Evanston Insurance Company v. Jasmine Company, Inc.
702 F.3d 68
1st Cir.2012Background
- This is an insurance-coverage dispute arising from sexual-harassment charges by Burgess against Jasmine’s former president Manganella.
- Jasmine had an Evanston Employment Practices Liability Insurance Policy with a retroactive date of April 28, 1999, and coverage requires the wrongful practice to have happened entirely after that date.
- Jasmine canceled the policy in 2005 but purchased an extended reporting period for 36 months thereafter.
- Burgess filed a MCAD charge in March 2007 alleging harassment throughout her Jasmine employment (1997–2006).
- Evanston denied coverage in 2007 on the ground that Burgess’s conduct did not “happen in its entirety” after the retroactive date; Jasmine settled Burgess’s MCAD claim in 2008.
- The district court found Evanston must investigate, then concluded the Burgess claim fell within the policy’s exclusion for willful misconduct, and granted Jasmine summary judgment; we vacate and remand for factual determination on when the harassment began.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the harassing conduct began after the retroactive date. | Manganella; Burgess’s MCAD charge and pre-1999 remarks may contribute to a post-date coverable conduct. | Evanston; pre-date remarks could constitute the wrongful practice, limiting coverage. | Genuine factual dispute; issue for trial to determine timing. |
| Whether the 2008 Burgess affidavit can support summary judgment. | N/A to resolution on appeal; treat as admissible and decisive. | Affidavit is inadmissible or not controlling; credibility concerns exist. | Affidavit is not determinative; cannot resolve coverage as a matter of law. |
| Whether the policy language limiting coverage to “happened in its entirety” after the retroactive date is ambiguous and construes in the insured’s favor. | Ambiguity should be construed against insurer; conduct could be seen as post-date. | Language unambiguous, excludes pre-date conduct from coverage. | Ambiguity resolved in insured’s favor; cannot grant summary judgment. |
Key Cases Cited
- Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912 (Mass. 1993) (insurer bears burden when duty to defend is involved; coverage requires factual showing)
- Blanchard v. Peerless Insurance Co., 958 F.2d 483 (1st Cir. 1992) (state-of-mind evidence may affect interpretation of coverage when credibility is at stake)
- Cuddyer v. Stop & Shop Supermarket Co., 750 N.E.2d 928 (Mass. 2001) (pattern of harassment; hostile environment may emerge in hindsight)
- Finn v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 896 N.E.2d 1272 (Mass. 2008) (ambiguities in contract language resolved against insurer)
- GRE Ins. Grp. v. Metro. Bos. Housing P'ship, Inc., 61 F.3d 79 (1st Cir. 1995) (ambiguous policy terms interpreted in insured’s favor)
- Hazen Paper Co. v. U.S. Fid. & Guar. Co., 555 N.E.2d 576 (Mass. 1990) (principles for construing ambiguous policy language)