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Creamer v. Arbella Insurance Group

Appeals Court of Massachusetts, Essex

March 13, 2019

TIMOTHY CREAMER & another [1]
v.
ARBELLA INSURANCE GROUP.

          Heard: November 6, 2018.

         Civil action commenced in the Superior Court Department on April 7, 2014.

         The case was heard by Salim Rodriguez Tabit, J., on motions for summary judgment.

          Brad W. Graham for the plaintiffs.

          Michael B. Weinberg (Ben N. Dunlap also present) for the defendant.

          Present: Sullivan, Kinder, & Shin, JJ.

          SHIN, J.

         After the plaintiffs purchased a residential property (property), they discovered that heating oil had spilled from a supply line, contaminating the property and threatening to migrate, or actually migrating, to the adjacent property. Alleging that the sellers concealed the spill, the plaintiffs brought suit against them for deceit, negligence and negligent misrepresentation, and liability under G. L. c. 21E.[2]The sellers, who had declared bankruptcy, failed to answer or appear, and a default judgment entered against them. The plaintiffs then commenced this action seeking, among other forms of relief, a declaration that the sellers' homeowners insurance policy (policy) issued by Arbella Insurance Group (Arbella) covers the claims raised in the underlying lawsuit.

         On the parties' cross motions, a Superior Court judge granted summary judgment in favor of Arbella, essentially on the ground that the source of the plaintiffs' injury is the sellers' act of concealing the spill, which does not qualify as an "occurrence" under the policy. On appeal the plaintiffs quarrel with the judge's decision only insofar as it relates to their claim under G. L. c. 21E. We agree with the plaintiffs that, with regard to that claim, the source of their injury is the spill itself, and not the sellers' later act of concealment, as G. L. c. 21E imposes liability based on ownership status without regard to fault. We further conclude, however, that there remains a genuine issue of material fact as to whether the plaintiffs' c. 21E damages fall within the policy exclusion for "'property damage' . . . [w]hich is expected or intended by the insured." We therefore vacate the judgment and remand.

         Background.

         1. Underlying complaint.

         The complaint against the sellers, filed in May 2008, alleged the following facts. The sellers were "owners and residents of the [p]roperty for many years." While they lived on the property, a heating oil fuel line leaked oil "over an extended period of time, "[3]causing contamination of the foundation, the ground underneath, and the groundwater. The spill also "posed an imminent threat to adjoining property or actually migrated to the adjoining property."

         In June 2005 the sellers listed the property for sale. Several weeks later, their agent provided the plaintiffs with the "[s]eller's [s]tatement of [p]roperty [c]ondition," which made no mention of an oil spill. The sellers thereafter accepted the plaintiffs' offer to purchase the property for $380, 000, and the sale closed on October 28, 2005.

         The day after the closing, the plaintiffs noticed a smell of oil on the property. They then discovered that rugs were concealing a sizeable oil spill that had permeated the concrete flooring. Although the sellers knew about the spill prior to the sale, they "took affirmative steps to conceal and/or prevent the plaintiffs from discovering" it. For example, they "made affirmative representations that no non-obvious conditions were present on the [p]roperty that would affect [its] value or use." As a result of ...


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