Source: http://masscases.com/cases/distapp/2010/2010massappdiv85.html
Timestamp: 2019-04-24 21:49:08+00:00

Document:
Present: Greco, P.J., Curtin & Swan, JJ.
Joseph B. Bertrand for the plaintiff.
David M. Crowley for the defendant.
GRECO, P.J. The plaintiff-homeowners, Joseph and Nancy Bertrand (Bertrands), filed this action against Merrimack Mutual Fire Insurance Company (Merrimack) to recover benefits they alleged were due under their insurance policy with Merrimack for damage to their property caused by a fire. The trial court granted summary judgment to Merrimack, and the Bertrands have appealed.
it is mutually agreed that the amount of such loss shall be referred to three disinterested men, the company and the insured each choosing one out of three persons to be named by the other, and the third being selected by the two so chosen; and the award in writing by a majority of the referees shall be conclusive and final upon the parties as to the amount of loss or damage, and such reference, unless waived by the parties, shall be a condition precedent to any right of action in law or equity to recover for such loss . . . .
The provision in the standard home insurance policy that the decision of a board of referees is binding is of limited effect. Such a decision clearly does not preclude a lawsuit. Indeed, as stated in § 99, the reference procedure is a condition precedent to a subsequent lawsuit. However, both § 99 and § 101E of G.L. c. 175 provide that a decision of a board of referees is final as to the amount of the loss sustained by the insured. See Employers Liab. Assur. Corp., Ltd. v. Traynor, 354 Mass. 763 (1968). How application of these provisions actually works in a particular situation can be somewhat problematic.
company appealed. On that appeal, the property owner argued that the amount of loss found by the referees was not binding since they improperly took it upon themselves to determine the question of . . . liability. Id at 286. In sustaining the exceptions of the insurer, the Court stated that [i]n order intelligently to determine the amount of loss or damage under a given policy, as an incidental step in their deliberations, the referees must reach their own conclusions as to what they think that loss or damage is. Such conclusions must necessarily be affected by what they think the coverage is. Their views so far as ultimate liability goes are wholly tentative and in no sense a decision on that underlying question. Id. at 287-288. However, the Court concluded that the award by the referees of $317.00 was supported by evidence tending to show that the entire damage was due to windstorm. Accordingly, the jurys verdict could not stand. In so ruling, the Court stated its understanding that it was not being contended that the referees . . . were in error in their construction of the policies. Id. at 289.
the referees had only to resolve the ordinary meaning of commonly used words -- for example the difference between lightning and wind (as in Fox) or what is a theft (as in Augenstein). The interpretations required in this case to determine which coverage applies are far from self-evident. Coverage C addresses loss of property, but the storage fees incurred obviously related to property not lost or damaged in the fire. In Coverage C, specific items are listed and applicable limitations on them set out. While rented property is mentioned, that provision could arguably be interpreted as referring to damage to, and not use of, such rental property. An argument can also be made that the Bertrands needed access to their stored property to maintain their normal standard of living, especially if their temporary residence was smaller than their damaged home. [Note 4] We conclude that in these circumstances, the trial judge was presented with a question of construction that he had to resolve unfettered by the decision of the referees.
We cannot discern, however, the basis for the judges allowance of Merrimacks motion for summary judgment. He may have found that there were no illegalities in the reference procedure and that the $0.00 award was binding on him; or he may have properly reached the construction issue and found that any coverage for the storage expenses would have been under the exhausted Coverage C. [A]ny ground supporting the judgment may be considered on appeal. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991). Compare, however, Pupecki v. Madison Corp., 376 Mass. 212 , (1978), where the Supreme Judicial Court chose to examine only those grounds argued on appeal by the party who had sought summary judgment. Id. at 215-216. Here, both in the trial court and on this appeal, the gravamen of Merrimacks argument related to the binding effect of the award (other than to argue that there were no irregularities in the reference procedure). There has never been a real discussion at trial, or on appeal, by either party about the language used in Coverages C and D. In these circumstances, it appears highly probable that summary judgment was granted on the erroneous ground that the reference award was binding. Even though the interpretation of a contract is generally a question of law, any argument as to the interpretation of these provisions is best made in the first instance in the trial court. Accordingly, summary judgment was not appropriate. That being the case, we need not address the other illegalities in the reference procedure alleged by the Bertrands, or their claims under G.L. c. 93A and c. 176D.
Accordingly, the summary judgment for the defendant is vacated, and the case is returned to the trial court for trial, or for further proceedings on the defendants motion for summary judgment.
[Note 3] In Augenstein, since there was no suggestion that the referees misconceived the meaning of theft and thus were mistaken as to coverage . . . or any other illegality or mistake of law by the referees, Id. at 37-38, the Court held that the insureds motion for a directed verdict should have been allowed on the basis of the referees award. Id. at 34.
[Note 4] In a separate section setting out additional coverages related to damaged property, the insurer agreed to pay the reasonable cost incurred . . . for necessary measures taken solely to protect against further damage. While the items stored by the Bertrands were not damaged, query whether this provision is some indication of an intent by the insurer to minimize future damages.

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