Heard: November 6, 2018.
action commenced in the Superior Court Department on April 7,
case was heard by Salim Rodriguez Tabit, J., on motions for
W. Graham for the plaintiffs.
Michael B. Weinberg (Ben N. Dunlap also present) for the
Present: Sullivan, Kinder, & Shin, JJ.
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.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.
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.
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, "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
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.
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 ...