Heard: March 6, 2017.
Vehicle, Insurance. Insurance, Motor vehicle insurance,
Excess liability insurance.
of a question of law to the Supreme Judicial Court by the
United States District Court for the District of
R. Doherty (Thomas M. Elcock also present) for the plaintiff.
Kimberly A. Hartman, of Illinois, for the defendant.
Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd,
case we answer a certified question from the United States
District Court for the District of Massachusetts concerning
the priority of coverage of two automobile insurance policies
that both covered a single motor vehicle accident. The
accident occurred when an employee of a refuse company,
driving a garbage truck owned by another company, struck and
killed a bicyclist. The policies were issued respectively by
the plaintiff and defendant insurers to the employer of the
driver and the company that owned the truck.A portion of the
loss was covered by a primary insurance policy from a third
insurance company, not a party here. The two policies at
issue were triggered, according to the language in each
policy, after the exhaustion of the primary policy. Although
the relevant language of the policies differs, each policy
states that it provides "excess"
coverage (in the circumstances here) and each
policy also contains an "other insurance"
clause. As the Federal District Court judge noted
in his certification order, the circumstances here involve a
question of first impression, because one of the two policies
is a "hybrid" policy that provides primary coverage
for an incident where its insured is driving a vehicle owned
by the insured, and excess coverage for an accident where its
insured is the driver but is driving a vehicle owned by
someone else. The other policy is a "true . . .
umbrella" policy that provides only excess coverage
where other coverage has been exhausted. For the reasons that
follow, we conclude that both excess policies cover the
accident equally, after exhaustion of the underlying primary
policy, to the extent of their respective policy limits.
Background and procedural history.
undisputed facts are drawn from the decision of the Federal
District Court judge certifying the question to this court,
supplemented by additional facts set forth in the
parties' cross-motions for summary judgment. On April 3,
2014, an employee of EZ Disposal Service, Inc. (EZ), was
driving a garbage truck assertedly leased by Capitol Waste
Services, Inc. (Capitol), and owned by Atlantic Refuse
Leasing Equipment, LLC (Atlantic), when he struck and killed
a bicyclist. The bicyclist's wife and brother thereafter
brought a wrongful death action in the Superior Court against
EZ, Capitol, and Atlantic.
loss at issue was covered by three insurance policies. The
first policy, not at issue here, was issued by Commerce
Insurance Company (Commerce) and provided Capitol with
primary insurance, up to a limit of $1 million. The second
policy, issued by Lexington Insurance Company (Lexington),
provided Capitol with excess insurance, and contained a limit
of $10 million. The third policy, issued by Great Divide
Insurance Company (Great Divide), provided EZ with primary
insurance for a number of different risks, including
accidents involving automobiles owned by EZ, up to a limit of
$1 million. Great Divide's policy also contained an
"Other Insurance" clause, which stated, "For
any covered 'auto' you don't own, the insurance
provided by this coverage form is excess over any other
defended all the insureds in the underlying tort action. In
October, 2015, Great Divide filed a complaint against
Lexington in the Superior Court, seeking a declaration that
its policy and Lexington's policy were both excess
policies covering the same level of loss. Lexington removed
the case to the United States District Court for the District
of Massachusetts on diversity grounds. In a decision on the
parties' cross motions for summary judgment, the Federal
District Court judge certified the question at issue to this
parties agree that the policy issued by Capitol's primary
insurer, Commerce, provides the primary coverage for the
first layer of the loss. They also agree that both the
Lexington policy and the Great Divide policy cover the loss
beyond the Commerce limits as excess policies. The dispute
centers on whether the primary policy issued by Great Divide,
which contains an "other insurance" clause, must be
exhausted before Lexington's "true excess"
policy is ...