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Bunker Hill Insurance Co v. G.A. Williams & Sons, Inc.

Appeals Court of Massachusetts, Norfolk

December 13, 2018

BUNKER HILL INSURANCE COMPANY [1]
v.
G.A. WILLIAMS & SONS, INC.[2]

          Heard: October 9, 2018.

         Civil action commenced in the Superior Court Department on August 12, 2013. The case was tried before Rosalind H. Miller, J.; postverdict motions to offset the jury award and for attorney's fees and costs were heard by her; and judgment was entered by her.

          Scott E. Regan for the defendant.

          Anna K. Bennett for the plaintiff.

          Present: Meade, Sullivan, & McDonough, JJ.

          MEADE, J.

         The defendant, G.A. Williams & Sons, Inc. (Williams), appeals from a judgment entered in Superior Court following the denial of its motion to offset the jury award in this tort action brought against it by Bunker Hill Insurance Company (Bunker Hill), as subrogee of Shirley Gilbody, with the remediation costs paid by its insurer to Bunker Hill pursuant to an earlier declaratory judgment action. The motion judge determined that the earlier payment was from a collateral source and, as such, was not required to be offset against the jury verdict. Judgment entered against the defendant in the full amount of the jury verdict. Because the source of the offset was not collateral to the defendant, we determine that the defendant's motion for offset of damages should have been allowed, and we modify the judgment accordingly.[3]

         Background.

         This case arises from an oil spill on property owned by Shirley Gilbody and insured by a homeowner's insurance policy purchased by her and issued by Bunker Hill. Williams installed an oil tank in Gilbody's home in 2003 and, at all material times, was the oil service company for Gilbody. The oil spill occurred in April, 2012. Williams had purchased and paid the premiums for an insurance policy with International Insurance Company of Hannover, Ltd. (Hannover). The parties do not dispute that the policy was in effect at all times material to this case. The Hannover policy covered, as an insured location, the property owned by Gilbody.

         When the oil spill occurred, Gilbody notified her insurer, Bunker Hill. Bunker Hill paid for the full remediation of the property, $262, 894.05, under a reservation of rights. Pursuant to a declaratory judgment action, Bunker Hill sought compensation from Hannover for damage to the insured location, Gilbody's property. In that declaratory judgment action, a Superior Court judge determined that both the Bunker Hill policy and the Hannover policy covered Gilbody's property, that each policy contained "other insurance clauses," and that these clauses were mutually repugnant. See Mission Ins. Co. v. United States Fire Ins. Co., 401 Mass. 492 (1988). The judge determined that each insurer would bear fifty percent of the cost of remediation of Gilbody's property. A declaratory judgment entered, and Hannover reimbursed Bunker Hill for fifty percent of the cost of remediation, $131, 447.03.

         In 2012, Bunker Hill, as subrogee to its insured, Gilbody, also filed the present action against Williams for negligence, breach of contract, and violation of G. L. c. 21E (negligence action).[4] After trial, the jury rendered a negligence verdict in favor of Gilbody in the full amount of the cost of the remediation of the property, $262, 894.05.[5] Williams then filed its motion to offset the amount of damages in the negligence action by the amount that Bunker Hill had received pursuant to Williams's insurance policy with Hannover in the declaratory judgment action, $131, 447.03.

         Bunker Hill sought entry of judgment for the full amount of the jury verdict arguing that the payment to it from Hannover on the declaratory judgment was made pursuant to the remediation coverage in Williams's insurance policy that insured Gilbody and, therefore, was a payment from a source collateral to the judgment in the negligence action against Williams. The judge agreed with Bunker Hill and determined that because the claims were "analytically different," the collateral source rule applied and precluded an offset. Judgment entered in the full amount of the jury verdict.

         Discussion.

         "The measure of damages is a question of law reviewed de novo on appeal, see Burkev.Rivo, 406 Mass. 764, 764-765 (1990) (proper measure of damages recoverable in tort is question of law), but the amount of damages awarded is a factual issue reviewed on appeal under an abuse of discretion standard. See Bartleyv.Phillips, 317 Mass. 35, 43 (1944)." Twin FiresInv., LLCv.Morgan Stanley Dean Witter & Co., 445 Mass. 411, 424 (2005). Here, we determine that the damage award in this case is the result of an error of law; we order the modification of judgment to reflect the offset. See Brownv.Leighton, 385 Mass. 757, 758 (1982) ("counsel agreed that whether the defendant ...


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