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Atlantic Casualty Insurance Co. v. Price

United States District Court, D. Massachusetts

July 26, 2016

ATLANTIC CASUALTY INSURANCE COMPANY, Plaintiff,
v.
DOYLE PRICE d/b/a ON SITE CONSTRUCTION, and ANTONIO SOUSA, Defendants,
v.
P.J. LOMBARDO INSURANCE AGENCY, INC., Third Party Defendant.

          MEMORANDUM & ORDER

          Indira Talwani United States District Judge.

         I. Introduction

         Plaintiff Atlantic Casualty Insurance Company (“Atlantic Casualty”) seeks a declaration that it has no duty to defend or indemnify Defendant Doyle Price (“Price”) in connection with a personal injury action that Defendant Antonio Sousa (“Sousa”) is litigating against Price. Presently before the court is Atlantic Casualty’s Motion for Summary Judgment [#24]. For the reasons set forth below, the motion is ALLOWED.

         II. Factual and Procedural Background

         Price is the sole proprietor of the construction business that operates as “Onsite Construction.” Pl.’s Statement Undisputed Material Facts Supp. Mot. Summ. J. ¶ a [#26] (“Pl.’s Facts”). Price was hired as the general contractor for the demolition and construction of a home in Winchester, Massachusetts. Id. ¶ b. Price subcontracted, via oral agreement, with insulation company Anderson Insulation to work on the home. Id. Sousa, one of Anderson Insulation’s employees, was injured while working on the site. Id. ¶¶ c, d. Sousa has filed a complaint in state court against Price, alleging that Price was negligent in not ensuring the safety of the workplace. See Compl. Ex. 1 [#1-1].

         Atlantic Casualty is an out-of-state insurance company. Pl.’s Facts Ex. 1 80 [#26-1] (Price Dep.). Atlantic Casualty provided general liability insurance to OnSite Construction. See Pl.’s Facts Ex. 5 [#26-5] (Atlantic Casualty Insurance Policy). Atlantic Casualty asserts that Price has requested a defense and indemnification under the insurance contract for Sousa’s state court action. See Pl.’s Facts Ex. 1 32 [#26-1] (Price interrogatory response in underlying personal injury action stating that he is covered under an insurance policy for the satisfaction of any judgment in that action). Atlantic Casualty claims that Sousa’s injury is not covered under OnSite Construction’s policy due to an endorsement to the policy titled “Exclusion of Injury to Employees, Contractors and Employees of Contractors.” See Pl.’s Facts Ex. 5 36 [#26-5].

         Atlantic Casualty filed this declaratory judgment action on July 3, 2015, naming both Price and Sousa as defendants. See Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 274 (1941) (finding that an action brought by an insurance company seeking declaratory relief against the insured and an injured party contained an actual controversy between the parties). Atlantic Casualty’s complaint seeks a declaration that it has no duty to defend or indemnify Price and a declaration that Sousa is bound by that first declaration. See Compl. 6 [#1]. Sousa, in turn, seeks a declaration that third party defendant P.J. Lombardo Insurance Agency, Inc. (“PJ Lombardo”), seeking a declaration that PJ Lombardo is also bound by any judgment, order, or declaration applicable to Sousa. Sousa Amended Answer & Third Party Claim 9 [#15].

         Atlantic Casualty now moves for summary judgment that it has no duty to defend or indemnify Price. Pl.’s Mot. Summ. J. [#24]. Sousa opposes Atlantic Casualty’s motion. Price has been served but has not answered the complaint or responded to the motion. PJ Lombardo has answered the cross-complaint but has filed no response to Atlantic Casualty’s motion.

         III. Summary Judgment Standard

         A movant is entitled to summary judgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine dispute of fact exists if an issue can be resolved in favor of either party. Calero-Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st Cir. 2004). Facts are material if they have the potential to affect the outcome of the case. Id.

         IV. Discussion

         The facts here are not in dispute. Atlantic Casualty and Sousa do, however, dispute both the construction of the policy and the endorsement at issue, and the enforceability of the policy to the extent it excludes coverage for Sousa’s injuries. The court first construes the policy and then reaches the parties’ enforceability arguments.

         A. Construction of the Policy and Endorsement

         Atlantic Casualty argues that Sousa’s claim against Price is not covered by Price’s policy, due to the endorsement titled “Exclusion of Injury to Employees, Contractors and Employees of Contractors” (the “Employee and Contractor Endorsement”). That endorsement provides:

         This insurance does not apply to:

i. “Bodily injury” to any “employee” of any insured arising out of ...

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