Opinion
No. 12–P–1370.
2013-05-29
GRANITE STATE INSURANCE COMPANY v. James W. CONNER & others.
By the Court (RUBIN, FECTEAU & HINES, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This appeal arises out of a declaratory judgment action brought by Granite State Insurance Company (Granite State) against James W. Conner, the Melrose Young Men's Christian Association (Melrose YMCA), Richard Whitworth, Karen Dauteuil, and Nancy Madden. Granite State sought a declaration that it did not owe a duty to defend under the insurance policy it sold to the Melrose YMCA, effective from July 15, 2003, with respect to an underlying case filed by John and Jane Doe as parents and next friends of their minor daughter, Mary Doe, for injuries suffered by Mary as a result of being sexually abused by Conner, an employee of the Melrose YMCA (the Doe suit). The predecessor to American Motorists Insurance Company (American Motorists) defended the Melrose YMCA and its representatives, its insureds, who were defendants in the Doe suit. After settlement of that action, American Motorists intervened in Granite State's suit below seeking equitable contribution on the basis that Granite State also owed a duty to defend and indemnify the Melrose YMCA and its representatives. On cross motions for summary judgment, the Superior Court judge entered a judgment in favor of Granite State, and American Motorists now appeals. Granite State issued a commercial general liability insurance policy to the Melrose YMCA. It is American Motorists' contention that Granite State's obligation to defend comes about as a result of bodily injury coverage contained in the body of the policy and described as “COVERAGE A” and under a professional liability insurance endorsement which extends the commercial general liability coverage part of the insurance policy by adding what is described as “COVERAGE E.” The policy also includes an endorsement that modifies the insurance provided under the commercial general liability coverage part that is labeled “YMCA SEXUAL ABUSE LIABILITY COVERAGE” and that endorsement is captioned “COVERAGE D.” This endorsement provides additional insurance coverage by, among other things, expanding the definition of “bodily injury” for purposes of the sexual liability endorsement to include “mental anguish,” and by offering coverage for damages because of bodily injury, including that mental anguish, to any person arising out of “sexual abuse,” which it defined to mean “sexual molestation, including but not limited to sexual exploitation, deliberate physical contact, mental abuse and illicit conduct not involving physical contact.”
The parties are in agreement that if all this endorsement did was add this coverage, certain acts of sexual abuse might be independently covered under coverages A, D, and E, and they agree that the insurance policy allows for such overlapping coverages. The parties likewise agree that, in the absence of the endorsement captioned “COVERAGE D,” certain acts of sexual abuse might have been covered under coverages A and E. For example, Granite State does not deny that it might have been required to cover the cost of defense in the Doe case, in the absence of coverage D, under coverage A, since the allegations in the Doe suit included, among other things, an allegation of grievous bodily harm done to the victim, Mary Doe.
The question before us is whether a clause contained in the “Insuring Agreement” portion of coverage D serves to limit the availability of coverage not only under coverage D but also under coverage A and coverage E. The relevant paragraph reads, “As respects each claimant, multiple acts of ‘sexual abuse’ by the same person(s), including any breach of duty in allowing or contributing to such act(s), will be deemed one event. The date of the event will be deemed to be the date of the first act of ‘sexual abuse.’ There is no coverage under this policy as respects such claimant if the date of the event precedes the effective date of this policy.”
This clause, referred to by the parties as the “deemer” clause, clearly eliminates coverage under coverage D with respect to the sexual abuse alleged in the Doe suit, as the date of the first act of sexual abuse was prior to the effective date of the policy. American Motorists seeks to rely on the canon of construction that an ambiguous provision of an insurance policy must be construed against the insurer. Citation Ins. Co. v. Gomez, 426 Mass. 379, 381 (1998). It argues that if this provision was intended as an exclusion of some otherwise covered acts not only under coverage D, but under coverages A and E as well, it was required to be so stated in clear and unmistakable language.
While we agree with the statement of the law articulated by American Motorists, we think it does not provide a basis for reversal here. Despite its location in the endorsement captioned “COVERAGE D,” and indeed in the section describing the insuring agreement, rather than in some other section, such as the one enumerating “EXCLUSIONS,” the language of the deemer clause is clear and unmistakable. It does not merely limit “this insurance.” Rather, it states a limit to coverage under “this policy.” At the top of the endorsement there is language that provides that “[t]his endorsement modifies insurance provided under the following: COMMERCIAL LIABILITY COVERAGE PART,” and the entire section of the endorsement comprising the insuring agreement and the exclusions is preceded by the statement that “[t]he following is added to SECTION I–COVERAGES:” a portion of the policy itself. The language in the deemer clause limiting the scope of the “policy” therefore must be read as though it were inserted into the body of the policy itself. At least in this circumstance, the language inserted into the body of the policy that limits the coverage provided under “the policy” serves as a limitation on all the policy's coverages, not only on coverage D. The language of the policy being unambiguous, the judgment of the Superior Court is affirmed.
So ordered.