Title: Progressive Northwest Insurance Co. v. Metropolitan Property & Casualty Insurance Co.

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2021 ME 54 
Docket: 
Cum-21-85 
Argued: 
October 6, 2021 
Decided: 
November 2, 2021 
 
Panel: 
STANFILL, C.J., and MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ. 
 
 
PROGRESSIVE NORTHWEST INSURANCE COMPANY 
 
v. 
 
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY 
 
 
JABAR, J. 
[¶1]  Progressive Northwest Insurance Company appeals from a 
summary judgment entered by the Superior Court (Cumberland County, 
Warren, J.) in favor of Metropolitan Property and Casualty Insurance Company 
on Progressive’s complaint seeking indemnification for a portion of a final 
settlement paid involving a mutually insured party, Vincent J. Micale Jr.  
Because the relevant part of Metropolitan’s homeowner’s insurance policy 
unambiguously did not cover injuries resulting from the use of rented 
watercraft equipped with water jet pump engines of over fifty horsepower, we 
affirm. 
 
 
2 
I.  BACKGROUND 
[¶2]  The following facts, which are undisputed, are drawn from the 
parties’ statements of material facts.  See InfoBridge, LLC v. Chimani, Inc., 2020 
ME 41, ¶ 2, 228 A.3d 721. 
[¶3]  On June 18, 2017, Micale rented two jet skis, equipped with 
125 horsepower water jet pump engines, from Jet Ski Guy, Inc. (JSG).  Two other 
individuals listed on Micale’s rental agreement collided while operating the jet 
skis, severely injuring one of them.  At the time, Progressive provided a boat 
and personal watercraft liability insurance policy to Micale.1  Metropolitan 
provided homeowner insurance to Micale.   
[¶4]  Micale’s Metropolitan homeowner policy provided that it would 
“pay all sums for bodily injury and property damage to others for which the law 
holds [the holder] responsible because of an occurrence to which this coverage 
applies.”  The policy excluded coverage for bodily injury or property damages 
arising from watercraft.  An exception to that exclusion, however, provided for 
coverage in some instances.  The exception provided:  
                                         
1  The specific terms of the Progressive policy are not at issue in this appeal. 
 
 
3 
Coverage is extended for bodily injury and property damage 
arising out of: 
 
a. any watercraft on the insured premises; 
b. any watercraft while stored; 
c. watercraft, owned or furnished or available for [the holder’s] 
regular use: 
1) that is powered by one or more motors with 50 total 
horsepower or less.  This includes watercraft propelled by 
a water jet pump engine or motor; or 
2) that is a sailing vessel 31 feet and under in length with or 
without auxiliary power; 
d. rented watercraft: 
1) powered by one or more outboard motors; 
2) with an inboard or inboard-outdrive motor with 
50 horsepower or less.  This includes watercraft 
propelled by a water jet pump engine or motor; or 
3) that is a sailing vessel 31 feet and under in length with or 
without auxiliary power; or 
e. watercraft not owned by [the holder], not rented to [the 
holder] nor furnished or available for [the holder’s] regular 
use. 
 
[¶5]  After the collision, on November 20, 2017, JSG filed an amended 
complaint in the Superior Court (Cumberland County) alleging that Micale and 
others (including the injured individual) were negligent in the operation of the 
two jet skis, causing their destruction.  On January 8, 2018, the injured 
individual filed a cross-claim against Micale, alleging that Micale’s negligence 
caused the bodily injuries he sustained as a result of the accident.   
[¶6]  The parties eventually negotiated a settlement that included 
Progressive paying $300,000 to the injured individual on Micale’s behalf.  
 
 
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Progressive demanded that Metropolitan pay half this amount, but 
Metropolitan asserted that it had no duty to indemnify Micale.  After making 
the payment, Progressive brought a declaratory judgment action on July 1, 
2019, seeking a declaration that Metropolitan had a duty to indemnify Micale 
for half the amount that Progressive paid to the injured individual on Micale’s 
behalf.   
[¶7]  Progressive and Metropolitan filed dueling motions for summary 
judgment.  On March 3, 2021, the Superior Court denied Progressive’s motion 
and granted Metropolitan’s motion.  In its order, the Superior Court concluded 
that “the Metropolitan policy is not reasonably susceptible of different 
interpretations and . . . an ordinary person in the shoes of the insured would 
have understood that the 50 horsepower limitation applied to a watercraft with 
a water jet pump engine.”   
 
[¶8]  The court entered final judgment in Metropolitan’s favor on 
March 4, 2021.  Progressive timely appealed.  See 14 M.R.S. § 1851 (2021); M.R. 
App. P. 2A, 2B(c)(1). 
 
 
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II.  Discussion 
A. 
Interpretation of Insurance Contracts 
 
[¶9]  We review de novo a grant of summary judgment and the 
interpretation of an insurance policy.  Kelley v. N. E. Ins. Co., 2017 ME 166, ¶ 4, 
168 A.3d 779.  Where the material facts are not in dispute, “we limit our review 
to whether the prevailing party was entitled to judgment as a matter of law.”  
Id.  
[¶10]  We interpret unambiguous language in an insurance policy 
according to its plain meaning but “construe ambiguous policy language strictly 
against the insurance company and liberally in favor of the policyholder.”  
Haskell v. State Farm Fire & Cas. Co., 2020 ME 88, ¶ 15, 236 A.3d 458 (quoting 
Kelley, 2017 ME 166, ¶ 5, 168 A.3d 779).  An insurance policy must be examined 
as a whole to determine whether it is ambiguous.  Jipson v. Liberty Mut. Fire Ins. 
Co., 2008 ME 57, ¶ 10, 942 A.2d 1213; Found. for Blood Rsch. v. St. Paul Marine 
& Fire Ins. Co., 1999 ME 87, ¶ 11, 730 A.2d 175.  Policy language is ambiguous if 
it is reasonably susceptible to different interpretations.  Cambridge Mut. Fire 
Ins. Co. v. Vallee, 687 A.2d 956, 957 (Me. 1996).  However, a dispute over the 
meaning of a term, “or [the] inability of the insured to understand the policy, 
 
 
6 
does not render the contract ambiguous.”  Colford v. Chubb Life Ins. Co. of Am., 
687 A.2d 609, 614 (Me. 1996).   
[¶11]  Courts determine as a matter of law whether the terms of an 
insurance contract are ambiguous.  Jipson, 2008 ME 57, ¶ 6, 942 A.2d 1213; Am. 
Protection Ins. Co. v. Acadia Ins. Co., 2003 ME 6, ¶ 11, 814 A.2d 989.  The party 
arguing against coverage (the insurer) bears the burden of proving 
applicability of any policy exclusion.  See Mut. Fire Ins. Co. v. Hancock, 634 A.2d 
1312, 1313 (Me. 1993).  
B. 
Metropolitan’s Policy 
 
[¶12]  Reading the policy as a whole, see Found. for Blood Rsch., 1999 ME 
87, ¶ 11, 730 A.2d 175, it is clear that in the list of circumstances in which 
coverage is provided, the fifty-horsepower limitation found in the first sentence 
of item d(2) applies to the next sentence, which states, in its entirety, “This 
includes watercraft propelled by a water jet pump engine or motor.”  Item d(2) 
comprises solely these two sentences and is set apart from any other items in 
the list.  The unambiguous meaning of the section is that coverage is extended 
to rented watercraft with inboard and inboard-outdrive motors of fifty 
horsepower or less, and that the fifty-horsepower limitation applies to water 
jet pump engines. 
 
 
7 
 
[¶13]  Because Metropolitan’s policy is unambiguous, we interpret it by 
its plain meaning.  See Haskell, 2020 ME 88, ¶ 15, 236 A.3d 458.  The policy 
provides that losses arising out of watercraft are not covered.  An exception 
extends coverage when the watercraft was rented and powered by an inboard 
or inboard-outdrive motor—which may include a water jet pump engine—with 
fifty horsepower or less.  In this case, the engines on the rented jet skis exceeded 
the fifty-horsepower limitation, and therefore the exception to the exclusion 
does not apply.  The Metropolitan policy does not cover the injuries, and thus 
Metropolitan has no duty to indemnify Micale for any portion of the settlement 
payment Progressive made to the injured individual on Micale’s behalf. 
[¶14]  Because we conclude that Metropolitan’s policy is unambiguous 
and by its plain meaning does not provide coverage for injuries arising out of 
the use of the watercraft involved in the accident, we affirm the judgment of the 
Superior Court. 
The entry is: 
Judgment affirmed. 
 
 
 
 
 
 
 
 
 
 
 
8 
Christopher C. Dinan, Esq. (orally), and Laura A. Maher, Esq., Monaghan Leahy, 
LLP, Portland, for appellant Progressive Northwestern Insurance Company 
 
Jeffrey T. Edwards, Esq. (orally), and John J. Cronan III, Esq., Preti Flaherty 
Beliveau & Pachios, LLP, Portland, for appellee Metropolitan Property and 
Casualty Insurance Company 
 
 
Cumberland County Superior Court docket number CV-2019-250 
FOR CLERK REFERENCE ONLY