. Harding, Morrison, Mahoney & Miller, Boston, MA, for Defendant.
MEMORANDUM AND ORDER RE: DEFENDANT SENTRY INSURANCE A MUTUAL COMPANY'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFFS' CHAPTER 93A, TORT AND OTHER CLAIMS (DOCKET ENTRY # 90); DEFENDANT SENTRY INSURANCE A MUTUAL COMPANY'S MOTION FOR SUMMARY JUDGMENT ON THE 1986, 1989 AND 1990 POLICIES (DOCKET ENTRY # 88); DEFENDANT SENTRY INSURANCE A MUTUAL COMPANY'S MOTION FOR SUMMARY JUDGMENT ON ASSIGNED CLAIMS OF SUBURBAN CONSTRUCTION COMPANY, INC. (DOCKET ENTRY # 92); PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT (DOCKET ENTRY # 140); CROSS-MOTION FOR SUMMARY JUDGMENT THAT PLAINTIFFS HAVE STANDING TO PURSUE THESE CLAIMS (DOCKET ENTRY # 110); DEFENDANT SENTRY INSURANCE A MUTUAL COMPANY'S MOTION TO STRIKE PLAINTIFFS' SUMMARY JUDGMENT AFFIDAVITS (DOCKET ENTRY # 161); DEFENDANT SENTRY INSURANCE A MUTUAL COMPANY'S MOTION TO STRIKE AFFIDAVIT OF DENNIS PHILLIPS (DOCKET ENTRY # 193); CROSS-MOTION FOR SUMMARY JUDGMENT ON ASSIGNED CLAIMS OF SUBURBAN CONSTRUCTION COMPANY, INC. (DOCKET ENTRY # 109)
Pending before this court are the above styled motions. After conducting a hearing, this court took the motions (Docket Entry 88, 90, 92, 109, 110, 140, 161 & 193) under advisement.
Plaintiffs John Beaudette, Inc. ("JBI") and John Beaudette ("Beaudette") initially filed this environmental insurance coverage action in Massachusetts Superior Court on March 11, 1996. Defendant Sentry Insurance A Mutual Company ("Sentry") removed the action to the United States District Court for the District of Massachusetts. Thereafter, this court allowed plaintiffs leave to amend the complaint to allege various causes of action by them in their capacity as assignees of Suburban Construction Company, Inc. ("Suburban").1
The amended complaint sets forth counts: (1) for declaratory judgment by Beaudette, JBI and the Suburban Assignees (Count I); (2) to reach and apply by Beaudette and JBI (Count II); (3) for violation of section 112 of Massachusetts General Laws chapter 175 ("section 112") by Beaudette and JBI (Count III); (4) for violation of section 113 of Massachusetts General Laws chapter 175 ("section 113") by Beaudette and JBI (Count IV); (5) for estoppel by Beaudette and JBI (Count V); (6) for breach of contract by the Suburban Assignees (Count VI); (7) for negligence and misrepresentation by Beaudette, JBI and the Suburban Assignees (Count VII); (8) for violation of Massachusetts General Laws chapters 93A ("chapter 93A") and 176D ("chapter 176D") by Beaudette and JBI (Count VIII); and (9) for violation of chapters 93A and 176D by the Suburban Assignees (Count IX). (Docket Entry # 51).
Sentry moves for summary judgment on the claims raised by the Suburban Assignees due to the expiration of the relevant statute of limitations. (Docket Entry # 92). Sentry additionally moves for summary judgment on plaintiffs' claims for coverage under the insurance policies issued by Sentry during the years 1986, 1989 and 1990, thereby leaving at issue the policies for the years 1987 and 1988. (Docket Entry # 88). Sentry asserts that the 1986 insurance policy predates the date of the loss and that the loss was known at the time of the issuance of the 1989 and 1990 insurance policies. (Docket Entry 89 & 165). Finally, Sentry moves for summary judgment on counts I through V, VII and VIII (Docket Entry # 90) insofar as these claims are brought by Beaudette and JBI because: (1) Beaudette is not a "judgment debtor" within the meaning of section 3(9) of Massachusetts General laws chapter 214 ("chapter 214"); (2) Beaudette and JBI lack a private right of action under sections 112 and 113; (3) Beaudette and JBI cannot assert a chapter 93A claim due to the absence of a business or contractual relationship; (4) Beaudette and Sentry cannot assert a chapter 93A claim based on a violation of section 176D because their chapter 93A claim arises under section 11; (5) the chapter 93A, negligence, misrepresentation and estoppel claims are time barred; (6) Beaudette's and JBI's misrepresentation claim is deficient due to the absence of any commercial, transactional or fiduciary relationship which might give rise to a duty on the part of Sentry, the absence of any reasonable reliance and the absence of any evidence that Sentry intended to induce JBI to act on the alleged misrepresentation concerning coverage; (7) Beaudette's and JBI's estoppel claim fails due to the lack of reasonable reliance and the lack of a legal or transactional relationship with Sentry; and (8) Beaudette's and JBI's negligence claim fails because of the absence of any duty of care between Sentry vis-a-vis Beaudette and JBI. (Docket Entry 91 & 164).
Plaintiffs also move for summary judgment. (Docket Entry # 140). Without referring to any particular count, plaintiffs seek to establish that Suburban was entitled to defense and indemnity coverage under the insurance policies issued in the years 1987, 1988, 1989 and/or 1990 and that the environmental damage to the gasoline station owned by JBI was caused by an "occurrence" which is covered by the policies and not subject to an absolute pollution exclusion which was not contained in the original policies for the years 1987 and 1988.2 Plaintiffs seek a declaration that the 1987 policy contained a "sudden and accidental" pollution exclusion as opposed to the absolute pollution exclusion and that the 1988 policy contained a "completed operations" pollution exclusion as opposed to the absolute pollution exclusion. They additionally seek a declaration that Sentry is obligated to pay JBI the amount of a default judgment entered against Suburban as well as consequential damages and that Sentry wrongfully denied coverage in violation of chapter 93A. Plaintiffs also move for summary judgment on the negligence and misrepresentation count. (Docket Entry 140 & 180).
JBI owns a gasoline station ("the station") in Rockport, Massachusetts. Beaudette is the sole shareholder, officer and director of JBI. In 1987 Suburban was hired to install a new gasoline dispensing system at the station. (Docket Entry 140 & 168, ¶¶ 18 & 19). Suburban began installing the new system at the station on November 18, 1987. It completed all of the work no later than December 10, 1987. (Docket Entry # 146).
The work consisted of installing three new gasoline pumps and suction lines between the pumps and the underground storage tanks. Suburban tested the system for tightness after completing the work. Initially the pumps dispensed an incorrect grade of gasoline thereby necessitating disconnecting and reconnecting the piping between the pumps and the storage tanks. Suburban performed this work but did not conduct a test for tightness after finishing these repairs. (Docket Entry # 146).
On January 26, 1988, gasoline vapors were detected in the Rockport sewer system. In March 1988 the gasoline was traced back to the station. (Docket Entry 142 & 146).
On March 16 and 17, 1988, Down to Earth Drilling tested the four underground storage tanks. The testing determined that two of the tanks showed evidence of a leak. On March 21, 1988, Down to Earth Drilling excavated the surface of the two tanks and detected a leak in the unions connecting certain pipes. (Docket Entry # 147, Ex. 8 & 9).4 Suburban was
notified of the release of gasoline stemming from its work at the station. (Docket Entry # 146). On or about April 5, 1988, Suburban notified Sentry of the problem. (Docket Entry # 95).
Sentry issued two types of insurance policies to Suburban, a comprehensive liability policy, designated by the number 88-87723-02, and an umbrella liability policy, designated by the number 88-76723-03. Sentry initially issued the comprehensive liability policy in January 1986 ("the 1986 CLP policy"), with annual renewals thereafter in January 1987 ("the 1987 CLP policy"), January 1988 ("the 1988 CLP policy"), January 1989 ("the 1989 CLP policy"), January 1990 ("the 1990 CLP policy") and January 1991. Likewise, Suburban first issued the umbrella liability policy in January 1986 ("the 1986 umbrella policy"), with annual renewals thereafter in January 1987 ("the 1987 umbrella policy"), January 1988 ("the 1988 umbrella policy"), January 1989 ("the 1989 umbrella policy"), January 1990 ("the 1990 umbrella policy") and January 1991. (Docket Entry 51 & 54, ¶¶ 11).
In or around March 1989 Sentry reconstructed the 1987 and 1988 CLP and umbrella policies. (Docket Entry # 147, Ex. 2). Sentry undertook prior efforts to locate true and correct copies of these policies due to its involvement in another insurance coverage dispute with Suburban resulting from contaminated property in New Hampshire. That dispute gave rise to litigation in the United States District Court for the District of New Hampshire, Suburban Construction Company, Inc. v. Hartford Fire Insurance Company and Sentry Insurance A Mutual Company, No. 90-379-D ("the New Hampshire action"). (Docket Entry # 95, Ex. I). Based upon a search Sentry conducted in connection with the present dispute, Sentry determined that it did not have a complete paper copy of each of the insurance policies issued to Suburban.5 Lacking a complete photocopy of the original of the policies and/or the subsequent renewals, Sentry reconstructed the...
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