386 F. Supp. 3d 1030
D. Me.2019Background
- Laura and Frank Kammerer owned a homeowners policy from Auto-Owners; they asked J.M. to dog-sit their two dogs.
- While dog-sitting on Dec. 31, 2016, J.M. was bitten multiple times and was injured.
- The policy’s DEFINITIONS section states that words shown in boldface type have the meanings given there; the policy defines “insured” (in bold) to include persons legally responsible for the named insureds’ animals, but only with respect to those animals.
- The policy also contains a Personal Liability exclusion disallowing coverage for "bodily injury ... to any insured," with the word "insured" appearing in plain (non-bold) text in the exclusion.
- Auto-Owners sought a declaratory judgment that the plain-text “insured” in the exclusion incorporates the boldface definition (thus excluding J.M.); J.M. intervened and moved to dismiss for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the term "insured" in the intra-insured exclusion has the same meaning as the boldfaced defined term "insured" | Auto-Owners: the DEFINITIONS clause shows each defined word has a single meaning and any plain-text instances are typographical lapses; therefore the exclusion applies to J.M. | J.M.: the DEFINITIONS clause limits the special meaning to words in boldface; plain-text "insured" may bear its ordinary meaning (e.g., named insured) and thus exclude J.M. from the intra-insured exclusion | The term is at least ambiguous; reasonably read to have different meanings depending on bold vs. plain text, so ambiguity must be construed against the insurer; complaint dismissed |
| Whether the policy unambiguously excludes coverage for J.M.'s dog-bite claim | Auto-Owners: yes — the defined term includes persons legally responsible for the dogs, so the exclusion bars coverage | J.M.: no — plain-text usage need not invoke the specialized definition; ordinary meaning could mean only the named insureds | The complaint alleging a single unequivocal interpretation is implausible and dismissed |
| Whether extrinsic law (dog-owner statute or case law) controls interpretation | Auto-Owners: Minnesota dog-liability statute and some cases support treating a dog-sitter as an insured/keeper | J.M.: statute and cited cases do not resolve contract interpretation; cited cases involved boldface usage in both provisions so are distinguishable | Statute and those cases do not overcome the textual ambiguity in the policy |
| Whether dismissal is appropriate under Rule 12(b)(6) | Auto-Owners: policy text supports its reading; claim is plausible | J.M.: policy text is ambiguous and construed against insurer, so declaratory claim fails as implausible | Court grants 12(b)(6) motion and dismisses complaint with prejudice |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleadings)
- Erie R. Co. v. Tompkins, 304 U.S. 64 (forum must apply state substantive law in diversity cases)
- Carlson v. Allstate Ins. Co., 749 N.W.2d 41 (Minn. 2008) (general contract principles apply to insurance policies)
- Depositors Ins. Co. v. Dollansky, 919 N.W.2d 684 (Minn. 2018) (undefined policy words get ordinary meaning; ambiguity can depend on context)
- City of Boise v. Planet Ins. Co., 878 P.2d 750 (Idaho 1994) (where defined term appears in other typeface, ambiguity may arise because it could carry defined or ordinary meaning)