Opinion
11-P-286
03-26-2012
GREYHOUND LINES, INC. v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA & another. [FN1]
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
Greyhound Lines, Inc. (Greyhound) appeals from the allowance of summary judgment in favor of Travelers Property Casualty Company of America (Travelers) and UGL Unicco (Unicco) on all three counts of Greyhound's amended complaint. We reverse.
Background. On August 28, 2006, a Greyhound bus carrying fifty-two passengers was involved in an accident in New York State. The accident resulted in five fatalities and numerous injuries. Several passengers or their families filed suit alleging, in part, that Greyhound negligently inspected and maintained the tires on the bus. One of the suits names Unicco as a defendant, and Greyhound has instituted third-party actions against Unicco in the suits wherein Unicco is not named.
Bedard v. Greyhound Lines, Inc., No. 06-09626, pending in the 116th Judicial District of the District Court of Dallas County, Texas.
At the time of the accident, Unicco held a comprehensive general liability insurance policy from Travelers which identified Greyhound as an additional insured. Greyhound is entitled to insurance under that policy as provided by two endorsements relating to additional insureds. The Scheduled Endorsement entitles Greyhound to coverage 'only with respect to liability arising out of [Unicco's] ongoing operations performed for [Greyhound].' The Blanket Endorsement also provides coverage, except with respect to 'liability arising out of the independent acts or omissions of [Greyhound].'
Unicco and Greyhound were parties to a tire maintenance agreement, whereby Unicco agreed to service and maintain the Goodyear tires which Greyhound leased for its fleet from The Goodyear Rubber & Tire Company. The tire maintenance agreement required Unicco to obtain insurance which named Greyhound as an additional insured.
After Greyhound's demands for defense and indemnification in the negligence suits were rejected by Unicco and Travelers, Greyhound instituted an action against both companies for breach of contract (Count I), violations of G. L. c. 93A (Count III), and seeking a declaratory judgment that Travelers and Unicco are obligated to pay litigation expenses incurred by Greyhound in defending the various negligence suits (Count II). A Superior Court judge denied Greyhound's motion for summary judgment on Count II, allowed Travelers's and Unicco's cross-motion for summary judgment on that count, and allowed Travelers's and Unicco's motions for summary judgment on Counts I and III.
Discussion. We review a grant of summary judgment de novo, Miller v. Cotter, 448 Mass. 671, 676 (2007), looking to the summary judgment record to determine 'whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law.' Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).
In this case, we consider the legal obligation of an insurer's duty to defend an insured. 'An insurer has a duty to defend an insured when the allegations in a complaint are reasonably susceptible of an interpretation that states or roughly sketches a claim covered by the policy terms.' Billings v. Commerce Ins. Co., 458 Mass. 194, 200 (2010). 'The process is not one of looking at the legal theory enunciated by the pleader but of 'envisaging what kinds of losses may be proved as lying within the range of the allegations of the complaint, and then seeing whether any such loss fits the expectation of protective insurance reasonably generated by the terms of the policy." Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 406 Mass. 7, 12-13 (1989), quoting from Continental Cas. Co. v. Gilbane Bldg. Co., 391 Mass. 143, 147 (1984).
It is undisputed that Greyhound is entitled to coverage under the Scheduled Endorsement for 'liability arising out of [Unicco's] ongoing operations performed for [Greyhound].' One of the lawsuits names Unicco and Greyhound as defendants and alleges that the accident was caused, in part, by Unicco's negligent performance under the tire maintenance agreement. Given the presence of Unicco in this suit as a direct defendant, Travelers's duty to defend Greyhound is clearly implicated. See Boston Symphony Orchestra, Inc., supra at 10-11 ('[T]he duty to defend is based on the facts alleged in the complaint').
Greyhound also is entitled to coverage under the Blanket Endorsement. Although that endorsement expressly excludes coverage for 'liability arising out of the independent acts or omissions of [Greyhound],' the complaint in the suit naming Unicco alleges that Unicco's negligent performance under the tire maintenance agreement caused or contributed to the accident. The duty to defend is not, as the judge's decision implies, an all or nothing proposition. Without an agreement to the contrary, an insurer's broad duty to defend generally extends to all counts of a complaint, even those not specifically covered by the policy. See Simplex Technologies, Inc. v. Liberty Mut. Ins. Co., 429 Mass. 196, 199 (1999) ('That some, or even many, of the underlying claims may fall outside the coverage does not excuse [the insurer] from its duty to defend these actions'); Aetna Cas. & Sur. Co. v. Continental Cas. Co., 413 Mass. 730, 732 n.1 (1992) ('[T]he weight of authority places the duty to defend all counts on an insurer which has a duty to defend at least one count of a complaint, barring a contrary agreement with the insured'); Citation Ins. Co. v. Newman, 80 Mass. App. Ct. 143, 146 n.5 (2011) ('If the complaint in question contains a covered claim, the insurer's duty to defend extends to the other counts of the complaint, as well'). See also Dilbert v. Hanover Ins. Co., 63 Mass. App. Ct. 327, 331 (2005). While Greyhound's independent acts and omissions might not give rise to a duty to indemnify, Travelers has a duty to defend Greyhound nonetheless. See Boston Symphony Orchestra, Inc., supra at 10 ('The duty to defend . . . is antecedent to, and independent of, the duty to indemnify').
Lastly, given the facts reasonably known to Travelers from the lawsuits in which Unicco is named as a direct defendant and is alleged to be liable for the accident, and because similar claims for negligence with respect to the maintenance and inspection of the tires are alleged against Greyhound, Travelers has a duty to defend Greyhound in the suits arising from the accident which do not name Unicco. See Citation Ins. Co., supra at 146 (when analyzing the scope of an insurer's duty to defend, 'consideration must be given to extrinsic facts known or readily knowable by the insurer, which place liability within the coverage of the policy').
'The content of publicly available court records in the underlying case and related cases is readily knowable by an insurer and, where that information is relevant to the duty to defend, may be considered in deciding whether the insurer has a duty to defend.' Billings, supra at 205.
Because the undisputed facts demonstrate that Greyhound is entitled to coverage as an additional insured under the Travelers policy, Travelers has a duty to pay Greyhound for 'Allocated Loss Adjustment Expense(s).' These are defined by the policy to include attorney's fees, court fees, costs associated with investigating the claims, prejudgment and postjudgment interest assessed against Greyhound, and '[a]ll costs taxed against the insured in the 'suit." Because the amount expended by Greyhound thus far in defending against the underlying suits is disputed, the case must be remanded for further proceedings consistent with this memorandum and order.
Under the policy, Travelers agreed to 'indemnify the insured for ' Allocated Loss Adjustment Expense(s)' that are in excess of the 'retained limit' and which arise out of any claim or 'suit' for which damages are, or would be payable under this Coverage Part in the absence of a 'retained limit.''
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So ordered.
By the Court (Kantrowitz, Fecteau & Carhart, JJ.),