VERMONT MUTUAL INSURANCE COMPANY, Plаintiff, Appellant, v. Andrew ZAMSKY et al., Defendants, Appellees.
No. 13-1172.
United States Court of Appeals, First Circuit.
Oct. 9, 2013.
McArdle‘s state law claims against the individual defendants are entirely without merit. The recklessness with which McArdle has lodged and pursued damage claims, including punitive damage claims, against individuals who did nothing wrong, is highlighted by (but not limited to) his claim against Scott. Scott became superintendent only after McArdle was terminated. McArdle made no factual allеgations about her conduct except that, fourteen months after his termination, she replied to correspondence from his attorney with a letter taking the plainly correct position that he was ineligible for FMLA leave. McArdle‘s brief does not even attempt to argue that Scott‘s conduct was tortious, yet he inexplicably appeals the district court‘s grant of summary judgment in her favor on the state law claims.
His claim for intentional infliction of emotional distress against the remaining defendants fails even to get to first base because Massachusetts workers’ compensation law bars the use of that tort by an employee (or former employee) against coworkers or employers acting within the scope of their employment.
Finally, McArdle‘s claim for intentional interference with advantageous business relations fails because McArdle provided no evidence of actual malice, which is required for an employee to prevail against an employer on that tort. Blackstone v. Cashman, 448 Mass. 255, 260, 860 N.E.2d 7 (2007). Moreover, McArdle‘s only argument in support of his appеal on this claim relies on the same theory as his FMLA retaliation claim and so fails for the same reason that claim does.
IV. Conclusion
For the foregoing reasons the judgment of the district court is affirmed.
So ordered.
James T. Scamby, with whom Michael W. Reilly, Tommasino & Tommasino, and Heifetz Rose LLP were on brief, for appellees Andrew Zamsky and Massachusetts Property Insurance Underwriting Association (FAIR Plan).
David W. White, Jr., with whom Breakstone, White & Gluck was on brief, for appellee Renata Ivnitskaya.
Kara Thorvaldsen, with whom George C. Rockas and Wilson, Elser, Moskowitz, Edelman & Dicker LLP were on brief, for appellee Scottsdale Insurance Company.
Before HOWARD, SELYA and LIPEZ, Circuit Judges.
SELYA, Circuit Judge.
It seems self-evident that a story that involves throwing gasoline on a smoldering fire is unlikely to have a happy ending. That is true here, but the parties to this appeal have sifted through the embers and identified what some might regard as an oxymoron: an interesting insurance coverage question. After careful considеration, we conclude that the district court properly construed the relevant insurance contracts and proceeded to answer the coverage question correctly.1 Accordingly, we affirm.
Defendant-appellee Andrew Zamsky is an insured under three homeowners’ policies issued to his parents by plaintiff-appellant Vermont Mutual Insurance Company (Vermont Mutual). Each of these policies covered a separate parcel of residential real estate owned by the Zamskys.
The background facts are susceptible to succinct summary. On the night of November 27, 2008, Zamsky, defendant-appellee Renata Ivnitskaya, and several friends drove to a house in Falmouth, Massachusetts owned by Zamsky‘s parents. It is undisputed that the Falmouth house was not an “insured location” as defined in the policies.
At some point after their arrival, Zamsky retrieved from a shed on the property a portable fire pit that he had purchased earlier that year. The fire pit was somewhere around 30 inches wide and about 18 inches high. It weighed between 30 and 40 pounds.
The group positioned the fire pit on a deck attached to the house. They tried to start a fire, but the wood that they had collected for that purpose was damp and would not burn readily.
One member оf the group, Aaron Bronstein, told Zamsky that he wanted to get something to help the fire along. Zamsky suggested that Bronstein look in either the garage or the shed. Bronstein retrieved a container of gasoline and poured it on the fire.
The consequent conflagration set at least three of the assembled persons aflame. One of these individuals—Ivnitskaya—suffered especially severe burns.
In due course, Ivnitskaya sued Zamsky for bodily injuries in a Massachusetts state court, alleging a golconda of negligent acts and omissions. That suit is still pending; Vermont Mutual and defendant-appellee Massachusetts Property Insurance Underwriting Association (FAIR Plan) have been sharing the cost of defending Zamsky. Vermont Mutual, however, has done so pursuant to a reservation of rights. Defendant-appellee Sсottsdale Insurance Company (Scottsdale) has been keeping a watchful eye on the proceedings because it provides umbrella coverage (i.e., excess liability coverage) to the Zamsky family.
After Ivnitskaya‘s state court suit was brought, Vermont Mutual filed this declaratory judgment action in the federal court. It named as defendants Zamsky, FAIR Plan, Ivnitskaya, and Scottsdale; premised fedеral jurisdiction on diversity of citizenship and the existence of a controversy in the requisite amount, see
The question before us is a limited one. Vermont Mutual asked the district court to declare nonexistent any duty on its part either to defend or to indemnify. The district court did not take the bait but, rather, restricted its judgment to the duty to dеfend. See Zamsky, 916 F.Supp.2d at 159. This makes sense as, in the ordinary course, “the duty of an insurance carrier to defend the insured is broader than its duty to indemnify.” B & T Masonry Constr. Co. v. Pub. Serv. Mut. Ins. Co., 382 F.3d 36, 39 (1st Cir.2004) (construing Massachusetts law). Had the appellees been intent on securing a more complete declaration of their rights (extending, say, to the duty to indemnify), they could have cross-appealed. They did not do so. In the absence of a cross-appеal, only the duty to defend is properly before us. See Haley v. City of Boston, 657 F.3d 39, 53 (1st Cir.2011) (“It is black-letter law that even though an appellee can argue in support of a lower court‘s ruling in his favor on any ground made manifest in the record . . . , he cannot, without a cross-appeal, argue against a judgment in his favor in an endeavor either to expand his rights or to diminish the appellant‘s rights.“). We proceed accоrdingly.
This is a diversity case and, with respect to the limited question before us, the law of Massachusetts supplies the substantive rules of decision. See B & T Masonry, 382 F.3d at 38; U.S. Liab. Ins. Co. v. Selman, 70 F.3d 684, 688 (1st Cir.1995). In Massachusetts, the duty to defend arises when “the facts alleged in the complaint and those facts which are known by the insurer,” Bos. Symph. Orch., Inc. v. Commercial Union Ins. Co., 406 Mass. 7, 545 N.E.2d 1156, 1158 (1989), demonstrate “a possibility that the liability claim falls within the insurance coverage,” B & T Masonry, 382 F.3d at 39 (internal quotation marks omitted). The initial burden is on the insurеd to demonstrate that the overall coverage provisions apply. If the insured successfully makes that showing, the burden then shifts to the insurer to demonstrate that some exclusion defeats coverage. See id. At all times, ambiguity in the language of the policy must be construed in favor of coverage or, put another way, in favor of the insured. See id.
In this instance, the parties agree that, based on the allegations in Ivnitskaya‘s complaint and facts known to Vermont Mutual, coverage attaches unless some exclusion operates to defeat it. We thus proceed directly to the second stage of the inquiry and ask whether Vermont Mutual has identified such an exclusion.
To this end, Vermont Mutual says that the UL exclusion carries the day. The district court disagreed. See Zamsky, 916 F.Supp.2d at 158-59. Our task is to determine thе accuracy of the district court‘s conclusion that the UL exclusion does not apply.
In the case at hand, there is no genuine dispute as to any material fact.3 These undisputed facts tee up a question about the meaning and effect of the UL exclusion. This is a question that the highest court of Massachusetts—the Supreme Judicial Court (SJC)—has yet to answer. In such a situation, it is our obligation to make an informed prophecy as to how that court, if confronted with the quеstion, would be likely to rule. See Andrew Robinson Int‘l, Inc. v. Hartford Fire Ins. Co., 547 F.3d 48, 51 (1st Cir.2008). When making such a prediction, we may look to a variety of sources, including decisions of the lower courts in Massachusetts, persuasive adjudications by other courts, scholarly works, and considerations touching upon public policy. See Blinzler v. Marriott Int‘l, Inc., 81 F.3d 1148, 1151 (1st Cir.1996).
We start close to home. “While decisions of a state‘s intermediate appellate court are not binding оn a federal court sitting in diversity, such opinions are entitled to some weight.” Andrew Robinson, 547 F.3d at 55. Two decisions of the Massachusetts Appeals Court, each of which construes the UL exclusion, are instructive here.
The first of these cases is Callahan v. Quincy Mutual Fire Insurance Co., 50 Mass.App.Ct. 260, 736 N.E.2d 857 (2000). There, an insured‘s dog had bitten a third party at premises owned by the insured but not covered by Quincy Mutual. See id. at 858. The victim sued the insured for personal injuries. In the ensuing coverage dispute, the court held that the UL exсlusion in Quincy Mutual‘s policy did not pertain because the dog “was not a condition of the ... premises.” Id. at 859. Thus, while the occurrence “happened [at the uninsured location], ... it did not ‘arise out of’ ” the premises. Id.
The second case is Commerce Insurance Co. v. Theodore, 65 Mass.App.Ct. 471, 841 N.E.2d 281 (2006). There, a third party entered premises owned by the insured but not covered by Commerce in order to minister to a dying tree. See id. at 282. Due to the insured‘s alleged negligence, the third party fell from a ladder and sustained injuries. See id. He subsequently brought suit against the insured. In the ensuing coverage dispute, the court held that the UL exclusion in Commerce‘s policy applied. It reasoned that “where a third person is on the property to repair a condition of the property ... [t]here is a sufficiently close relationship between the injury and the premises” such that the injury should be understood to have arisen out of the premises. Id. at 285. (internal quotation marks omitted).
These bookend cases set the parameters of our inquiry. In both of them, the Appeals Court interpreted the UL exclusion‘s ambiguous “arising out of a premises” language to mean arising out of a condition of a premises. See id. at 284-85; Callahan, 736 N.E.2d at 859. Read together, the cases establish a dichotomy: if
In аn effort to alter the trajectory of the debate, Vermont Mutual suggests that this principle is trumped (or at least neutralized) by the SJC‘s instruction that the phrase “arising out of” should be construed broadly, regardless of whether that phrase appears in an exclusion or an insuring agreement. See, e.g., Bagley v. Monticello Ins. Co., 430 Mass. 454, 720 N.E.2d 813, 816 (1999) (construing the phrase in the context of a policy exclusion); Rischitelli v. Safety Ins. Co., 423 Mass. 703, 671 N.E.2d 1243, 1245 (1996) (construing the phrase in the contеxt of an insuring agreement). This suggestion fails because the “arising out of” language only comes into play if there is some causal link between the covered occurrence and a condition of the premises. Here, there is no such linkage.
The bookend cases illustrate this sequencing. In Callahan, the court found no causal link between the occurrence and a condition of the premises, see 736 N.E.2d at 859, and thus did not separately address any ambiguity inherent in the interstitial “arising out of” language. As the court said, the question before it was “less one of reach than it [was] of fit.” Id.
In Theodore, however, the court determined that a condition of the premises—a diseased tree—had a sufficient link with the occurrence. See 841 N.E.2d at 285 (“[I]t is incontrovertible that the insured asked [the victim] to help him because of the dying tree on the ... property.“). Only after it had made that determination did the court proceed to construe broadly the phrase “arising out of” and conclude that the UL exclusion applied. See id. This second step gave force to the exclusion even though a more direct cause of the victim‘s injuries (the insured‘s alleged negligence in failing to steady the ladder) existed. See id. at 282, 285.
Vermont Mutual has a fallback position. It seizes upon the Theodore court‘s reference to the victim‘s purpose in order to аrgue that if Zamsky and his cohorts went to the Falmouth house with the preformed intention of lighting a fire, the occurrence at issue must have arisen out of the premises. This is linguistic legerdemain. The victim‘s purpose in Theodore was material because it was inextricably intertwined with a condition of the premises. Here, however, the group‘s reason for going to Falmouth was not material because that purposе was not related to a condition of the premises. That makes all the difference.4
We add a coda. Insurance policies should be construed, where possible, to conform to the reasonable expectations of the parties. See Hazen Paper Co. v. U.S. Fid. & Guar. Co., 407 Mass. 689, 555 N.E.2d 576, 583 (1990) (explaining that it is “appropriate, in construing an insurance policy, to consider what an objectively reasonable insured, reading the relevant policy language, would expect to be covered“). Vermont Mutual drafted the policies at issue here. If it wanted to exclude from coverage all injuries occurring at an owned premises that it did not insure, it would have been child‘s play to say so. But Vermont Mutual eschewed this straightforward course and chose instead to sound an uncertain trumpet. Under such circumstances, we do not believe that the SJC would countenance the insurer‘s revisionist attempt to make a policy exclusion sweep more broadly than its language dictates. See, e.g., Makrigiannis v. Nintendo of Am., Inc., 442 Mass. 675, 815 N.E.2d 1066, 1071 (2004) (observing that if the insurer “intended to exclude coverage” under certain conditions “it could have expressly stated such an exclusion“).
To say more on this point would be superеrogatory. We conclude that when squarely confronted with a case that hinges on the UL exclusion, the SJC will follow the path demarcated by the Massachusetts Appeals Court. Using this interpretive model, we hold that the UL exclusion does not apply here.
Although we leave for another day the exact contours of the phrase “a condition of the premises,” it is nose-on-the-facе plain that this portable fire pit—stored on the property for a matter of months and used just once prior to the occurrence (in a different location)—was not a condition of the Falmouth premises. The fact that the fire pit was easily movable is a significant consideration. See 9 Steven Plitt et al., Couch on Insurance 3d § 126:8 (2008); see also Callahan, 736 N.E.2d at 859. Unlike the tree in Theodore, 841 N.E.2d at 285, the fire pit was not a part of the premises.
It follows inexоrably, as night follows day, that the occurrence at issue here did not arise out of a condition of the premises. Consequently, the court below did not err in determining that the UL exclusion did not apply.
We need go no further. For the reasons elucidated above, the judgment is
Affirmed.
Paul ENOS, Chairman of the Rhode Island Bricklayers Benefit Funds, Plaintiff, Appellee, v. UNION STONE, INC., Defendant, Appellant.
No. 12-2480.
United States Court of Appeals, First Circuit.
Oct. 15, 2013.
Notes
1. Coverage E—Pеrsonal Liability and Coverage F—Medical Payments to Others do not apply to “bodily injury” or “property damage“: . . . e. Arising out of a premises: (1) Owned by an insured; (2) Rented to an “insured“; or (3) Rented to others by an “insured“; that is not an “insured location“.... It is conceded that if the occurrence which caused Ivnitskaya‘s injuries arose out of the Falmouth premises, the exclusion should be given effect.