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13-P-1387 Appeals Court

USF INSURANCE COMPANY vs. DAVID LANGLOIS & others,1 trustees,2

& others.3

No. 13-P-1387.

Essex. May 6, 2014. - July 22, 2014.

Present: Rapoza, C.J., Brown, & Berry, JJ.

Insurance, Fire, Business owner's policy, Construction of 

policy, Insured, Illegal acts exclusion. Contract, 

Insurance, Construction of contract.

Civil action commenced in the Superior Court Department on 

December 23, 2010.

The case was heard by James F. Lang, J., on motions for 

summary judgment.

Mark I. Zarrow for the defendants.

Thomas M. Tang for the plaintiff.

1 Robert Langlois, Bruce Langlois, and Richard J. Langlois.

2 Of the Langlois Family Realty Trust, also known as the 

Langlois Family Trust.

3 Smith's Tavern, Inc. of Haverhill, also known as Smith's 

Tavern of Haverhill, Inc.; and David Langlois, Robert Langlois, 

Bruce Langlois, and Richard J. Langlois in their capacities as

directors of Smith's Tavern, Inc. of Haverhill.

 
2

BROWN, J. The defendants appeal the declaratory judgment 

allowing the plaintiff's motion for summary judgment. We 

affirm.

1. Background. The facts giving rise to this action are 

undisputed. In 1983, the Langlois Family Realty Trust (trust) 

was formed to hold legal title to real estate in Haverhill. 

Richard A., Robert, and David Langlois were the original 

trustees, and Richard J. and Bruce Langlois were, respectively, 

first and second successor trustees.4 Richard A. passed away in 

1988; however, the trust provided that David and Robert would 

continue as trustees and that Bruce would only serve as trustee 

upon the deaths of the original three. Robert, David, Richard 

J., and Bruce were named the beneficiaries, as joint tenants

with rights of survivorship.5

Smith's Tavern, Inc. of Haverhill (corporation) leased a

building owned by the trust. Robert, David, Richard J., and 

Bruce all served as directors of the corporation.6 The 

4 Richard A. is the father of Robert, David, Richard J., and 

Bruce.

5 We note that on April 4, 2012, the trust was modified, 

removing Bruce as a successor trustee and as a beneficiary.

6 We note that as of March 1, 2011, Bruce was removed as a 

director of the corporation and that in or about April, 2012, 

Bruce transferred his shares of stock to the corporation.

 
3

corporation operated as a bar and restaurant. David and Robert 

managed the restaurant; Bruce worked as a bartender.

In July, 2010, the plaintiff, USF Insurance Company, issued 

an insurance policy with the "Named Insured" listed as "LANGLOIS 

FAMILY TRUST AND SMITH'S TAVERN OF HAVERHILL, INC." The policy 

provided a coverage limit of $20,000 for loss of business 

personal property and a coverage limit of $150,000 for loss of 

the building. The policy also contained an exclusions 

provision, explaining that the plaintiff would not pay for loss 

or damage caused by "[d]ishonest or criminal act[s] by you, any 

of your partners, members, officers, managers, employees . . . , 

directors, trustees, . . . or anyone to whom you entrust the 

property for any purpose."

On November 12, 2010, Bruce set fire to the building leased 

by the corporation and was charged with arson. He pleaded 

guilty, confessing that he acted with animus towards his 

estranged brothers. The loss was reported to the plaintiff, 

which then brought this declaratory judgment action to determine 

its coverage obligations under the policy.7

 On cross motions for 

summary judgment, the judge ruled in favor of the plaintiff, 

concluding that due to Bruce's act, both the corporation's and 

7 The complaint named as defendants the trust, the 

corporation, and Robert, David, Richard J., and Bruce in their 

capacities as trustees of the trust and directors of the 

corporation.

 
4

the trust's interests were subject to the exclusions provision

of the policy. This appeal ensued.

2. Discussion. a. The policy. As "[t]he interpretation 

of an insurance contract is not a question of fact for the

jury," summary judgment is appropriate. Cody v. Connecticut 

Gen. Life Ins. Co., 387 Mass. 142, 146 (1982). Therefore, we 

review the matter de novo to determine "whether the evidence, 

viewed in the light most favorable to the nonmoving party, shows 

that the moving party is entitled to judgment as a matter of 

law." Albahari v. Zoning Bd. of Appeals of Brewster, 76 Mass. 

App. Ct. 245, 248 (2010) (footnote omitted).

On appeal, the defendants allege various ambiguities in the 

insurance policy. As a threshold matter, we note that

ambiguities in an insurance policy are resolved against the 

insurer, in favor of the insured. Chow v. Merrimack Mut. Fire 

Ins. Co., 83 Mass. App. Ct. 622, 630 (2013). Alternatively, if 

the language in the policy is unambiguous, its terms will be 

construed according to their plain meaning. Sullivan v. 

Southland Life Ins. Co., 67 Mass. App. Ct. 439, 442 (2006).

When they executed the policy, the defendants understood 

that the trust's building and the corporation's personal 

property were being insured. See Hazen Paper Co. v. United 

States Fid. & Guar. Co., 407 Mass. 689, 700 (1990) (when 

construing insurance policy, we consider "what an objectively 
5

reasonable insured . . . would expect to be covered"). 

Accordingly, the defendants understood that both the trust and 

the corporation were named insureds under the policy. See 

Jacobs v. United States Fid. & Guar. Co., 417 Mass. 75, 78 

(1994) ("'Named insured' has a clear and explicit meaning. It 

is the individual or entity who is listed on the declarations 

page"). The fact that "Named Insured" is listed in singular 

form on the declarations page is not material and does not 

present an ambiguity.

Likewise, the policy's "BUILDING AND PERSONAL PROPERTY 

COVERAGE FORM" defines the terms "you" and "your" throughout the 

policy to mean the "Named Insured shown in the Declarations." 

Applying this definition, the policy excludes coverage to the

named insured whose dishonest or criminal act causes loss or 

damage to the insured property. The defendants understand this, 

evidenced by the fact they concede that the corporation is 

barred from recovering for damages to its personal property, as

Bruce was a director of the corporation at the time he committed 

the arson.

b. Innocent coinsured. The defendants' principal argument 

on appeal is that the trust, the innocent coinsured, should not 

be barred from recovering insurance proceeds for the loss of the 

building. This issue is controlled in material respects by the 

reasoning in Kosior v. Continental Ins. Co. 299 Mass. 601 
6

(1938). There the court held that if the coinsureds' interests 

in an insurance policy are joint and nonseverable, the innocent 

coinsured may not recover fire insurance after the blamable 

coinsured intentionally burned the covered property. See id. at 

604 ("Cases dealing with policies which by their express terms 

permit of a severance of interest of the insured are not in 

point"). See also Yerardi v. Pacific Indem. Co., 436 F. Supp. 

2d 223, 248 (D. Mass. 2006) ("Kosior may not apply to cases 

where the insureds' interests and obligations under the relevant 

policy are severable").

We think the judge properly determined that there was no 

genuine dispute that the trust's and the corporation's interests 

were "inextricably intertwined" and thus nonseverable. At the 

time of the fire, all four brothers were directors of the 

corporation, each sharing a twenty-five percent ownership 

interest, and two of the four brothers (Robert and David) were 

named trustees of the trust with the other two brothers (Richard 

J. and Bruce) listed as successor trustees. In addition, all 

four brothers were named beneficiaries of the trust, each 

holding joint interests with rights of survivorship. Moreover, 

the policy goes further and excludes recovery for loss or damage 

caused by "anyone to whom you entrust the property for any 

purpose." Though the Langlois family attempted to cover their 

bases by listing the trust and the corporation as separate 
7

entities in the policy, it still follows that the trust 

entrusted the corporation with the care of the building. 

Consequently, despite the trust's innocence, Bruce's intentional 

arson left the entire insurance policy subject to the

exclusionary provision. See Kosior v. Continental Ins. Co., 

supra at 604 (husband unilaterally "burning the insured 

buildings was an act of the 'insured,' . . . which rendered the

policies void in accordance with their terms").

c. Standard form policy. We do not address the 

defendants' argument regarding the Massachusetts standard form 

policy because this issue was raised for the first time on 

appeal and therefore is deemed waived. See Martins v. 

University of Mass. Medical School, 75 Mass. App. Ct. 623, 634 

n.17 (2009).

Judgment affirmed.