NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
23-P-1427
RALPH V. LADD
vs.
ARBELLA PROTECTION INSURANCE COMPANY.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Ralph V. Ladd appeals from a summary judgment entered in
favor of his insurance carrier, Arbella Protection Insurance
Company (Arbella). Ralph had been joined as a third-party
defendant by Alina Bosch in another lawsuit arising out of
construction work performed by Ralph's son, David.1 After
Arbella refused to defend Ralph in Bosch's suit, Ralph filed a
declaratory judgment action challenging that refusal. A
Superior Court judge allowed Arbella's motion for summary
judgment, concluding that Arbella had no duty to defend Ralph
against Bosch's claims. For the reasons below, we affirm.
1As some of the parties share a surname, we use first names to avoid confusion. Background. Ralph is a licensed plumber and the father of
David, who also is a plumber, although the two do not work or
operate together. David filed a breach of contract claim
against Alina Bosch for nonpayment of services related to a
construction project. Bosch filed a counterclaim against David,
as well as a third-party complaint against Ralph, for breach of
contract, breach of the implied covenant of good faith and fair
dealing, negligence, gross negligence, negligent
misrepresentation, fraud and deceit, and violations of New
Hampshire's Consumer Protection Act. Bosch alleged that both
David and Ralph had performed work at her property but had done
so in an unprofessional and unworkmanlike manner. Ralph
maintained that he is a sole proprietor and does not work with
his son David in any capacity, including the project with Bosch.
Ralph made a demand on his insurance company, Arbella, to
defend him against Bosch's third-party complaint. Subject to
additional limitations and exclusions, Arbella's commercial
general liability policy provides coverage for "bodily injury"
or "property damage" that is caused by an "occurrence," which
the policy defines as "an accident." As pertinent here, the
policy specifically excludes from coverage any damage or injury
to "[t]hat particular part of real property on which you or any
contractors or subcontractors working directly or indirectly on
your behalf are performing operations, if the 'property damage'
2 arises out of those operations; or . . . that particular part of
property that must be restored, repaired or replaced because
'your work' was incorrectly performed on it" (business risk
exclusions).
After a review of Bosch's complaint, Arbella's coverage
counsel sent Ralph a letter disclaiming coverage under the
policy. Among other reasons, the letter explained that Bosch's
complaint did not allege an "occurrence" as defined by the
policy. Even if the complaint did allege an "occurrence," the
policy specifically excluded coverage for claims for "faulty
workmanship."
In response, Ralph filed a complaint against Arbella,
seeking declaratory relief and alleging a violation of G. L.
c. 93A for failing to comply with its duty to defend him against
Bosch's third-party complaint. Arbella moved for summary
judgment and, following a hearing, a Superior Court judge
allowed the motion. Ralph timely appealed.
Discussion. Standard of review. "The issues in this
appeal are well-suited for summary judgment, since the
interpretation of an insurance contract is a question of law for
the court" (quotation and citation omitted). Lessard v. R.C.
Havens & Sons, Inc., 104 Mass. App. Ct. 572, 574 (2024). We
review the interpretation of the policy and the grant of summary
judgment de novo. Id.
3 Arbella's duty to defend. "A liability insurer's duty to
defend is determined by comparing the allegations in the third-
party complaint against the provisions of the insurance policy."
Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass.
741, 744-745 (2013). The duty to defend is also determined
based "on facts known or readily knowable by the insurer that
may aid in its interpretation of the allegations in the
complaint." Billings v. Commerce Ins. Co., 458 Mass. 194, 200
(2010). Where "the allegations in the underlying complaint lie
expressly outside the policy coverage . . . the insurer is
relieved of the duty . . . to defend" (quotation and citation
omitted). Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439
Mass. 387, 394-395 (2003).
The allegations in the underlying third-party complaint and
the facts known by Arbella establish that Arbella did not have a
duty to defend or indemnify Ralph against Bosch. In substance,
Bosch sought damages only for faulty workmanship; she did not
allege an accident such as that the faulty workmanship caused
damage to something other than the work product. Thus, Bosch's
claims alleging (a) failure "to provide construction design,
services, and materials in a workmanlike manner" and (b) that
the project was "critically flawed and fundamentally deficient,"
4 do not constitute an "occurrence."2 The fact that Bosch
characterized some of these allegations as "negligence" does not
transform them into occurrences, given that Bosch alleged that
the damage arising from negligence was "for faulty workmanship
that damaged only the resulting work product." All America Ins.
Co. v. Lampasona Concrete Corp., 95 Mass. App. Ct. 79, 82
(2019). See also New England Mut. Life Ins. Co. v. Liberty Mut.
Ins. Co., 40 Mass. App. Ct. 722, 727 (1996) ("It is the source
from which the plaintiff's personal injury originates rather
than the specific theories of liability alleged in the complaint
which determines the insurer's duty to defend").3
In sum, none of Bosch's allegations constitute an
"occurrence" that would be covered by the policy. Nevertheless,
Ralph maintains that Arbella had a duty to defend because he
2 We have stated our approval of such exclusions, called "business risk" exclusions. See Pacific Indem. Co. v. Lampro, 86 Mass. App. Ct. 60, 66 (2014) ("General liability coverage is not intended as a guarantee of the insured's work, and for that reason, general liability policies contain 'business risk' exclusions" [quotation and citation omitted]). See also Commerce Ins. Co. v. Betty Caplette Bldrs., Inc., 420 Mass. 87, 92 (1995) ("Repairing or replacing faulty products is a business expense, ordinarily to be borne by the insured contractor in order to satisfy customers").
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NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
23-P-1427
RALPH V. LADD
vs.
ARBELLA PROTECTION INSURANCE COMPANY.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Ralph V. Ladd appeals from a summary judgment entered in
favor of his insurance carrier, Arbella Protection Insurance
Company (Arbella). Ralph had been joined as a third-party
defendant by Alina Bosch in another lawsuit arising out of
construction work performed by Ralph's son, David.1 After
Arbella refused to defend Ralph in Bosch's suit, Ralph filed a
declaratory judgment action challenging that refusal. A
Superior Court judge allowed Arbella's motion for summary
judgment, concluding that Arbella had no duty to defend Ralph
against Bosch's claims. For the reasons below, we affirm.
1As some of the parties share a surname, we use first names to avoid confusion. Background. Ralph is a licensed plumber and the father of
David, who also is a plumber, although the two do not work or
operate together. David filed a breach of contract claim
against Alina Bosch for nonpayment of services related to a
construction project. Bosch filed a counterclaim against David,
as well as a third-party complaint against Ralph, for breach of
contract, breach of the implied covenant of good faith and fair
dealing, negligence, gross negligence, negligent
misrepresentation, fraud and deceit, and violations of New
Hampshire's Consumer Protection Act. Bosch alleged that both
David and Ralph had performed work at her property but had done
so in an unprofessional and unworkmanlike manner. Ralph
maintained that he is a sole proprietor and does not work with
his son David in any capacity, including the project with Bosch.
Ralph made a demand on his insurance company, Arbella, to
defend him against Bosch's third-party complaint. Subject to
additional limitations and exclusions, Arbella's commercial
general liability policy provides coverage for "bodily injury"
or "property damage" that is caused by an "occurrence," which
the policy defines as "an accident." As pertinent here, the
policy specifically excludes from coverage any damage or injury
to "[t]hat particular part of real property on which you or any
contractors or subcontractors working directly or indirectly on
your behalf are performing operations, if the 'property damage'
2 arises out of those operations; or . . . that particular part of
property that must be restored, repaired or replaced because
'your work' was incorrectly performed on it" (business risk
exclusions).
After a review of Bosch's complaint, Arbella's coverage
counsel sent Ralph a letter disclaiming coverage under the
policy. Among other reasons, the letter explained that Bosch's
complaint did not allege an "occurrence" as defined by the
policy. Even if the complaint did allege an "occurrence," the
policy specifically excluded coverage for claims for "faulty
workmanship."
In response, Ralph filed a complaint against Arbella,
seeking declaratory relief and alleging a violation of G. L.
c. 93A for failing to comply with its duty to defend him against
Bosch's third-party complaint. Arbella moved for summary
judgment and, following a hearing, a Superior Court judge
allowed the motion. Ralph timely appealed.
Discussion. Standard of review. "The issues in this
appeal are well-suited for summary judgment, since the
interpretation of an insurance contract is a question of law for
the court" (quotation and citation omitted). Lessard v. R.C.
Havens & Sons, Inc., 104 Mass. App. Ct. 572, 574 (2024). We
review the interpretation of the policy and the grant of summary
judgment de novo. Id.
3 Arbella's duty to defend. "A liability insurer's duty to
defend is determined by comparing the allegations in the third-
party complaint against the provisions of the insurance policy."
Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass.
741, 744-745 (2013). The duty to defend is also determined
based "on facts known or readily knowable by the insurer that
may aid in its interpretation of the allegations in the
complaint." Billings v. Commerce Ins. Co., 458 Mass. 194, 200
(2010). Where "the allegations in the underlying complaint lie
expressly outside the policy coverage . . . the insurer is
relieved of the duty . . . to defend" (quotation and citation
omitted). Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439
Mass. 387, 394-395 (2003).
The allegations in the underlying third-party complaint and
the facts known by Arbella establish that Arbella did not have a
duty to defend or indemnify Ralph against Bosch. In substance,
Bosch sought damages only for faulty workmanship; she did not
allege an accident such as that the faulty workmanship caused
damage to something other than the work product. Thus, Bosch's
claims alleging (a) failure "to provide construction design,
services, and materials in a workmanlike manner" and (b) that
the project was "critically flawed and fundamentally deficient,"
4 do not constitute an "occurrence."2 The fact that Bosch
characterized some of these allegations as "negligence" does not
transform them into occurrences, given that Bosch alleged that
the damage arising from negligence was "for faulty workmanship
that damaged only the resulting work product." All America Ins.
Co. v. Lampasona Concrete Corp., 95 Mass. App. Ct. 79, 82
(2019). See also New England Mut. Life Ins. Co. v. Liberty Mut.
Ins. Co., 40 Mass. App. Ct. 722, 727 (1996) ("It is the source
from which the plaintiff's personal injury originates rather
than the specific theories of liability alleged in the complaint
which determines the insurer's duty to defend").3
In sum, none of Bosch's allegations constitute an
"occurrence" that would be covered by the policy. Nevertheless,
Ralph maintains that Arbella had a duty to defend because he
2 We have stated our approval of such exclusions, called "business risk" exclusions. See Pacific Indem. Co. v. Lampro, 86 Mass. App. Ct. 60, 66 (2014) ("General liability coverage is not intended as a guarantee of the insured's work, and for that reason, general liability policies contain 'business risk' exclusions" [quotation and citation omitted]). See also Commerce Ins. Co. v. Betty Caplette Bldrs., Inc., 420 Mass. 87, 92 (1995) ("Repairing or replacing faulty products is a business expense, ordinarily to be borne by the insured contractor in order to satisfy customers").
3 "Given our conclusion that coverage did not attach in the first place, we need not reach [Arbella's] alternative arguments that other terms in the policies would exclude coverage." Verveine Corp. v. Strathmore Ins. Co., 489 Mass. 534, 545 (2022). Regardless, we note that the policy contained business risk exclusions that also barred coverage.
5 denied any involvement in the construction project. However, we
have previously held, "[a]n insured's denial of the underlying
allegations has no bearing on whether a duty to defend exists,
because coverage turns on the nature of those allegations, not
on whether they are true." Marculetiu v. Safety Ins. Co., 98
Mass. App. Ct. 553, 560 (2020). The sole issue is whether any
of Bosch's allegations are possibly covered by the policy. For
the reasons stated above, they are not. Accordingly, the judge
properly allowed Arbella's motion for summary judgment.4
Ralph's c. 93A claim. Ralph concedes that his c. 93A claim
against Arbella is, in essence, contingent on whether Arbella
had a duty to defend. This is because "[r]ecovery under G. L.
c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely
when [a]n insurance company . . . in good faith denies a claim
of coverage on the basis of a plausible interpretation of its
insurance policy" (quotation and citation omitted). McGilloway
v. Safety Ins. Co., 488 Mass. 610, 618 (2021). Arbella's
interpretation of its policy was not only plausible, but, as
explained above, correct. Accordingly, we discern no error in
4 We note that Ralph filed an abuse of process claim against Bosch, prevailed, and was awarded the legal costs of defending against her false claims. Bosch has appealed from that judgment.
6 the allowance of Arbella's motion for summary judgement on
Ralph's c. 93A claim.
Judgment affirmed.
By the Court (Blake, C.J., Neyman & Wood, JJ.5),
Clerk
Entered: February 25, 2025.
5 The panelists are listed in order of seniority.