Opinion
14-P-790
07-22-2015
30 MAGAZINER REALTY, LLC, & another v. LIBERTY MUTUAL INSURANCE CO.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such 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. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs, 30 Magaziner Realty, LLC, and Osgood Textile Co. (collectively, Osgood), appeal from a Superior Court judgment dismissing their action against the defendant, Liberty Mutual Insurance Co. (Liberty Mutual).
Background. Osgood, a textile business operating in West Springfield, received a notice on March 25, 2011, from the California Center for Environmental Health (CEH) that it was in violation of California Health and Safety Code § 25249.6 (Proposition 65), for failure to warn individuals of the presence of lead and lead compounds in the fabrics it manufactured. The CEH, a nonprofit corporation, stated it intended to file a citizen enforcement lawsuit unless Osgood agreed in a binding instrument to take certain actions, including "appropriate measures to otherwise comply with Proposition 65" and "pay an appropriate civil penalty."
California Health and Safety Code § 25249.7(d) allows actions to be brought "by a person in the public interest" subject to enumerated requirements and notification to the Attorney General.
On April 7, 2011, Osgood submitted a claim to its insurer, Liberty Mutual, for defense and indemnification, based on the violation notice. Liberty Mutual denied coverage on April 15, 2011. Osgood filed a complaint in the Superior Court on November 27, 2012. Following cross motions of the parties for summary judgment, the motion judge on February 21, 2014, allowed Liberty Mutual's motion, concluding that Osgood failed to meet its burden to prove that its claim for coverage falls within the provisions of its policy.
Osgood timely appealed to this court seeking a reversal of the judgment, arguing that it will show that an interpretation of the policy favoring Osgood is reasonable.
Discussion. Our review of a summary judgment decision is de novo and is confined to the same record as was before the motion judge. Welch v. Barach, 84 Mass. App. Ct. 113, 118-119 (2013), and cases cited. "The proper interpretation of an insurance policy is a matter of law to be decided by a court." Boazova v. Safety Ins. Co., 462 Mass. 346, 350 (2012).
We begin with the April 15, 2011, letter from Liberty Mutual to Osgood stating that the commercial general liability coverage form CG 00 01 endorsement in its policy does not provide the coverage it requested for the claim made by the CEH. Liberty Mutual wrote that there were "no claims caused by an 'occurrence' resulting in 'bodily injury' or 'property damage' as required by the insuring agreement and as those terms are defined by your policy."
Osgood reacted by filing a complaint in the Superior Court challenging the denial of coverage and asserting that the denial was based on "so-called exclusions or provisions that are nowhere contained in the Policy," principally asserting that the CG 00 01 form was missing and therefore not part of the policy.
Substantially all of Osgood's arguments below and on appeal concern its allegation that endorsement form CG 00 01, titled "General Liability Coverage," was not provided in the sixty-five page policy packet it received from its insurance agent, Haberman Insurance Group, Inc., for the policy year February 12, 2011, to February 12, 2012.
These arguments are wholly without merit. Osgood is deemed to have knowledge of the form through the policy's forms and endorsements list, as well as through communications with Liberty Mutual. In any event, the motion judge analyzed whether Osgood could prove coverage with and without form CG 00 01 as part of the policy.
In its motion for partial summary judgment Osgood argued that its coverage under the policy should not be limited by the missing form CG 00 01, and because the form's absence constituted a unilateral mistake, it cannot be enforced.
Liberty Mutual sought summary judgment on all counts in Osgood's complaint, arguing that Osgood had knowledge of the terms of the policy, and is not entitled to coverage for the claims made under the California Health and Safety Code or for the product withdrawal expenses under the commercial general liability coverage form CG 83 37 endorsement.
Osgood's complaint included counts of misrepresentation, breach of contract, violation of the implied covenant of good faith and fair dealing, violation of G. L. c. 93A, negligence, and equitable relief. Class action allegations were also included but not pursued.
The motion judge first determined whether Osgood had met its initial burden to show the claim of loss falls within coverage of the policy. See Boazova, 462 Mass. at 351. She stated that the "question of coverage does not rest on whether or not [form] CG 00 01 is a part of the policy as [Osgood] cannot prove coverage under either scenario." The judge acknowledged that Osgood asserted that the occurrence triggering its claim for coverage was the notice of violation of the California Health and Safety Code. The judge determined that such violations are punishable by civil penalties that are not "suits for damages resulting from bodily injury or property damage," as are covered by the provisions of form CG 00 01.
Form CG 00 01 states in relevant part:
"SECTION I - COVERAGES
. . .
"1. Insuring Agreement
"a. We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply.
. . .
"b. This insurance applies to 'bodily injury' and 'property damage' only if:
"(1) The 'bodily injury' or 'property damage' is caused by an 'occurrence' that takes place in the 'coverage territory[.]'
. . .
"SECTION V - DEFINITIONS
. . .
"3. 'Bodily injury' means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.
. . .
"13. 'Occurrence' means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
. . .
"17. 'Property damage' means:
"a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
"b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the 'occurrence' that caused it."
The judge, assuming that the provisions of form CG 00 01 were not part of the policy, then stated that form CG 83 37 provides coverage. Form CG 83 37, titled "Manufacturers or Distributors Extension," contains provisions covering reasonable and necessary expenses incurred during product withdrawal. Osgood did seek reimbursement for attorney's fees, but attorney's fees are not included in the list of reasonable and necessary extra product withdrawal expenses. Osgood also did not demonstrate that any product withdrawal had occurred.
Form CG 83 37, section I.A. states in relevant part:
"1. Insuring Agreement
"a. We will reimburse you for 'product withdrawal expenses' incurred because of a 'product withdrawal' to which this insurance applies. . . .
"b. This insurance applies to a 'product withdrawal' only if the 'product withdrawal' is initiated in the 'coverage territory' during the policy period because:
"(1) You determine that the 'product withdrawal' is necessary; or
"(2) An authorized government entity has ordered you to conduct a 'product withdrawal.'
. . .
"2. Exclusions
"This insurance does not apply to 'product withdrawal expenses' arising out of:
. . .
"e. The defense of a claim or 'suit' against you for 'product withdrawal expenses.'"
There is indication in our record that Osgood incurred some expenses for legal fees charged by a California law firm between April, 2011, and November, 2012, where some of the work items in August, 2012, and November, 2012, involved settlement issues and a consent judgment. Osgood makes no reference to these charges or to any action which may have been taken by CEH after its initial notice of violation.
Osgood failed to show that coverage was provided in any section of the policy, and the motion judge therefore concluded that Osgood had no reasonable expectation of proving its counts of breach of contract, breach of the covenant of good faith and fair dealing, misrepresentation, negligence, or violation of G. L. c. 93A. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). We conclude that summary judgment properly was allowed for Liberty Mutual.
Judgment affirmed.
By the Court (Cypher, Trainor & Katzmann, JJ.),
The panelists are listed in order of seniority. --------
Clerk Entered: July 22, 2015.