National Union Fire Insurance Co. of Pittsburgh, PA v. Shield Guard Service, Inc.

5 Mass. L. Rptr. 689
CourtMassachusetts Superior Court
DecidedAugust 5, 1996
DocketNo. CA 940347
StatusPublished

This text of 5 Mass. L. Rptr. 689 (National Union Fire Insurance Co. of Pittsburgh, PA v. Shield Guard Service, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Fire Insurance Co. of Pittsburgh, PA v. Shield Guard Service, Inc., 5 Mass. L. Rptr. 689 (Mass. Ct. App. 1996).

Opinion

Connolly, J.

The plaintiff, National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) moves for summary judgment against the intervenor defendant, Digital Equipment Corp. (“Digital”). Digital brings a cross motion for summary judgment against National Union.1

BACKGROUND

The parties have stipulated to many of the facts of this case, and the undisputed material facts are as follows:

Between May 1988 and June 1990, Digital contracted with Shield Guard to provide security guards for its warehouse in Athol, Massachusetts. Shield Guard employed Louis Buckman as a security guard, and assigned him to guard the Athol warehouse. During the course of his employment, Buckman and others stole merchandise from the warehouse, and then resold the stolen property.

[690]*690Digital sought compensation for its losses from Shield Guard. National Union provided insurance coverage for Shield Guard. The insurance policy was a third-party liability policy which provided coverage for loss or damage to property within Shield Guard’s care, custody, or control, thereby protecting the property guarded by Shield Guard in the course of their business.2

The policy provides coverage for the negligent acts of Shield Guard and its employees, pursuant to the following endorsement:

2. ERRORS AND OMISSIONS
THE COVERAGE AFFORDED BY THE POLICY (BODILY INJURY LIABILITY, PERSONAL INJURY LIABILITY AND PROPERTY DAMAGE LIABILITY) SHALL APPLY TO NEGLIGENT ACTS, ERRORS OR OMISSIONS COMMITTED OR ALLEGED TO HAVE BEEN COMMITTED BY OR ON BEHALF OF THE NAMED INSURED, ITS EMPLOYEES OR AGENTS WHILE ACTING SOLELY WITHIN THE COURSE OF THEIR DUTIES IN THE CONDUCT OF THE NAMED INSURED’S SECURITY SERVICE OPERATIONS.

The policy also contains the following exclusion:

THEFT
NOT WITHSTANDING ANYTHING IN THE POLICY OR ENDORSEMENTS ATTACHED HERETO, TO THE CONTRARY, NO COVERAGE SHALL BE PROVIDED FOR THEFT, BURGLARY, ROBBERY, MYSTERIOUS DISAPPEARANCE, INVENTORY SHORTAGE OR INVENTORY SHRINKAGE. FURTHER, NO COVERAGE SHALL BE PROVIDED FOR ANY DIRECT OR CONSEQUENTIAL DAMAGE RESULTING FROM OR CONTRIBUTED TO BY ANY OF THE FORGOING.

After the thefts were discovered, National Union denied coverage for loss of property and lost profits, citing the theft exclusion.

National Union filed this declaratory judgment action as a result of the underlying action brought by Digital against Shield Guard.3 The underlying action has been settled.

At issue in both the motion and cross motion for summary judgment is whether the theft exclusion provision of the policy is absolute and excludes coverage for any loss that involves theft. Digital asserts that the exclusion is not absolute. Digital argues that the theft was the result of the negligent hiring and supervision of Buckman, and therefore the loss was proximately caused by negligence, which is a covered risk under the policy.

For the purposes of this action, the parties have stipulated that the only issue to be tried by this court is whether the insurance policy extends or excludes coverage for the losses that occurred. They have also agreed that, for the present purposes, Shield Guard acted negligently, and this negligence proximately caused Digital’s losses.

DISCUSSION

Summary judgment shall be granted when there are no genuine issues of material fact and the moving parly is entitled to judgment as a matter of law. Good v. Commissioner of Correction, 417 Mass. 329, 332 (1994); Massachusetts Bay Transportation Authority v. Allianz Ins. Co., 413 Mass. 473, 476 (1992); Mass.R.Civ.P. 56(c). The moving party must demonstrate “by materials described in Mass.R.Civ.P. 56(c), unmet by countervailing materials, that the . . . [opposing party] has no reasonable expectation of proving an essential element of [his or her] case . . .” Brunner v. Stone & Webster Engineering Corp., 413 Mass. 698, 705 (1992). A party moving for summary judgment who does not bear the burden of proof at trial may demonstrate the absence of a triable issue either by submitting affirmative evidence negating an essential element of the nonmoving party’s case or by showing that the nonmoving party is unlikely to submit proof of that element at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). “The nonmoving party cannot defeat the motion for summary judgment by resting on its pleadings and mere assertions of disputed facts ...” LaLonde v. Eisner, 405 Mass. 207, 209 (1989). Establishing the absence of a triable issue requires the nonmoving party to respond by alleging specific facts demonstrating the existence of a genuine issue of material fact. Pederson v. Time, Inc., 404 Mass. 14, 17 (1989).

In support of its motion for summary judgment, National Union argues that the theft exclusion is worded in plain, unambiguous language, and is therefore not subject to differing interpretations. The theft exclusion is absolute, and prevents recovery when any theft occurs, even if negligence was involved. In its cross motion for summary judgment, Digital asserts that the theft exclusion is ambiguous, and any ambiguity must be construed against the drafter. Digital further claims that the losses arose from the negligent acts of Shield Guard’s employees, and that it was rational for Shield Guard to interpret the policy to provide coverage for losses proximately caused by negligence.

In examining the policy exclusion, this court is required to construe the words of the policy in their usual and ordinary sense. Barnstable County Mutual Fire Ins. Co. v. Lally, 374 Mass. 602, 605 (1978). Insurance exclusions “are to be read literally, without poetic license — they are to be strictly construed.” Great Southwest Fire Ins. Co. v. Hercules Building & Wrecking Co., 35 Mass.App.Ct. 298, 302 (1993) (internal citations omitted).

An ambiguity in the policy will be found to exist if the language is susceptible of more than one meaning, and “reasonably intelligent persons would differ as to which one of two or more meanings is the proper one.” [691]*691Jefferson Ins. Co. of New York v. Holyoke, 23 Mass.App.Ct. 472, 474-75 (1987). The existence of a controversy between the parties does not itself create ambiguity. Id. at 475.

The court finds that the exclusion is not ambiguous, and it' absolutely excludes all losses that involve theft. The court is persuaded by the language at the end of the theft exclusion policy, which states that “no coverage shall be provided for any direct or consequential damage resulting from or contributed to by [theft].” In other words, if theft is a contributing cause, then the loss is excluded from coverage. This court interprets this provision to mean that if theft is merely one contributing cause, then coverage will be denied, even if theft is not the only cause which contributed to the loss.

Since the language in the exclusion is not ambiguous, the “train of events” test is not applicable here.

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Bluebook (online)
5 Mass. L. Rptr. 689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-insurance-co-of-pittsburgh-pa-v-shield-guard-masssuperct-1996.