Joseph E. Bennett Co. v. Fireman's Fund Ins. Co.

• Decision Date: 05 April 1962
• Citation: 181 N.E.2d 557,344 Mass. 99
• Parties: JOSEPH E. BENNETT CO., Inc. v. FIREMAN'S FUND INSURANCE COMPANY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 557

181 N.E.2d 557

344 Mass. 99

JOSEPH E. BENNETT CO., Inc. v. FIREMAN'S FUND INSURANCE COMPANY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 5, 1962.

Decided April 5, 1962.

Edward J. Barshak, Boston, for plaintiff.

Francis E. Dooley, Jr., Dorchester, for defendants.

Before WILKINS, C. J., and SPALDING, WHITTEMORE, CUTTER and KIRK, JJ.

CUTTER, Justice.

The plaintiff (Bennett) seeks to recover under policies of insurance for losses occasioned by vandalism to a swimming pool on country club premises held by Bennett as mortgagee in possession. The insurance companies, among other defences, denied that the policies covered this loss. Bennett's counsel made an extended opening and offered in evidence a sample policy 'in the form of each one of the * * * policies * * * issued.' After this opening, the trial judge directed a verdict for the defendants. Bennett claimed an exception. The significant facts are stated on the basis of the opening.

The insured premises were on a golf course. At the time of the vandalism, there were in force various policies of fire insurance, all of which included extended coverage and vandalism indorsements ('direct loss caused by [v]andalism and [m]alicious [m]ischief, being only wilful and malicious damage to or destruction of the described property and including damage to the building[s] covered hereunder caused by burglars'). Each policy also contained '[a]lterations and [r]epairs [c]lauses.' ¹ There was no specific mention of the swimming pool, as such, in the policies. Under the heading 'Description & location of property covered' were the following items: 'Frame Bldg. (Country Club) * * * Frame Bldg.--Pro Shop Two Frame Bldgs.--Pump Houses ($500 each) Contents of Pump Houses ($1,500 each) Situated North Street, North Reading, Massachusetts (LRD-12004).' ²

One other provision is of significance, that defining '[b]uilding [c]overage' in what is entitled the '[g]eneral [f]orm,' which reads: 'Building Coverage: When this policy covers buildings, it shall cover the basic structure and additions, including foundations * * * and * * * shall include building service equipment * * *; property of the following kinds belonging to the Insured as building landlord [then are listed various types of building parts or equipment, such as refrigerating equipment, window shades, etc.] * * * and all property fastened to and made a part of the building.'

Originally there was a small building on the site of the clubhouse. In 1955 Bennett as general contractor reconstructed this building into a much larger country club with clubhouse, terraces, and a swimming pool (40 by 100 feet) set in the middle of a concrete terrace. In the rear of the large building was a concrete terrace extending thirty feet from the building for almost the whole width of the building, where the members would sit and have refreshments. At the outer edge of this, twelve to fifteen steps led down a slight incline to the second concrete terrace containing the swimming pool. The large building and the terraces were used together as a unit by the members, and, from a side view they appeared to be one unit set off from the golf course. ³

The building reconstruction started in late 1955 and was finished before the summer of 1956. Bennett took a mortgage from the club for money owned to it. On November 8, 1957, Bennett became mortgagee in possession.

One insurance policy had been issued each spring in 1954, 1955, and 1956. Bennett's president approached Boylston Insurance Agency (Boylston), 'an agent for all the defendant insurance companies * * * for the purpose of receiving information for fire and extended coverage and vandalism policies, for writing * * * policies with the approval of the companies, for countersigning the policies.' He told Boylston's representatives 'that the wanted * * * complete coverage, fire, extended coverage, and vandalism on the * * * [c]lub' as described above. Boylston's representatives informed him that he could not have 'vandalism coverage except as part of a fire * * * policy.' Bennett's president 'told them to * * * write up the fire insurance policies, so long as he ha[d] extended * * * and vandalism coverage to include, among other things, the pool and the pool area.' Bennett then 'was sent a form, filled out by * * * Boylston * * * to give the valuations * * * for insurance purposes.' Bennett's president included approximately $27,000 'for the pool and the pool area' and intended to cover the pool area for vandalism.

The earlier policies were issued as of November 8, 1957, 'so far as listing * * * Bennett * * * as * * * owner.' In addition to the three policies, already mentioned, issued in 1954, 1955, and early 1956, four more were issued in October, 1956, two in October, 1957, and one in February, 1958.

On the evening of October 15, 1958, when all the policies were in effect, boys 'broke into the Pro shop * * * [and] stole some' articles. They then went to the pool and damaged it to the extent of $29,000, and threw articles into the pool. Within two days notice of loss was given. No settlement has been made by the insurance companies of Bennett's claims.

1. In passing upon the motion for a directed verdict upon an opening, the facts stated by counsel must be considered as true. The motion must be denied 'if the statements * * * together with all rational inferences of which those facts are susceptible, can, upon any reasonable view * * * be deemed sufficient to support the * * * cause of action.' Douglas v. Whittaker, 324 Mass. 398, 399, 86 N.E.2d 916. See Amorosso v. Farina Bros. Co., Inc., 339 Mass. 595, 596, 161 N.E.2d 761; Singarella v. Boston, Mass., 173 N.E.2d 290. ^a Cf. Perry v. Carter, 332 Mass. 508, 509, 125 N.E.2d 780; Mallard v. Waldman, 340 Mass. 288, 290, 163 N.E.2d 658.

2. The vandalism coverage in these policies is that listed in the fire policies and extended coverage provisions, which do not purport to describe the swimming pool as property covered. Bennett, however, seeks to recover on the theory that the 'additions' clauses (footnote 1, supra) and the conversations between Bennett's president and representatives of Boylston (the insurance agency) sufficed to bring all the new construction, including the swimming pool, within the policies. The earlier policies (probably those of 1954, 1955, and May, 1956) were issued before the reconstruction of the clubhouse was completed. Bennett contends that, as to these policies, the swimming pool was an 'addition,' and that the later policies should be interpreted in the same way. Bennett also contends (largely on the basis of Upper Columbia River Towing Co. v. Glens Falls Ins. Co., 179 F.Supp. 705, 707 [D.Or.]) that the insurance companies, through the knowledge of their general agents, knew that Bennett wanted vandalism coverage on the swimming pool. This desire, Bennett contends, was verified by the approximately $27,000 valuation placed upon the pool and pool area by Bennett's president.

The policies 'must be reasonably construed by giving to * * * [their] words * * * their usual and ordinary significance * * * but if the terms * * * are ambiguous then every doubt is to be resolved against the insurer[s].' Woogmaster v. Liverpool & London & Globe Ins. Co., Ltd., 312 Mass. 479, 481, 45 N.E.2d 394. See Schroeder v. Federal Ins. Co., Mass., 179 N.E.2d 328. ^b See also MacArthur v. Massachusetts Hosp. Serv., Inc., Mass., 180 N.E.2d 449. ^c 'Where the language permits two rational interpretations that more favorable to * * * the insured in to be taken. The insurer chose the words to express the contract of indemnity and whichever of two warranted interpretations * * * best effectuates the main manifested design of the parties is to be favored.' Rezendes v. Prudential Ins. Co., 285 Mass. 505, 511, 189 N.E. 826, 828.

These policies insure, so far as the clubhouse is concerned, a 'Frame bldg. (Country Club).' The additions clauses (footnote 1, supra) permit 'additions, alterations and repairs' to the buildings or structures described and the construction of 'new buildings on the premises.' The policies 'in so far as * * * [they] cover buildings or structures' will 'also cover such additions * * * and new buildings * * * when not otherwise covered by insurance.' If the swimming pool is either a new building or an addition to the clubhouse building, the language of the policies covers it. If the pool is not a new building or an addition, the policies do not cover it.

The pool cannot be regarded as a new building. Although it is below ground, that in itself is not fatal to the contention that it is a building. See Jenney v. Hynes, 285 Mass. 332, 335, 189 N.E. 102. It certainly is not a structure designed for human occupancy or use except for a limited and specialized purpose, it is not covered with a roof, and it does not come within the ordinary concept of a building. See Truesdell v. Gay, 13 Gray, 311, 312.

The term 'addition' ⁴ most aptly describes any enlargement of what previously existed by a piece of construction of the same general character, having some definite connection and community of use with the basic building. In considering whether the swimming pool is an 'addition' to this clubhouse, it must be recognized that any connection between the two is only by the tenuous link of the upper thirty foot wide concrete terrace, then some twelve to fifteen steps, and the apron portion of the lower concrete terrace in which the pool is set. There is, of course, a very general community of use in that the clubhouse and the pool are both used for recreation. The manner of use of the clubhouse and pool, however, is substantially different; so much so, that in ordinary parlance the use would not be thought to be the same. In at least one case, where a more substantial connection and perhaps greater proximity existed, this court treated each of two buildings resting upon separate foundations...