On Junе 14, 1990, Pedro Flores, Jr., fifteen years of age, was disporting with his model 1987 KX-125 Kawasaki “dirt bike” on the ground of the former municipal dump in Brockton. As he drove down a hill or declivity, he crashed into his riding buddy, Frank Lima, who was below on his three-wheel ATV (all terrain vehicle). Lima suffered severe injuries and permanent physical impairments.
The parents were named insureds and the son an unnamed insured in a homeowners’ policy of Worcester Insurance Compаny (Worcester). Accordingly, the parents gave notice of the negligence action to their insurance agent on July 2, 1992. On July 23, 1992, Worcester, by Paula J. Donohue, a claims adjuster, informed the Flores parents that there was no coverage, thus declining to defend the action or to indemnify.
Denied assistance by Worcester, the parents as defendants in the negligence action retained counsel. Counsel carried on for a while but then asked the court for leave to withdraw because the clients lacked funds to continue to support the litigation. Leave was granted and the Flores parents were left to defend pro se. When trial was called, they defaulted. Flores, Sr., apparently was present at the subsequent assessment of damages. It resulted on April 28, 1994, in judgment against the parents in the amount of $422,352.33.
Flores, Sr., filed a petition for relief under Chapter 7 of the Bankruptcy Code and was discharged on May 2, 1996; the chief debt discharged was the negligence judgment. In June, 1996, an attorney representing the Floreses аpplied to the trustee in bankruptcy and asked the trustee to reopen the proceeding to allow institution of suit against Worcester. The trustee agreed and the bankruptcy judge approved.
The present action is by Laurie Tavares and thе trustee, represented by the attorney just mentioned, against Worcester, asserting breach by Worcester of its duties to defend and to indemnify. Further, the action asserts the violation by Worcester of G. L. c. 176D, § 3, and c. 93A, §§ 2, 9, by its engaging in improper business practices dеscribed in those statutes. (The avails of any judgment obtained against Worcester in the action will, of course, in substance pass to Frank Lima.)
Upon cross-motions by the parties for summary judgment, a judge of the Superior Court held, with memorandum of decision, in favor оf the plaintiffs on the policy, and for the defendant under the statutes. The parties have cross-appealed. Agreeing with the judge, we affirm his decisions.
“1. Coverage E — Personal Liability and Coverage F — Medical Payments to Others do not apply to bodily injury or property damage: . . .
“e. arising out of:
“(1) the ownership, maintenance, use, loading or unloading of motor vehiclеs or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an insured; ...
“This exclusion does not apply to: . . .
“(2) a motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and:
“(a) not owned by an insured; or
“(b) owned by an insured and on an insured location.”
*13 “Severability of Insurance. This insurance applies separately to each insured. This condition will not increase our limit of liability for any one occurrence.”
1. In Worcester Mut. Ins. Co. v. Marnell,
The parents, when sued, notified the insurer and invoked the insurer’s duties to defend and indemnify. The insurer followed a self-protective procedure often recommended, see Medical Malpractice Joint Underwriting Assn, of Mass. v. Goldberg,
The insurer in Marnell pointed to exclusion (e)(1). At first sight this might seem applicable, as an insured, the son, owned and operated the motor vehicle involved in the accident. That view, however, would take no account of the severability clause, by which the insurance “applies separately to each insured.” The plaintiffs, named insureds, did not own or operate the fatal automobile, and thus were not caught up in exclusion (e)(1).
The court said (398 Mass, at 242, 244-245):
“The resolution of this case depends on an interpretation*14 of the motor vehicle exclusion in light of the severability of insurance clause.
“[The administrator] correctly states that this clause requires that each insured be treated as having a separate insurance policy. Thus, the term ‘insured’ as used in the motor vehicle exclusion refers only to the person claiming coverage under the policy. Since it is undisputed that neither Richard nor Ellen Mamell owned or operated the motor vehicle that struck the intestate, the provision excluding coverage for bodily injury arising out of the insured’s ownership or use оf a motor vehicle does not preclude Richard and Ellen Mamell from obtaining coverage in connection with the [administrator’s] tort action.”
The point is elaborated in later authority.
The court having declared in the declaratory action that the insurer had a duty to defend, the insurer proceeded to perform the duty. In the event, the insurer defended successfully in the tort action and preserved its victory on appeal. Alioto v. Marnell,
2. As the judge below recognized, the present case is similar to the Mamell case (but the insurer, rather recklessly, as we may suggest, chose to forego the declaratory route).
3. Not surprisingly, Worcester is displeased with the interpretation of policy language in the Mamell case. Worcester would like us to say that the policy embodies a motor vehicle exclusion that applies across the board when a named or unnamed insured is sued for his alleged fault in any connection with an accident involving a motor vehicle. This view has been discredited.
(i) Under Mamell it makes a differencе whether the insured who is sued in the third-party action did or did not own the vehicle involved in the accident. Worcester would simply disregard the meaning ascribed to the severability clause. See West Am. Ins. Co. v. AV & S,
(ii) Worcester is suggesting that it should not matter that there was negligent parеntal supervision that allegedly had a causative bearing on the accident; if the injury occurred through the use of a motor vehicle, the insurer’s responsibility, according to Worcester, should be excluded. Marnell, supra at 245-246, has held against this; the negligent supervision clаim is within the general class of claims covered by the policy and no exclusionary clause applies; indeed the clause (2)(a) indicates coverage in this case of a recreational vehicle not owned by the parents.
(iii) The prеvious point may be put another way. Worcester wants to overlook the court’s remarks in Mamell that the negligent supervision theory advanced there was “separate and distinct from the use or operation of an automobile” (398 Mass, at 245), and in that sensе the (e)(1) exclusion was inapplicable. The court’s characterization of the negligent supervision claim is cogent and significant. See Grinnell Mut. Reinsurance Co. v. Employers Mut. Cas. Co.,
If Worcester is suggesting that the parents’ negligent supervision in the present case was not “separate аnd distinct” in any
We add that in the interpretive aspects of this case the insurer has to contend with the rule that exclusionary policy terms are to be strictly construed against the insurer, and the further rule that doubts created by any terms in a policy that may be considered ambiguous are to be resolved against the insurer. See Liquor Liab. Joint Underwriting Assn, of Mass. v. Hermitage Ins. Co.,
Consumer protection statutes. The majority of the panel are not disposed to overrule the judge’s holding for the insurer on this phase. The insurer’s handling of the parents’ claim was offhand, not studied as it should have been in the light of the decisional law, but the judge could well rule that the mistake was not such as to justify the enhanced statutory damages.
Attorney’s fees. Under the rule of Preferred Mut. Ins. Co. v. Gamache,
The judgments appealed from are affirmed and the case is remanded to the Superior Court for assessment of the plaintiffs’ attorney’s fees and expenses as indicated in the opinion.
So ordered.
Notes
“If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will:
“1. Pay up to our limit of liability for the damages for which the insured is legally liable; and
“2. Provide a defense at our expense by counsеl of our choice ....
“ ‘occurrence’ means an accident, . . . which results, during the policy period, in:
“a. bodily injury; or
“b. property damage.”
The present policy has the word “an,” in relation to “insured,” the Marnell policy had “any," but the parties agree there is no difference of meaning.
“[T]he quеstion of the initial duty of a liability insurer to defend third-party actions against the insured is decided by matching the third-party complaint with the policy provisions: if the allegations of the complaint are ‘reasonably susceptible’ of an interpretation that they state or adumbrate a claim covered by the policy terms, the insurer must undertake the defense.” Sterilite Corp. v. Continental Cas. Co.,
The court in Ayer v. Imperial Cas. & Indem. Co.,
The more remarkable because the defendant Worcester herein is the successor with a change of name to the plaintiff Worcester Mutual Insurance Company in Mamell.
Worcester’s defenses of laches and failure of Laurie Tavares to give notice were without merit and the judge so held.