Court Opinion

ID: 5122630
Source: CourtListenerOpinion
Date Created: 2021-11-02 15:07:41.602711+00
Date Added: 2024-06-11T08:22:29.230063
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                            Reporter of Decisions
Decision: 2021 ME 54
Docket:   Cum-21-85
Argued:   October 6, 2021
Decided:  November 2, 2021

Panel:          STANFILL, C.J., and MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ.

                  PROGRESSIVE NORTHWEST INSURANCE COMPANY

                                               v.

     METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY

JABAR, J.

         [¶1]      Progressive Northwest Insurance Company appeals from a

summary judgment entered by the Superior Court (Cumberland County,

Warren, J.) in favor of Metropolitan Property and Casualty Insurance Company

on Progressive’s complaint seeking indemnification for a portion of a final

settlement paid involving a mutually insured party, Vincent J. Micale Jr.

Because the relevant part of Metropolitan’s homeowner’s insurance policy

unambiguously did not cover injuries resulting from the use of rented

watercraft equipped with water jet pump engines of over fifty horsepower, we

affirm.
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                                               I. BACKGROUND

          [¶2] The following facts, which are undisputed, are drawn from the

parties’ statements of material facts. See InfoBridge, LLC v. Chimani, Inc., 2020

ME 41, ¶ 2, 228 A.3d 721.

          [¶3]     On June 18, 2017, Micale rented two jet skis, equipped with

125 horsepower water jet pump engines, from Jet Ski Guy, Inc. (JSG). Two other

individuals listed on Micale’s rental agreement collided while operating the jet

skis, severely injuring one of them. At the time, Progressive provided a boat

and personal watercraft liability insurance policy to Micale.1 Metropolitan

provided homeowner insurance to Micale.

          [¶4] Micale’s Metropolitan homeowner policy provided that it would

“pay all sums for bodily injury and property damage to others for which the law

holds [the holder] responsible because of an occurrence to which this coverage

applies.” The policy excluded coverage for bodily injury or property damages

arising from watercraft. An exception to that exclusion, however, provided for

coverage in some instances. The exception provided:

    1   The specific terms of the Progressive policy are not at issue in this appeal.
                                                                               3

      Coverage is extended for bodily injury and property damage
      arising out of:

          a. any watercraft on the insured premises;
          b. any watercraft while stored;
          c. watercraft, owned or furnished or available for [the holder’s]
          regular use:
             1) that is powered by one or more motors with 50 total
                horsepower or less. This includes watercraft propelled by
                a water jet pump engine or motor; or
             2) that is a sailing vessel 31 feet and under in length with or
                without auxiliary power;
          d. rented watercraft:
             1) powered by one or more outboard motors;
             2) with an inboard or inboard-outdrive motor with
                50 horsepower or less.           This includes watercraft
                propelled by a water jet pump engine or motor; or
             3) that is a sailing vessel 31 feet and under in length with or
                without auxiliary power; or
          e. watercraft not owned by [the holder], not rented to [the
              holder] nor furnished or available for [the holder’s] regular
              use.

      [¶5] After the collision, on November 20, 2017, JSG filed an amended

complaint in the Superior Court (Cumberland County) alleging that Micale and

others (including the injured individual) were negligent in the operation of the

two jet skis, causing their destruction.     On January 8, 2018, the injured

individual filed a cross-claim against Micale, alleging that Micale’s negligence

caused the bodily injuries he sustained as a result of the accident.

      [¶6]   The parties eventually negotiated a settlement that included

Progressive paying $300,000 to the injured individual on Micale’s behalf.
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Progressive demanded that Metropolitan pay half this amount, but

Metropolitan asserted that it had no duty to indemnify Micale. After making

the payment, Progressive brought a declaratory judgment action on July 1,

2019, seeking a declaration that Metropolitan had a duty to indemnify Micale

for half the amount that Progressive paid to the injured individual on Micale’s

behalf.

      [¶7] Progressive and Metropolitan filed dueling motions for summary

judgment. On March 3, 2021, the Superior Court denied Progressive’s motion

and granted Metropolitan’s motion. In its order, the Superior Court concluded

that “the Metropolitan policy is not reasonably susceptible of different

interpretations and . . . an ordinary person in the shoes of the insured would

have understood that the 50 horsepower limitation applied to a watercraft with

a water jet pump engine.”

      [¶8]   The court entered final judgment in Metropolitan’s favor on

March 4, 2021. Progressive timely appealed. See 14 M.R.S. § 1851 (2021); M.R.

App. P. 2A, 2B(c)(1).
                                                                                5

                                 II. Discussion

A.    Interpretation of Insurance Contracts

      [¶9]    We review de novo a grant of summary judgment and the

interpretation of an insurance policy. Kelley v. N. E. Ins. Co., 2017 ME 166, ¶ 4,

168 A.3d 779. Where the material facts are not in dispute, “we limit our review

to whether the prevailing party was entitled to judgment as a matter of law.”

Id.

      [¶10]   We interpret unambiguous language in an insurance policy

according to its plain meaning but “construe ambiguous policy language strictly

against the insurance company and liberally in favor of the policyholder.”

Haskell v. State Farm Fire & Cas. Co., 2020 ME 88, ¶ 15, 236 A.3d 458 (quoting

Kelley, 2017 ME 166, ¶ 5, 168 A.3d 779). An insurance policy must be examined

as a whole to determine whether it is ambiguous. Jipson v. Liberty Mut. Fire Ins.

Co., 2008 ME 57, ¶ 10, 942 A.2d 1213; Found. for Blood Rsch. v. St. Paul Marine

& Fire Ins. Co., 1999 ME 87, ¶ 11, 730 A.2d 175. Policy language is ambiguous if

it is reasonably susceptible to different interpretations. Cambridge Mut. Fire

Ins. Co. v. Vallee, 687 A.2d 956, 957 (Me. 1996). However, a dispute over the

meaning of a term, “or [the] inability of the insured to understand the policy,
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does not render the contract ambiguous.” Colford v. Chubb Life Ins. Co. of Am.,

687 A.2d 609, 614 (Me. 1996).

      [¶11] Courts determine as a matter of law whether the terms of an

insurance contract are ambiguous. Jipson, 2008 ME 57, ¶ 6, 942 A.2d 1213; Am.

Protection Ins. Co. v. Acadia Ins. Co., 2003 ME 6, ¶ 11, 814 A.2d 989. The party

arguing against coverage (the insurer) bears the burden of proving

applicability of any policy exclusion. See Mut. Fire Ins. Co. v. Hancock, 634 A.2d

1312, 1313 (Me. 1993).

B.    Metropolitan’s Policy

      [¶12] Reading the policy as a whole, see Found. for Blood Rsch., 1999 ME

87, ¶ 11, 730 A.2d 175, it is clear that in the list of circumstances in which

coverage is provided, the fifty-horsepower limitation found in the first sentence

of item d(2) applies to the next sentence, which states, in its entirety, “This

includes watercraft propelled by a water jet pump engine or motor.” Item d(2)

comprises solely these two sentences and is set apart from any other items in

the list. The unambiguous meaning of the section is that coverage is extended

to rented watercraft with inboard and inboard-outdrive motors of fifty

horsepower or less, and that the fifty-horsepower limitation applies to water

jet pump engines.
                                                                                 7

      [¶13] Because Metropolitan’s policy is unambiguous, we interpret it by

its plain meaning. See Haskell, 2020 ME 88, ¶ 15, 236 A.3d 458. The policy

provides that losses arising out of watercraft are not covered. An exception

extends coverage when the watercraft was rented and powered by an inboard

or inboard-outdrive motor—which may include a water jet pump engine—with

fifty horsepower or less. In this case, the engines on the rented jet skis exceeded

the fifty-horsepower limitation, and therefore the exception to the exclusion

does not apply. The Metropolitan policy does not cover the injuries, and thus

Metropolitan has no duty to indemnify Micale for any portion of the settlement

payment Progressive made to the injured individual on Micale’s behalf.

      [¶14] Because we conclude that Metropolitan’s policy is unambiguous

and by its plain meaning does not provide coverage for injuries arising out of

the use of the watercraft involved in the accident, we affirm the judgment of the

Superior Court.

      The entry is:

                   Judgment affirmed.
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Christopher C. Dinan, Esq. (orally), and Laura A. Maher, Esq., Monaghan Leahy,
LLP, Portland, for appellant Progressive Northwestern Insurance Company

Jeffrey T. Edwards, Esq. (orally), and John J. Cronan III, Esq., Preti Flaherty
Beliveau & Pachios, LLP, Portland, for appellee Metropolitan Property and
Casualty Insurance Company

Cumberland County Superior Court docket number CV-2019-250
FOR CLERK REFERENCE ONLY