Lumbermens Mut. Cas. Co. v. Offices Unlimited, Inc.

• Decision Date: 09 February 1995
• Citation: 419 Mass. 462,645 N.E.2d 1165
• Parties: LUMBERMENS MUTUAL CASUALTY COMPANY v. OFFICES UNLIMITED, INC.; Federal Insurance Company, third-party defendant.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1165

645 N.E.2d 1165

419 Mass. 462

LUMBERMENS MUTUAL CASUALTY COMPANY v. OFFICES UNLIMITED, INC.; Federal Insurance Company third-party defendant.

Supreme Judicial Court of Massachusetts Middlesex.

Argued Dec. 8, 1994.

Decided Feb. 9, 1995.

Kevin M. Truland, Boston, for plaintiff.

Robert P. Powers, Boston (Michael R. Byrne with him), for defendants.

Before ABRAMS, NOLAN, LYNCH, O'CONNOR and GREANEY, JJ.

LYNCH, Justice.

This appeal arises from an insurance coverage dispute, which also prompted allegations of unfair and deceptive business practices, pursuant to the Consumer Protection Statute, G.L. c. 93A, § 11 (1992 ed.). Lumbermens Mutual Casualty Company (Lumbermens) filed an action seeking a declaration that its insurance policy with Offices Unlimited, Inc. (OUI), did not cover an automobile tort claim against one of OUI's employees. In response to Lumbermens' complaint, OUI filed a counterclaim against Lumbermens alleging violations of G.L. c. 93A and G.L. c. 176D. ¹ OUI also filed an action against Federal Insurance Company (Federal) seeking a declaration that insurance provided by Federal would apply in the event that Lumbermens' does not, or that Lumbermens' coverage is not adequate. Federal also filed an action seeking a declaration of the rights and responsibilities of the parties and that, in handling the investigation and defense of the underlying action, Lumbermens breached its fiduciary obligations to Federal and to OUI.

Arising from these various claims, three separate summary judgments were issued, two of which are currently before us. On January 5, 1993, a judge allowed OUI's and Federal's joint motion for summary judgment on Lumbermens' declaratory relief action. Lumbermens filed a timely notice of appeal. On July 1, 1993, the same judge allowed Lumbermens' motion for summary judgment on OUI's counterclaim, alleging that Lumbermens violated G.L. c. 93A. OUI and Federal filed a timely notice of appeal. ² We transferred the case here on our own motion. We reverse the order of January 5, 1993, and affirm the order of July 1, 1993.

In January, 1988, Gary E. Rand was struck by a 1987 Ford F-150 pickup truck which was owned and operated by an employee of OUI. ³ When the accident occurred, the OUI employee was transporting furniture to OUI's Natick store. At the time of this motor vehicle accident, Lumbermens insured OUI under a standard Massachusetts motor vehicle and physical damage policy issued for the period January 1, 1988, through January 1, 1989, with a limit of one million dollars. Part of this policy included an employers' nonownership liability endorsement. Additionally, Federal insured OUI under a commercial umbrella liability policy issued for the policy period November 1, 1987, through November 1, 1988. In its declaratory relief action, Lumbermens requested that the judge rule that the underlying action fell outside the scope of its insurance policy. In support of this request, Lumbermens argued that the employee's pickup truck constituted a "non-owned" automobile of the commercial type used on more than an occasional and infrequent basis in the employer's business and, therefore, pursuant to the policy's employers' nonownership liability endorsement, coverage was not available.

OUI and Federal sought summary judgment on their respective claims. On April 10, 1990, in ruling on OUI's motion for partial summary judgment, the judge found that OUI's liability in the underlying action will be covered by either Lumbermens' policy or Federal's policy and that OUI has no real interest in the outcome of Lumbermens' declaratory action. Therefore, the judge dismissed Lumbermens' case against OUI and ordered that the defense shall be assumed by Federal as the real party in interest. With respect to OUI's counterclaim against Lumbermens, alleging violations of G.L. c. 93A, the judge ruled that this claim raised a question of fact and, therefore, denied OUI's motion for summary judgment.

The order of January 5, 1993, granted summary judgment in favor of OUI and Federal, with respect to Lumbermens' declaratory judgment complaint. A second judge ruled that a pickup truck qualified as a private passenger automobile and, therefore, that Lumbermens' coverage applied. The judge denied the joint motion for summary judgment on the c. 93A action.

In the judgment of July 1, 1993, the same judge ruled that, even assuming Lumbermens' actions were deceptive with respect to OUI, OUI cannot demonstrate that it has suffered a loss of money or property within the meaning of G.L. c. 93A, § 11. Therefore, the judge allowed Lumbermens' motion for summary judgment.

Policy interpretation. Summary judgment shall be granted where there are no material facts in dispute, and the moving party is entitled to judgment as a matter of law. See Cassesso v. Commissioner of Correction, 390 Mass. 419, 422, 456 N.E.2d 1123 (1983); Mass.R.Civ.P. 56(c), 365 Mass. 824 (1974). There are no material facts in dispute relevant to whether the terms of Lumbermens' policy afford coverage for the tort claim. The resolution of this issue depends on the proper interpretation of the term "private passenger automobile" as it is used in the policy's employers' nonownership liability endorsement, and, therefore, raises only a question of law. Massachusetts Bay Transp. Auth. v. Allianz Ins. Co., 413 Mass. 473, 476, 597 N.E.2d 439 (1992), citing Nelson v. Cambridge Mut. Fire Ins. Co., 30 Mass.App.Ct. 671, 673, 572 N.E.2d 594 (1991). ⁴ There is no question that the pickup truck was a "non-owned" vehicle being frequently used in OUI's business. The crucial question is, therefore, whether the truck is a "private passenger automobile" within the terms of Lumbermens' policy. The judge ruled that the term "private passenger automobile" is not clearly defined, and therefore, the policy is ambiguous. Because the language of the policy is within the control of the insurer, the judge construed the policy strictly against the insurer and found that the pickup truck is included as a private passenger automobile. We conclude that the term "private passenger automobile" is not ambiguous and that the truck was not covered under Lumbermens' policy.

We recognize that an ambiguity exists in an insurance contract when the language contained therein is susceptible of more than one meaning. Ober v. National Casualty Co., 318 Mass. 27, 30, 60 N.E.2d 90 (1945). However, an ambiguity is not created simply because a controversy exists between parties, each favoring an interpretation contrary to the other. ⁵ Jefferson Ins. Co. v. Holyoke, 23 Mass.App.Ct. 472, 475, 503 N.E.2d 474 (1987), citing Southern Constr. Co. v. United States, 364 F.2d 439, 453, 176 Ct.Cl. 1339 (1966). We conclude that the term "private passenger automobile" is clear and unambiguous and that its plain and ordinary meaning does not include a pickup truck. See Johnsen v. Harper, 213 Neb. 145, 147, 328 N.W.2d 192 (1982); Ohio Casualty Ins. Co. v. Tyler, 85 Ill.App.3d 410, 413, 40 Ill.Dec. 846, 407 N.E.2d 77 (1980); Concord General Mut. Ins. Co. v. Hills, 345 F.Supp. 1090, 1096 (S.D.Me.1972). Certainly the plain meaning of the term "pickup truck" suggests that it is not an automobile of the private passenger type, designed primarily for transporting persons. See Hall v. Gamble Alden Life Ins. Co., 34 Ill.App.3d 837, 838-839, 341 N.E.2d 69 (1975).

Even though we conclude that the term "private passenger automobile" is clear and unambiguous, we recognize that words, which are clear by themselves, may become ambiguous when read in the context of an insurance policy. See Save-Mor Supermarkets, Inc. v. Skelly Detective Serv., Inc., 359 Mass. 221, 226, 268 N.E.2d 666 (1971). In this case, however, the context of the policy does not create ambiguity but rather further clarifies the term. The endorsement states that coverage applies to a "non-owned" private passenger automobile and to any "non-owned" automobile of the commercial type used infrequently or occasionally in OUI's business. Although "commercial type" vehicle is not specifically defined, it is clear that the policy is making a distinction between vehicles designed primarily to carry passengers and vehicles designed primarily to carry goods. This conclusion is further supported by the fact that the pickup truck was registered as a commercial vehicle.

Although it is not necessary for us to look at how the vehicle was being used in order to resolve the coverage question, see Ohio Casualty Ins. Co. v. Tyler,...