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Easthampton Congregational Church v. Church Mutual Insurance Co.

United States District Court, D. Massachusetts

May 10, 2018

EASTHAMPTON CONGREGATIONAL CHURCH, Plaintiff,
v.
CHURCH MUTUAL INSURANCE COMPANY, Defendant.

          MEMORANDUM AND ORDER REGARDING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DEFENDANT CHURCH MUTUAL INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT (Dkt. Nos. 18 and 20)

          KATHERINE A. ROBERTSON United States Magistrate Judge

         I. Introduction

         On April 25, 2016, the ceiling in the Fellowship Hall of the Easthampton Congregational Church (“the Church” or “Plaintiff”) fell to the floor. This is a dispute about whether the Church's property insurance policy issued by Church Mutual Insurance Company (“Church Mutual” or “Defendant”) provides coverage for the loss. The parties have cross-moved for summary judgment on the issue of coverage. For the reasons discussed below, Plaintiff's motion is allowed, and Defendant's motion is denied.[1]

         II. Applicable Legal Standard

         “Summary judgment is proper where ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'” Carroll v. Xerox Corp., 294 F.3d 231, 236 (1st Cir. 2002) (quoting Fed.R.Civ.P. 56(c)). “For this purpose, an issue is ‘genuine' if it ‘may reasonably be resolved in favor of either party.'” Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)). “A fact is ‘material' only if it ‘possess[es] “the capacity to sway the outcome of the litigation under the applicable law.”'” Id. (alteration in original) (quoting Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997)). In determining whether genuine disputes of material fact exist, all reasonable inferences must be drawn in the non-movant's favor. Id. “Cross-motions for summary judgment do not alter the basic Rule 56 standard, but rather simply require [the court] to determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed.” Adria Int'l Grp., Inc. v. Ferré Dev., Inc., 241 F.3d 103, 107 (1st Cir. 2001) (citing Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230 (1st Cir. 1996)).

         “Under Massachusetts law, [2] the interpretation of an insurance policy and the application of policy language to known facts pose questions of law for the court to decide.” Nascimento v. Preferred Mut. Ins. Co., 513 F.3d 273, 276 (1st Cir. 2008) (citing Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 788 N.E.2d 522, 530 (Mass. 2003)). An insurance policy is construed under general rules of contract interpretation Brazas Sporting Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1, 4 (1st Cir. 2000) (citing Merchants Ins. Co. of N.H., Inc., v. U.S. Fidelity & Guar. Co., 143 F.3d 5, 8 (1st Cir. 1998)). The court “begin[s] with the actual language of the policies, given its plain and ordinary meaning.” Id. (citing GRE Ins. Grp. v. Metro. Boston Hous. P'ship, Inc., 61 F.3d 79, 81 (1st Cir. 1995)). Where a term is undefined, it is appropriate for the court to look to the dictionary definition for assistance in determining its ordinary meaning. Fed. Ins. Co. v. Raytheon Co., 426 F.3d 491, 498-99 (1st Cir. 2005) (citing Ellery v. Merchs.' Ins. Co., 20 Mass. (3 Pick.) 46, 48 (1825)).

         “If a term is ‘susceptible of more than one meaning and reasonably intelligent persons would differ as to which meaning is the proper one, ' the term is ambiguous.” U.S. Liability Ins. Co. v. Benchmark Constr. Servs., Inc., 797 F.3d 116, 119-20 (1st Cir. 2015) (quoting Citation Ins. Co. v. Gomez, 688 N.E.2d 951, 953 (Mass. 1998)). “[A]n ambiguity does not exist simply because the parties disagree about how to interpret the policy.” Id. at 120 (citing Citation Ins. Co., 688 N.E.2d at 953). “‘Nor does the mere existence of multiple dictionary definitions of a word, without more, suffice to create an ambiguity, for most words have multiple definitions.'” Cty. of Barnstable v. Am. Fin. Corp., 744 N.E.2d 1107, 1109 (Mass. App. Ct. 2001) (quoting Citation Ins. Co., 688 N.E.2d at 953). “To the extent the policy language is ambiguous, any ambiguities must be construed in favor of the insured.” Clark Sch. for Creative Learning, Inc. v. Philadelphia Indem. Ins. Co., 734 F.3d 51, 55 (1st Cir. 2013) (citing Allmerica Fin. Corp. v. Certain Underwriters at Lloyd's, London, 871 N.E.2d 418, 425 (Mass. 2007)). “‘This rule of construction applies with particular force to exclusionary provisions.'” U.S. Liability Ins. Co., 797 F.3d at 120 (quoting Boazova v. Safety Ins. Co., 968 N.E.2d 385, 390 (Mass. 2012)).

         The insured bears the initial burden of showing that the case involves a generally covered risk under the policy. Stor/Gard, Inc. v. Strathmore Ins. Co., 717 F.3d 242, 247 (1st Cir. 2013) (citing Boazova, 968 N.E.2d at 390). If the insured makes this showing, the burden shifts to the insurer to show that an exclusion applies. Id. (citing Boazova, 968 N.E.2d at 390). And if the insurer satisfies that burden, the burden shifts back to the insured to show that an exception to the exclusion applies. Id. (citing Boazova, 968 N.E.2d at 390).

         III. Facts[3]

         A. The Loss

         On April 25, 2016, the ceiling in the Fellowship Hall section of the Church failed and fell to the floor. The ceiling was not under construction, remodeling, or renovation at the time. The Church had in effect a property insurance policy issued by Church Mutual (“the Policy”), and the Church promptly reported the ceiling failure to Church Mutual.

         B. The Policy

         In the Policy, Church Mutual agreed to “pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations Page caused by or resulting from any Covered Cause of Loss.” The Fellowship Hall section of the Church is part of the premises described in the Declarations Page. Church Mutual does not contest that the damage to the Fellowship Hall ceiling constituted direct physical loss of or damage to Covered Property at the premises insured by the Policy.

         “Covered Causes of Loss” are defined as “Risks of Direct Physical Loss unless the loss is” excluded or limited. Exclusion 2.j. excludes “loss or damage caused by or resulting from . . . Collapse, except as provided below in the Additional Coverage - Collapse.” The Additional Coverage - Collapse coverage part provides that “[t]he term Covered Cause of Loss includes the Additional Coverage - Collapse as described and limited in D.1. through D.5. below.” Paragraph D.1.a. defines “Collapse” as “an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose.” The parties agree that the failure of the ceiling in the Fellowship Hall constitutes a collapse within the meaning of the Policy. Paragraph D.2. provides, in pertinent part:

[Church Mutual] will pay for direct physical loss or damage to Covered Property, caused by collapse of a building or any part of a building that is insured under this Coverage Form . . ., if the collapse is caused by one or more of the following:
. . .
b. Decay that is hidden from view, unless the presence of such decay is known to any insured prior to collapse;
. . .
f. Use of defective material or methods of construction, remodeling, or renovation if the collapse occurs during the course of construction, remodeling, or renovation. However, if the collapse occurs after construction, remodeling, or renovation is complete and is caused in part by a cause of loss listed in a. through e.; we will pay for the loss or damage even if use of defective material or methods, in construction, remodeling, or renovation, contributes to the collapse.

         The Policy does not define the term “decay.”

         In addition to the general exclusion for collapse, Exclusion 3.c. excludes loss or damage caused by or resulting from “[f]aulty, inadequate, or defective . . . [d]esign, . . .[or] construction . . . of part or all of any property on or off the described premises.” However, a preamble to Exclusion 3.c. provides that “if an excluded cause of loss that is listed in . . . 3.c. results in a Covered Cause of Loss, we will pay for the loss or damage caused by that Covered Cause of Loss.” Exclusion 2.d. excludes loss or damage resulting from “[w]ear and tear, ” and “[r]ust, or other corrosion, decay, deterioration, hidden or latent defect, or any quality in property that causes it to damage or destroy itself.”

         C. The Expert Report

         On May 3, 2016, Joseph Malo, a Forensic Engineer with Donan Engineering, inspected the church and the ceiling failure at the request of Church Mutual. Mr. Malo reported his findings and conclusions by letter dated May 11, 2016 (“the Report” or “Malo's Report”). The parties accept the contents of Malo's Report as agreed material facts. In the Report, Malo confirmed that a major section of ...


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