Bristol West Ins. Co. v. Farm Family Casualty Ins. Co.

• Court: Superior Court of Maine
• Decided: May 18, 2018
• Docket: PIScv-17-1
• Status: Unpublished

Opinion

STATE OF MAINE SUPERJOR COURT PISCATAQUIS, ss. CIVIL DIVISION DKT. NO. CV-17-1 ) BRISTOL WEST INS. CO., ) ) Plaintiff, ) ) ) ORDER GRANTING PLAINTIFF'S ) MOTION FOR SUMMARY ) .nJDGMENT v. ) ) ) ) FARM FAMILY CASUALTY INS. CO., ) ) ) Defendant. )

Bristol West Insurance Company ("Plaintiff') filed a Complaint for Declaratory Judgment

against Farm Family Casualty Insurance Company ("Defendant") seeking a declaration that the

insurance policy at issue does not provide coverage for Defendant's separate reach-and-apply

claim against Plaintiff. (PISSC-CV-2016-004.) That case was stayed pending the outcome ofthis

case. Plaintiff has now filed a Motion for Summary Judgment on its Complaint for Declaratory

Judgment. Defendant opposed the Motion on the basis that the insurance policy at 'issue is

ambiguous and there are genuine disputes of material fact present. The Motion is in order for

decision.

FACTS

Plaintiff issued a Maine Personal Auto Policy (Policy No. GOO 5211134 00), which had an

effective policy period of February 24, 2012, through August 24, 2012, to Todd Rand. (Pl.'s

Supp.' g S.M.F. ,r 1.) Deborah Northrup, a friend of Mr. Rand, gave Mr. Rand permission to use

her detached garage on or about February 29, 2012, at 104 Parkman Road in Wellington, Maine,

Heidi Eddy, Esq for Plaintiff 1 Josh Sirocco, Esq for Defendant in order to perform repairs to his vehicle. (Id ,r,r 5-7.) Mr. Rand was not renting the garage from

Ms. Northrup. (Id ,r 7.) While he was using the garage to perform the vehicle repairs, afire started

in the garage and destroyed the garage and its contents. (Id ,r 8.)

Defendant, who is Ms. Northrup's insurance company, paid her for the loss of her garage

and its contents. (Id ,r 9.) Defendant then filed a reach-and-apply action against Plaintiff pursuant

to 24-A M.R.S. § 2904 seeking to recover in the amount of $39,034.59. (Id. ,r 10.) Part A of

Plaintiffs policy for Mr. Rand pertains to liability coverage and, under the heading of

"EXCLUSIONS THAT APPLY TOPART A-LIABILITY COVERAGE," the second paragraph

contains an exclusion "[f]or damage to property owned by, used by, rented to, being transported

by, or in the care custody or control of an insured person." (Id. ,r 3.) That exclusion is not

applicable to "damage to a rented residence or rented private garage." (Id ,r 4.)

Plaintiff filed the present declaratory judgment action pursuant to 14 M.R.S. §§ 5951-5963

seeking a judicial declaration that it is not required to indemnify and/or reimburse Defendant for

any amount Defendant paid to Ms. Northrup based on the exclusion listed in the preceding

paragraph. (Pl. 's Compl. 3-4.)

LEGAL STANDARD

Summary judgment is granted to a moving party where "there is no genuine issue as to any

material fact" and the moving party "is entitled to judgment as a matter of law." M.R. Civ. P.

56(c). "A material fact is one that can affect the outcome of the case, and there is a genuine issue

when there is sufficient evidence for a fact-finder to choose between competing versions of the

fact." Lougee Conserva~cy v. CityMortgage, Inc., 2012 ME 103, ,r 11, 48 A.3d 774 (quotation

omitted). Courts must "consider only the portions of the record referred to and the material facts

set forth in the Rule 56(h) statements" and view those facts in the light most favorable to the non­

2 moving party. Johnson v. McNeil, 2002 ME 99, ,r 8, 800 A.2d 702. A genuine issue exists where

the jury would be required to "choose between competing versions of the truth." MP Assocs. v.

Liberty, 2001 ME 22, ,r 12, 771 A.2d 1040. However, "[s]ummary judgment is no longer an

extreme remedy." Curtis v. Porter, 2001 ME 158, ,r 7, 784 A.2d 18.

DISCUSSION

Plaintiff moved for summary judgment arguing that there is no genuine dispute of material

fact that the insurance policy in question excludes coverage for the loss and does not provide

coverage for Defendant's reach-and-apply claim against Plaintiff. The Court agrees and grants

Plaintiffs requested judgment on its Complaint for Declaratory Judgment. While Defendant

argues that there are genuine issues of material fact with respect to purported ambiguities within

the subject policy, the Court disagrees because it finds the policy to be unambiguous and plainly

excludes coverage for this loss.

Determining whether or not contract language is ambiguous is a question of law for the

Court. Apgar v. Commercial Union Ins. Co., 683 A.2d 497,498 (Me. 1996). "Contract language is

ambiguous when it is reasonably susceptible of different interpretations." Portland Valve, Inc. v.

Rockwood Sys. Corp., 460 A.2d 1383, 1387 (Me. 1983). Just because parties have differing views

on what a contract means does not make the contract ambiguous. Champagne v. Victory Homes,

Inc., 2006 ME 58, ,r 10, 897 A.2d 803. "If a document is unambiguous, then its interpretation is

also a question of law and must be determined from the plain meaning of the language used and

from the four comers of the instrument without resort to extrinsic evidence." Eastwick v. Cate St.

Capital, Inc., 2017 ME 206, ,r 17, 171 A.3d 1152 (internal quotation marks omitted). When the

Court interprets a contract of insurance, it must consider the entire document and it must

"give force and effect to all of its provisions and not in a way that renders any of its provisions

3 meaningless." Am. Prof. Ins. Co. v. Acadia Ins. Co., 2003 ME 6, ,i 12, 814 A.2d 989 (internal

quotation marks omitted).

First, the exclusion at issue is not reasonably susceptible to different interpretations. In

fact, while Defendant argues that term "rented" within the exclusion at issue is ambiguous, the

parties actually agree on the interpretation ofthe exclusion. Fundamentally, they disagree whether

there is a genuine dispute of material fact as to whether the exclusion-and the internal exception

to the exclusion-applies in this instance. That exclusion explains that Plaintiff does not provide

liability coverage under the policy "[f]or damage to property owned by, used by, rented to, being

transported by, or in the care, custody or control of an insured person. This exclusion does not

apply to damage to a rented residence or rented private garage." (Pl. 's Ex. A-1 to Supp. 'g S.M.F.,

at 6.)

Defendant argues that this provision is reasonably susceptible to different interpretations

because the term "rented" is not defined in the policy and can have different meanings. This

argument appears to be premised on an assumption that Ms. Northrup's statement in her affidavit

that Mr. Rand "was not renting the garage from" her means only that Mr. Rand did not pay

monetary consideration for use of the garage. Defendant then proceeds to assert that "rented"

could apply to use ofproperty in exchange for services provided. However, Plaintiff did not cabin

its proposition as to the meaning of the term "rented" in the policy solely to use of property in

exchange for monetary consideration. Instead, both Plaintiff and Defendant agree that "rented"

can mean monetary compensat~on or other forms of consideration. (See, e.g., Def.' s Opp'n to Pl.' s

Mot. Summ. J. 2; Pl.'s Rep. to Mot. Summ. J. 2-3.) In any event, "rented" is not reasonably

susceptible to different interpretations because it is commonly understood to encompass

consideration in general. See, e.g., rent, Black's Law Dictionary 1410 (9th ed. 2009).

4 What Defendant really disputes is whether Mr. Rand "rented" the garage from Ms.

Northrup, which would then bring into play the exception to the exclusion in the policy. However,

it is clear that there is no genuine dispute of material fact that Ms. Northrup was not renting the

garage to Mr. Rand because she provided an affidavit stating as much in support of Plaintiffs

Statement of Material Facts. (Pl. 's Supp.'g S.M.F. ,r 7; Pl.'s Ex. B to Supp.'g S.M.F., at ,r 3.)

Defendant has not pointed to any evidence in the record to qualify Ms. Northrup's statement, i.e.,

that Mr. Rand did use the garage in exchange for some type of consideration; instead, Defendant

qualifies the statement of material fact by disputing what Ms. Northrup meant when she stated that

Mr. Rand "was not renting the garage from" her. See generally Dyer v. DOT, 2008 ME 106, ,r 15,

951 A.2d 821 ("Failure to properly respond to a statement of material facts permits a court to deem

admitted any statements not properly denied or controverted."). Without properly controverting

this statement by pointing to evidentiary support in the record, this characterization of Ms.

Northrup's intent behind her statement is not sufficient to generate a genuine dispute of material

fact.

Second, the other provision within the policy starting on page 40 that Defendant offers as

purportedly ambiguous is not ambiguous at all. Defendant points to an "INSURING

AGREEMENT" starting on page 40 with language that differs from the standard "Insuring

Agreement" in Part A of the policy. From there, Defendant notes that the exclusion in question

does not appear after the "INSURING AGREEMENT" on page 40, but that both might seemingly

apply to "PART A - LIABILITY COVERAGE," which is the part of the policy to which the

exclusion in question is applicable. Defendant concludes that a "genuine issue of material fact is

raised because an insured is left to question which 'Insuring Agreement' section of the policy

would apply." (Def.'s Opp'n to Pl.'s Mot. Summ. J. 3.)

5 I .

This "INSURING AGREE1\1ENT" Defendant points to as allegedly creating an ambiguity

appears in a section of the policy titled "NA1\1ED NON-OWNER COVERAGE

ENDORSE1\1ENT." (Pl.'s Ex. A-1 to Supp.'g S.M.F., at 40.) Directly below this heading it states

that "[i]fyou pay the premium for Named Non-Owner Coverage, then you agree that this policy

is amended as follows ...." The "NA1\1ED NON-OWNER COVERAGE ENDORSE1\1ENT"

then details which general definitions are amended, that the "INSURING AGREEMENT" is

amended, and that certain exclusions are deleted or deleted and replaced. (Id at 40-41.) However,

viewing the policy as a whole and based on the qualification in the section, it is clear that these

amended definitions, the amended "INSURING AGREE1\1ENT," and the removal or revisions of

some exclusions only apply if the policyholder pays the premium for Named Non-Owner Coverage

(hence the "ifyou pay ... then you agree" language).

The two policy declaration pages and the policy change request form both indicate that Mr.

Rand's coverage was limited to · bodily injury, property damage, medical payments, and

uninsured/underinsured motorist coverage. (Pl.'s Ex. A-1 to Supp.'g S.M.F.) While that does not

prove that Mr. Rand did not pay the premium for Named Non-Owner Coverage, which would

bring the "NA1\1ED NON-OWNER COVERAGE ENDORSE1\1ENT" into play, even assuming

he did pay the premium for Named Non-Owner Coverage, the exclusion at issue would not be

affected. It is clear that the "NA1\1ED NON-OWNER COVERAGE ENDORSE1\1ENT," when

applicable, does not delete all of preceding pages of the policy but instead amends or deletes the

specified sections of the policy. For example, Sections II(C)-(E) indicate that Exclusion 5 is

deleted and replaced with referenced text, Exclusion 11 is deleted and replaced with referenced

text, and Exclusion 12 is deleted. (Id at 41-42.) T]lere are no other exclusions referenced, i.e.,

Exclusion 2 is not affected by the "NAMED NON-OWNER COVERAGE ENDORSEMENT."

6 Defendant argues that because the exclusion at issue here from "PART A - LIABILITY

COVERAGE," Exclusion 2, is not referenced in the "NAMED NON-OWNER COVERAGE

ENDORSEMENT," the policy is ambiguous because it is unclear what applies. The Court

disagrees. As Plaintiff astutely pointed out, there would be no need to specify which exclusions

were being deleted or deleted and replaced if the "NAMED NON-OWNER COVERAGE

ENDORSEMENT" deleted all exclusions. That part of the endorsement clearly amends only the

referenced portions of the general policy. To interpret it otherwise would render an extensive

number of provisions in the policy meaningless, which is something the Court must avoid doing.

See Acadia Ins. Co., 2003 ME 6, ,r 12, 814 A.2d 989. Defendant has not generated a genuine

dispute of material fact as to whether or not the relevant exclusion, Exclusion 2, applies in this

case.

Accordingly, there is no genuine dispute of material fact here that Mr. Rand was using Ms.

Northrup's private garage but was not renting it from her. This factual situation fits the exclusion

to liability coverage in Plaintiff's policy that excludes coverage "[f]or damage to property owned

by, used by, rented to, being transported by, or in the care, custody or control of an insured

person," and the exception that states the "exclusion does 'not apply to damage to a rented

residence or rented private garage" is not applicable here. (Pl.' s Ex. A-1 to Supp.' g S.M.F ., at 6.)

Here, Mr. Rand damaged property-a private garage-he was using but was not renting. (Pl.'s

Supp.'g S.M.F. ,r,r 5-8.) Under the policy, Plaintiff has no obligation to provide coverage for this

loss or indemnify or reimburse Defendant for its payment to Ms. Northrup.

CONCLUSION

Because there is no genuine dispute of material fact and the subject policy is unambiguous

in its exclusion of coverage for the loss, Plaintiffs Motion for Summary Judgment must be

7 granted.

The entry is:

1. Plaintiffs Motion for Summary Judgment on its Complaint for Declaratory Judgment is GRANTED. 2. The Clerk is directed to incorporate this Order into the docket by reference pursuant to M.R. Civ. P. 79(a).

Justice, Maine Superior Court