47 Mass. App. Ct. 687 | Mass. App. Ct. | 1999
On November 5, 1992, fire destroyed an unoccupied restaurant owned by the plaintiffs, Louis F. Aguiar and Fernando N. Lopes, as tenants in common. Aguiar gave notice of the loss to the defendant insurer, Generali Assicurazioni Insurance Company (Generali), which denied coverage. There were two principal grounds for that denial: (1) the policy contained a provision, mandated by statute, that liability for loss from fire would not attach should the insured premises be vacant for thirty consecutive days, and the premises, at the time of the fire,
1. Facts. We recite the undisputed facts material to the defense that the owners had left the property vacant for more than thirty consecutive days. Aguiar and Lopes bought the property, located in Westport, in 1988, and organized Mediterranean, Inc., to operate there a restaurant called the Mediterranean.
American Legion entered into a lease with Aguiar and Lopes, who continued to own the real estate. In July, 1992, Aguiar undertook to replace existing insurance that was due to expire September 26, 1992. Through his insurance agent, the Maury Kusinitz Insurance Agency (the Kusinitz agency), Aguiar applied to Generali for casualty insurance coverage on the property on behalf of himself, Lopes and his wife (although she appeared to have no insurable interest), and American Legion. Generali issued a policy for the period September 30, 1992, to September
In the year it burned down, the property was remarkably vulnerable to incendiaries — what Lieutenant William G. Baraby of the Westport fire department called fire “intentionally set by human intervention.” As we rest our decision on the first ground urged by the defense (as did the motion judge), that arson history is only of peripheral interest, but it illuminates why an insurer would be concerned about an unoccupied building. On February 23, 1992, the fire department responded to a call to investigate a smell of gasoline at the restaurant. It turned out the floor of the attic in the restaurant building had been saturated with gasoline. While checking that out, Lieutenant Baraby observed charring and smoke stains in the attic from an earlier fire which in his judgment had been intentionally set but did not spread.
2. Discussion. Section 99 of G. L. c. 175, as amended through St. 1985, c. 464, § 2, prescribes a standard form of fire insurance policy in Massachusetts. See Pappas Enterprises, Inc. v. Commerce & Indus. Ins. Co., 422 Mass. 80, 81 (1996). Among the provisions required by § 99 is the following:
*690 “Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring ...(b) while the described premises, whether intended for occupancy by owner or tenant, are vacant or unoccupied beyond a period of . . . thirty consecutive days. . . .”5
That precise language appeared in amendatory Massachusetts endorsements to the policy under the caption “Conditions suspending or restricting insurance.”
(a) Reasonable expectation. The plaintiffs suggest that one who buys fire insurance expects to be protected against — well — loss by fire. Of course it cannot be as simple as that, because an insurance policy is full of requirements and conditions, some of which can be altered by amendments to the policy, more often than not in consideration of an additional premium to reflect the altered risk. But, the plaintiffs say, they did not receive the actual text of the policy until after the loss and the disavowal by Generali of liability. To that there may be two responses. First, as the occupancy requirement is of statutory origin, it would have appeared in every fire policy that the plaintiffs had read, assuming they had read one. The plaintiffs had no reason to expect the condition would be absent from the Generali policy. There was no history of negotiation for amendment of the occupancy requirement. Second, an insured is charged with his agent’s knowledge of the terms and conditions of an insurance policy. The Kusinitz agency was the plaintiffs’ agent. See Century Indent. Co. v. Jameson, 333 Mass. 503, 504 (1956); Commercial Union Ins. Co. v. Connors, 42 Mass. App. Ct. 538, 542 (1997); Restatement (Second) of Agency § 272 (1958); 3 Couch, Insurance § 46.21 (3d ed. 1995).
Massachusetts cases have smiled upon, even if not yet wholly
(b) Waiver. The plaintiffs’ argument of waiver is pitched primarily on a letter from Generali’s regional managing agent, James Kelley, to an employee of the Kusinitz agency, dated October 26, 1992, in which Kelley notifies the Kusinitz agency that certain security measures will have to be taken if the building is left “unused for any long period.” That letter does not amount to a revision of the fire insurance contract. Binding waivers commonly make their appearance in insurance cases, see, e.g., Jackson & Co. v. Great Am. Indem. Co., 282 Mass. 337, 342 (1933), and Merrimack Mut. Fire Ins. Co. v. Nonaka, 414 Mass. 187, 189-191 (1993), but waivers implied from
Once the judge determined, correctly, that Generali was not liable for the fire loss to the plaintiffs’ property, the counts in the complaint under G. L. c. 93A and G. L. 176D, § 3(9), fell away by derivation.
Judgment affirmed.
Aguiar and Lopes each owned fifty per cent of the stock in Mediterranean, Inc. Ana Lopes, a named plaintiff and Lopes’s wife, was an employee of Mediterranean, Inc., and referred to as a “coowner” of the restaurant. She gave her guaranty of a mortgage note given by Mediterranean, Inc., in connection with the property.
The policy named as persons insured Aguiar, Lopes, Ana Lopes (notwithstanding her lack of insurable interest), and Mediterranean, Inc.
The gasoline pour was traced to Randall Schaller, an assistant manager of the restaurant. Schaller pled guilty in United States District Court to attempted arson. A jury sitting in United States District Court convicted DiSanto, the manager and a stockholder in American Legion, of attempted arson.
The thirty-day vacancy provision applies to commercial occupancies. There is a sixty-day vacancy provision for residential premises of three units or less.
The occupancy condition also appeared in § 5 of the Massachusetts amendatory endorsement.