Defendant claims that even if Santa Fuel's negligence was the cause of the contamination, the train of events test is inapplicable because the peril caused by that negligence — contamination — is unambiguously excluded by the policy. Defendant cites Hanover New England Ins. Co. v. Smith, 35 Mass. App. Ct. 417, 621 N.E.2d 382 (1993) as support. Under the train of events test, "`[t]he active efficient cause that sets in motion a train of events which brings about a result without intervention of any force started and working actively from a new and independent source is the proximate cause. . . . [citations omitted]'" Frontis v. Milwaukee Ins. Co., 156 Conn. 492, 499, 242 A.2d 749 (1968).
Indeed, in cases since Jussim v. Massachusetts Bay Ins. Co., 415 Mass. 24, 610 N.E.2d 954 (1993), Massachusetts courts have refused to apply the "train of events" test where the policy in question contained language excluding coverage regardless of fault, responsibility or causation. See e.g. Hanover New England Ins. Co. v. Smith, 35 Mass. App. Ct. 417, 420-21, 621 N.E.2d 382 (1993) ("[T]he distinction made in this policy between direct losses and ensuing losses cuts across the train of events analysis, separately indicating the legal effect of each successive causal step in the train."). The Court of Appeals for the First Circuit in United States Liability Ins. Co. v. Bourbeau, 49 F.3d 786 (1st Cir. 1995), expressly recognized that the "train of events" test is confined to first-party policies and is not applicable in the context of third-party policies.
That case law endorses an analysis that has become known as the "train of events test." Hanover New England Ins. Co. v. Smith, 35 Mass.App.Ct. 417, 419 (1993), quoting Jussim, supra at 27. Under it, there can be coverage for "a covered event which causes a loss in the form of an excluded event" (citation omitted). Hanover New England Ins. Co., supra at 420.
The Appeals Court in Hanover New Eng. Ins. Co. v. Smith, concluded that an insurance policy that states any ensuing loss " not excluded or excepted in this policy is covered" cuts " across the train of events analysis" because the policy language identifies which ensuing losses were covered and which were not covered. 35 Mass.App.Ct. 417, 418, 420 (1993). An example of anti-concurrent language is " [w]e will not pay for loss of damage caused directly or indirectly by any of the following.
(Page 0045.) They assert that business interruption losses constitute ensuing losses, and thus they are covered under the Cost of Construction Endorsement. The plaintiffs cite Hanover New England Ins. Co. v. Smith, 35 Mass.App.Ct. 417, 419-21 (1993), in which the court held that coverage may exist for an ensuing loss even where a policy excludes coverage for the direct loss that led to the ensuing loss. Finally, the plaintiffs argue that Commonwealth is not entitled to summary judgment on the 93A claim, citing Boston Symphony Orchestra., Inc. v. Commercial Union Ins. Co., 406 Mass. 7, 14-15 (1989), where the court held that an insurance company could be liable under 93A for taking an unreasonable position as to the interpretation of the policy and unjustifiably delaying payment.
Finally, the Massachusetts Supreme Judicial Court, to which we look in this matter, see Commercial Union Ins., 7 F.3d at 1048, n. 1, recently assumed that a home heating oil spill "was comprehended by an exclusion for 'loss . . . caused by . . . release, discharge or dispersal of contaminants.'" Hanover New England Ins. Co. v. Smith, 621 N.E.2d 382, 383 n. 2 (Mass.App.Ct. 1993) (quoting Jussim v. Massachusetts Bay Ins. Co., 610 N.E.2d 954, 955 (Mass. 1993)).
Under New York law, Plaintiff would be entitled to coverage under an exception for ensuing loss only if and to the extent that it could prove that 'collateral or subsequent' damage occurred to other insured property as a result of the [excluded peril]." Montefiore Medical Ctr. v. Am. Protection Ins. Co.,226 F.Supp.2d 470, 479 (S.D.N.Y.2002) (citing Laquila Constr. Inc. v. Travelers Indem. Co. of Ill.,66 F.Supp.2d 543 (S.D.N.Y.1999), and Narob Devel. Corp. v. Ins. Co. of N. Am.,219 A.D.2d 454, 631 N.Y.S.2d 155 (1st Dep't 1995) ); accord Hanover New England Ins. Co. v. Smith,35 Mass.App.Ct. 417, 621 N.E.2d 382, 383 (1993). Moreover, "[w]here a property insurance policy contains an exclusion with an exception for ensuing loss, courts have sought to assure that the exception does not supersede the exclusion by disallowing coverage for ensuing loss directly related to the original excluded risk."
American Family cites other cases that tend to support this interpretation. See Weeks v. Co-Operative Ins. Co, 817 A.2d 292, 296-97 (N.H. 2003); Hanover New England Ins. Co. v. Smith, 621 N.E. 2d 382, 383 (Mass. App. 1993). See also Vermont Electric Power Co., Inc. v. Hartford Steam Boiler Inspection and Ins. Co., 72 F. Supp. 2d 441, 445 (D. Vermont 1999).
quila Constr. Inc v Travelers Indem. Co. 66 F. Supp. 2d 543, 544-45 (S.D.N.Y 1999) (where builder's risk policy contained exclusion for cost of making good faulty workmanship, with "ensuing loss" exception for physical damage resulting from such faulty workmanship, claim for cost of repairing defective concrete fell within exclusion); aff'd 216 F.3d 1072 (2d Cir. 2000) (unpub); Schloss v Cincinnati Ins. Co. 54 F. Supp. 2d 1090, 1094-96 (M D. Ala. 1999) (where homeowner insurance policy contained exclusion for loss caused by rot, and exclusion was subject to "ensuing loss" exception, the costs associated with repair rot damage were excluded), aff'd 211 F.3d 131 (11th Cir. 2000 (unpub); Allianz Ins Co v Impero, 654 F. Supp. 16, 17-18 (E.D. Wash. 1986) (where builder's risk policy contained an exclusion for cost of making good faulty workmanship, but also contained "ensuing loss" exception, losses incurred in repair of defectively erected concrete wall were not covered as "ensuing loss").Hanover New England Ins. Co v Smith, 35 Mass. App. 417, 621 N.E. 2d 382 (Mass.App.Ct. 1993) (under homeowner policy which excluded loss "directly caused" by release of contaminants, but covered "ensuing losses" not otherwise excluded, policy did not extend coverage for property damage to rug and wood caused by heating oil which seeped into building structure from leaking furnace, but theoretically might extend coverage in event of fire caused by oil spill under "ensuing loss" exception). Just as any broader reading of "ensuing loss" within the context of an exception to a policy exclusion would otherwise `swallow' the exclusion, IRI argues that any broader reading of "ensuing loss" within the context of an exception to a policy deductible would lead to the absurd result of swallowing or eviscerating the deductible.
Although policy exclusions are to be construed strictly, Massachusetts courts have consistently held oil to be a "pollutant" under similar policy language. Hanover New England Ins. Co. v. Smith, 35 Mass. App. Ct. 417 (1993) (oil burner leak held to be a contaminant); Halstead Indus., Inc. v. Home Ins. Co., No. 9603835, 1998 WL 34066141 at *4 (Mass.Super. Jan. 14, 1998) (fuel oil released onto land held to be a pollutant); Town of Wakefield v. Royal Ins. Co., No. 94-1579, 1995 WL 433585, at *3 (Mass.Super. July 20, 1995) (boiler room oil leak spilled into sewage system and transmitted to water treatment plant held to be a pollutant); Rubin v. St. Paul Fire and Marine Ins. Co., No. 931261, 1995 WL 809524, at *5 (Mass.Super. Apr. 19, 1995) ("[a]s a matter of law either lead or oil would fulfill the language of the pollution exclusion").