31 F. Supp. 3d 315
D. Mass.2014Background
- USLIC issued Benchmark Commercial Liability Insurance Policy No. CL1151220D (06/23/2009–06/23/2010) with premium covering subcontracted work.
- Endorsement L500 excludes bodily injury to employees or others of any contractor or subcontractor performing services for the insured.
- Bailey, an employee of Egan (Painted Design) and independent contractor for Huth, allegedly injured while Benchmark was completing renovations.
- Bailey sued Benchmark in Middlesex Superior Court; Benchmark sought USLIC defense/indemnity.
- USLIC notified Benchmark in Jan. 2013 that the Bailey suit fell within Endorsement L500 and was not covered.
- Court addresses whether Endorsement L500’s term “contractor” is ambiguous and applies to Bailey’s injury, affecting USLIC’s defense obligation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Endorsement L500’s 'contractor' ambiguity-free? | USLIC argues 'contractor' unambiguously includes any contractor. | Benchmark argues 'contractor' could mean construction worker or independent contractor, creating ambiguity. | Endorsement L500 is unambiguous; Bailey falls within exclusion. |
Key Cases Cited
- Jacobs v. U.S. Fid. & Guar. Co., 417 Mass. 75 (Mass. 1994) (interpretation to give meaning to all provisions; ambiguities construed against insurer)
- Valley Forge Ins. Co. v. Field, 670 F.3d 93 (1st Cir. 2012) (reasonable expectations do not apply to unambiguous contracts)
- Brazas Sporting Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1 (1st Cir. 2000) (contract language read to give reasonable meaning; ambiguities ruled against insurer)
- Fishman v. LaSalle Nat’l Bank, 247 F.3d 300 (1st Cir. 2001) (interpretation should align with common sense and policy as a whole)
- Robbins v. Krock, 73 Mass.App.Ct. 134 (Mass. App. Ct. 2008) (ambiguity must be construed against insurer; plain meaning rule applies)
- Hazen Paper Co. v. U.S. Fid. & Guar. Co., 407 Mass. 689 (Mass. 1990) (ambiguity construction favoring insured when multiple rational interpretations exist)
- B & T Masonry Constr. Co. v. Pub. Serv. Mut. Ins. Co., 382 F.3d 36 (1st Cir. 2004) (coverage determination under Massachusetts law; insurer bears burden to show exclusion)