Opinion
11-P-195
03-19-2012
WILLIAM D. CONNELL & another v. PETER D. PLASTRIDGE.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs (Connells) own property in Westford on which they operated a pig farm. In 2002, approximately ten thousand gallons of liquid pig manure broke through an earthen berm and flowed down a hill onto neighboring land. The Connells spent approximately $400,000 toward addressing the resulting mess and associated contamination concerns. When the Connells sought reimbursement, their insurer, Farm Family Casualty Insurance Company (Farm Family), declined coverage on the ground that the release of manure fell within the 'pollution exclusion' of the Connells' insurance policies. In the current action, the Connells seek recovery from Peter Plastridge, the agent who sold them the policies, on the theory that he was negligent in failing to sell them a policy that included the pollution coverage. A Superior Court judge allowed Plastridge's motion for summary judgment and entered a separate and final judgment pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), dismissing him from the case. The Connells appealed, and we affirm, albeit on different grounds than the motion judge. See Cabot Corp. v. AVX Corp., 448 Mass. 629, 637 (2007) (reviewing court may consider any ground supporting summary judgment).
The contractor that the Connells hired to clean up the spill was also a named defendant. The parties report that this claim has been resolved. The record also reveals that the Connells reached a separate settlement with the contractor who was handling the manure at the time the spill occurred.
Background. The facts, viewed in the light most favorable to the Connells, see Bank of N.Y. v. Bailey, 460 Mass. 327, 331 (2011), are as follows.
The initial purchase of insurance. The Connells began raising pigs in or around 1976. In the early 1990s, when they decided also to get into the horse stable business, the Connells approached their regular insurance agent about buying insurance for their farm operations. He told them that he did not sell farm insurance, and he recommended that they make an inquiry of the local Farm Bureau. They did so, and the Farm Bureau directed them to Peter Plastridge, the exclusive agent for Farm Family in Middlesex County (where the Connells' farm is located). Farm Family specialized in providing farm insurance.
According to the summary judgment record, Farm Family was initially established by farmers (apparently through the Farm Bureau) as a mutual company. It has since gone public and then been privately acquired.
At the time the manure produced by the pigs was placed in piles outside the pig barn and then brought to the fields for composting. Plastridge came out to meet the Connells in person and to tour their farm. He spent about an hour there, and during their meeting, he and the Connells discussed both the pig and horse operations. Plastridge sold the Connells two policies: a 'special farm package' (Farm Family's 'flagship' product) and a separate commercial general liability policy for the horse operations.
In his deposition testimony, Plastridge suggests that he was unaware of the ongoing pig operations, despite the fact that he toured the farm on foot and took photos of the pig barn. The judge's summary judgment decision indicates that he may have credited Plastridge's position on this. Leaving aside the potential implausibility of Plastridge's professed ignorance of the pig operations, the Connells stated that they specifically discussed the pig operations with him, and their version must be accepted on summary judgment. The fact that Plastridge may have had general knowledge of the pig operations does not in the end make a difference.
The manure pit. In 1997, the Connells made some changes in the manner in which they handled the pig manure. Specifically, they constructed a concrete holding area, which has been likened to an in-ground swimming pool. On a daily basis, pig manure was pushed into this holding area (the pit) where it accumulated. Once a year, it was removed from the pit (through the use of heavy equipment) and taken to compost areas in the field. Because the pit was open to the elements, water collected there. According to the deposition testimony of the contractor regularly hired to empty the pit, the 'water' there had to be pumped off before the solids were removed. The record is not clear where this 'water' was pumped, what it contained, or whether it was the same or different from the 'liquid manure' that was the subject of the spill.
The 2001 meeting. In 2001, the Connells approached Plastridge with concerns about whether their existing insurance coverage was sufficient. The inquiry was apparently prompted by the fact that the Connells were moving to Florida for the winter (leaving farm operations to two of their children). The Connells expressed concern to Plastridge about liability to third parties whom they believed were trespassing on their property. They did not raise any specific concern over potential liability related to their manure handling operations. Nor did they at this time, or at any other time prior to the spill, inform Plastridge about the construction of the manure pit. Plastridge increased their insurance by adding an umbrella policy, and he told them, 'You are completely covered.'
The spill. The manure spill occurred on November 11, 2002, while the Connells were in Florida. The Connells hired their usual contractor to perform the annual emptying of manure from the pit, and that the contractor in turn hired Rick Magaw to do the actual work. Magaw had apparently pumped or otherwise transported some ten thousand gallons of liquid from the pit onto the ground in an area adjacent to the pit. It is not clear whether this was consistent with the Connells' regular manure management practices, or whether it was instead something that Magaw improvised in the field (as Magaw's employer suggested it may have been). In any event, the liquid broke through some sort of earthen berm that was apparently constructed to hold it back.
The availability of coverage. When the Connells' daughter reported the incident to Plastridge, he initially told her that he thought their claim would be covered. However, the insurer eventually denied the claim under the policies' 'pollution exclusion.' Richard Bourgault, the insurance agent who replaced Plastridge, testified at his deposition that, although there was a market for additional pollution coverage at the relevant time, the Connells would not have been able to purchase such coverage for the specific manure handling operations they used when the spill occurred (placing large amounts of liquid in an earthen containment area), because the Farm Family underwriters would never have approved this. The Connells submitted an affidavit from their own expert in support of their argument that such coverage was available.
Both parties concede that the incident was not covered by the policies that the Connells had purchased. However, the precise boundary between what would have been covered under the policies and what would not have been, is not clear on the present record (which does not include the relevant policies). The deposition testimony of Richard Bourgault suggests that ordinary manure composting would have been covered under the Connells' existing policies, even though the operations that led to the spill were not covered.
As Bourgault stated, Farm Family will 'only sell [pollution policies] to people that don't need it.'
Discussion. The principal claim set forth in the Connells' complaint is that Plastridge negligently failed to sell them pollution coverage. The judge below rested primarily on the ground that the Connells could not show that pollution coverage would have been available to them. On this point, the judge relied on the deposition testimony of Bourgault, whom the judge misidentified as the Connells' expert. As Bourgault indisputably was not the Connells' expert, the judge erred in concluding that they were estopped from trying to contradict Bourgault's assertion that pollution coverage was unavailable to them. In the end, we need not resolve whether the Connells made a sufficient showing of the availability of pollution coverage to survive summary judgment, because we conclude that their claim fails for a more fundamental reason.
The Connells brought this error to the judge's attention in a motion for reconsideration. In response, Plastridge argued that the judge's ruling could be upheld on multiple other grounds, including that Bourgault's testimony demonstrated the unavailability of pollution coverage even if he was not the Connells' expert. The judge denied the motion 'for the reasons set forth in the opposition memorandum of law' (without further specification).
At all relevant times, Plastridge was aware that the Connells had a pig farm, and -- as an expert in farm insurance -- he can fairly be charged with knowledge that pigs produce manure and that such manure poses various risks. But the Connells have not claimed that they ever specifically discussed the manure handling operations with him. Moreover, it is uncontested that the Connells never told Plastridge about the construction of the manure holding pit, and there is no evidence that he independently became aware of it. Under these circumstances, their negligence claim can succeed only if Plastridge owed a duty to them to investigate their needs and advise them on coverage. See Lev v. Beverly Enterprises-Mass., Inc., 457 Mass. 234, 240 (2010).
The Connells protest that, at least from the perspective of a farmer, their manure handling operations did not fundamentally change over time: both before and after the construction of the pit, they composted the pig manure in the field. They also point out that the pit itself did not leak or otherwise fail. However, the construction of the pit did lead to large amounts of liquid waste being collected, with the wastes then deposited onto the ground. In this respect, the Connells did alter their manure handling operations in a manner that materially changed the risks that those operations posed.
'There is no general duty of an insurance agent to ensure that the insurance policies procured by him provide coverage that is adequate for the needs of the insured.' Martinonis v. Utica Natl. Ins. Group, 65 Mass. App. Ct. 418, 420 (2006). In order to impose such a duty, 'the insured may show that special circumstances prevailed that gave rise to a duty on the part of the agent to ensure that adequate insurance was obtained.' Id. at 421. Such special circumstances include factors such as: (1) the complexity and comprehensiveness of the particular insurance business at issue; (2) whether a continuing relationship existed between the plaintiff and the broker over a period of years; (3) the frequency of contact the broker had with the plaintiff to attend to his insurance needs; and (4) the extent to which the plaintiff, because of the complexity of the policies, had come to rely on the broker. Schwartz v. Travelers Indem. Co., 50 Mass. App. Ct. 672, 680-681 (2001). That list is not exhaustive; for example, enhanced duties will certainly arise 'when the agent holds himself out as an insurance specialist, consultant or counselor and is receiving compensation for consultation and advice apart from premiums paid by the insured.' Baldwin Crane & Equip. Corp. v. Riley & Rielly Ins. Agency, 44 Mass. App. Ct. 29, 32 (1997), quoting from Sandbulte v. Farm Bureau Mut. Ins. Co., 343 N.W.2d 457, 464 (Iowa 1984).
We note that the Sandbulte case has been overruled by the Iowa Supreme Court. Langwith v. American Natl. Gen. Ins. Co., 793 N.W.2d 215, 223-224 (Iowa 2010).
Whether such special circumstances exist is a question of fact. See McCue v. Prudential Ins. Co., 371 Mass. 659, 661 (1976). However, viewing the record in the light most favorable to the Connells, no rational fact finder could conclude that such circumstances existed in this case. Plastridge was not an independent broker who received separate compensation from the Connells for his advice. Instead, he was Farm Family's agent and received his compensation from them. Although the Connells' relationship with Plastridge may have spanned a decade or more, it was confined to two or three conversations prior to the spill. Moreover, any general assurances that Plastridge may have provided as to the adequacy of the insurance coverage that they were purchasing are typical of the agent-consumer relationship, and do not by themselves establish the special relationship necessary. Wallman v. Suddock, 200 Cal. App. 4th 1288, 1313, 1315 (2011). The Connells' reliance on Martinonis v. Utica Natl. Ins. Group, supra, is misplaced, because the agent there gave an affirmative assurance in response to a specific inquiry from the insured (in the context of a longstanding relationship that included the insured's regular reliance on the agent's advice). See 65 Mass. App. Ct. at 421-422. There was no similarly specific assurance given here; to the contrary, Plastridge was never even told of the manure pit.
We recognize that there are some factors here that may cut in the Connells' favor on the special relationship issue, such as the 'thin market' for farm insurance. Cf. Archer Daniels Midland Co. v. Hartford Fire Ins. Co., 243 F.3d 369, 373 (7th Cir. 2001) (under Illinois law a finding of dual agency is more likely in thin markets because 'if there is only one insurance broker in town, both the driver and the auto insurer may need to use that person's services '). However, in the end, we do not view the existence of a special relationship a close enough question for such factors to create a genuine dispute of material fact.
In sum, the summary judgment record reveals that the Connells cannot meet their burden of proving that Plastridge owed them a duty to investigate their coverage needs. As they cannot succeed without making such a showing, summary judgment was appropriately granted in favor of Plastridge. See generally Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711 (1991) (summary judgment for defendant is appropriate where there is '[a] complete failure of proof' on an essential element of a cause of action).
Other claims. The Connells' case against Plastridge fares no better pleaded as a contract claim. Although there was a contract between the Connells and Farm Family, the Connells have not demonstrated that they had a contract with Plastridge, and certainly not one through which Plastridge agreed, expressly or impliedly, to procure coverage for their manure pit. Because their underlying contract and negligence theories fail, so too does their claim under G. L. c. 93A. Even if we were to assume that Plastridge's statement that the Connells were 'completely covered' could be viewed as 'deceptive,' it was not a 'negligent misrepresentation . . . so extreme or egregious as to constitute a violation of G. L. c. 93A.' Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 62 (2004). See Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 563 (2008) ('Although whether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact[,] the boundaries of what may qualify for consideration as a c. 93A violation is a question of law').
Even if the Connells' complaint were generously read to encompass a claim for promissory estoppel, it would still fail, because their reliance on a general statement by an agent that they had sufficient coverage for their needs would not support reasonable reliance.
Judgment affirmed.
By the Court (Green, Vuono & Milkey, JJ.),