Court Opinion

ID: 9743182
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:27:24.739389+00
Date Added: 2024-06-11T07:24:39.794115
License: Public Domain

Abrams, J.
(dissenting, with whom Liacos, J., joins). The court recognizes that exclusion (a) is somewhat confusing, ante at 549, and the insurer concedes that “[a] fast reading of [exclusion (a)] would appear to grant coverage when work is not performed in a workmanlike manner.” Even so, the court permits the insurer to escape liability. In such circumstances, I would apply the doctrine of reasonable expectations, see Markline Co. v. Travelers Ins. Co., 384 Mass. 139, 146-147 (1981) (Liacos, J., dissenting), and permit the plaintiff to recover. There is no justification in this case for any departure from our long-standing rule that it is the insurer’s responsibility to provide exclusionary clauses “free from any ambiguity and in such simple language so as to be readily understood by a person not versed in legal technicalities or nuances of phraseology.” MacArthur v. Massachusetts Hosp. Serv., Inc., 343 Mass. 670, 672 (1962). Conflicting and confusing clauses should be construed against the insurer. Vappi & Co. v. Aetna Casualty & Sur. Co., 348 Mass. 427, 431 (1965).
The exclusion on which the insurer relies on appeal, (y) (2) (d) (iii), is found in an endorsement entitled “General Liability Multi/Cover Endorsement,” which states in its first sentence that the insurance afforded by the policy “is amended to include the following additions and extensions of coverage” (emphasis supplied). Thereafter, contrary to the implication of the first sentence, the policy sets forth a series of exclusions including (y) (2) (d) (iii). In order to determine whether there was coverage, the plaintiff would have had to make a. detailed study of the policy. I think it unconscionable to defeat reasonable expectations by inserting exclusionary language in fine print in an endorsement to a policy, particularly where the endorsement’s stated and clear purpose is to extend coverage. “[Insurers ought not to be allowed to use qualifications and excep-*554tians from coverage that are inconsistent with the reasonable expectations of a policyholder having an ordinary degree of familiarity with the type of coverage involved. This ought not to be allowed even though the insurer’s form is very explicit and unambiguous, because insurers know that ordinarily policyholders will not in fact read their policies. Policy forms are long and complicated and cannot be fully understood without detailed study; few policyholders ever read their policies as carefully as would be required for moderately detailed understanding.” R. Keeton, Insurance Law 351-352 (1971). If this reasoning is applied to this case, the plaintiff should prevail.
I do not agree with the court’s conclusory statement that the cases denying coverage are better reasoned. Ante at 549. A number of prestigious courts have reached the opposite result. See, e.g., Federal Ins. Co. v. P.A.T. Homes, Inc., 113 Ariz. 136, 139 (1976); Baybutt Constr. Corp. v. Commercial Union Ins. Co., 455 A.2d 914, 919-922 (Me. 1983); Fresard v. Michigan Millers Mut. Ins. Co., 414 Mich. 686, 703-704 (1982); McRaven v. F-Stop Photo Labs, Inc., 660 S.W.2d 459, 462 (Mo. Ct. App. 1983); Commercial Union Assurance Cos. v. Gollan, 118 N.H. 744, 745 (1978); Aid Ins. Servs., Inc. v. Geiger, 294 N.W.2d 411, 414-415 (N.D. 1980); Applegren v. Milbank Mut. Ins. Co., 268 N.W.2d 114, 118 (N.D. 1978). See also Olszak v. Peerless Ins. Co., 119 N.H. 686 (1979); Storms v. United States Fidelity & Guar. Co., 118 N.H. 427, 429 (1978); Atwood v. Hartford Accident & Indem. Co., 116 N.H. 636, 639 (1976), for cases applying the reasonable expectation doctrine to policy clauses other than those discussed in the instant case. A majority of the Supreme Judicial Court of Maine has determined in a policy containing similar clauses that, if the “language of [a] policy, construed as a whole, might reasonably be read by the ordinary intelligent insured, including ordinary business people in the construction field, as providing coverage for liability in breach of warranties of the type suffered in the instant case . . ., notwithstanding that the insurance company through its sophisticated use of a complex structural format may have intended and considered them to be excluded,” then the court will not engage in “an *555extensive and intricate analysis of the legal niceties of ambiguous and misleading insurance language ... to the detriment of the ordinary member of the purchasing public.” Baybutt Constr. Corp. v. Commercial Union Ins. Co., supra at 922 & n.3. The Supreme Court of New Hampshire also has concluded that the relationship between exclusion (a) and (o) (in our case [y] [2] [d] [iii]) should be determined by “whether the ordinary layman in the position of the insured could reasonably be expected to understand that certain exclusions qualified the policy’s grant of coverage.” Commercial Union Assurance Cos. v. Gollan, supra.
Where, as here, the insurer concedes that “[a] fast reading” would appear to grant coverage, the policy should “be construed as laymen would understand it and not according to the interpretation of sophisticated underwriters. . . . An important corollary of the expectations principle is that insurers ought not to be allowed to use qualifications and exceptions from coverage that are inconsistent with the reasonable expectations of a policyholder having an ordinary degree of familiarity with the type of coverage involved.” R. Keeton, Insurance Law 351 (1971). I think it unconscionable to permit “[t]he use of fine-print clauses negating the reasonable expectations of the non-drafting party.” 15 S. Williston, Contracts § 1763A, at 215 (3d ed. 1972). I dissent.