Peerless Ins Co. v. Hatford Ins. Co., 98-P-49

• Court: Appeals Court of Massachusetts
• Citation: 723 N.E.2d 996
• Docket Number: No. 98-P-49,98-P-49
• Parties: (Mass.App.Ct. 2000) PEERLESS INSURANCE COMPANY V. HATFORD INSURANCE COMPANY
• Decision Date: 25 May 1999

723 N.E.2d 996 (Mass.App.Ct. 2000) PEERLESS INSURANCE COMPANY
V.
HATFORD INSURANCE COMPANY No. 98-P-49 Appeals Court of Massachusetts, Middlesex. May 25, 1999. February 10, 2000

Andrew J. Fay for the plaintiff. Myles W. McDonough for the defendant.

Present: Armstrong, Perretta, & Gelinas, JJ.

Contract, Insurance. Insurance, Workers' compensation insurance, Insurer's obligation to defend. Workers' Compensation Act, To whom act applies. Statute, Construction. Wrongful Death.

The opinion of the court was delivered by: Armstrong, J.

Civil action commenced in the Superior Court Department on August 17, 1987.

Following review by this court, 34 Mass. App. Ct. 534 (1993), motions for summary judgment were heard by Carol Stroud Ball, J.

The present action arises out of a previous wrongful death suit brought by the administrator of the estate of John Doyon on behalf of Doyon's nondependent parents to recover damages for loss of consortium against two parties, only one of whom, Stephen F. Lewis, is material to this appeal. Lewis was doing business as Eastern Waterproofing Company (Eastern) and was waterproofing a building owned by the other defendant in the prior action when Doyon fell to his death from Eastern's scaffolding. The suit alleged negligent maintenance by Eastern of its equipment.

The present action is between Eastern's two liability insurers as to which one had the duty to defend Eastern and to indemnify in the event of an adverse judgment. Hartford Insurance Company (Hartford), Eastern's workers' compensation and employers' liability insurer, declined to defend the claim, alleging that Doyon was not an employee of Eastern and that it would not be responsible for defending against the claim even if Doyon had been an employee. Peerless Insurance Company (Peerless), Eastern's general liability insurer, undertook defense of the claim and eventually settled it for $125,000.¹ Peerless brought the present action for indemnification, alleging that it was Hartford that had the duty to defend against the claim.

Peerless's action came to this court once before, on a report that we discharged as improvidently made, see Peerless Ins. Co. v. Hartford Ins. Co., 34 Mass. App. Ct. 534, 537 (1993). In discharging the report we implied by way of dictum that as between the workers' compensation insurer and the general liability insurer, it was the former that had the broad, general duty of defending claims that arose from a worker's injury or death, regardless whether the claim was asserted before the Department of Industrial Accidents or a court, and that if the exclusivity of the administrative forum precluded the availability of an action in court, that was a matter that should be raised in the normal course of defending the claim in court, not a reason for refusing to defend. Id. at 536-537. We followed our Peerless holding in a subsequent case, HDH Corp. v. Atlantic Charter Ins. Co., 41 Mass. App. Ct. 131, 134-135 (1996). On further appellate review, however, that decision was reversed, see 425 Mass. 433 (1997). The latter decision, starting from the proposition that an insurer has a duty to defend only if the allegations of the complainant are reasonably susceptible of an interpretation that they state a claim covered by the terms of the insurance policy, reasoned that the Atlantic Charter Insurance Company (Atlantic Charter) policy, a standard workers' compensation and employers' liability policy, under coverage A² insured only for claims brought under the workers' compensation act -- i.e., claims for compensation brought before the department, not claims for damages brought in a civil action before a court (id. at 436-438) -- and that coverage B, "the employers' liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out [of the compensation scheme under G. L. c. 152, Sect. 24,] brings a tort action for personal injuries." Id. at 439 n.11.

Following the...