Opinion ID: 203754
Heading Depth: 2
Heading Rank: 2

Heading: Insurance policy construction

Text: The parties agree that Massachusetts law applies to this case. Accordingly, we begin with the unexceptional proposition that Scottsdale owes a duty to defend CTC if the allegations in the underlying lawsuit are reasonably susceptible to an interpretation that they state a claim covered by CTC's policy. Liquor Liab. Joint Underwriting Ass'n. of Mass. v. Hermitage Ins. Co., 419 Mass. 316, 644 N.E.2d 964, 967 (1995). Conversely, there is no duty to defend a claim that is excluded from coverage. Metro. Prop. & Cas. Ins. Co. v. Fitchburg Mut. Ins. Co., 58 Mass.App.Ct. 818, 793 N.E.2d 1252, 1254 (Mass.App.Ct. 2003). The interpretation of insurance contracts is generally a matter of law for the court. Home Ins. Co. v. Liberty Mut. Fire Ins. Co., 444 Mass. 599, 830 N.E.2d 186, 188 (2005). The court must construe the words of the policy according to the fair meaning of the language used, as applied to the subject matter. Jacobs v. U.S. Fid. & Guar. Co., 417 Mass. 75, 627 N.E.2d 463, 464 (1994) (citing Johnson v. Hanover Ins. Co. 400 Mass. 259, 508 N.E.2d 845, 849 (987)). Where the words in the policy are not ambiguous, they must be construed in their usual and ordinary sense. Id. Ambiguity exists when the policy language is susceptible to more than one meaning. Lumbermens Mut. Cas. Ins. Co. v. Offices Unlimited, Inc., 419 Mass. 462, 645 N.E.2d 1165, 1168 (1995). Ambiguous policy terms are construed in favor of the insured. Hazen Paper Co. v. U.S. Fid. & Guar. Co., 407 Mass. 689, 555 N.E.2d 576, 583 (1990). At the same time, however, ambiguity is not created simply because the parties offer different interpretations of the policy language. Lumbermens, 645 N.E.2d at 1168. If a contract term is found to be ambiguous, and the court finds it necessary to rely on extrinsic evidence to resolve the dispute, then a question of fact appropriate for jury consideration may arise. See Preferred Mut. Ins. Co. v. Gamache 42 Mass.App.Ct. 194, 675 N.E.2d 438, 442 (1997) (summary judgment vacated where intent to cause harm was at issue and genuine issue of material fact remained as to intoxicated insured's mental capacity), aff'd 426 Mass. 93, 686 N.E.2d 989 (1997); see also Foisy v. Royal Maccabees Life Ins. Co., 356 F.3d 141 (1st Cir. 2004) (district court correctly submitted the question of parties' intent to the jury). Finally, the insurer has the burden of proving that an exclusion applies. Allmerica Fin. Corp. v. Certain Underwriters at Lloyds, London, 449 Mass. 621, 871 N.E.2d 418, 425 (2007).