Opinion
20-P-879
05-25-2021
Rebecca LAING & another v. MERRIMACK MUTUAL FIRE INSURANCE COMPANY.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Together with their children, Rebecca and Dana Laing lived in a home in Gloucester that was owned by George Allen, Rebecca Laing's father. The home was insured under a homeowner's policy issued by defendant Merrimack Mut. Fire Ins. Co. (insurer) to Allen. On May 8, 2015, the home burned to the ground, destroying a substantial amount of personal property that the Laings had kept there. In order to pursue recovery for their losses from the insurer and others, the Laings intervened in Superior Court litigation that Allen had initiated. Concluding that the three counts that the Laings had brought against the insurer failed to state a claim for which relief could be granted, a Superior Court judge entered judgment dismissing those counts. On the Laings’ appeal, we affirm.
The counts are counts VII, VIII, and IX of the third-party plaintiffs’ amended complaint. The procedural history of the litigation as a whole is complicated, but for present purposes it suffices to note that a separate and final judgment pursuant to Mass. Civ. P. 54(b), 365 Mass. 820 (1974), was entered with regard to the dismissal of the three counts that the Laings brought against the insurer.
The Laings also appeal an order denying their motion to recuse, which we additionally affirm.
We accept as true the factual allegations set forth in the Laings’ complaint as well as the inferences that reasonably can be drawn therefrom, and assess whether they "plausibly suggest an entitlement to relief." Fraelick v. PerkettPR, Inc., 83 Mass. App. Ct. 698, 699-700 (2013). Moreover, the essential facts here are uncontested. The Laings’ lead claim, based in contract, is governed by the terms of the insurance policy that Allen had obtained. To simplify our analysis, we assume arguendo that if the Laings could show that the policy covered the losses to their personal property, they could sue the insurer as intended third-party beneficiaries.
The policy covers the personal property of an "insured," wherever such property is located. At the named insured's request, the policy also covers the personal property of others "while the property is on the part of the ‘residence premises’ occupied by an ‘insured.’ " The term "insured" in turn is defined to include Allen as the named insured "and residents of [his] household who are ... [his] relatives." As Allen's daughter, son-in-law, and grandchildren, the Laings presumably all qualified as his "relatives." Accordingly, whether they also qualified as "insureds" comes down to whether they were "residents of [Allen's] household."
The term "household" is not defined by the policy, so we look first to its ordinary usage. See Hakim v. Massachusetts Insurers’ Insolvency Fund, 424 Mass. 275, 280 (1997) ("The interpretation of an insurance contract is no different from the interpretation of any other contract, and we must construe the words of the policy in their usual and ordinary sense"). A "household" is commonly defined as "those who dwell under the same roof and compose a family" or "a social unit composed of those living together in the same dwelling." Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/household. See also Black's Law Dictionary (11th ed. 2019) (defining "household" as "[a] group of people who dwell under the same roof" or "[a] family living together"). In other words, at the core of "household's" ordinary usage is the idea of a group of people living together in a specific location. Nonetheless, Massachusetts courts do "recognize ... that, because modern society presents an almost infinite variety of possible domestic situations and living arrangements, the term ‘household member’ can have no precise or inflexible meaning." Vaiarella v. Hanover Ins. Co., 409 Mass. 523, 526-527 (1991). Thus, we apply a "pragmatic balancing approach" to determining whether an individual is part of a household. Metropolitan Prop. & Cas. Ins. Co. v. Morel, 60 Mass. App. Ct. 379, 383 (2004).
The Laings claim that the term "household" is ambiguous, but the mere fact that the term is not defined in the policy does not render it so. Even if the term were ambiguous, it would still have to be reasonably susceptible of the meaning the Laings wish to impose on it. As a matter of law, it is not.
The Laings’ amended complaint alleges no facts suggesting that Allen was connected to the Gloucester home other than as their relative and landlord. Most of their allegations cut the other way. They allege that "[a]t all relevant times, George Allen was engaged in business or commerce as a landlord," and repeatedly refer to themselves as Allen's "tenants." They also allege that their residence at the home predated his ownership, and that Allen "never occupied" the home. They allegedly paid all the costs of upkeep on the home, which suggests their functional independence from Allen. Finally, they specifically allege that the insurance policy on the home was separate from the policy that insured "Allen's primary residence." Of their remaining allegations, none begins to suggest that Allen's household included the Gloucester home.
In fact, the word "household" is absent from the amended complaint.
The one case the Laings identify, in which a household spanned two physical residences, involved unusual facts not present here. See Morel, 60 Mass. App. Ct. 382-384. In that case, the insured had moved out of the home where his wife and their son lived, but the couple chose not to divorce and the insured "remained an active presence" there. Id. at 380. He owned the house jointly with his wife, "filed joint tax returns with his wife using the [marital] address in the filings, kept his own set of keys to the house, and visited several times a week." Id. He "received mail" there, "took the family trash to the dump each week, kept a workbench and tools in the basement, and did maintenance and remodeling on the house." Id. Here, the only similar allegations in Allen's complaint are that Allen kept some personal property at the Laings’ home, and spent time and money repairing it. Given the absence of any other allegations suggesting that Allen was behaving as a household member, these are not enough. In short, the amended complaint does not allow a reasonable inference that the Laings were part of Allen's "household."
Of course, it is possible that the Laings’ personal property was covered by the policy even if they themselves were not among the insured. In fact, the policy states that it covers not only personal property of an "insured," but also personal property owned by "[o]thers while the property is on the part of the ‘residence premises’ occupied by an ‘insured.’ " For this provision to apply, there would have to be an "insured" living at the home; otherwise, it would be impossible for the covered personal property to be "on the part of the ‘residence premises’ occupied by an ‘insured.’ " But the Laings allege that Allen himself did not occupy any part of the premises, and nothing in their complaint suggests that any other person qualifying as an insured lived there. Thus, this provision does not help them.
The policy contains an express exclusion for "[p]roperty of roomers, boarders and other tenants, except property of roomers and boarders related to an ‘insured.’ " The plaintiffs do not claim that the exception to the exclusion creates or demonstrates the existence of coverage, and it is doubtful that they could. See Bond Bros., Inc. v. Robinson, 393 Mass. 546, 549-550 (1984). In addition, the term "roomers and boarders" suggests tenants living under the same roof as the owner.
The Laings’ claim fares no better when framed as one in negligence. To state a claim, the Laings must allege among other things, that the insurer owed them a legal duty that it breached. Jupin v. Kask, 447 Mass. 141, 146 (2006). Whether the insurer owed them a duty is a question of law. Id. It is true that an insurance broker can face liability for failing to procure insurance coverage under circumstances in which the broker knew that a third party was relying on there being such coverage. See, e.g., Quigley v. Bay State Graphics, Inc., 427 Mass. 455, 459-460 (1998). However, the broker must have actual knowledge of their reliance. See Wilson v. James L. Cooney Ins. Agency, 66 Mass. App. Ct. 156, 165 (2006) (no duty to third parties absent insurance agency's knowledge of their reliance on coverage). See also Nycal Corp. v. KPMG Peat Marwick LLP, 426 Mass. 491, 495 n.4 (1998) ; Meridian At Windchime, Inc. v. Earth Tech, Inc., 81 Mass. App. Ct. 128, 133 (2012). Putting aside whether such cases can be applied to an insurer (who bears a different relationship with insured parties than does a broker), the Laings have not alleged facts sufficient to support a reasonable inference that the insurer had actual knowledge that they were relying on their personal property being insured under Allen's policy. The judge therefore was correct to conclude that their negligence claim failed as a matter of law.
The Laings argue at length that they were entitled to survive the motion to dismiss because Massachusetts permits "notice pleading." However, the complaint must do more than put the defendant on notice of the plaintiff's desire to proceed against it. "[T]o survive a motion to dismiss, a complaint must include factual allegations plausibly suggesting (not merely consistent with) an entitlement to relief" (quotation omitted). Frazier v. Frazier, 96 Mass. App. Ct. 775, 778 (2019), quoting Iannacchino v. Ford Motor Co., 451 Mass. 623 636 (2008). The Laings have not done so.
Finally, the Laings also brought a separate count alleging violations of G. L. c. 93A, and G. L. c. 176D. However, those claims depended on the viability of their contract or negligence claims, and the Laings make no argument that these claims can survive if their contract and negligence claims fail.
Finally, the Laings challenge the judge's denial of their motion that he recuse himself. This argument merits little discussion, because their claim that the judge was biased against them is utterly unsubstantiated. The Laings principally rely on the judge's having suggested -- during a hearing on their motion to amend their complaint -- that he found their claims against the insurer relatively weak and potentially dismissible. Especially given that "futility" is a proper consideration on a motion to amend a complaint, e.g., Johnston v. Box, 453 Mass. 569, 583-584 (2009), there was nothing out of bounds about the judge's comments. And that leaves aside that those comments were accurate. The Laings’ other arguments that the judge was required to recuse himself are even weaker. The judge plainly did not abuse his discretion or otherwise err in declining to recuse himself.
Because we conclude that the judge was correct in deciding that the Laings’ claims failed as a matter of law, whether the judge erred in denying their motion to recuse appears to be moot. However, given that the Laings have subsequently questioned the integrity of the judicial system, we exercise our discretion to address the issue.
--------
We affirm the order denying the Laings’ motion to recuse and the separate and final judgment dismissing the Laings’ claims against the insurer.
So ordered.
Affirmed