Source: http://masscases.com/cases/app/25/25massappct383.html
Timestamp: 2019-04-22 13:58:34+00:00

Document:
Present: [Note Star] BROWN, KAPLAN, & KASS, JJ.
CIVIL ACTION commenced in the Superior Court Department on November 21, 1984.
Robert W. Gardner, Jr. (Bruce N. Finkle with him) for the defendants.
Kenneth F. Rosenberg for the plaintiff.
KAPLAN, J. Commerce Insurance Company (Commerce) is the plaintiff in this declaratory action. It seeks an interpretation of a provision of the simplified or plain-talk [Note 2] Standard Massachusetts Automobile Insurance Policy (2d ed. 1979) as applied to the situation described in a statement of agreed facts. The facts may be summarized as follows.
"Under this Part, we will pay damages to people injured or killed in accidents if you or a household member is legally responsible for the accident . . . .
"If someone covered under this Part is using an auto he or she does not own at the time of the accident, the owner's auto insurance must pay its limits before we pay. Then, we will pay, up to the limits shown on your Coverage Selections page for any damages not covered by that insurance . . . ."
It is agreed that Benjamin was a "household member," [Note 5] and the defendants say that, as "owner's auto insurance" on the Monza was absent and amounted to zero, Commerce was obliged to pay "up to the limits" of Charles's policy. To the contrary, Commerce says any coverage by Charles's policy was dependent on there being "owner's auto insurance" on the Monza, and here that insurance was absent.
"Unlike the Compulsory Part, this Part does provide coverage . . . for accidents occurring outside Massachusetts [meaning elsewhere in the United States or in Canada]."
". . . this Part does not pay for the benefit of anyone using an auto without the consent of the owner."
2. We believe the foregoing interpretation of the Part 5 provisions is determinative. But if not, then we suggest the most that can be said for the insurer is that the pertinent language is ambiguous. What result should follow?
The judgment appealed from is reversed, and judgment will be entered declaring the rights of the parties in accordance with the foregoing opinion.
[Note 1] Elizabeth Koch and Benjamin Gray.
[Note Star] The case was reargued on April 27, 1988, and the panel thereafter amended its opinion. The following is the opinion as so amended.
[Note 2] See G. L. c. 175, Section 2B (insurance policies to be written in easily understandable form). See Alperin & Chase, Consumer Rights and Remedies Section 363 (1979).
[Note 3] Victor's mother, the defendant Elizabeth Koch, claimed consequential damages for loss of companionship and society and for emotional distress.
[Note 5] Defined by the policy as "anyone living in your household who is related to you by blood, marriage or adoption."
[Note 6] In these cases, the primary insurers became insolvent. For a case where the insurance was not collectible because absent, see Mid-Century Ins. Exch. v. State Farm Mut. Auto Ins. Co., 98 Ill. App. 3d 493, 494-496 (1981).
[Note 7] To support its claimed "condition precedent" interpretation of Part 5, Commerce cites two cases which are exercises in the application of owned-vehicle provisions (see the provision commencing with "we will not pay," quoted in our text above): Thomas v. Hartford Acc. & Indemn. Co., 398 Mass. 782 (1986); Zamani v. Auto Club Ins. Assn., 124 Mich. App. 29 (1983). The third cited case is also wide of the mark of interpreting the core provision of Part 5: Nasis v. American Motorists Ins. Co., 353 Mass. 219 (1967).
Also lacking support for Commerce's interpretation are Cardin v. Royal Ins. Co. of Am., 394 Mass. 450, 452 (1985), and Johnson v. Hanover Ins. Co., 400 Mass. 259, 265 (1987), cited by Commerce. These cases refer to the separate and distinct provisions for uninsured-or-underinsured coverage and do not speak at all to the present problem.
[Note 8] As to the requirement of official approval of policies, see G. L. c. 175, Sections 2B, 113A. A "standard" policy in this context appears to differ from an ordinary approved policy only in that it is the only form approved in a particular field.
[Note 9] This may lead to the thought that the courts in such cases should consider how far the insurers in fact took part in influencing the policy form. Cf. Lumbermens Mut. Cas. Co. v. DeCenzo, 18 Mass. App. Ct. 973, 975 (1984), S.C., 396 Mass. 692 (1986).
[Note 10] The quoted words are taken from Save-Mor Supermarkets, Inc., supra at 226, which in turn quotes from earlier authority. Such statements commonly appear where the rule contra proferentem is not applied. See, e.g., Johnson, supra at 266.
[Note 11] "Reasonable Expectations." Although unnecessary to decision herein, we mention the emergent doctrine, as summarized by R. Keeton, Insurance Law 351 (1971): "The objectively reasonable expections of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations." Our courts have been receptive to the proposition, although its shape has not been finally settled. See Bond Bros. v. Robinson, 393 Mass. 546, 551 (1984); Home Indem. Ins. Co. v. Merchants Distribs., Inc., 396 Mass. 103, 107 (1985).
In Moore, supra at 1011, the court said in finding the doctrine inapplicable to the particular situation, "We have no evidence of any expectations of the insured . . . nor do we have any indication whether any expectations he may have had were reasonable." Presumably the court did not mean evidence in the sense of legal proof. If the concept is to have practical consequences, it must operate on the basis of reasonable inference from the total situation. In the present case we can say with confidence that a policyholder purchasing the optional Part 5 would expect, in reason, that his coverage would extend, generally, where he (or another insured) was using a borrowed car. This is the key to expectation. He would think it unreasonable, an unfair deal, to find that his insurer could renounce all liability on its own policy because of the adventitious circumstance that owner's insurance on the borrowed car was lacking.

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