Metropolitan Property and Casualty Insurance Co. v. Micale

• Court: Superior Court of Maine
• Decided: January 24, 2018
• Docket: CUMcv-18-144
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss CIVIL ACTION DOCKET NO. CV-18-,,­

METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, ORDER ON CROSS MOTIONS FOR SUMMARY Plaintiff JUDGMENT AND DEFENDANT'S MOTION V. TO AMEND ANSWER AND COUNTERCLAIM VINCENT MICALE, JR., REc~u GIJf:JB CLERKS [JF: Defendant Jf.1tJ 24 ~19 F~2:(1;~

Before the court are plaintiff/counterclaim defendant Metropolitan Property and Casualty

Insurance Company and defendant/counterclaim plaintiff Vincent Micale, Jr.'s cross-motions for

summary judgment and defendant/counterclaim plaintiff Micale's motion to amend answer and

counterclaim. For the following reasons, Mr. Micale's motion to amend answer and counterclaim

is granted, Metropolitan's motion for summary judgment is denied, and Mr. Micale's cross motion

for summary judgment is granted.

I. FACTS

Plaintiff Metropolitan is a foreign insurer authorized to do business in the State of Maine.

(Pl.'s Supp'g S.M.F. ! 1.) Metropolitan issued a homeowner's policy to defendant, Vincent J.

Micale, Jr. (Pl.'s Supp'g S.M.F. ! 3.) The policy, numbered 599003786-0, names Vincent J.

Micale, Jr. as the insured and has a policy term from August 1, 2016 to August 1, 2017. (Pl.'s

Supp'g S.M.F. ~ 3.) On or about June 18, 2017, Mr. Micale rented two jet skis from Jet Ski Guy

Inc., pursuant to a rental agreement. (Pl.'s Supp'g S.M.F. ~~ 4-5.) Monica Curtin and Adam Kelly

were listed as authorized operators of the jet skis. (Pl.'s Supp'g S.M.F. ~ 6.) On June 18, 2017,

1 Ms. Curtin and Mr. Kelly operated the jet skis on Little Sebago Lake and collided, destroying both

jet skis. (Pl.'s Supp'g S.M.F. ~~ 7-10.) Mr. Kelly received serious bodily injury as a result of the

collision, including an injury to his left leg, which later required amputation. (Pl.'s Supp'g S.M.F.

~ 11.)

The policy provides:

Section II - We will pay all sums for bodily injury and property damage to others for which the law holds you responsible because of an occurrence to which this coverage applies.

(Pl.'s Supp'g S.M.F., 20.) "Property damage" is defined as "physical damage to or destruction

of intangible property, including loss of use of this property." (Pl.' s Supp' g S .M.F. ~ 21.) "Bodily

injury" is defined as "physical harm to the body including any resulting sickness or disease." (Pl. ' s

Supp'g S.M.F.' 22.)

The policy's watercraft exclusion and extension of coverage (coverage extension) applies

to the coverage as follows:

9 . Watercraft. We do not cover bodily injury or property damage arising out of: A . the ownership, maintenance, occupancy, operation, use loading or unloading of watercraft of any type owned or operated by you or rented or loaned to you, B. The entrustment by you of a watercraft of any type to any person, C. the failure to supervise or negligent supervision by you of any person involving a watercraft of any type; or D. vicarious liability, whether or not imposed by law, for the actions of a child or minor involving a watercraft of any type.

(Pl.'s Supp'g S.M.F. ! 23 .) Coverage is extended for bodily injury and property damage arising

out of:

a. Rented Watercraft; 2. With an inboard/outboard motor with 50 total horsepower or less. This includes watercraft propelled by a water jet pump engine or motor,

(Pl.'s Supp'g S.M.F. ! 24.)

2 An additional exclusion applies to the coverage as follows :

Care, Custody, or Control. We do not cover property damage to property occupied or used by you, rented to you, in your care or which you have physical control.

(Pl.'s Supp'g S.M.F. ~ 25.)

On November 20, 2017, Jet Ski Guy, Inc. filed an amended complaint in the Cumberland

County Superior Court against Mr. Micale and sought damages for the Joss of the two jet skis .

(Pl.'s Supp'g S.M.F. ~ 12; Amended Complaint, Jet Ski Guy . Inc . v . Vincent Micale. Jr., CUMSC­

CV-17-300 (Me. Super. Ct., Cum. Cty.).) On January 8, 2018, Mr. Kelly filed a cross-claim against

defendant for bodily injuries caused by the collision. (Pl.'s Supp'g S.M.F. ~ 16; Jet Ski Guy, Inc.

v. Vincent Micale , Jr., CUMSC-CV-17-300 (Me. Super. Ct., Cum. Cty.).)

The amended complaint provides:

5. On or about June 18, 2017, Defendant Micale contracted to rent two jet skis from Plaintiff . . .

8. Defendants totaled both watercraft leaving them inoperable and incapable of being repaired .

9. It resulted in a total loss of both watercraft.

10. As a result of Defendant's action, in addition to the loss of its property, Plaintiff has lost additional substantial business income.

11. On or about January 8, 2018, Adam Kelly asserted a Cross-Claim against Defendant Micale seeking damages for bodily injuries suffered by Kelly on June 18, 2017.

(Pl.'s Supp' g S.M.F. ~ 14.)

Mr. Kelly's cross-claim provides:

44. Micale was negligent in renting the jet ski for Kelly's use and providing it to Kelly when he knew that Kelly had not received adequate and necessary safety instructions .

45. As a result of Micale's negligence, Kelly suffered severe physical damage, including the amputation of his leg.

3 (Pl.'s Supp'g S.M.F. ! 18.)

Metropolitan notified Mr. Micale by letter dated August 18, 2017 that Metropolitan

declined to defend and indemnify Mr. Micale in the underlying action brought by Jet Ski Guy, Inc.

(Pl.'s Supp'g S.M.F. ! 27.) Metropolitan notified Mr. Micale by letter dated March 22, 2018 that

Metropolitan declined to defend and indemnify Mr. Micale in the underlying action brought by

Mr. Kelly. (Pl.'s Supp'g S.M.F. ! 29.)

II. PROCEDURE

On April 10, 2018, Metropolitan filed this complaint against Mr. Micale. Metropolitan

seeks a declaratory judgment that it has no duty under the policy to defend or indemnify Mr. Micale

against Jet Ski Guy, Inc.' s complaint and Mr. Kelly's cross-claims. (Compl. ! 1.) On September

11, 2018, Mr. Micale filed an amended answer to the complaint and a counterclaim against

Metropolitan for breach of contract and declaratory judgment. (Amend. Ans." 6, 8, 12-22.) On

July 27, 2018, Metropolitan filed a motion for summary judgment and its statement of material

fact.On August 30, 2018, Mr. Micale responded with an opposing statement of material fact, an

opposition to Metropolitan's motion, and a cross-motion for summary judgment. September 11,

2018, Mr. Micale also filed a motion to amend answer and counterclaim. On October 1, 2018,

Metropolitan filed a reply to Mr. Micale's opposition to Metropolitan's motion and an opposition

to Mr. Micale's motion for summary judgment. On October 2, 2018, Metropolitan filed its

opposition to Mr. Micale's motion to amend answer and counterclaim. On October 19, 2018, Mr.

Micale filed a reply to Metropolitan' s opposition to his motion for summary judgment. On October

17, 2018, Mr. Micale filed a reply to Metropolitan's opposition to the motion to amend answer and

counterclaim.

4 III. DISCUSSION

A. MOT ION T O AMEND ANSWER AND COUNTERCLAIM

1. Standard of Review

A party may amend its pleadings by leave of court and such leave "shall be freely given

when justice so requires." M.R. Civ. P. 15(a). Therefore, "if the moving party is not acting in bad

faith or for delay, the motion will be granted in the absence of undue prejudice." Kelly v.

Michaud 's lns. Agency, 651 A.2d 345, 347 (Me. 1994). "When faced with both a motion for a

summary judgment and a Rule 15(a) motion to amend pleadings, considerations of finality and

judicial economy suggest that a court should dispose of the pending Rule 15(a) motion prior to

entertaining a summary judgment." Id. at 346.

Mr. Micale's proposed amended answer and counterclaim contains a request for relief

pursuant to 24-A M.R.S. § 2436-B (2001). (Amend. Ans. , 22.) Metropolitan objects to the

motion to amend the answer and counterclaim. (Opp'n to Def.'s Mot. to Amend 2 , 5.)

Metropolitan argues that the motion to amend is untimely because it was not filed prior to the

motion for summary judgment and therefore may result in prejudice; Metropolitan does not allege

bad faith. (Opp'n to Def.'s Mot. to Amend,, 5-6.)

Mr. Micale's motion to amend the answer and counterclaim was filed on September 11,

2018, fewer than two weeks after he filed the cross motion for summary judgment on August 30,

2018. Metropolitan responded to Mr. Micale's cross motion for summary judgment on October

1, 2018 and responded to Mr. Micale's motion to amend the counterclaim on October 2, 2018.

These facts do not support a finding of undue delay. See Kelly v . Michaud's In s. Agency , fo e.,

651 A .2d at 347 (granting a motion to amend pleadings six weeks after defendant had filed its

5 response to the complaint). Because the amended counterclaim concerns the same dispute over

Metropolitan's alleged breach of contract and contains a request for additional relief based on the

requirement in section 2436-8(2) that an insurer pay court costs and reasonable attorney's fees if

the insured prevails in the action, the court's interests in the finality of litigation and judicial

economy weigh strongly in favor of allowing the amendment of Mr. Micale's answer and

counterclaim. See Kelly, 651 A.2d at 346; 24-A M.R.S. § 2436-8(2). Accordingly, the motion to

amend answer and counterclaim is granted.

B. CROSS MOTIONS FOR SUMMARY JUDGMENT

Summary judgment is proper 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). On a motion for

summary judgment, the court takes all facts and inferences in favor of the non-moving party.

LePage v. Bath Iron Works Corp., 2006 ME 130, 1f 9,909 A.2d 629. "A fact is material if it has

the potential to affect the outcome of the case." Id. A genuine issue exists "when there is sufficient

evidence for a fact-finder to choose between competing versions of the fact." Lougee Conservancy

v. CityMortgage, Inc., 2012 ME 103, 1f 11, 48 A.3d 774. "To withstand a motion for summary

judgment, the plaintiff must establish a prima facie case for each element of her cause of action.

If a plaintiff does not present sufficient evidence on the essential elements ... the defendant is

entitled to a summary judgment." Watt v. UniFirst Corp., 2009 ME 47, 1f 21, 969 A.2d 897

(quotation omitted).

"Cross motions for summary judgment neither alter the basic Rule 56 standard, nor warrant

the grant of summary judgment per se." Remmes v. Mark Travel Corp ., 2015 ME 63, 1f 19, 116

A.3d 466 (internal citation and quotations omitted). The court reviews each motion for summary

6 judgment separately in the light most favorable to the non-moving party. F.R. Carroll. Inc. v. TD

Bank.NA., 2010 ME 115,' 8, 8 A.3d 646.

In this case, the underlying facts are undisputed. (See Def. Opp'n to S.M.F. 1-3 .) In their

cross-motions for summary judgment, the parties ask the court to determine the correct

interpretation of the settled facts as a matter of law. Mitchell v . Allstate Ins. Co ., 2011 ME 133,,

8, 36 A.3d 876. Summary judgment is an appropriate device to determine whether an insurer has

a duty to defend an insured as a question of law. Harlor v. Amica Mut. lns . Co., 2016 ME 161,,

7, 150 A.3d 793.

2. Declaratory Judgment

In their cross-motions for summary judgment, the parties dispute whether plaintiff has a

duty to provide defendant with a defense in Jet Ski Guy, Inc. v. Vincent Micale. Jr .. First, the

parties dispute whether the policy's exclusions and extensions of coverage apply to the Jet Ski

Guy. Inc. amended complaint and Mr. Kelly's cross claims. Second, the parties dispute whether

exclusions and extensions that potentially apply to some claims require Metropolitan to provide a

defense for all claims alleged against Mr. Micale in the Jet Ski Guy. Inc. case.

The "comparison test" is used to determine whether an insurer must defend an insured in

an underlying lawsuit. Barnie's Bar & Grill . Inc . v. UaHed States Liab. Ins . Co ., 2016 ME 181,,

6, 152 A.3d 613. The "comparison test" compares the allegations in the underlying complaint

with the terms of the applicable insurance policy to determine whether there is "any legal or factual

basis that could potentially be developed at trial and result in an award of damages covered by the

terms of the policy." City of S. Portland v. Me. Mun. Ass'n ProP-. & Cas . Pool, 2017 ME 57,, 7,

158 A .3d 11. The court has "consistently applied a broad construction of the underlying complaint

7 in favor of the insured and a strict construction of policy exclusions and ambiguities against the

insurer." Barnie's, 2016 ME 181,, 6.

An insurer's duty to defend is broader than the duty to indemnify. Mitchell, 2011 ME 133,

, 10, 36 A.3d 876 (citation omitted). "Even when evidence could conclusively establish the

absence of a duty to indemnify, ordinarily that evidence is irrelevant to the determination of the

duty to defend." Northern Sec. Ins. Co . v . Dolley, 669 A.2d 1320, 1323 (Me. 1996).

The policy includes coverage for bodily injury, as alleged in Mr. Kelly's cross-claim, and

property damage, as alleged in the Jet Ski Guy, Inc. amended complaint. Broadly constructing the

underlying complaint in favor of the insured, the bodily injury claims and property damage claims

potentially fall within the policy coverage extended to bodily injury and property damage arising

out of watercraft "powered by one or more motors with 50 total horsepower or less." (Pl.' s Supp' g

S.M.F.' 24.)

Metropolitan argues that because jet skis' horsepower was not included in the Jet Ski Guy,

Inc. amended complaint or Mr. Kelly's cross-claim, the horsepower should not be considered in

the "comparison test." (Pl.'s Mot. Summ . J. 11.) The comparison test asks, however, whether "any

factual or legal basis could potentially be developed at trial and result in an award of damages

covered by the terms of the policy." City of S. Portland, 2017 ME 57,, 7, 158 A.3d 11 (emphasis

added); Harlor, 2016 ME 161,, 8, 150 A.3d 793. "An insured is not at the mercy of the notice

pleading of the third party suing him to establish his own insurer's duty to defend." Gibson v . Farm

Family Mut. Ins. Co., 673 A.2d 1350, 1352 (Me. 1996). Further, Maine's notice pleading

requirements are forgiving; the plaintiff need only give "fair notice of the cause of action by

providing a short and plain statement of the claim showing that the pleader is entitled to relief."

8 Desjardins v. Reynold s , 2017 ME 99, ~ 17, 162 A.3d 228 (citation omitted) (quotation marks

omitted); see M.R. Civ. P. 8(a)(l).

Metropolitan also argues that the personal liability care, custody, or control exclusion,

which applies to property damage as alleged in the Jet Ski Guy , Inc . amended complaint,

supersedes the coverage extension for watercraft with one or more motors with 50 total horsepower

or less, which would potentially provide coverage for property damage. (Pl.'s Mot. Summ. J. 10.)

Whether property damage from rented watercraft with one or more motors with 50 horsepower or

less is covered by the policy is ambiguous. Under the "comparison test," any ambiguities and

policy exclusions are strictly construed against the insurer and a broad construction of the

complaint is applied in favor of the insured. Barnie's , 2016 ME 181, ~ 6, 152 A.3d 613. This

ambiguity regarding whether property damage resulting from property rented to the insured if the

property is watercraft with a motor with 50 total horsepower or less is construed against the insurer.

"[I]n some circumstances the duty of an insurance company to defend one count in a

lawsuit imposes a duty to defend all counts." Gibson, 673 A. 2d at 1354 (Me. 1996). In Gibson,

the court found that because all claims against the insured arose from common issues of fact, the

insurer had a duty to defend. Id. Here, the allegations in the amended complaint and Mr. Kelly's

crossclaim in Jet Ski Guy. Inc. arise out of the same occurrence. Metropolitan has a duty to defend

any claims that are potentially not within the policy coverage.

3. Attorney s Fees

Section 2436-B(2) provides:

In [a declaratory judgment action] to determine an insurer's contractual duty to defend an insured under an insurance policy, if the insured prevails in such action, the insurer shall pay court costs and reasonable attorney's fees.

9 24-A M.R.S. § 2436-B(2) (2001). Mr. Micale is entitled to costs and reasonable attorney's fees,

which will be supported by affidavit.

The entry is

Defendant/Counterclaim Plaintiff Vincent Micale, Jr.'s Motion to Amend Answer and Counterclaim is GRANTED.

Defendant/Counterclaim Plaintiff Vincent Micale, Jr.'s Motion for Summary Judgment is GRANTED as follows: Plaintiff/Counterclaim Defendant Metropolitan Property and Casualty Insurance Company owes a duty to defend Defendant/Counterclaim Plaintiff Vincent Micale, Jr. in Jet Ski Guy. Inc. v. Vincent Micale. Jr., CUMSC-CV-17-300 (Me. Super. Ct., Cum. Cty .) and Defendant/Counterclaim Plaintiff Vincent Micale, Jr. is entitled to court costs and reasonable attorney's fees incurred in this action. Metropolitan Property and Casualty Ins. Co. v. Vincent Micale, Jr., CUMSC-CV-18-144 (Me. Super. Ct., Cum. Cty.).

Plaintiff/Counterclaim Defendant Metro ·olitan Property Casualty Insurance Company's Motion f r Summary Judg DENIED.

Date: January 24, 2018 Nancy Mills Justice, Supenor Court

Entered on the Docket:··i.~·.'Jo/!lJ?