Utica Mut. Ins. Co. v. Fontneau

• Citation: 875 N.E.2d 508,70 Mass. App. Ct. 553
• Decision Date: 25 October 2007
• Docket Number: No. 06-P-930.,06-P-930.
• Parties: UTICA MUTUAL INSURANCE COMPANY v. Edward T. FONTNEAU & others.<SMALL><SUP>1</SUP></SMALL>
• Court: Appeals Court of Massachusetts

875 N.E.2d 508

70 Mass. App. Ct. 553

UTICA MUTUAL INSURANCE COMPANY v. Edward T. FONTNEAU & others.¹

No. 06-P-930.

Appeals Court of Massachusetts, Middlesex.

Argued March 15, 2007.

Decided October 25, 2007.

James T. Scamby, Boston, for the plaintiff.

J. Michael Conley, Braintree, for Edward W. Burbank & another.

Present: LENK, GREEN, & SIKORA, JJ.

SIKORA, J.

This appeal requires interpretation of a phrase common in homeowner's insurance policies. The question presented is whether an insured party, Edward T. Fontneau, used an adjacent parcel "in connection with" his insured residence so as to require the insurer, Utica Mutual Insurance Company (Utica Mutual), to defend and to indemnify him against personal injuries suffered by a third party on the adjacent parcel. By allowance of Fontneau's cross motion for partial summary judgment, a Superior Court judge ruled that Utica Mutual had a duty to defend. At the conclusion of a jury-waived trial, a second Superior Court judge ruled that the insurer had a duty to indemnify. We affirm the conforming final judgment.

1. Background. We summarize the facts from the trial judge's findings and the uncontradicted evidence in the record. On March 23, 1995, while in the course of his law enforcement duties, police Officer Edward W. Burbank sustained an injury on a dirt track at 380 Old Colony Road in Norton (380). The track led to the rear of the adjoining parcel, 378 Old Colony Road (378). At the time of the accident, Fontneau owned both parcels.

The 378 parcel consisted of approximately two acres and contained a two-family house rented by Fontneau to tenants. A driveway led from Old Colony Road to the house. Behind the house lay an upper backyard and a lower backyard. The lower backyard was a flat, clear area. A drop-off and a concrete retaining wall, ranging from four to eight feet in height, separated the lower area from the house and upper yard. They made the lower area inaccessible to vehicles from the front of 378.

The adjacent 380 parcel consisted of approximately eleven acres of land on which Fontneau had built a 7,200 square foot metal building. He used part of the building to store equipment and materials, and to house offices for his construction business. He leased the remainder of the building to commercial tenants. A driveway connected the metal building to Old Colony Road. The concrete retaining wall extended from 378 to the rear of the metal building on 380.

A fifteen to twenty foot wide dirt track connected the rear of 378 and the rear of 380. It passed behind the metal building on 380, ran behind and parallel to the concrete retaining wall, and extended to the lower backyard of 378. Although it was not necessary to use the dirt track to access any part of 378 from 380, it was the most convenient way to get from 380 to 378, and it provided the only vehicle access to the lower backyard of 378. Fontneau's employees regularly operated construction equipment along the dirt track behind 380.

Fontneau collected classic and antique automobiles as a hobby. In the early 1990's, he brought four automobiles to the lower backyard behind the retaining wall on 378 by means of a tow truck along the dirt track from 380. He visited or inspected the cars on nights and weekends. He also stored some construction materials in this area.

On March 23, 1995, Fontneau learned that the children of the tenants at 378 had vandalized his antique cars. He arranged to meet Burbank that evening in front of 380. When Burbank arrived, no one was present. Knowing that the alleged vandalism involved cars stored "behind the building," he proceeded in the dark on foot behind the metal building. He walked down the dirt track and investigated the site of the antique cars at the lower backyard of 378. While coming back on the dirt track, Burbank walked into the extended stabilizer arm of a backhoe behind the metal building and was injured.

From 1989 until approximately 1994, Fontneau had maintained separate insurance policies on 378 and 380. In 1994 or 1995, he allowed the policy on 380 to lapse. The dwelling policy issued for 378 by Utica Mutual, in effect at the time of Burbank's injury, excludes coverage for "bodily injury" "arising out of a premises . . . owned by an insured . . . that is not an `insured location.'" The policy defines the term "insured location" as "the `residence premises'" or "any premises used by [the insured] in connection with [the residence premises]" (emphasis supplied). Fontneau had not altered the dirt track since he acquired the policy.

Burbank and his wife brought a personal injury action against Fontneau for negligent conduct on 380. Fontneau sought coverage from Utica Mutual. In June of 1999, Utica Mutual began this action for a declaration that its policy did not provide coverage for the Burbanks' claims. In October of 1999, the Burbanks amended their complaint in the negligence action to include an allegation that Fontneau owned and controlled 378, and that he regularly used the dirt track to access the lower backyard of 378 from 380.

2. Prior proceedings. By a memorandum of decision, the motion judge ruled that from the time of the amendment of the Burbanks' complaint, Utica Mutual had a duty to defend Fontneau because the amended complaint stated a claim that might reasonably fall within the coverage of the policy.

The case went to a jury-waived trial on the issue of indemnification. The parties stipulated that they were unable to locate any Massachusetts case law addressing the "used . . . in connection with" clause at issue. The trial judge analyzed case law from other jurisdictions and concluded that "for premises to be used `in connection with' other premises, the insured must use the premises regularly and on an ongoing basis for some purpose logically related to his use of the [insured] premises," with "[t]he particular use of the premises in question [as] the determining factor." Upon her findings of fact, she ruled that Utica Mutual had breached its duty to indemnify Fontneau.

After the trial judge issued her ruling, we held in Massachusetts Property Ins. Underwriting Assn. v. Wynn, 60 Mass. App.Ct. 824, 830, 806 N.E.2d 447 (2004), that "the term `insured location' is intended and appropriately understood to be limited to the residence and premises integral to its use as a residence" (emphasis added). Relying on the Wynn decision, Utica Mutual filed a motion for reconsideration and for relief from judgment. It argued that the word "integral" meant "essential to completeness," and that "[n]othing about the [dirt track] behind 380 was essential to the `completeness' of 378 as a residence." The trial judge denied the motion. Utica Mutual presses the same argument on appeal.

3. Discussion. a. The duty to defend. With the same summary judgment record as the motion judge, the reviewing court examines the allowance de novo. See Matthews v. Ocean Spray Cranberries, Inc., 426 Mass. 122, 123 n. 1, 686 N.E.2d 1303 (1997). We assess the factual materials in the light most favorable to the nonmoving (losing) party, determine whether all material facts are established, and inquire whether the applicable law entitles the movant to judgment. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991).

The motion judge correctly ruled that Utica Mutual had a duty to defend Fontneau against the allegation of negligence in the Burbanks' amended complaint of October 12, 1999. As he observed, the proper analysis compares the pertinent language of the complaint and the text of the policy. The settled rule in Massachusetts and elsewhere is that, if the allegations of the complaint are reasonably susceptible of an interpretation stating a claim covered by the policy terms, the insurer must undertake a defense. See Lusalon, Inc. v. Hartford Acc. & Indem. Co., 400 Mass. 767, 772, 511 N.E.2d 595 (1987); Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 847, 616 N.E.2d 68 (1993); Simplex Technologies, Inc. v. Liberty Mut. Ins. Co., 429 Mass. 196, 197-198, 706 N.E.2d 1135 (1999); Sterilite Corp. v. Continental Cas. Co., 17 Mass.App.Ct. 316, 318, 458 N.E.2d 338 (1983).² In Simplex Technologies, Inc. v. Liberty Mut. Ins. Co., supra at 199, 706 N.E.2d 1135, the court added that "`the insurer's duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the possibility of recovery under the policy; there need not be a probability of recovery.' 7C J.A. Appleman, Insurance Law and Practice § 4683.01, at 67 (rev. ed.1979)."

In the amended complaint, the Burbanks pleaded in clear and separately numbered paragraphs (1) that "[a]s owner and possessor of 378 Old Colony Road, Mr. Fontneau and others entering with his permission regularly used portions of 380 Old Colony Road, including [the dirt track] at the rear of the building at 380 Old Colony Road, to gain access to the rear of his property at 378 Old Colony Road, and the [dirt track] was otherwise used by Mr. Fontneau in connection with 378 Old Colony Road"; (2) that at the time of the accident Fontneau possessed and parked a backhoe in the rear of 380 on or adjacent to the dirt track leading to 378, and that the backhoe's stabilizer arms were dangerously extended outward; and (3) that this dangerous condition and the failure to warn Burbank as a foreseeable visitor walking on the dirt track behind 380 "in connection with" his investigation at the rear of 378 constituted negligence.

These allegations satisfied the standard of reasonable textual susceptibility and mere possibility of recovery so as to trigger the duty to defend.³ b. The duty to indemnify. Utica Mutual is invoking an exclusion from coverage. The interpretation of an exclusionary clause "is a `question of law for the trial judge, and then for the reviewing court.'" Jefferson Ins. Co. v. Holyoke, 23 Mass.App.Ct. 472, 475, 503 N.E.2d 474 (1987), quoting...