Court Opinion

ID: 199002
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:22:41+00
Date Added: 2024-06-11T17:26:56.882112
License: Public Domain

220 F.3d 1 (1st Cir. 2000)
BRAZAS SPORTING ARMS, INC., Plaintiff, Appellant,v.AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY, Defendant, Appellee.
No. 99-2055.
United States Court of Appeals, For the First Circuit.
Heard Apirl 4, 2000.Decided July 13, 2000.

John G. Bagley, with whom Egan, Flanagan and Cohen, P.C. was  on brief, for appellant.
James F. Kavanaugh, Jr., with whom Conn, Kavanaugh, Rosenthal,  Peisch & Ford, L.L.P. was on brief, for appellee.
Before: Torruella, Chief Judge, Lynch and Lipez, Circuit Judges.
TORRUELLA, Chief Judge.

1
This is primarily a declaratory  judgment action in which a firearms distributor sought a  determination that it was entitled to defense and/or indemnity from  its insurance carrier under its general liability policiesfor  civil actions brought by or on behalf of gunshot victims on a  general theory that several firearm distributors had negligently,  willfully, knowingly, and recklessly flooded the firearms market. The district court granted summary judgment in favor of the  insurance carrier holding that the "products-completed operations  hazard" exclusion provision applied to the civil actions, thereby  precluding coverage.  See Brazas Sporting Arms, Inc. v. American  Empire Surplus Lines Ins. Co., 59 F. Supp. 2d 223, 225-26 (D. Mass.  1999).  Because we agree with the district court's interpretation  of the exclusion provision, and for the additional reasons  discussed below, we affirm the grant of summary judgment.

BACKGROUND

2
Between 1992 and 1997, appellee American Empire Surplus  Lines Insurance Company, a Delaware corporation, issued three  identical "commercial general liability" policies to appellant  Brazas Sporting Arms, Inc., a Massachusetts corporation.  Brazas's  policies contained the following endorsement that altered the  standard policy agreement:  "This insurance does not apply to  'bodily injury' or 'property damage' included within the 'products-completed operations hazard.'"  Products-completed operations  hazard includes "all 'bodily injury' and 'property damage'  occurring away from premises you own or rent and arising out of  'your product' or 'your work' except:  (1) Products that are still  in your physical possession; or (2) Work that had not yet been  completed or abandoned."  "Your product" is defined as,

3
a.  Any goods or products, other than real  property, manufactured, sold, handled,  distributed or disposed of by:

4
(1) You;

5
(2) Others trading under your name; or

6
(3) A person or organization whose business or  assets you have acquired . . . .

7
. . .

8
'Your Product' includes:

9
a. Warranties or representations made at any  time with respect to the fitness, quality,  durability, performance or use of 'your  product'; and

10
b. The providing of or failure to provide  warnings or instructions."

11
"Your work" means:

12
a.  Work or operations performed by you or on  your behalf . . . .

13
. . .

14
'Your work' includes:

15
a. Warranties or representations made at any  time with respect to the fairness, quality,  durability, performance or use of 'your work';  and

16
b. The providing of or failure to provide  warnings or instructions.

17
In 1995, Brazas discovered that it had been named as a  defendant in litigation pending in the Eastern District of New  York.  It subsequently learned that it was named as a defendant in  an additional law suit.  Both lawsuits charged Brazas and various  other manufacturers and dealers of handguns, as well as industry  trade groups, with liability for contributing to market overflow. Specifically, the lawsuits alleged that:

18
Defendants have knowingly produced and  distributed handguns in excess of the  reasonable demand by responsible consumers in  the lawful national handgun market, and they  have knowingly failed or refused to take any  meaningful steps to regulate and control the  distribution and sale of their guns by retail  dealers.  Their willfully negligent conduct -  individually and as an industry - has created  and supplied an unlawful national market in  firearms, the source of the handguns that  killed and wounded plaintiffs and their loved  ones.

19
Notably, the lawsuits did not identify any particular guns sold by  Brazas as the cause of injury to any particular plaintiffs.  By the  time the district court entered judgment, one of the cases had gone  to trial, and Brazas had eventually been dismissed. See Hamilton v. Accu-Tek, No. C.V. 95-0049 (E.D.N.Y. 1995).  Brazas has incurred  in excess of $75,000 in defense costs in connection with the  litigation.

20
At least some of the claims alleged in the lawsuits  occurred during the effective period of the American Empire  policies.  However, upon notice, American Empire denied coverage  and refused to defend Brazas.  As a result, Brazas brought this  declaratory judgment action in the United States District Court for  the District of Massachusetts under that court's diversity  jurisdiction pursuant to 28 U.S.C. § 1332.  Brazas also brought a  claim under the Massachusetts consumer protection statute, Mass.  Gen. Laws ch. 93A, § 11.  The parties filed cross motions for  summary judgment.  Brazas appeals from the district court's grant  of summary judgment for American Empire and the denial of Brazas's  motion for partial summary judgment on its duty to defend claim.

DISCUSSION
I.  The Policy Coverage Claim

21
We review de novo the district court's interpretation of  the insurance contracts.  See Fed. R. Civ. P. 56; Merchants Ins.  Co. of New Hampshire, Inc. v. United States Fidelity & Guar. Co.,  143 F.3d 5, 6-8 (1st Cir. 1998); GRE Ins. Group v. Metropolitan  Boston Hous. Partnership, Inc., 61 F.3d 79, 81 (1st Cir. 1995). Under Massachusetts law, we construe an insurance policy under the  general rules of contract interpretation.  See Merchants, 143 F.3d  at 8 (citing Hakim v. Massachusetts Insurers' Insolvency Fund, 675 N.E.2d 1161, 1164 (Mass. 1997)).  We begin with the actual language  of the policies, given its plain and ordinary meaning.  See GRE  Ins. Group, 61 F.3d at 81 (citing cases).  In so doing, we  "consider 'what an objectively reasonable insured, reading the  relevant policy language, would expect to be covered.'"  Id. (quoting Trustees of Tufts Univ. v. Commercial Union Ins. Co., 616 N.E.2d 68, 72 (Mass. 1993)).

22
As a liability insurer in Massachusetts, American Empire  has a duty to defend Brazas if the allegations in the New York  litigation are "reasonably susceptible" to an interpretation that  they state a claim covered by Brazas's policy.  Merchants, 143 F.3d  at 8 (quoting New England Mut. Life Ins. Co. v. Liberty Mut. Ins.  Co., 667 N.E.2d 295, 297 (Mass. App. Ct. 1996) (internal quotations  omitted)); see also Mt. Airy Ins. Co. v. Greenbaum, 127 F.3d 15, 18  (1st Cir. 1997) (quoting Sterilite Corp. v. Continental Cas. Co.,  458 N.E.2d 338 (Mass. App. Ct. 1983)).  Under Massachusetts law,  the duty to defend is broader than, and independent of, the duty to  indemnify.  See Merchants, 143 F.3d at 8 (citing Boston Symphony  Orchestra, Inc. v. Commercial Union Ins. Co., 545 N.E.2d 1156, 1158  (Mass. 1989)); Millipore Corp. v. Travelers Indem. Co., 115 F.3d 21, 35 (1st Cir. 1997) (citing same).  That is, the obligation to  defend turns on the facts alleged in the complaint rather than the  facts proven at trial.  See Millipore, 115 F.3d at 35; see also GRE  Ins. Group, 61 F.3d at 81.

23
A liability insurer has no duty to defend a claim that is  specifically excluded from coverage, but the insurer bears the  burden of establishing the applicability of any exclusion.  See Mt.  Airy, 127 F.3d at 19 (citing Great Southwest Fire Ins. Co. v. Hercules Bldg. & Wrecking Co., 619 N.E.2d 353 (Mass. App. Ct.  1993)); GRE Ins. Group, 61 F.3d at 81 (citing Camp Dresser & McKee,  Inc. v. Home Ins. Co., 568 N.E.2d 631, 633 (Mass. App. Ct. 1991)). Consistent with the Massachusetts general rule favoring insureds in  policy interpretation, any ambiguities in the exclusion provision  are strictly construed against the insurer.  See Mt. Airy, 127 F.3d  at 19 (citing Sterilite, 458 N.E.2d 338); GRE Ins. Group, 61 F.3d  at 81; see also Hakim, 675 N.E.2d at 1165 (holding that "[t]his  rule of construction applies with particular force to exclusionary  provisions").  Ambiguity exists when the policy language is  susceptible to more than one rational interpretation.  SeeMerchants, 143 F.3d at 8 (citing Boston Symphony Orchestra, 545 N.E.2d at 1169); Mt. Airy, 127 F.3d at 19 (citing Jefferson Ins.  Co. of New York v. Holyoke, 503 N.E.2d 474 (Mass. App. Ct. 1987)). But it does not follow that ambiguity exists solely because the  parties disagree as to the provision's meaning.  See Continental  Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d 370, 374 (1st  Cir. 1991).

24
Before the district court, and on appeal, American  Empire's position is that the products-completed operations hazard  exclusion excludes coverage for all injuries arising from Brazas's  products, off premises, regardless of the circumstances.  Brazas  contends that such a reading of the exclusion provision would  render the general liability policy meaningless.  Brazas challenged  summary judgment on two grounds:  (1) the products-completed  operations hazard exclusion was intended to apply to defective  products only, and (2) the New York civil actions do not actually  allege injuries from Brazas's products, but rather injuries caused  by the company's business management and strategy, thereby  rendering the exclusion provision inapplicable.

25
The district court rejected the appellant's arguments. The court held that the language of the exclusion provision did not  support a reading that would limit the exclusion to injuries from  defective products.  Additionally, the court concluded that "[o]nly  by a distortion of language and logic can plaintiff suggest that  the injuries sued upon do not 'arise from' the distribution of  Brazas products, off Brazas premises."  Brazas, 59 F. Supp. 2d at  226.  We take up each of the appellant's arguments in turn.

A.  Defective Products

26
The appellant posits that the "pivotal issue" of the case  is "whether the exclusion is meant to bar more than product  liability claims."1  Appellant's Brief at 15.  It suggests that in  the scheme of the commercial general liability policy as a whole  the general risks of doing business should be protected, and,  therefore, the exclusion provision should be limited to defective  products claims.  Moreover, the appellant argues, a reasonable  insured would interpret the provision as applying to defective  products only.

27
Unfortunately, we have no guidance from Massachusetts  courts on this issue.  Indeed numerous other courts have read  similar exclusion provisions to be defective products exclusions,2 but there is contrary authority from courts finding such a reading  to be beyond the text of the exclusion.3

28
We agree with the district court that the latter line of  case law is more persuasive.  First, we observe that many of the  courts that have held that a products-completed operations hazard  exclusion provision was, in effect, a defective products exclusion  were considering provisions that contained materially different  language from the provision in American Empire's policies.  Second,  and more significant, in order to limit the American Empire  exclusion provision to defective products, we would need to read  into the text a requirement that is simply not there.  The  products-completed operations hazard includes in plain and  unambiguous language "all 'bodily injury' and 'property damage'  occurring away from premises you own or rent and arising out of  'your product.'"  Where, as here, the language of the exclusion  provision is unambiguous, the text should be given its plain  meaning.  In this case, the plain meaning of the exclusion is that  it applies to all product-related injuries.  See Cobbins, 290 N.E.2d at 877.  Although we take into account the likely  understanding of a reasonable insured, we may not read into the  provision a condition or language that is not present.  See Hakim, 675 N.E.2d at 1164-65.  Nor are we sure that in the context of  Brazas's actual business as a distributor, rather than a  manufacturer, a reasonable insured would read the exclusion to  refer to defective products.  Consequently, we are convinced that  the exclusion clause does not limit itself to injuries that arise  out of defective products.

29
B.  "Arising out of"

30
The second issue -- whether the New York civil actions  state claims for injuries that "arise out of" Brazas products -- is  a much closer case.  We have before us Brazas, an insured who  purchased a commercial general liability policy, arguably with the  intent of covering the general risks of doing business.  See  Western Alliance Ins. Co. v. Gill, 686 N.E.2d 997, 1000-01 (Mass.  1997).  However, an exclusion provision in the policy explicitly  denies coverage for all injuries "arising out of" the insured's  products, products which are inherently dangerous.  Subsequently,  a civil action is brought for wrongful injuries allegedly resulting  from Brazas's saturation of the market with its products.  However,  the plaintiffs, who were directly injured by products from that  market (or an underground market), through intervening intentional  wrongdoing, do not claim that any of Brazas's products were  involved in their specific injuries.  We must therefore determine  whether it is legally significant that the underlying civil action  alleges that the injury was caused by the appellant's conduct and  not the appellant's products.

31
On the one hand, Massachusetts case law instructs that  the term "arising out of" should be broadly construed and  additionally directs our attention to the source of the underlying  injury rather than the theory of liability alleged in the  complaint.  See, e.g., Bagley v. Monticello Ins. Co., 720 N.E.2d 813, 816-17 (Mass. 1999).  On the other hand, at least some  Massachusetts courts recognize a separate injury arising out of the  insured's negligence independent of the proximate cause of harm, see, e.g., Worcester Mut. Ins. Co. v. Marnell, 496 N.E.2d 158, 161  (Mass. 1986), which taken together with Massachusetts general  policy favoring insureds in interpreting insurance contracts, see GRE Ins. Group, 61 F.3d at 81, suggests a narrow reading of the  exclusion provision.  Traditional considerations, such as parties'  expectations, see Western Alliance, 686 N.E.2d at 1000-01, shed no  further light on the issue because neither party would have  foreseen this type of lawsuit when they entered into the policy  agreement.

32
Faced with these conflicting principles of construction,  and in the absence of a definitive answer from Massachusetts  courts, we focus our inquiry on the text of the exclusion  provision.  The products-completed operations hazard exclusion  applies to "all 'bodily injury' . . . arising out of '[Brazas's]  product.'"  Under Massachusetts law, "arising out of" "indicates a  wider range of causation than the concept of proximate causation in  tort law."  Rischitelli v. Safety Ins. Co., 671 N.E.2d 1243, 1245 (Mass. 1996), quoted in Merchants, 143 F.3d at 9; see also Mt.  Airy, 127 F.3d at 20; Bagley, 720 N.E.2d at 816.  In other words,  it falls somewhere between proximate and "but for" causation -- an  intermediate causation standard.  See Merchants, 143 F.3d at 9-10; Rischitelli, 671 N.E.2d at 1245; see also Bagley, 720 N.E.2d at 816  (observing that many cases interpret the term as much more  analogous to "but for" causation).  It is generally understood to  mean "originating from," "growing out of," "flowing from,"  "incident to," or "having connection with."  See Merchants, 143 F.3d at 9;aMt. Airy, 127 F.3d at 20; New England Mut. Life Ins.  Co., 667 N.E.2d at 298 (citing Webster's Third New International  Dictionary 117 (1981)); see also Continental Cas. Co. v. City of  Richmond, 763 F.2d 1076, 1080 (9th Cir. 1985) (listing similar  variations of "arising out of" to illustrate that phrase is broader  than "caused by").

33
In interpreting the phrase "arising out of" in the  context of the case at hand, we are compelled by Massachusetts law  to consider the "source from which the plaintiff's personal injury  originates rather than the specific theories of liability alleged  in the complaint [of the underlying civil action]."  Bagley, 720 N.E.2d at 817 (quoting New England Mut. Life Ins. Co., 667 N.E.2d  at 299).  Thus, in this case, firearms were the immediate source of  the plaintiffs' injuries, and the fact that the plaintiffs, to  reach the deep pockets of the firearms industry, contrived a theory  of liability that targeted Brazas for its alleged participation in  flooding the firearms market cannot affect the application of the  exclusion provision.  See id. at 816-17; United Nat'l Ins. Co. v. Parish, 717 N.E.2d 1016, 1018-19 (Mass. App. Ct. 1999).

34
The appellant correctly asserts that under Massachusetts  law an act of negligence can create a separate legal injury that  does not arise out of the product.  However, the primary cases upon  which the appellant relies for this proposition, Rischitelli v. Safety Insurance Co., 671 N.E.2d 1243 (Mass. 1996), and Worcester  Mutual Insurance Co. v. Marnell, 496 N.E.2d 158 (Mass. 1986), are  readily distinguishable.

35
In Rischitelli, the plaintiff was the victim of road rage  -- after a car accident, he was physically attacked by the driver  of the other car.  As an insured under a standard automobile  insurance policy, the plaintiff sought to recover benefits.  The  policy afforded coverage for "'bodily injury . . . arising out of  the ownership, maintenance or use of an auto.'"  Rischitelli, 671 N.E.2d at 1245.  Although the issue before the court related to  policy coverage rather than to an exclusion provision, the court's  construction of the expression "arising out of" is duly applicable  to this case.  The court recognized that the phrase did not "refer  to all circumstances in which the injury would not have occurred  'but for' the involvement of a motor vehicle."  Id.  Instead, it  observed, cases fall along a continuum depending on the causal  connection between the injury and the automobile.  See id. at 1245. For instance, under a standard auto policy there was no coverage  when a plaintiff tripped on a rope that fell off a truck or when a  plaintiff was shot by the insured while seated in his automobile,  but the sexual assault of a school bus passenger by the bus driver  involved an injury arising from the use of a motor vehicle.  Seeid. (citing Perry v. Chipouras, 66 N.E.2d 361 (Mass. 1946), Sabatinelli v. Travelers Ins. Co., 341 N.E.2d 880 (Mass. 1976), and Roe v. Lawn, 634 N.E.2d 117 (Mass. 1994)).  In these cases, the  intervening act of violence broke the chain of causation between  the operation of the vehicles and the injuries only where the  violence was merely incidental to the use of the vehicle. Consequently, the Rischitelli court concluded that the battery was  sufficiently independent of the motor vehicle accident that the  losses the plaintiff sustained arose from the intentional  wrongdoing of the other driver and not from the use of an  automobile.  See id. at 1246.

36
A variation of this independent causation analysis aided  the court in Worcester Mutual Insurance Co.  In that case, the  underlying complaint alleged that the insureds' negligent  supervision of a party held at their residence was the proximate  cause of an automobile accident that killed the plaintiff's  intestate.  See 496 N.E.2d at 159.  The insureds sought coverage  for the wrongful death action under their homeowners' insurance  policy, but the policy had an exclusion for bodily injury arising  out of the ownership or use of a motor vehicle.  See id.  The court  concluded, however, that negligent supervision "is separate and  distinct from the use or operation of an automobile."  Id. at 161. The court reasoned that the allegations in the complaint, namely,  that the insureds had failed to prevent their son from drinking,  related solely to activities that took place in the home and that,  therefore, the insureds could reasonably expect to be protected by  their homeowner's policy.  See id.

37
The court's reasoning in Worcester would at first glance  seem to control the outcome in this case -- the New York civil  actions accuse Brazas of making bad business decisions, conduct  which takes place on Brazas's premises, and, therefore, Brazas  could reasonably expect protection under its comprehensive general  liability policy.  However, unlike the circumstances in Worcester and Rischitelli, here the two sources of injury are interdependent. Brazas's alleged misconduct is the over-distribution of firearms  and the proximate cause of the plaintiffs' injuries are firearms,  whereas in Worcester, the parents' negligent supervision of their  son derived from their illegal and unsupervised provision of  alcohol, not the automobile that was ultimately the cause of the  wrongful death.  As the Worcester Court explained, alternatively,  a claim for negligent entrustment (of the automobile), conduct  which still occurred in the home, would necessarily have been  within the exclusion provision.  See id. at 245-46.  Similarly, in Rischitelli the battery and the car accident were separate and  distinct events; the car accident merely preceded, and set the  context for, the battery.  In contrast, Brazas's conduct, along  with the New York plaintiffs' claims, indisputably derived from  firearms.  In other words, the company, in distributing its  firearms, is allegedly negligent precisely because it created the  risk of the exact kind of injuries suffered by the New York  plaintiffs.  See United Nat'l Ins. Co., 717 N.E.2d at 1018-19; New  England Mut. Life Ins. Co., 447 N.E.2d at 298-99; see alsoContinental Cas. Co., 763 F.2d at 1080-81.

38
Because the New York law suits concern off-premises  conduct arising out of (not merely incidentally related to) firearms products, Brazas is not entitled to defense or indemnity  coverage as a result of the products-completed operations hazard  exclusion.

II.  Unfair Trade Practice Claim

39
This Court can quickly dispose of Brazas's additional  claim that American Empire violated the Massachusetts consumer  protection statute, Mass. Gen. Laws ch. 93A, § 11, because it is  nothing more than a reconfiguration of its coverage claim. Moreover, Brazas fails to direct the Court to any evidence that  would create a genuine issue of fact to support this claim.

40
The Massachusetts consumer protection statute provides a  right of action to anyone who suffered a loss of money or property  as a result of an unfair or deceptive business practice.  See Brown  Daltas & Assocs. v. General Accident Ins. Co. of America, 844 F.  Supp. 58, 67 (D. Mass. 1994), rev'd on other grounds, 48 F.3d 30  (1st Cir. 1995).  It generally protects consumers from unfair  business practices that are "immoral, unethical, oppressive, or  unscrupulous; or within the bounds of some statutory, common-law or  other established concept of unfairness."  Ellis v. Safety Ins.  Co., 672 N.E.2d 979, 986 (Mass. App. Ct. 1996).

41
In this vein, Brazas contends that American Empire  violated the Massachusetts law that established the rules of  fairness as to an insurer's claims handling procedures, Mass. Gen.  Laws ch. 176D, § 3(9)(a), (n), and thereby violated chapter 93A. Specifically, the appellant charges American Empire with (1)  misrepresenting pertinent policy provisions and (2) failing to  provide a reasonable explanation of the basis for denial of  coverage.  As an initial matter, a violation of chapter 176D is not  automatically actionable under chapter 93A, § 11, which provides a  cause of action for business plaintiffs injured by unfair trade  practices.  See Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 197 (Mass. 1993); cf. Mass. Gen. Laws ch. 93A, § 9(1)  (establishing right of action for consumer plaintiffs for  violations of ch. 176D, § 3(9)).  That said, conduct that violates  ch. 176D may independently be an unfair trade practice actionable  under ch. 93A, § 11.  See Kiewit Constr. Co. v. Westchester Fire  Ins. Co., 878 F. Supp. 298, 301-02 (D. Mass. 1995).  But we need  not get distracted by the interrelationship of the two statutes  because the appellant utterly fails to develop this claim.

42
At its core, the appellant's misrepresentation argument  is that American Empire issued a policy called a "general  liability" policy, which, based on the broad scope of the products-completed operations hazard exclusion, is in fact only a premises  liability policy.  Brazas does not allege, or point to any  evidence, indicating that American Empire made any  misrepresentations when it issued the policy, but argues only that  the policy itself, in its own terms, misrepresents its coverage --  that is, a comprehensive liability policy would cover the New York  civil actions because they arise from the general risks of doing  business.  Despite the appellant's claim to the contrary, this  convoluted argument does not in itself create an issue of fact.  We  held above that the exclusion provision was not ambiguous and that,  consequently, a reasonable insured would have understood that  product-related injuries like those at issue in the New York civil  actions would be excluded from coverage.  Thus, as a matter of law  the policies are not misleading.

43
The appellant's claim that American Empire violated  chapter 176D because it did not provide a reasonable explanation  for the denial of coverage is likewise unavailing.  Again, Brazas  does not point to any deficiency on the part of American Empire in  its correspondence with Brazas.  Instead, Brazas argues that the explanation was inadequate because American Empire "chose to read  the allegations in the underlying New York actions in the manner  most favorable to its position."  Appellant's Brief at 27.  Not  only has the appellant failed to articulate a tenable theory under  chapter 176D, § 3(9), without offering any legal support, but, more  important, we have concluded that American Empire properly denied  coverage and did not owe Brazas a duty to defend.  Where as here,  the insurer properly denied coverage, there can be no violation of  chapter 176D.  See Spurlin v. Merchants Ins. Co. of New Hampshire,  866 F. Supp. 57, 62 (D. Mass. 1994).

44
As the appellant has failed to persuade the Court that  American Empire engaged in any conduct that rose to the level of  unfairness as a matter of law, summary judgment was appropriate. See Brown Daltas & Assocs., 844 F. Supp. at 67-68.

CONCLUSION

45
Because we conclude that the allegations raised in the  New York action arise out of Brazas's products and fall directly  within the products-completed operations hazard exclusion in the  general liability policy, we hold that American Empire could  reasonably have concluded that the New York action was outside the  scope of coverage and, thus, that it owed Brazas no duty to defend. For similar reasons, this Court holds that the appellant's consumer  protection claim is baseless.  Thus, we affirm the district court's  grant of summary judgment in favor of American Empire.

Notes:

1
   The parties and the case law use the terms "products liability"  and "defective products" interchangeably in the context of the  products-completed operations hazard exclusion.  However, these  terms are not coterminous, and it is at least arguable that the New  York law suits are a variety of a products liability action. Because such an understanding of products liability is antithetical  to the appellant's argument, for purposes of this discussion, we  will assume that the New York cases are not products liability  actions.  And to avoid further confusion, we will only use the term  defective products for the remainder of this opinion.

2
   See, e.g., Scarborough v. Northern Assurance Co. of America, 718 F.2d 130, 136 (5th Cir. 1983) (negligent failure to warn); Farm  Bureau Mut. Ins. Co. of Arkansas, Inc. v. Lyon, 528 S.W.2d 932, 934  (Ark. 1975) (negligent sale of gun powder to minors); McGinnis v. Fidelity & Cas. Co. of New York, 276 Cal. App. 2d 15, 17-18 (Cal.  Ct. App. 1969) (negligent sale of gun powder to minors); ADA  Resources v. Don Chamblin & Assocs., 361 So. 2d 1339, 1343 (La. Ct.  App. 1978) (sale of defective joint fits within exclusion  provision); Lessak v.aMetropolitan Cas. Ins. Co. of New York, 151 N.E.2d 730, 734-35 (Ohio 1958) (negligent sale of BB gun to minor); Hartford Mut. Ins. Co. v. Moorhead, 578 A.2d 492, 495-96 (Pa.  Super. Ct. 1990) (negligent failure to warn); General Ins. Co. of  America v. Crawford, 635 S.W.2d 98, 102 (Tenn. 1982) (negligent  sale of products); Colony Ins. Co. v. H.R.K., Inc., 728 S.W.2d 848,  851 (Tex. App. 1987) (wrongful death action arising out of suicide  with gun sold by insured).

3
   See, e.g., Cobbins v. General Accident Fire & Life Assurance  Corp., 290 N.E.2d 873, 877 (Ill. 1972) (negligent sale of fireworks  to minor); Pennsylvania Gen. Ins. Co. v. Kielon, 492 N.Y.S.2d 502,  503-04 (N.Y. App. Div. 1985) (negligent sale of gunpowder to  minor).
We agree with the appellant that two of the cases upon which the  district court and the appellee rely, Rhinebeck Bicycle Shop, Inc. v. Sterling Insurance Co., 546 N.Y.S.2d 499 (N.Y. App. Div. 1989),  and New York Casualty Insurance Co. v. Halley Electric Co., 539 N.Y.S.2d 204, 205 (N.Y. App. Div. 1989), are inapposite.  In those  cases, the plaintiffs alleged injuries that resulted from negligent  assembly or manufacture -- i.e. defective products -- and  therefore, the fact that those courts applied the product hazard  exclusion under those circumstances sheds no light on the  applicability of the provision to a negligent sale type of case.