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Roche Brothers Supermarkets, LLC v. Continental Casualty Co.

Superior Court of Massachusetts, Suffolk

March 14, 2018

ROCHE BROTHERS SUPERMARKETS, LLC
v.
CONTINENTAL CASUALTY COMPANY

          File Date: March 16, 2018

          DEFENDANT’S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT

          Mitchell H. Kaplan, Justice of the Superior Court

         The plaintiff, Roche Brothers Supermarkets, LLC (Roche), was insured under a commercial property insurance policy issued by the defendant, Continental Casualty Company (the Policy and Continental), during the period May 15, 2014 to May 15, 2015. In the winter of 2015 (January through March), Massachusetts experienced record amounts of snow, and, as a consequence, Roche spent more than $800, 000 to remove snow from the roofs of its properties at locations throughout Massachusetts. It submitted a claim to Continental under the Policy for payment of its snow removal expenses, which Continental denied. In its Second Amended Complaint (the Complaint), Roche asserts that Continental’s denial of this claim constitutes a breach of contract (Count I). It also asserts claims for Declaratory Relief (Count II); Breach of the Covenant of Good Faith and Fair Dealing (Count III); and a violation of G.L.c. 93A, §§ 2 and 11 (Count IV). The case is now before the court on Continental’s motion to dismiss the Complaint for failure to state a claim on which relief may be granted pursuant to Mass.R.Civ.P. 12(b)(6). For the reasons that follow that motion is ALLOWED.

         FACTS

         For the purposes of this motion, the court will assume that removing the snow from the roofs of its buildings was a very prudent, prophylactic step for Roche to take in the winter of 2015 to avoid possible structural damage to its buildings. The Complaint does not allege that any insured property actually suffered any physical damage as a result of the snow storms, nor that any property located in the buildings was lost or damaged. Roche’s claim is only for the preventative expense of snow removal.

         As relevant to this case, the Policy provides that it:

insures against risks of direct physical loss of or damage to property and/or interest described herein at covered Locations.

         Section 12 of the Policy is entitled "Valuation" and describes how the amount of a claim for physical loss or damage to covered property will be determined:

In the event of physical loss or damage to covered property by perils(s) insured against the Company will not pay more than the least of: the limit of liability applicable to the lost or damaged property; the interest of the Insured in the lost or damaged property; the cost to repair the lost or damaged property; the actual expenditure incurred in repairing or replacing the damaged property; or the value of property insured determined as follows [there then follows methods of valuation for specific types of property not-relevant to this case].

         DISCUSSION

         This is a case which turns entirely on the interpretation of the Policy; no development of the facts underlying the claim is required. The rules governing the interpretation of an insurance policy under Massachusetts law have been well established for many years.

In this interpretation, we are guided by three fundamental principles: (1) an insurance contract, like other contracts, is to be construed according to the fair and reasonable meaning of its words, Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146 (1982); (2) exclusionary clauses must be strictly construed against the insurer so as not to defeat any intended coverage or diminish the protection purchased by the insured, Vappi & Co. v. Aetna Cas. & Sur. Co., 348 Mass. 427, 431-32 (1965); Bates v. John Hancock Mut. Life Ins. Co., 6 Mass.App.Ct. 823 (1978); Sterilite Corp. v. Continental Cas. Co., 17 Mass.App.Ct. at 321 n.10; and (3) doubts created by any ambiguous words or provisions are to be resolved against the insurer, Cody v. Connecticut Gen. Life Ins. Co., supra, 387 Mass. at 146; Bates v. John Hancock Mut. Life Ins. Co., supra.

Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass.App.Ct. 318, 321-24 (1991). More specifically, with respect to the issue of putatively ambiguous policy terms, an ambiguity exists when "there are two rational interpretations of policy language." See Hazen Paper Co. v. United States Fidelity & Guaranty Co., 407 Mass. 689, 700 (1990). In that case, the court should "consider what an objectively reasonable insured, reading the relevant policy language, would expect to be covered." Id. "However, an ambiguity is not created simply because a controversy exists between parties, each favoring an interpretation contrary to the other." Lumbermens Mut. Cas. Co. v. Offices Unlimited, Inc., 419 Mass. 462m 466 (1995). In determining whether ambiguity exists, "[e]very word in an insurance contract must be presumed to have been employed with a purpose and must be given meaning and effect whenever practicable." Allmerica Financial Corp. v. Certain Underwriters at Lloyd’s London, 449 Mass. 621, 628 (2007) (internal quotations and citations omitted).

         In the present case, Continental maintains that the Policy is a standard "all risks" commercial property policy, and the coverage provision in question has only a single rational interpretation. The Policy insures against two types of risks: direct physical loss of property and direct damage to property, i.e., coverage exists if property is lost completely or it is damaged. Roche offers the following alternative interpretation: there is coverage for expenses incurred to prevent "the risk that property will be lost or the risk that it will be damaged." The court finds ...


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