Kanamaru v. Holyoke Mut. Ins. Co.

• Decision Date: 21 August 2008
• Docket Number: No. 06-P-1290.,06-P-1290.
• Citation: 72 Mass. App. Ct. 396,892 N.E.2d 759
• Court: Appeals Court of Massachusetts
• Parties: Hideki KANAMARU v. HOLYOKE MUTUAL INSURANCE COMPANY.

892 N.E.2d 759

72 Mass. App. Ct. 396

Hideki KANAMARU v. HOLYOKE MUTUAL INSURANCE COMPANY.

No. 06-P-1290.

Appeals Court of Massachusetts, Middlesex.

Argued November 20, 2007.

Decided August 21, 2008.

Andrew M. Fischer, Boston, for the plaintiff.

Jon T. Skerry, Salem, for the defendant.

Present: RAPOZA, C.J., DUFFLY, & TRAINOR, JJ.

RAPOZA, C.J.

This appeal presents a question of interpretation of the standard Massachusetts automobile insurance policy, seventh edition, considered in light of the uninsured motorist statute, G.L. c. 175, § 113L. It arises from the grant of summary judgment to the defendant insurance company on both counts of the plaintiff's complaint and the corresponding denial of the plaintiff's cross motion for summary judgment. The plaintiff argues that the motion judge erred when he granted the defendant summary judgment on the first count and found, as matter of law, that the insurance contract in question did not cover the injury he suffered as a bicyclist struck by an uninsured motorist. The plaintiff also argues that the judge erred in granting summary judgment to the defendant on the second count of the complaint, which alleged unfair business practices in violation of G.L. c. 93A and conduct estopping the defendant from denying coverage. For the reasons we shall discuss, we affirm the grant of summary judgment on the insurance contract and c. 93A claims and reverse the grant of summary judgment on the estoppel claim.

Background. The plaintiff, Hideki Kanamaru, moved into an apartment with a fellow graduate student, Hideaki Hirata, for the school year 2001-2002. At that time, Hirata owned a car that was insured under a policy issued by the defendant, Holyoke Mutual Insurance (Holyoke). The roommates intended to share the use of the automobile, and Hirata therefore contacted Holyoke to have Kanamaru added to the policy. Hirata and Kanamaru went to the insurance agency together, and they aver that they were told by the sales representative that the addition of Kanamaru's name to the policy made the policy effective as to both of them.

On November 20, 2001, Kanamaru was riding his bicycle¹ and was injured in an accident caused by the driver of an uninsured vehicle. Upon learning that the vehicle was uninsured, Kanamaru placed Holyoke on notice of his claim under the uninsured motorist provision of the policy.² Holyoke denied Kanamaru's claim, interpreting the policy as excluding him from such coverage. Kanamaru sued Holyoke, requesting a declaratory judgment that he was covered by the uninsured motorist provision and claiming damages as a result of Holyoke's alleged unfair business practices. Kanamaru and Holyoke filed cross motions for summary judgment.

Interpreting the standard Massachusetts automobile policy of insurance, seventh edition, that was in effect at the time of the accident, the motion judge granted summary judgment to Holyoke on Kanamaru's request for declaratory judgment. In doing so, the judge concluded that a plain reading of the contractual language indicated that the plaintiff fit into neither of the two possible classifications under the policy that would have permitted uninsured motorist benefits, and rejected Kanamaru's argument that he was otherwise entitled to coverage as a "named insured" under G.L. c. 175, § 113(5), inserted by St.1988, c. 273, § 47. The judge also granted summary judgment on the second count of Kanamaru's complaint, although he did not discuss Kanamaru's claims for estoppel and c. 93A damages.

Discussion. Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as matter of law. Nunez v. Carrabba's Italian Grill, Inc., 448 Mass. 170, 174, 859 N.E.2d 801 (2007). Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002). In the present matter, we view the facts in the light most favorable to the plaintiff, the nonmoving party against whom judgment was entered. Nunez v. Carrabba's Italian Grill, Inc., supra.

1. Insurance contract claim. We begin by delineating what is not in dispute. The automobile policy at issue provides coverage for the policyholder while driving his automobile and for any other driver operating that vehicle with the policyholder's permission. The policy also requires disclosure to the insurance company of any "household member" or "customary" driver of the insured vehicle and mandates that such persons be classified as listed operators on the coverage selections page of the policy. This disclosure requirement allows the insurance company to evaluate a potentially higher risk (e.g., for young drivers or drivers with poor driving records) associated with the normal use of the vehicle, and accordingly to charge a higher premium. As represented by Holyoke at oral argument, failure to disclose an individual who falls within one of these higher risk categories could result in the insurance company's denial of that individual's claim arising from his or her permissive use of the automobile, but only if listing that individual would have resulted in a premium increase. It is not in dispute in this matter that, as a listed operator, Kanamaru would have been covered under the policy for a claim arising from his operation of the insured vehicle. The instant claim, however, did not arise in such a context.

Kanamaru asserts that Holyoke breached the contract because he is listed on the policy and therefore covered under its terms as a pedestrian³ who suffered bodily injury caused by an uninsured motorist. He further claims that the application of the policy to his claim is mandated by the statute requiring uninsured motorist coverage. A plain reading of the policy and the statute leads us to conclude otherwise on both theories.

"[W]here the words of an insurance contract are `plain and free from ambiguity they must be construed in their usual and ordinary sense.'" Jacobs v. United States Fid. & Guar. Co., 417 Mass. 75, 77, 627 N.E.2d 463 (1994), quoting from Hanover Ins. Co. v. Ramsey, 405 Mass. 1101, 1101, 539 N.E.2d 537 (1989). The presence of equitable considerations in circumstances in which a plain reading of the policy supports a lack of coverage does not create ambiguity in an otherwise unambiguous provision. Andrade v. Aetna Life & Cas. Co., 35 Mass.App.Ct. 175, 177, 617 N.E.2d 1015 (1993). Nor is this court free to reform the terms of a policy in such a situation. Ibid. In the case of an automobile insurance policy, the language of the policy is determined by the insurance commissioner and therefore is exempt from the usual construction against the drafter; rather, it is interpreted in its ordinary sense. Chenard v. Commerce Ins. Co., 440 Mass. 444, 445-446, 799 N.E.2d 108 (2003).

The terms of the automobile insurance policy at issue here concerning uninsured motorist coverage are not ambiguous as to the matter before us. Specifically part 3 of the policy, entitled "Bodily Injury Caused By An Uninsured Auto," states that Holyoke will pay damages for, among others: "You, while occupying your auto, while occupying an auto you do not own, or if injured as a pedestrian." "You" is defined in the policy as "the person(s) named in Item 1 of the Coverage Selections Page." On the coverage selections page of the policy, "Item 1" states: "This policy is Issued To: Hideaki Hirata." Thus, the definition of "you" in the present policy clearly denotes the line on the coverage selections page where the person(s) contemplated in that definition are to be found. On that line of the policy, only Hirata's name appears. Kanamaru therefore unambiguously fails to qualify under the provision that says Holyoke will cover "you" if said person is struck by an uninsured motorist as a pedestrian.

Kanamaru makes much of the fact that at the bottom of the coverage selections page, under "Driver Information," two names are listed: (1) Hirata Hideaki and (2) Hideki Kanamaru. However, there is nothing on the face of the policy that indicates that such listing modifies the definition of "you" contained in the contract. Nor do we find availing Kanamaru's argument that because he is listed in this section, the uninsured motorist statute independently requires coverage for his damages as a "named insured." While the statute does mandate that "named insureds" be covered, nothing in G.L. c. 175, § 113L, states or requires that listed operators qualify ipso facto as "named insureds."⁴

Our courts have consistently concluded that "listed operators" have a different status from that of "named insureds." See, e.g., Depina v. Safety Ins. Co., 419 Mass. 135, 137, 643 N.E.2d 430 (1994) (spouse-claimant of underinsured motorist benefits was household member and listed operator but not "named insured" on husband's policy); Mercadante v. Worcester Ins. Co., 62 Mass.App.Ct 293, 294, 816 N.E.2d 145 (2004) (noting that plaintiff was a "listed driver but not a named insured"). As in the policy issued here by Holyoke, in the Depina and Mercadante cases the "named insured" was the policyholder, not simply any listed operator.

Considering that G.L. c. 175, § 113L, does not state that all listed operators are also "named insureds," and in light of the cases distinguishing between a "named insured" and a "listed driver," we do not conclude that all listed operators necessarily qualify as "named insureds." Thus, nothing in the uninsured motorist statute that mandates coverage for "named insureds" requires Holyoke to compensate Kanamaru under the insurance policy in effect in the present circumstances.

In addition to Kanamaru's failure to qualify as "you" under the policy, Kanamaru also does not qualify under the policy as a "household member." The policy states that it covers "[a]ny household member, while occupying your auto, while occupying an auto not owned by you or if injured as a pedestrian." In the definitions section of the policy, "Household Member" is defined as "anyone living in your...