Opinion
10-P-1467
08-08-2011
WONDERLAND ENTERTAINMENT, LLC & another, third-party plaintiffs, v. LIQUOR LIABILITY JOINT UNDERWRITING ASSOCIATION OF MASSACHUSETTS, third-party defendant.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The third-party plaintiffs, Wonderland Entertainment, LLC and Wonderland Realty, LLC (collectively, Wonderland), brought claims for breach of contract and violations of G. L. c. 93A, and for declaratory relief against the third-party defendant, Liquor Liability Joint Underwriting Association of Massachusetts (LLJUAM), after LLJUAM had denied coverage and had refused to defend or indemnify Wonderland in an underlying lawsuit brought by the plaintiff, Allan Rossi. On cross motions for summary judgment, the judge allowed summary judgment in LLJUAM's favor. Separate and final judgment pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), entered in LLJUAM's favor. Wonderland appealed. We affirm.
The underlying lawsuit is not at issue here.
1. Background. This action arises out of a lawsuit brought by the plaintiff for damages resulting from an altercation between him and certain security personnel employed by Club Lido, a nightclub owned and operated by Wonderland. On October 31, 2005, a dispute arose inside the nightclub, causing Rossi and a companion to leave and wait outside. After the nightclub closed, Rossi, his companion, and several others walked toward their car in a parking lot adjacent to the nightclub. As they walked, several nightclub security personnel approached and assaulted them.
The parking lot in which this altercation took place was owned by the Massachusetts Bay Transportation Authority (MBTA). Customers of the nightclub often park in the lot, and Wonderland frequently hires uniformed police officers to direct traffic in the lot.
At all relevant times, Wonderland was insured pursuant to a Liquor Liability Insurance Policy issued by LLJUAM in February, 2005 (the policy). The policy contained an assault and battery endorsement which covered certain liability 'arising out of negligence of the Insured in preventing or in failing to prevent an assault and/or battery which takes place at the 'Insured premises." The policy defined 'Insured premises' as 'the premises designated in the Declarations.' The declarations page of the policy designated the premises '[a]s described on the liquor license dated Dec. 20, 2004' as the insured premises. That license, in turn, described the premises as '1290 North Shore Road, 2 rooms & kitchen w/storage on 1st floor, 1 room w/kitchen on 2nd floor. 2 entrances & exits at either end of premises & 2 exits in rear of building.' Neither the policy nor the license referred to the adjacent parking lot.
Rossi sent a G. L. c. 93A demand letter to Wonderland on January 27, 2006. Wonderland forwarded the letter to LLJUAM. On February 10, 2006, LLJUAM responded. Referring to an investigation conducted following a prior notice of claim which revealed that the altercation took place in the adjacent MBTA parking lot, not inside the nightclub, LLJUAM advised Wonderland that no coverage existed under the policy.
This prior notice of claim does not appear in the record.
Rossi filed suit against Wonderland in June, 2006. With leave from the judge, Wonderland filed a third-party complaint against LLJUAM in February, 2007, seeking a declaratory judgment that Rossi's suit fell within LLJUAM's duties to defend and indemnify and for damages arising out of LLJUAM's disclaimer of coverage.
After discovery, both LLJUAM and Wonderland moved for summary judgment on the third-party claim. In a thoughtful, thorough memorandum of decision, the judge allowed LLJUAM's motion and denied Wonderland's. The judge observed that the policy limited the scope of liability coverage arising out of assault and battery claims against Wonderland to events that occur 'at the insured premises' and that the policy unambiguously defined the 'insured premises' to include only the nightclub itself. Therefore, he reasoned, the policy unambiguously excluded claims arising out of assaults and batteries occurring outside the nightclub from coverage because they did not take place 'at the insured premises.'
2. Standard of review. We review the grant of summary judgment de novo. Miller v. Cotter, 448 Mass. 671, 676 (2007). The standard is familiar. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991); Mass.R.Civ.P. 56, as amended, 436 Mass. 1404 (2002).
We determine an insurer's duty to defend an insured under a policy by looking to the complaint's allegations and any other facts known by the insurer. Desrosiers v. Royal Ins. Co., 393 Mass. 37, 40 (1984). If the allegations in the complaint and other extrinsic facts are 'reasonably susceptible of an interpretation that they state or adumbrate a claim covered by the policy terms,' the duty to defend arises. Continental Cas. Co. v. Gilbane Bldg. Co., 391 Mass 143, 146 (1984) (internal quotation omitted).
3. Discussion. We agree with the judge that the unambiguous language of the policy excludes coverage for liability arising out of an assault and battery that took place in the MBTA parking lot adjacent to the nightclub.
'The interpretation of an insurance contract is no different from the interpretation of any other contract, and we must construe the words of the policy in their usual and ordinary sense.' Hakim v. Massachusetts Insurers' Insolvency Fund, 424 Mass. 275, 280 (1997). 'The term 'insured location' and [any] accompanying reference . . . is circumscribed by an obvious and necessary geographic limitation.' Massachusetts Property Ins. Underwriting Assn. v. Wynn, 60 Mass. App. Ct. 824, 829 (2004). Here, the policy's definition of 'insured premises' incorporated by reference the liquor license's description of the location where the nightclub was permitted to store and dispense alcoholic beverages. As a result, the policy spatially limited the 'insured premises' to the specific area defined by the license.
In order to expand insurance coverage beyond the obvious spatial limits of the 'insured premises,' a policy must include language contemplating more expansive coverage. See id. at 829-830 & n.7 (interpreting policy which covered '[a]ny premises used . . . in connection with [the residence premises],' however no coverage for episode at issue) (emphasis added). Compare Utica Mut. Ins. Co. v. Fontneau, 70 Mass. App. Ct. 553, 555 (2007) (construing 'in connection with' language in a different context and finding coverage). Because the policy here contained no language that expanded coverage beyond 'the insured premises,' the policy was unambiguous in excluding coverage for liability arising out of events that took place beyond the 'insured premises' as defined by the policy: the premises described in the liquor license.
We are not persuaded by Wonderland's arguments that this interpretation runs contrary to its reasonable expectations of coverage or impermissibly construes an ambiguity against the insured. Reasonable expectations yield to the plain language of the policy. Finn v. National Union Fire Ins. Co. of Pittsburgh, Pa., 452 Mass. 690, 697-698 (2008). 'Nor is ambiguity created simply because a controversy exists between the parties, each favoring an interpretation contrary to the other.' Wynn, 60 Mass. App. Ct. at 827, quoting from Citation Ins. Co. v. Gomez, 426 Mass. 379, 381 (1998).
Wonderland argues, for the first time on appeal, that facts suggesting that the altercation began inside the nightclub preclude summary judgment because they create a genuine issue of material fact as to whether the altercation falls within the policy coverage. Wonderland did not present this argument to the motion judge. The argument is therefore waived. See Cariglia v. Bar Counsel, 442 Mass. 372, 379 (2004).
Accordingly, we agree with the judge that the policy did not provide coverage to Wonderland for liability based on Rossi's underlying claim and that LLJUAM had no duty to defend or indemnify Wonderland. As a result, because LLJUAM properly denied coverage, no issues remained for jury consideration on Wonderland's breach of contract and G. L. c. 93A claims. Summary judgment was proper.
Judgment affirmed.
By the Court (Mills, Sikora & Rubin, JJ.),