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Murphy v. National Grange Mutual Insurance Co.

United States District Court, D. Massachusetts

October 16, 2014

JANICE MURPHY, Plaintiff,
v.
NATIONAL GRANGE MUTUAL INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND MOTION TO STRIKE

F. DENNIS SAYLOR, IV, District Judge.

This is an action for breach of contract and violation of Massachusetts General Laws chapter 93A, section 11. Jurisdiction is based on diversity of citizenship.

Plaintiff Janice Murphy owns a house at 104 Bowdoin Street in Springfield, Massachusetts. Defendant NGM Insurance Company issued an insurance policy to Murphy covering the property.

The house had been the residence of Ms. Murphy and her husband until 2007, when they moved to Connecticut. They rented the house to tenants until December 2010. They then prepared the house to be sold, eventually entering into a purchase and sale agreement with a buyer in April 2011. On or about May 15, 2011-shortly before the sale closing was to occur-an arsonist set the house on fire, resulting in substantial damage.

NGM denied insurance coverage on the ground that the house had been vacant for more than sixty days prior to the fire, and that the policy expressly excluded coverage under those circumstances.

Unbeknown to the Murphys, the mortgagee, Seterus, Inc., had hired a company called Safeguard Properties to perform periodic inspections of the property. A Safeguard employee prepared four reports indicating that the property was "occupied" during the relevant period. In October 2012, the Murphys became aware of those reports, and had the reports sent to NGM. NGM again denied coverage. Ms. Murphy then filed this lawsuit.

On April 30, 2014, NGM moved for summary judgment as to all claims. Plaintiff's opposition memorandum included, as Exhibit K, the various Safeguard inspection reports. NGM then moved to strike the exhibit.

The Court, while certainly sympathetic to plaintiff, has no realistic option but to uphold the clear policy language. Accordingly, the Court will grant defendant's motion for summary judgment on both the breach of contract claim and the chapter 93A claim. The motion to strike will be granted in part and denied in part as moot.

I. Background

The facts are presented in the light most favorable to the non-moving party.[1]

A. Factual Background

Janice Murphy owned a house at 104 Bowdoin Street in Springfield, Massachusetts. She purchased the property in 2005. She and her husband used the house as their principal residence until 2007, when they moved to Connecticut. Ms. Murphy rented the house from 2007 until December 2010, when the last tenants vacated the premises. The Murphys decided to sell the property and began repairs on the house in preparation for sale. A real estate agent showed the house to prospective buyers on five separate occasions between February 2011 and April 2011.

Between January and March 2011, Mr. Murphy made visits to the property to remove furnishings and other items left behind by prior tenants. He also made repairs to the house on weekends between January and May 2011. He stayed at the house overnight on multiple occasions in the course of making repairs (although he could not provide the exact dates). When Mr. Murphy stayed overnight, he would bring an air mattress with him to sleep on and take it with him when he left.

Ms. Murphy made at least one trip to the property in early December 2010. She could not recall whether she made other visits to the property between December 2010 and May 2011. She never stayed at the property overnight during that period.

During the period in question, Ms. Murphy permitted Stephen P. Gray to store antique cars in a detached garage on the property. Mr. Gray reported that he saw people on the property only "very rarely."

Ms. Murphy entered into a purchase and sale agreement for the property in late April 2011. The closing was delayed because Ms. Murphy had to attain approval from the mortgagee, Seterus, Inc., for a short sale.[2]

On or about May 15, 2011, [3] shortly before the sale was finalized, someone set fire to the house, causing substantial damage.

On the day of the fire, Ms. Murphy called her homeowners' insurance carrier, NGM Insurance Company, and reported the loss. NGM's recorded statement of the call shows the following conversation:

[Donna Burroughs of NGM]: Okay. Is the house rented right now ...

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