Court Opinion

ID: 4163329
Source: CourtListenerOpinion
Date Created: 2017-04-26 14:10:36.481996+00
Date Added: 2024-06-11T14:25:06.114760
License: Public Domain

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us

15-P-1554                                           Appeals Court

   THE HANOVER INSURANCE GROUP, INC.   vs.   RAW SEAFOODS, INC.

                          No. 15-P-1554.

       Suffolk.      September 16, 2016. - April 26, 2017.

             Present:    Agnes, Neyman, & Henry, JJ.

Insurance, General liability insurance, Coverage.      Words,
     "Occurrence."

     Civil action commenced in the Superior Court Department on
September 21, 2012.

     The case was heard by Christine M. Roach, J., on motions
for summary judgment.

     Michael J. Daly (Samuel P. Blatchley also present) for the
defendant.
     Jeffrey E. Dolan (Anthony M. Campo also present) for the
plaintiff.

    NEYMAN, J.    In this case we analyze whether damage to

scallops at a seafood processing facility, where the precise

cause of damage is unknown, constituted an "occurrence" within

the meaning of a commercial general liability (CGL) policy.     A

Superior Court judge concluded that the defendant-insured, Raw
                                                                        2

Seafoods, Inc. (RSI), has no reasonable expectation of proving

that its claimed loss was caused by an occurrence, and granted

summary judgment in favor of the plaintiff-insurer, Hanover

Insurance Group, Inc.     RSI appeals therefrom.   We reverse.

    Background.      1.   RSI and the damaged scallops.   RSI is a

seafood processing facility in Fall River.     One of RSI's

customers, Atlantic Capes Fisheries, Inc. (Atlantic), sells

scallops and other types of seafood around the world.       Atlantic

purchases fresh scallops from fishing vessels, then transports

the scallops to RSI for processing, portioning, packaging, and

freezing.   RSI's staff inspects the scallops for quality upon

arrival, reports the results to Atlantic, and receives

processing instructions from Atlantic.     After processing, the

scallops are transported to Arctic Cold Storage (Arctic), a

third-party cold storage facility.     Atlantic then ships its

customers' orders directly from Arctic's facility.        RSI handles

approximately 4 million to 6 million pounds of scallops for

Atlantic per year.

    In July, 2011, RSI-processed scallops were making their way

through customs in Denmark, heading to an Atlantic customer.

Upon inspection, the 37,102 pounds of scallops were found to be

decomposed, exhibited a strong ammonia smell, and were deemed

unacceptable for human consumption.      By all accounts, something
                                                                     3

was rotten in the state of Denmark.1    The United States Food and

Drug Administration tested the scallops and confirmed that they

were spoiled.    The scallops were then returned to Arctic's

facility, where representatives from Atlantic and RSI jointly

inspected the shipment and confirmed the damage.    They also

inspected another batch of scallops, processed by RSI for

Atlantic around the same time as the rejected batch, and

discovered approximately 20,000 additional pounds of damaged

product.

     2.    The underlying litigation.   In 2012, Atlantic brought

an action against RSI in the United States District Court for

the District of Massachusetts (the "underlying litigation"),

which included a count for negligence for the damage to the

scallops.    At that time, Hanover insured RSI pursuant to a CGL

policy (policy), and agreed to defend RSI in the underlying

litigation (with counsel selected by RSI), while reserving its

right to deny coverage under the policy.

     During discovery in the underlying litigation, RSI's

president, Jason Hutchens, acknowledged that the scallops were

delivered to RSI in good condition, but that "somewhere in

[RSI's] system, the product got messed up."    It is undisputed

that the damage occurred while the scallops were in RSI's

possession, but the precise cause of the damage at RSI's

     1
         William Shakespeare, Hamlet, act I, scene 4.
                                                                    4

facility remains unknown.   Hutchens stated that "we've never

seen anything like this before . . . we beat our heads against

the wall for, it seemed like months, trying to figure this out.

We've never seen anything like it and haven't seen anything

after this problem.   But we can't put our hands around it, how

it happened and why it happened -- we don't know."   Nonetheless,

he agreed that, to his understanding, "[t]he damage occurred in

[RSI's] custody" and "was the result of some, as yet, unknown

failure on the part of [RSI's] processing people or handling

people within [RSI's] plant."   He further agreed that the damage

to the scallops could have occurred because someone failed to

"maintain temperatures carefully enough."   Atlantic's chief

operating officer, Jeffrey Bolton, agreed with Hutchens's

statements and added that his "assumption is that somewhere

along the line during the process of the scallops that

[Atlantic] shipped to [RSI], there was temperature abuse, and

that's why they were deemed decomposed."

    Atlantic moved for summary judgment in the underlying

litigation under the doctrine of res ipsa loquitur, arguing that

it was undisputed that Atlantic had delivered the scallops to

RSI in good condition; RSI had exclusive control over the

scallops until they were delivered to Arctic in a frozen state;

the scallops were not damaged after they were delivered to

Arctic; although the precise cause of the damage was unknown,
                                                                      5

RSI accepted responsibility for damaging the scallops; and the

damage could only have been caused by RSI's negligent handling

of the product.    Atlantic further contended that while it could

not conclusively establish precisely where in RSI's handling the

scallops were damaged, the most likely cause was "temperature

abuse" caused by "RSI's personnel's failure to monitor the

temperature in some vats of scallops."     A Federal District Court

judge granted Atlantic's motion for summary judgment "for the

reasons stated therein," and issued a judgment against RSI and

in favor of Atlantic in the amount of $599,790.08 with

postjudgment interest.

     3.   The policy.    At all relevant times Hanover insured RSI.

RSI's policy with Hanover provides in relevant part that Hanover

"will pay those sums that the insured becomes legally obligated

to pay as damages because of 'bodily injury' or 'property

damage' to which this insurance applies."     By its terms, the

policy applies to "property damage" that is caused by an

"occurrence."     The policy defines "occurrence" as "an accident,

including continuous or repeated exposure to substantially the

same general harmful conditions."     The policy also contains

several exclusions limiting the application of the policy, as

well as a "special broadening endorsement."2    However, where the

     2
       The special broadening endorsement modifies insurance
coverage and the scope of certain exclusions in the policy.
                                                                      6

judge decided the motion for summary judgment solely on her

determination that RSI could not show that there was an

occurrence within the meaning of the policy, we need not delve

into these additional provisions here.

    4.   The present action.     During the pendency of the

underlying litigation, Hanover filed the present action in the

Superior Court.     Hanover sought a declaratory judgment that

either the damage to the scallops was not caused by an

"occurrence" within the meaning of the policy, or the damage to

the scallops fell under one or more exclusions to the policy,

such that Hanover had no duty to indemnify RSI for any judgment

in the underlying litigation.    RSI filed an answer and asserted

counterclaims for breach of contract and violations of G. L.

cc. 93A and 176D.     The Superior Court allowed RSI's motion to

stay discovery in the present action, which Hanover opposed,

pending resolution of the underlying litigation.     After judgment

entered against RSI in the underlying litigation, a Superior

Court judge further stayed discovery and the parties filed cross

motions for partial summary judgment on the issue of coverage.

A different Superior Court judge held a hearing on the cross

motions and granted summary judgment in favor of Hanover.     In a

comprehensive decision, the judge concluded that "because there

was no demonstrated accident distinct from [RSI's] performance

of its work," RSI could not meet its burden of proving that its
                                                                     7

claimed loss was caused by an "occurrence," as a matter of law.

The judge also dismissed RSI's counterclaims as moot.        RSI

timely appealed.

    Discussion.     1.   Legal standards.   a.   Summary judgment.

Summary judgment is appropriate where there are no issues of

material fact and the moving party is entitled to judgment as a

matter of law.    Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404

(2002).    We review a decision to grant summary judgment de novo.

See Boazova v. Safety Ins. Co., 462 Mass. 346, 350 (2012).

"[W]here both parties have moved for summary judgment, the

evidence is viewed in the light most favorable to the party

against whom judgment has entered."     Ibid. (citations and

quotations omitted).     "A party seeking summary judgment may

satisfy its burden of demonstrating the absence of triable

issues by showing that the party opposing the motion has no

reasonable expectation of proving an essential element of its

case."    Ibid. (citations omitted).

    b.     Insurance contract interpretation.    Questions

concerning the interpretation of an insurance contract are

questions of law.    Fuller v. First Fin. Ins. Co., 448 Mass. 1, 5

(2006).    Pacific Indem. Co. v. Lampro, 86 Mass. App. Ct. 60, 65

(2014).    RSI, as the insured, bears the burden of proving its

claim falls within the scope of coverage provided by the policy.

Boazova, supra at 351.     Thus, to survive summary judgment, RSI
                                                                        8

must demonstrate that it has a reasonable expectation of proving

that the claimed loss was caused by an "occurrence," which, as

discussed above, is defined in the policy as an "accident."

    Under Massachusetts law, an "accident" is commonly defined

as "an unexpected happening without intention or design."

Liberty Mut. Ins. Co. v. Tabor, 407 Mass. 354, 358 (1990),

quoting from Beacon Textiles Corp. v. Employers Mut. Liab. Ins.

Co., 355 Mass. 643, 646 (1969).       See also Pacific Indem. Co.,

supra (accident implies fortuitous or unexpected event).

Massachusetts courts broadly construe the term "accident" in an

insurance policy.    Quincy Mut. Fire Ins. Co. v. Abernathy, 393

Mass. 81, 83 (1984).        See also Vappi & Co. v. Aetna Cas. & Sur.

Co., 348 Mass. 427, 432-433 (1965) ("The breadth of

interpretation given to the term 'accident' by Massachusetts

cases makes it unnecessary to deal with Federal cases and cases

from other jurisdictions cited by [the insurer]").

    2.   Analysis.     a.    Occurrence.   With these guiding

principles in mind, we turn to the question whether the damage

to the scallops was caused by an "occurrence" under the policy.

The parties agree that the cause of the damage "was the result

of some, as yet, unknown failure on the part of [RSI's]

processing people or handling people within [RSI's] plant."       The

consensus ends there.
                                                                   9

    RSI contends that the record demonstrates that it has a

reasonable expectation of proving an occurrence; i.e., that RSI

did not specifically intend to destroy the scallops and that it

was an accident rather than an anticipated event.    As noted

above, such an event had never occurred before and has not

occurred since.   RSI grounds its argument on (1) the finding of

negligence in the underlying litigation, and (2) the decision in

the Beacon Textiles case, in which damage to a product caused by

an unexplained defect was held to constitute an accident.

    Hanover counters that RSI has produced no evidence as to

precisely how the scallops were damaged, leaving the actual

cause of the damage to speculation and conjecture.    Therefore,

RSI has no reasonable expectation of proving that the damage was

caused by an occurrence and cannot survive a motion for summary

judgment.   See, e.g., Brooks v. Peabody & Arnold, LLP, 71 Mass.

App. Ct. 46, 56 (2008).   Hanover further argues that even

assuming RSI could prove that the damage was caused by some

mishandling of the scallops on RSI's part, RSI has no reasonable

expectation of proving that the scallops were damaged by a

fortuitous event, and not by a "normal, foreseeable, and

expected incident of doing business."   Pacific Indem. Co., 86

Mass. App. Ct. at 65.

    We conclude that Massachusetts law favors RSI's position.

While the precise cause or mechanics of the damage to the
                                                                  10

scallops is unknown, the summary judgment record supports the

conclusion that the damage resulted from an unanticipated mishap

during RSI's processing operation.   Atlantic is a consistent RSI

customer for whom RSI handles approximately 4 million to 6

million pounds of scallops for Atlantic per year.   In the nearly

seventeen years RSI had been in business, it has "never seen

anything like this before . . . and [had not] seen anything

after this problem."   In other words, viewed in the light most

favorable to RSI, the damage resulted from an accident, and not

from a routine consequence of RSI's work.

     Hanover maintains that even assuming that the damage

resulting from RSI's mishandling of the scallops was atypical or

even anomalous, absent evidence to the contrary RSI can only

speculate that the damage stemmed from unintended conduct.

Therefore, Hanover posits, RSI still cannot sustain its burden

of proving that the scallops were damaged by an accident, rather

than by intentional conduct or a "normal, foreseeable, and

expected incident of doing business."   Pacific Indem. Co.,

supra.3   Hanover's argument ignores that the underlying

     3
       The summary judgment record is devoid of any evidence or
claim that fraud, collusion, or subterfuge played any role in
causing the damage. Hanover does not argue to the contrary.
Compare Vappi & Co., 348 Mass. at 432 ("Unintended or unforeseen
circumstances of reckless or negligent acts, and even of
intentional acts, at least if not undertaken 'with malice or
intent to injure' the person or property hurt . . . may be
within the definition of 'accident'").
                                                                   11

litigation by Atlantic against RSI went to judgment on a claim

of negligence.   Although the precise cause and mechanism of

damage was not established, Atlantic prevailed in the underlying

litigation on a theory of res ipsa loquitur.    Cases on res ipsa

loquitur are clear that the doctrine is simply a way of

establishing negligence.    See Edwards v. Boland, 41 Mass. App.

Ct. 375, 377-378 (1996); Restatement (Second) of Torts

§ 328D(1)(a) (1965).   We have found no Massachusetts precedent

for the proposition that a determination of negligence through

the application of res ipsa loquitur is treated any differently

from any other determination of negligence.

     Hanover responds that the judgment in the underlying

litigation contains no findings delineating how the scallops

were specifically damaged, and thus negligence and fortuity were

not demonstrated.   Contrary to Hanover's claim, the court in the

underlying litigation granted Atlantic's motion for summary

judgment "for the reasons stated therein" and in doing so,

necessarily held, on the undisputed facts, that the only

explanation for the damage to the scallops was RSI's negligent

handling of the product.4   Because the basis for RSI's liability

     4
       Atlantic and RSI were in agreement as to the facts in the
underlying litigation and the conclusion that the damage was
consistent with mishandling of scallops. Although the parties
could not conclusively establish precisely where in RSI's
handling the scallops were damaged, Atlantic's chief operating
officer testified that the most likely cause was "temperature
                                                                   12

-- negligence under a res ipsa loquitur theory -- was

established in an underlying case that went to judgment, the

insurer, Hanover, is bound by that ground.5   The insurer cannot

relitigate factual issues decided in the underlying case.     This

has long been the rule in Massachusetts.6   We further note that

there is no indication in the record that Hanover sought to

abuse caused by RSI's personnel's failure to monitor the
temperature in some vats of scallops, resulting in spoilage that
went undetected prior to the product being frozen. Failure to
manually ice the vats is likely the precise cause of the
damage."
     5
       Hanover's claim that all other causes of damage were not
explicitly ruled out also misses the mark. See Restatement
(Second) of Torts § 328D (1965) comment f ("plaintiff is not
required to exclude all other possible conclusions beyond a
reasonable doubt, and it is enough that he makes out a case from
which the jury may reasonably conclude that the negligence was,
more probably than not, that of the defendant").
     6
       In Miller v. United States Fid. & Guar. Co., 291 Mass.
445, 448-449 (1935), the Supreme Judicial Court held that
"[w]here an action against the insured is ostensibly within the
terms of the policy, the insurer, whether it assumes the defence
or refuses to assume it, is bound by the result of that action
as to all matters therein decided which are material to recovery
by the insured in an action on the policy. . . . This case is
but one instance under a rule of broad application that an
indemnitor, after notice and an opportunity to defend, is bound
by material facts established in an action against the
indemnitee." See also Jertson v. Hartley, 342 Mass. 597, 602-
603 (1961) (following rule in Miller); Blais v. Quincy Mut. Fire
Ins. Co., 361 Mass. 68, 70-71 (1972) ("In the absence of fraud
or collusion the insurer would be bound by a judgment entered by
default. A judgment by consent stands no worse"); Polaroid
Corp. v. Travelers Indem. Co., 414 Mass. 747, 763 n.20 (1993),
citing Miller, supra at 448-449 ("If an underlying case went to
judgment, the insurer would be bound by the result of the trial,
as to all material matters decided in that action that bear on
the coverage issue").
                                                                    13

intervene in the underlying litigation.    See, e.g., Newton v.

Krasnigor, 404 Mass. 682, 683 (1989); Liquor Liability Joint

Underwriting Assn. v. Hermitage Ins. Co., 419 Mass. 316, 323-324

(1995).

    Additionally, the judgment on Atlantic's negligence claims

in the underlying litigation precludes a subsequent

determination of intentional conduct by RSI in the present case.

Intentional and negligent conduct are mutually exclusive.

Miller v. United States Fid. & Guar. Co., 291 Mass. 445, 447

(1935) ("[N]egligence and wilful and wanton conduct are so

different in kind that words properly descriptive of the one

commonly exclude the other"); Sabatinelli v. Butler, 363 Mass.

565, 567 (1973) ("Under the law of the Commonwealth, the

difference between intentional and negligent conduct is a

difference in kind and not in degree.     If conduct is negligent

it cannot also be intentional"); Waters v. Blackshear, 412 Mass.

589, 590 (1992) ("intentional conduct cannot be negligent

conduct and . . . negligent conduct cannot be intentional

conduct"); Metropolitan Property & Cas. Ins. Co. v. Morrison,

460 Mass. 352, 361 (2011) (finding of negligence is inconsistent

with finding of intentional and criminal act).

    The Beacon Textiles decision further bolsters RSI's

position.   There, an insured sustained loss caused by yarn which

changed color after the yarn was used in a customer's sweaters.
                                                                       14

The evidence showed that the yarn was defective in the insured's

possession before it was delivered to the customer.     Beacon

Textiles Corp., 355 Mass. at 645.   The insured had been in

business as a seller of yarn for over thirty years and

discoloring of its yarn had never before occurred.     Ibid.     The

cause of the defect remained unknown.   The Supreme Judicial

Court concluded that "[s]ome ingredient or ingredients of the

dyed yarn acted or failed to act at some point in time contrary

to the intention and expectation of the person who put them

together," and held that "a change of color in yarn due to a

latent unexplained defect is an accident."   Ibid.    In making

this determination, the court relied on the rule that "[t]he

term 'accident' is to be broadly construed in a policy insuring

against damage by accident."   Ibid.

    Hanover attempts to distinguish the Beacon Textiles

decision on several grounds.   First, Hanover claims that the

term "occurrence" does not appear in that case and the court was

interpreting a different policy provision prior to decades of

jurisprudence interpreting the meaning of "occurrence."     We

disagree. The court in the Beacon Textiles case interpreted the

meaning of the term "accident" in an insurance policy which

obligated the insurer "[t]o pay on behalf of the insured all

sums which the insured shall become legally obligated to pay as

damages because of injury to or destruction of property,
                                                                     15

including the loss of use thereof, caused by accident."      Ibid.

In the present case, "occurrence" is defined by Hanover as an

"accident."    The alleged distinction is unpersuasive.

Furthermore, the Supreme Judicial Court has never overruled or

limited the application of the Beacon Textiles decision.     To the

contrary, the case has been cited approvingly by Massachusetts

courts.     See, e.g., Quincy Mutual Fire Ins. Co., 393 Mass. at

83; Liberty Mut. Ins. Co., 407 Mass. at 358; Powell v. Fireman's

Fund Ins. Cos., 26 Mass. App. Ct. 508, 515 (1988); Preferred

Mut. Ins. Co. v. Gamache, 42 Mass. App. Ct. 194, 197 (1997).

See also Markel Am. Ins. Co. v. Pajam Fishing Corp., 691 F.

Supp. 2d 260, 265 (D. Mass. 2010).

    Next, Hanover alleges that in the Beacon Textiles case, the

defendant insurer identified an expert who was able to attribute

damage to a defect that preexisted the transmission of the yarn

to the end user.     Thus, the damage in that case was not

completely unexplained.    Contrary to this interpretation, the

court in the Beacon Textiles decision merely states that an

expert concluded that the yarn was defective in the insured's

hands before it was delivered to the customer.     Beacon Textiles

Corp., 355 Mass. at 645.     There was no indication that the

expert narrowed or defined any specific cause of the damage to

the yarn.    Likewise, in the present case, all parties agreed

that the scallops were damaged in the insured's hands before
                                                                   16

they were delivered to the customer.   The claimed distinction

raised by Hanover is inapposite.

    Hanover also argues that the Beacon Textiles case involved

an insured that was accused only of selling defective yarn, and

did not involve a claim where a product was allegedly damaged

during the performance of the insured's work.    The purported

distinction misses the key point that, in both instances, the

damage or defect stemmed from an unknown cause and occurred

while the insured was in control of the product (i.e., the yarn

and the scallops).   In neither case could the parties determine

with certainty the specific cause of the damage.

    Finally, Hanover contends that the present case is

controlled by Pacific Indem. Co., 86 Mass. App. Ct. at 66, and

that a finding that the damage to the scallops was caused by an

occurrence is foreclosed under this precedent.    This argument is

also unpersuasive.   In that case, the insured was hired to cut

down trees.   Indeed, it cut down more trees than directed,

failed to follow restrictions in cutting brush and trees, and

"exceeded the scope of the [relevant] permits."    Ibid.   Cutting

down trees was part and parcel of the insured's ordinary work

process.   Furthermore, the insured intended to engage in the

"clear-cutting" at issue.

    In the present case, by contrast, damaging scallops was not

part of the ordinary work process, and, as evidenced by the
                                                                    17

finding of negligence in the underlying litigation, RSI did not

intend to cause the resulting harm.7    Moreover, the evidence in

the summary judgment record in the underlying litigation

supports the conclusion that the destruction of the scallops was

the result of an accident.   RSI has been processing scallops

using the same method for the greater part of seventeen years.

Whatever caused the harm to the scallops had never occurred

before and has not occurred since.     Furthermore, Atlantic did

     7
       Hanover also argues that RSI's argument is contrary to
Friel Luxury Home Constr., Inc. vs. ProBuilders Specialty Ins.
Co. RRG, No. 09-CV-11036-DPW (D. Mass. 2009). That case, which
is not binding on this court, is readily distinguishable.
There, the insured-builder was sued (via counterclaim) in the
underlying case for the cost of repairing numerous deficiencies
in a home it had negligently constructed. The defects were
characterized as being the result of the builder's "faulty
workmanship." Id. at 3. The counterclaim alleged that the
builder had "failed to perform work consistent with even minimum
industry standards and also materially misrepresented aspects of
the nature and the cost of the work." Id. at 1. For example,
the plumbing was incorrectly installed, the roofing work was
"shoddy," the ceilings were not level, certain walls were
bulging, and the stairs were not adequately supported in
accordance with the building code. Ibid. The builder argued
that the defects "must" have been accidental because it did not
specifically intend to cause the homeowner's harm, nor was it
substantially certain that such harm would occur. Id. at 5.
The court rejected this argument and noted that under
Massachusetts law, faulty workmanship generally fails to
constitute an accidental occurrence in a commercial liability
policy because "a failure of workmanship does not involve the
fortuity required to constitute an accident." Ibid. The court
opined that in these circumstances, none of the numerous alleged
defects in the builder's work were "reasonably susceptible" of
an interpretation that they were accidental, and concluded that
there was no "occurrence" resulting in property damage within
the meaning of the policy. Ibid. Thus, the insurer had no duty
to defend the builder in the underlying case.
                                                                   18

not sue RSI to have the defective processing redone, but rather

for the value of the damaged property.     Contrast Friel Luxury

Home Constr., Inc. vs. ProBuilders Specialty Ins. Co. RRG, No.

09-CV-11036-DPW (D. Mass. 2009) (homeowners sued builder for

cost of hiring someone else to redo builder's defective work).

This case is about protecting RSI from liability for the damage

it negligently caused to the property of a third party,

Atlantic.   It is not about reimbursing RSI for the cost to

reprocess the scallops or, in essence, redoing its own defective

work.    See Oxford Aviation, Inc. v. Global Aerospace, Inc., 680

F.3d 85, 88-89 (1st Cir. 2012).

     In short, the present case is controlled by the reasoning

in the Beacon Textiles decision, and Hanover's efforts to

distinguish that case are unconvincing.8    This precedent,

combined with the finding of negligence in the underlying

litigation and the broad construction of the term "occurrence"

in a CGL policy, compels us to conclude that RSI has a

reasonable expectation of proving that the unexplained damage

was caused by an occurrence.   See Vappi & Co., 348 Mass. at 432

("This court will be slow to adopt any narrow construction of

     8
       Were we to accept Hanover's argument, an insured would
never have a reasonable expectation of proving that damage was
caused by an occurrence if it could not specify the precise
cause of such damage. We think that such a blanket rule would
undermine the broad construction of CGL policies required by our
precedent, and unfairly limit coverage. See Quincy Mutual Fire
Ins. Co., 393 Mass. at 83.
                                                                   19

the term 'accident' which will limit or defeat any coverage

fairly intended to be given by a policy described by the insurer

in such broad terms . . . ").   Thus, the judge erred in allowing

Hanover's motion for summary judgment.

     b.   Exclusions.   Because the judge concluded that RSI did

not meet its initial burden of proving that its claimed loss was

caused by an occurrence, she did not analyze the applicability

of any exclusions or the special broadening endorsement.    RSI

contends that we need not remand the matter for determination as

to the applicability of the exclusions.   Although the

determination thereof is a question of law, we conclude that a

remand is appropriate in this case.    See, e.g., Middleborough v.

Middleborough Gas & Elec. Dept., 422 Mass. 583, 588 (1996);

Szymanski v. Boston Mut. Life Ins. Co., 56 Mass. App. Ct. 367,

382 (2002).   Hanover did not argue the applicability of the

exclusions in its opposition and cross motion for summary

judgment or in its appellate brief.   Nonetheless, we disagree

with RSI's assertion that Hanover waived its arguments regarding

the exclusions.9

     c.   Duty to defend and RSI's counterclaims.   The judge

granted summary judgment in Hanover's favor, and further ordered

     9
       The record reflects some confusion between the parties and
the judge as to what specific issues were to be briefed in the
partial motions for summary judgment. The record supports
Hanover's position that it did not waive the right to address
the applicability of the relevant exclusions.
                                                                     20

that "the remaining claims and counterclaims of the parties are

DISMISSED with prejudice, as moot."     Where we hold that summary

judgment should not have entered for Hanover, we vacate the

judgment entered by the Superior Court, and remand for further

proceedings consistent with this opinion regarding (1) the

applicability of the exclusions, (2) Hanover's duty to defend,10

and (3) RSI's counterclaims for breach of contract and

violations of G. L. cc. 93A and 176D.11

                                      So ordered.

     10
       Hanover defended RSI in the underlying litigation
pursuant to a reservation of rights with counsel selected by
RSI. However, RSI contends that Hanover did not pay all of the
legal bills and expenses incurred therein.
     11
       Hanover explicitly sought to conduct discovery in the
Superior Court prior to the filing of the cross motions for
summary judgment. A Superior Court judge rejected Hanover's
request and stayed all discovery pending the motions for partial
summary judgment on the question of coverage. Hanover continues
to seek discovery regarding the applicability of the exclusions.
Whether and to what extent discovery will be allowed as to all
issues in the case going forward, including the timing and scope
thereof, is left to the discretion of the judge of the Superior
Court.