Heard: June 3, 2014.
action commenced in the Superior Court Department on July 25,
for summary judgment regarding choice of law issues were
heard by Allan van Gestel, J., and a motion for
reconsideration was considered by him; motions for summary
judgment were heard by Margaret R. Hinkle, J., and Peter M.
Lauriat, J.; the remaining issues were tried in two phases
before them; and entry of final judgment was ordered by
Smith, of the District of Columbia (A. Hether Cahill with
him) for Narragansett Electric Company.
J. O'Connor for OneBeacon America Insurance Company.
B. Chaffin for Century Indemnity Company.
T. McCabe, of New York, & John T. Harding, for Certain
Underwriters at Lloyd's, London, & others, were
present but did not argue.
Michael F. Aylward, for American Home Assurance Company &
others, was present but did not argue.
Present: Kantrowitz, Hanlon, & Carhart, JJ.
matter is before us pursuant to the December 28, 2015, order
of the Supreme Judicial Court, remanding to this court for
express consideration the substantive law to be applied to
the interpretation of the insurance contracts at issue in
OneBeacon America Ins. Co. v.
Narragansett Elec. Co. (No. 2), 87 Mass.App.Ct. 1126
(2015) (OneBeacon No. 2). The plaintiff, OneBeacon
America Insurance Company (OneBeacon), along with third-party
defendants Certain Underwriters at Lloyd's, London and
Certain London Market Insurance Companies (collectively,
London), American Home Assurance Company (American Home), and
Century Indemnity Company (Century) argued in their
respective appeals that a Superior Court judge erred in
determining that Rhode Island law would apply both in
deciding whether the insured, Narragansett Electric Company
(NEC), was entitled to coverage for environmental
contamination at several Rhode Island sites, and in the
allocation of damages on the jury's verdicts as to one of
background, we refer to OneBeacon America Ins. Co.
v. Narragansett Elec. Co. (No. 1), 87
Mass.App.Ct. 417 (2015) (OneBeacon No. 1). Early in
the litigation, a judge of the Superior Court ruled that the
law of Rhode Island would apply to interpretation of the
insurance contracts, reasoning that the sites involved were
operated by a Rhode Island public utility (NEC) and were
almost all located in Rhode Island (see OneBeacon [No.
1], 87 Mass.App.Ct. at 420; note 7, infra), and
that Rhode Island utility customers had an interest in who
would bear the clean-up costs. On appeal, OneBeacon presses
for application of Massachusetts law,  as the State having
the most significant contacts with the primary policies
issued to the insured by OneBeacon's predecessor,
while London and American Home argue that New York law should
apply to the excess policies issued by them. We resolve the
choice-of-law debate in favor of the law of Massachusetts.
Massachusetts choice-of-law principles.
begin with the conflict-of-law rules of the forum State.
Clarendon Natl. Ins. Co. v. Arbella
Mut. Ins. Co., 60 Mass.App.Ct. 492, 495 (2004).
Massachusetts has adopted a functional choice-of-law
analysis, guided by the Restatement (Second) of Conflict of
Laws (1971) (Restatement). Bushkin Assocs.
v. Raytheon Co., 393 Mass. 622, 631-632
(1985). When dealing with insurance contracts, we look to
Restatement § 193, as well as § 188 and the
principles delineated in § 6. Clarendon Natl. Ins.
Co. v. Arbella Mut. Ins. Co., 60
Mass.App.Ct. at 496.
193 [of the Restatement] provides that the rights created by
a contract of casualty insurance are to be determined by the
local law of the State that the parties to the insurance
contract understood would be the principal location of the
insured risk during the term of the policy, unless some other
State has a more significant relationship under the
principles of § 6." Ibid. Section 193
further provides that "[t]he location of the insured
risk will be given greater weight than any other single
contact in determining the state of the applicable law
provided that the risk can be located, at least principally,
in a single state." Restatement § 193 comment b.
The insured risk generally will be located in the State where
the policy holder is domiciled. Ibid.
identity of the policy holder in this case is not clear cut.
NEC is a Rhode Island public utility. The first policy issued
by OneBeacon, a primary comprehensive general liability
policy for the period of October, 1972, to October, 1973,
listed the "named insured" and address as follows:
"Eastern Utilities Associates, EUA Service Corporation,
Brockton Edison Company, Blackstone Valley Electric Company
and/or any Subsidiary, Associated, Allied or Affiliated
Company which is Majority owned and now existing or which may