Towns v. Vermont Mut. Ins. Co.
Decision Date | 26 January 1999 |
Docket Number | No. 98-259.,98-259. |
Citation | 726 A.2d 65 |
Parties | Richard F. TOWNS v. VERMONT MUTUAL INSURANCE COMPANY. |
Court | Vermont Supreme Court |
Present MORSE, JOHNSON and SKOGLUND, JJ., FREDERIC W. ALLEN, C.J. (Ret.) and ERNEST W. GIBSON, J. (Ret.), Specially Assigned.
Plaintiff Richard Towns appeals from a grant of summary judgment in favor of defendant Vermont Mutual Insurance Company, holding that defendant was not required to defend and indemnify plaintiff under a homeowner's policy because plaintiff's liability for an unlawful landfill arose from formerly owned property not included as an insured location under the instant policy. We affirm.
The parties do not dispute the facts. Plaintiff owned property on Collins Hill in Johnson from 1972 until he sold it on June 28, 1987. Beginning June 29, 1987, plaintiff owned and occupied a residence in Morrisville. Plaintiff is a named insured under a homeowner's policy issued by defendant that went into effect on the same date as his occupancy of the Morrisville residence began, June 29, 1987, and that remained in effect through June 29, 1997. The insured location listed on the policy is plaintiff's residence in Morrisville.
On September 30, 1996, the Vermont Agency of Natural Resources issued an administrative order alleging that, during the time plaintiff owned the Johnson property, he illegally disposed of fill there. Plaintiff notified defendant of the State's proceeding against him and demanded that defendant defend him pursuant to the policy. Defendant denied coverage.1 In June 1997, plaintiff sued defendant for failure to defend and indemnify plaintiff. On cross-motions for summary judgment, the court ruled that the policy excludes coverage for plaintiff's personal liability arising from the Johnson property because the Johnson property is not listed as a residence premises and therefore is not an insured location. Plaintiff appeals.
At issue on appeal is interpretation of plaintiff's homeowner's insurance policy. The dispute in this case turns on the meaning of an exclusionary clause. The exclusion to personal liability coverage states in pertinent part:
(Emphasis added.)
Plaintiff contends that the liability coverage exclusions bar coverage for damages arising from premises currently owned by an insured that do not comprise an insured location. He argues that the policy covers any formerly owned property of the insured as such premises are not specifically excluded by the definition. Plaintiff maintains that, since ambiguity in insurance contracts must be resolved against the drafter, see Garneau v. Curtis & Bedell, Inc., 158 Vt. 363, 367, 610 A.2d 132, 134 (1992), we must adopt his reading of the uninsured location exclusion.
Defendant asserts that the provision should be interpreted as unambiguously excluding premises previously owned by an insured. To support this position, it cites to cases from other jurisdictions that have held plaintiff's interpretation is an illogical and unreasonable reading of similar provisions. See State Farm Fire & Cas. Co. v. Thomas, 756 F.Supp. 440, 445 (N.D.Cal.1991) ( ); Wickner v. American Reliance Ins. Co., 141 N.J. 392, 661 A.2d 1256, 1259 (1995) ( ); see also Huntzinger v. Hastings Mut. Ins. Co., 143 F.3d 302, 314-17 (7th Cir.1998) ( ).
Before applying the rule of insurance contract construction that the language must be strictly construed against the insurer, we must first conclude that the language or provision at issue is ambiguous. See 2 L. Russ & T. Segalla, Couch on Insurance § 21.11 (3d ed.1995). Although we have no easy guidelines by which to gauge whether language in an insurance contract is ambiguous, generally ambiguity exists if language is reasonably or fairly susceptible to different interpretations. See Northern Sec. Ins. Co. v. Hatch, 165 Vt. 383, 386, 683 A.2d 392, 394-95 (1996). The fact, however, that a dispute has arisen over the proper interpretation of a contract does not automatically render the language ambiguous. See Isbrandtsen v. North Branch Corp., 150 Vt. 575, 581, 556 A.2d 81, 85 (1988). Further, a term of an insurance contract is not ambiguous if its meaning can be ascertained by fair inference from other terms...
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