Liberty Mutual Insurance Co. v. Gonzalez
| Decision Date | 08 June 2017 |
| Docket Number | ESCV2015-1794-B |
| Parties | Liberty Mutual Insurance Company v. Joel Gonzalez et al No. 137204 |
| Court | Massachusetts Superior Court |
Filed June 12, 2017
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT BY DEFENDANT JOEL GONZALEZ AND PLAINTIFF LIBERTY MUTUAL INSURANCE COMPANY
The defendant/counterclaim plaintiff, Joel Gonzalez (" Gonzalez"), has moved pursuant to Mass.R.Civ.P. 56 for summary judgment on the issue of liability on his breach of contract counterclaim against his insurer, the plaintiff/counterclaim defendant, Liberty Mutual Insurance Company (" Liberty Mutual") (Gonzalez's Counterclaim Count I). Gonzalez also moves for summary judgment as to Liberty Mutual's request for declaratory relief under Count I of its complaint, wherein Liberty Mutual seeks a declaration that Gonzalez's property loss claim is not covered by the Liberty Mutual insurance policy in place at the time of the loss (Count I of Liberty Mutual's complaint). Liberty Mutual, in turn, has moved for summary judgment on its claim for declaratory judgment as well as Gonzalez's counterclaims (breach of contract and, in Counterclaim Count II, violation of G.L.c. 93A). This dispute relates to a fire that co-defendant, Somaly Yet (" Yet"), started at a house in Lynn, Massachusetts that she and Gonzalez jointly owned. Both Gonzalez and Yet were named as insureds on the Liberty Mutual policy. Although Liberty Mutual alleges that Yet's actions were precipitated by Gonzalez's just-announced termination of their romantic relationship and his refusal of her overture to reconcile, it is undisputed that Gonzalez did not participate in the actual setting of the fire. Yet pleaded guilty to a charge of arson (she also pleaded guilty to a charge of assault and battery by means of a dangerous weapon relating to a collision between her vehicle and that of Gonzalez outside the residence immediately after she set the fire). On those unadorned and uncontested facts, Gonzalez and Liberty Mutual each claim entitlement to a ruling as a matter of law regarding whether the Liberty Mutual policy covered the loss. A non-evidentiary hearing on the motion was held on June 6, 2017. For the reasons that follow, Gonzalez's Motion for Summary Judgment is ALLOWED and Liberty Mutual's Motion for Summary Judgment is DENIED.
Summary judgment is appropriate when the moving party demonstrates that there is no genuine dispute of material fact and that he is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Pederson v. Time, Inc., 404 Mass. 14, 16-17, 532 N.E.2d 1211 (1989) . The movant makes this showing by submitting affirmative evidence that negates an essential element of the opposing party's case or by demonstrating that the opposing party has no reasonable expectation of proving an essential element of his case at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809, 575 N.E.2d 1107 (1991). When the burden of proof at trial would rest on the nonmoving party, the nonmovant may not rest upon bare allegations or denials in the pleadings, but must, by probative documentary evidence, set forth specific facts showing that there is a genuine issue of material fact for trial. See Pederson v. Time, Inc., 404 Mass. at 17; Key Capital Corp. v. M& S Liquidating Corp., 27 Mass.App.Ct. 721, 728, 542 N.E.2d 603 (1989), A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds could differ. Cassesso v. Commissioner of Corr., 390 Mass. 419, 422, 456 N.E.2d 1123 (1983).
That the parties here filed cross motions for summary judgment does nothing to alter or amend this standard of review; it is not decisive of either the lack of factual controversy, see Bernard J. Basch & Sons v. Travelers Indem. Co., 392 Mass. 1002, 1003, 465 N.E.2d 248 (1984), or the absence of a need for further evidentiary exploration of issues at trial. Fidelity Co-op Bank v. Nova Cas. Co., 726 F.3d 31, 36 (1st Cir. 2013) (citation and internal quotation omitted). It demands only that the court consider " each motion separately and draw all reasonable inferences in favor of the respective non-moving party." Roman Catholic Bishop of Springfield v. City of Springfield, 724 F.3d 78, 89 (1st Cir. 2013). See Bernard J. Basch & Sons v. Travelers Indem. Co., 392 Mass. at 1003. To that end, the court considers pleadings, deposition transcripts, answers to interrogatories, admissions on file, and affidavits in the light most favorable to the applicable non-moving party, but does not weigh evidence, assess credibility, or find facts. See Mass.R.Civ.P. 56(c); Attorney Gen. v. Bailey, 386 Mass. 367, 370-71, 436 N.E.2d 139 (1982).
A dispute over the proper interpretation of an insurance policy raises a question of law. Massachusetts Bay Transp. Auth. v. Allianz Ins. Co., 413 Mass. 473, 476, 597 N.E.2d 439 (1992). See also Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146, 439 N.E.2d 234 (1982) (). Although generally interpreted in the same manner as " any other contract, " The Money Store/Massachusetts, Inc. v. Hingham Mut. Fire Ins. Co., 430 Mass. 298, 300, 718 N.E.2d 840 (1999), the rules of construction peculiar to insurance contracts apply. Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. at 146. Like all contracts, the court is obliged to ask in the first instance whether the contract, when viewed as a whole, is clear and unambiguous. See Sullivan v. Southland Life Ins. Co., 67 Mass.App.Ct. 439, 442, 854 N.E.2d 138 (2006). If it is, the court is required to construe the express policy language in its plain, ordinary, and popular sense as a matter of law, so as " to give reasonable effect to each of its provisions." Id., quoting J.A. Sullivan Corp. v. Commonwealth, 397 Mass. 789, 795, 494 N.E.2d 374 (1986). If, however, an ambiguity lurks in the parties' agreement, it is a cardinal tenant of insurance contract construction that the ambiguity is construed in favor of the insured. Hazen Paper Co. v. U.S. Fid. & Guar. Co., 407 Mass. 689, 700, 555 N.E.2d 576 (1990). In particular, exclusions are strictly construed so as not to diminish the protections purchased by the insured. City Fuel Corp. v. National Fire Ins. Co. of Hartford, 446 Mass. 638, 640, 846 N.E.2d 775 (2006).
The following facts are drawn from the summary judgment record. They are undisputed, except where otherwise noted. Gonzalez and Yet purchased a residence located at 48 Sheridan Street in Lynn, Massachusetts on or about December 5, 2014. Gonzalez and Yet subsequently purchased a homeowner's policy from Liberty Mutual that covered damage and/or loss by fire. The policy contained a list of exclusions. Of significance to this case is the exclusion for " Intentional Loss, " which provides:
We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence . . . Intentional Loss, meaning any loss arising out of any act committed (1) By or at the direction of an " insured"; and (2) With the intent to cause loss.
Shortly before 11:00 A.M. on April 3, 2015, Yet set fire to the residence after Gonzalez told her that he was ending their relationship. Soon after she set the fire, Yet was taken into custody. On April 7, 2015, a designated forensic psychologist of the Lynn District Court, Dr. Tammy Howe, filed her evaluation report with the court and testified that Yet not only met " the standard for commitment for the question of competency" but also met the " standard for commitment just based on psychiatric symptoms." Yet was then committed to the Dr. Solomon Carter Fuller Mental Health Center in Boston, and, on April 23, 2015, Dr. Daniel R. Reilly, a board-certified forensic psychiatrist, determined that Yet was incompetent to stand trial. Following several weeks of treatment, Yet was deemed competent to stand trial. Yet later pleaded guilty to a charge of arson and assault and battery by means of a dangerous weapon.
When Gonzalez sought payment under the policy, Liberty Mutual denied his claim on the ground that his recovery was barred by the intentional loss exclusion. Two months after denying Gonzalez's claim, Liberty Mutual filed the instant action seeking a declaration that Gonzalez (Count I) and Yet (Count II) were not entitled to coverage under the policy. It also sought a declaration as to the amount owed to mortgagee M& T Bank (Count III).
Under the express and unambiguous terms of the Liberty Mutual policy, any loss arising out of an act committed by " an insured" with the intent to commit a loss is not covered. On the undisputed facts of record, that exclusion appears unquestionably to apply. Gonzalez contends, however, that there is a genuine factual dispute as to whether Yet had the requisite mental capacity to act intentionally at the time that she started the fire. He cites to Hanover Ins. Co. v. Talhouni, 413 Mass. 781, 787, 604 N.E.2d 689 (1992), for the proposition that an insurer may not deny coverage to a mentally ill policyholder who lacked the capacity to form the intent for purposes of an exclusionary clause, and he contends that a question of fact is presented regarding the applicability of the intentional loss exclusion, one that is not suitable for resolution by summary judgment.[1]
In Baker v. Commercial Union Ins. Co., 382 Mass. 347 350-51, 416 N.E.2d 187 (1981), the Supreme Judicial Court held that wrongful...
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