Opinion
Civil Action No. 04-01044A.
August 28, 2006.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
This action involves an insurance coverage dispute stemming from a fire loss to a Safari Motor Home owned by the Plaintiffs (the "Carringtons") and insured by the Defendant ("Mendota"). Mendota denied coverage for the loss based on the business use exclusion in the Carrington's insurance policy. The Carringtons filed suit for breach of contract and violation of G.L. c. 93A and G.L. c. 176D. Mendota now moves for summary judgment as to all claims against it. For the reasons stated below, that motion is ALLOWED.
BACKGROUND
The plaintiffs, Calvin Carrington and Kelly Carrington are residents of Sturbridge, Massachusetts. On or about August 30, 2003, the Carringtons insured a 1997 Safari Motor Home (the "RV") with Mendota. Mendota, a Minnesota corporation, insured the RV under a Florida recreational vehicle insurance policy (the "Policy"). The Carringtons purchased the Policy from Mendota in Florida and the Policy indicated the RV was to be garaged at 927 SE 16th Terrace, Cape Coral, FL. In deposition testimony, Calvin Carrington indicated that the RV was sometimes kept at his residence in Sturbridge, MA.
The Policy contained the following exclusion:
"Section D — Recreational Vehicle Damage Coverage: We do not cover loss . . . 13.) When your Insured Recreational Vehicle is used for business or commerce."
The policy does not further define the terms "business" and "commerce," and the policy does not contain a choice of law provision specifying which state's law should apply to interpret that provision.
Calvin Carrington owns and operates a motor sports entertainment business know as Wildfire Motorsports ("Wildfire"). This business produces motor sports events such as demolition derbies, monster truck shows and motorcycle shows. In the summer of 2003, Wildfire promoted seven to ten shows in New England. Revenue from Wildfire provided the main source of income for the Carringtons. In August of 2003, Wildfire had six employees. Wildfire also owned and used four additional motor homes as part of its operations. These other motor homes were used to transport equipment and vehicles from one show to the next. During the shows, employees of Wildfire would sleep in the motor homes.
In August of 2003, Wildfire promoted a show at the Bangor Maine State Fairgrounds. Calvin Carrington, the six employees of Wildfire, plus the four motor homes used by Wildfire and the RV at issue were present and utilized at this event. During this event Clive Featherby ("Featherby"), a resident of Australia used and slept in the RV at issue. Featherby, whom Calvin Carrington describes as a "friend", does not have a visa to work in the United States and is not on Wildfire's payroll. The Carringtons maintain that Featherby received no compensated from Wildfire, and was not paid for traveling to and attending the shows. There is however, evidence that Featherby performed some manner of work on behalf of Carrington and Wildfire. There is further evidence that Carrington and Featherby had a business relationship jointly producing fireworks and water screen shows. At his deposition, Calvin Carrington testified:
"[Featherby] helps me. He always helps me get the monster trucks on the grounds, and stuff like that, when it comes to show time."
In a recorded statement taken after the RV fire Calvin Carrington was asked if Featherby working for Wildfire. He responded:
"Yes, he works for my company, we have a laser light show production company and he was over here helping me set up the lasers."
After the Bangor Maine event, Featherby drove the RV to the Rochester, New Hampshire Fairgrounds for another event promoted by Wildfire Motorsports. The RV arrived in Rochester on or about August 27, 2003. On August 29, 2003 and August 30, 2003 Wildfire put on the following events: monster truck car crushing, demolition derby, tough truck competition and a jet truck show. During this time all of Carrington's vehicles, including the RV at issue were parked together near the track at the fairgrounds.
On August 30, 2003, while parked at the Rochester New Hampshire fairgrounds, the RV suffered fire damage. The Carringtons timely submitted an insurance claim, which was denied by Mendota. On April 29, 2004 the Carringtons filed this complaint alleging breach of contract and violation of G.L. c. 93A and G.L. c. 176D.
DISCUSSION
This court grants summary judgment where there are no genuine issues of material fact and where the moving party is entitled to judgment as a matter of law based upon review of the summary judgment record. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community Nat'l Bank v. Dawes, 369 Mass. 550, 553 (1976); Mass. R. Civ. P. 56(c). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and "that the summary judgment record entitles the moving party to judgment as a matter of law." Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). A party moving for summary judgment who does not bear the burden of proof at trial may demonstrate the absence of a triable issue either by submitting affirmative evidence negating an essential element of the nonmoving party's case or by showing that the nonmoving party is unlikely to submit proof of that element at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991);Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). The nonmoving party cannot defeat the motion for summary judgment by resting on its "pleadings and mere assertions of disputed facts . . ." LaLonde v. Eissner, 405 Mass. 207, 209 (1989). If a case only involves a question of law, a court will grant summary judgment to the party entitled to judgment as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983).
As an initial matter, the parties dispute which state's law should be applied to the to the interpretation of the exclusionary clause at issue. The Policy itself does not expressly provide an answer to this question.
In determining which state's law will apply, "Massachusetts has adopted a functional choice-of-law approach." Clarendon National Ins. v. Arbella Mutual Ins., 60 Mass. App. Ct. 492, 495 (2004). "The Massachusetts functional approach is explicitly guided by the Restatement (Second) Conflicts of Laws (1971)."Id. at 496. "The Restatement is structured such that, when faced, as here, with a conflict of laws question involving insurance contracts, the first step is to ascertain whether the provisions of § 193 will resolve the matter. . . ." Id. "Section 193 provides that the rights created by a contract of casualty insurance are to be determined by the local law of the State that the parties to the insurance contract understood would be the principal location of the insured risk during the term of the policy, unless some other State has a more significant relationship under the principles of § 6." Id. citing Restatement (Second) of Conflict of Laws § 193 (1971). "Comment b to § 193 suggests that, in the case of an automobile liability policy, the parties ordinarily know beforehand where the automobile will be garaged and that the garaged location is the principal location of the insured risk." Id. (emphasis added)
Mendota points out that when the policy was issued, it stated that the RV was to be garaged in Florida. The Carrington's counter that they have principally resided in Massachusetts, that they executed the four most recent RV policy renewals in Massachusetts, and that they receive their billing statements in Massachusetts. The Carringtons argue that based on these facts it was understood by both parties that Massachusetts would be "the principal location of the insured's risk" and that therefore Massachusetts's law should be applied to interpret the "business or commercial" exclusion clause in the policy.
Here, the Policy states that the location of the RV is in Florida. Although the Carrington's received bills and renewal notices at their home in Massachusetts the court does not find that these practices contradict or alter the express statement in the contract that the location of the insured risk was Florida. Particularly in the case of a motor home, maintaining a residence in another state and receiving bills at that residence is not inconsistent with an understanding that the principal location of the insured risk remained somewhere else. Motor homes by their very nature are designed to allow their owners to utilize them for extended periods far away from that owner's permanent residence. It would certainly not be unusual for a Massachusetts resident to primarily keep and garage his or her motor home in a popular vacation destination such as Florida while maintaining a primary residence in Massachusetts. Furthermore, the court does not find that the alleged facts, where the RV was damaged by a fire in New Hampshire while being used for business purposes, provide any support for the argument that Massachusetts rather than Florida had a more significant relationship to this matter. Therefore, Florida law will be applied to contract language at issue.
Given that Massachusetts and Florida law are essentially the same on the relevant issues, the court notes that its decision in this case would not have come out any differently had Massachusetts law been applied.
The Florida rule regarding insurance contract clauses is that "unambiguous language requires no special construction or interpretation . . . [and that] [s]uch language will be given that meaning which it clearly expresses." Valdes v. Prudence Mutual Casualty Co., 207 So. 2d 312, 314 (Fla.App. 1968) citingGoldsby v. Gulf Life Ins. Co., 117 Fla. 889 (1935). "Buisness use" and "business pursuits" exclusions are standard exclusionary clauses found in many insurance policies. See Generally, Construction and Application of "Business Pursuits" Exclusion Provisions in General Liability Policy, 35 A.L.R 5th 375 (2005). "The purpose of a 'business pursuits' exclusion is to help the insurer keep premiums at a reasonable level by eliminating a type of coverage that (1) normally requires specialized underwriting and rating, (2) is not essential to most purchasers of the policy, and (3) is provided by other insurance contracts a business owner is likely to have." Avoiding the "Business Pursuits" Exclusion — Insured's Activity as Not Business Pursuit, 15 Am. Jur. Proof of Facts 3d 515 § 1 (2005). Where, as is the case here, the insurance policy does not explicitly define the terms "business" or "business pursuits" Florida courts have used the definition, "a continuous and comprehensive activity for financial gain." Gaynor v. Williams, 366 So. 2d. 1243, 1243 (Fla.App. 1979).
While the definition of the term "business pursuits" may vary somewhat by jurisdictions, under any definition, the RV's use by the Carringtons must properly fall within the meaning of that term. See 35 A.L.R. 5th 375, § 2-2a ("A great number of courts have taken the position that 'business pursuits,' within the meaning of the standard policy exclusion, refers to activities which are conducted on a regular or continuous basis, and for the purpose of earning income, profit, or as a means of livelihood").
Mendota cites two Florida Appeals Court cases, Volkswagen Insurance Company v. Nguyen, 405 So. 2d. 190 (Fla.App. 1981) and Battle v. Coleman, 336 So. 2d. 140 (Fla.App. 1976), to support its argument that the business pursuits exclusion of the policy applies in this case and that it is therefore entitled to summary judgment. While the facts of those two cases are different from the one at bar, this court finds them both instructive and supportive of Mendota's argument that the exclusion applies based on the undisputed facts presented here.
In Volkswagen the court found that the business exclusion provision in a personal automobile policy was applicable when an employee was injured while moving items at the request of his employer while using his employer's personal automobile. TheVolkswagen court took note of the fact that that the injured employee had successfully filed for and received workers compensation benefits, and that he was being paid overtime by his employer at the time of the incident. Here, unlike inVolkswagen there is some dispute as to whether Featherby, the man using the RV at the time of the incident, was an employee or was performing services on behalf of Wildfire or Carrington. However, whether or not Featherby was an employee or was performing services on behalf of Wildfire is not determinative on the issue of coverage under the exclusion. The critical question remains whether the RV itself was being used for "business pursuits" at the time it was damaged. As explained below, this court finds that regardless of the specifics of Featherby's role in Carrington's business, the underlying use of the RV was to further that business.
In the second case, Battle v. Coleman, 336 So. 2d. 140 (Fla.App. 1976), the court found that a business use exclusion in a personal automobile policy was applicable to claim made on a liability insurance policy covering a van. That van had been jointly owned by several band members, had been paid for with band profits, had been painted with the band's slogan, and at the time of the incident was occupied by three band members and their instruments. The court concluded, "It would be grossly unreasonable to think that either the insured or the insurer, upon the issuance of the liability insurance policy covering Coleman's private automobile, contemplated that such coverage extended to the vehicle equitably owned and operated by Coleman and his fellow band members in pursuit of their business." Id. at 141. The court finds, that here the undisputed facts in this summary judgment record are sufficiently similar or analogous to those in Volkswagen and Battle to conclude that the business exclusion should likewise be applied.
In the present case, immediately before the loss occurred the RV had been driven from one event in Maine to another event in New Hampshire. At the time of the loss the RV was parked at the fairgrounds in an area with other vehicles that were being used for set-up, production, and promotion of the motor sports event. That the RV may have been incidentally or momentarily used for recreational or personal uses such as eating and sleeping, does not alter the fact that the overall purposes of the RV's presence at the fairgrounds was related to Carrington's business of promoting motor sports.
Furthermore, it is immaterial that at the time of the incident the RV may not have been utilized by an employee on the payroll of Carrington or Wildfire. The undisputed fact is that at the time of the loss this RV was being utilized, at the direction of Carrington, by an individual who had an established business relationship with Carrington while parked at a location where Carrington and his employees were engaged in business pursuits. The conclusion that the RV was being used for business pursuits is further bolstered by the fact that prior to the New Hampshire event, the RV had traveled from an earlier event where it had also been utilized by Carrington and Wildfire for business purposes. This is not a situation where someone with strictly personal/recreational interest in motorsports events was using the RV to independently attend one of events for his own personal enjoyment or edification. Carrington, had a clear financial purpose for being at the event, and Featherby, whatever his exact role was, was undisputedly there to advance a business purpose of Carringtons. In fact, by Carrington's own admission, Featherby performed work for Carrington and/or Wildfire. There is no evidence that but for Carrington's business interest, Featherby or the RV would have otherwise been at the New Hampshire fairgrounds. Because the undisputed facts of this case are that Carrington was using the RV in connection with his business of promoting motor sports shows at the time of the loss and because of the exclusionary language in the Policy, Mendota is not responsible for Carrington's loss.
ORDER
For the foregoing reasons Mendota's Motion for Summary Judgment is ALLOWED.