Continental Western Ins. Co. v. Mass. Bay Ins. Co.

\r)
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
DOCKET NO. CV-20-282
CONTINENT AL WESTERN )
INSURANCE COMPANY )
)
Plaintiff ) ORDER
v. )
)
MASSACHUSETTS BAY ) REC'D •::UMB CLERKS OF
INSURANCE COMPANY, ) OCT 21 '21 PM2:<l2
)
Defendant )
)

Before the court is a motion by plaintiff Continental Western Insurance Co. ("Continental

Western") for partial summary judgment. Specifically, Continental Western seeks summary

judgment on Counts I and III of its complaint. For the following reasons, summary judgment is

granted on both counts.

With the record to be considered in the light most favorable to the non-moving party, a

motion for summary judgment shall be granted if the filings show no genuine issue of material fact

and support entry of judgment as a matter of law. M.R. Civ. P. 56(c); Mahar v. Stone Wood

Transp., 2003 ME 63, ~ 8, 823 A.2d 540.

In this case it is undisputed that both Continental Western and defendant Massachusetts

Bay Insurance Company ("Mass Bay"), at varying times, provided commercial liability coverage,

including coverage for property damage, to two insureds, Tra-Mir Properties LLC and Pre go LLC.

Mass Bay provided commercial liability coverage from sometime in 2004 to September 2009.

Continental Western provided commercial liability coverage from mid 2015 to October 2017.

Tra-Mir Properties instituted litigation against Marc Nadeau in York County Superior

Court in September 2017. Tra-Mir Properties LLC v. Nadeau, CV-17-50. Nadeau thereafter
brought a counterclaim against Tra-Mir and Prego (the "insureds") which included claims of

trespass and nuisance. Included in the counterclaim were allegations that the actions of the insureds

and their invitees had resulted in damage to Nadeau's lawn, fence, and drainage system. First

Amended Counterclaim dated September 26, 2017 11~ 25-26, 31-32. 1 Nadeau alleged that the

damage had occurred multiple times every year since 2004. Id. The counterclaim sought various

forms of relief including monetary damages.

There is no dispute that Continental Western tendered the defense of Nadeau's

counterclaim to Mass Bay and requested that Mass Bay reimburse 50% of the defense costs and

that Mass Bay declined to do so.

Count I

In Count I Continental Western seeks a determination that the counterclaims filed by

Nadeau in triggered a duty to defend on the part of Mass Bay.

To determine whether an insurer has a duty to defend, the court compares the allegations

in the underlying pleading (in this case, the amended counterclaim) with the coverage provided in

the insurance policy. Only the complaint and the policy are considered in determining whether the

insurer has a duty to defend. Mitchell v. Allstate ins. Co., 2011 ME 133, ~ 9, 36 A.3d 876. An

insurer may have a duty to defend even against a complaint that could not survive a motion to

dismiss. id. ~ 10.

In this case the summary judgment materials contain both the amended counterclaim and

the Mass Bay policy. Comparing the policy and Nadeau's allegations shows a duty to defend

1Nadeau's trespass claim is captioned "trespass by exceeding the scope of the agreement," referring to an
agreement between Nadeau and the insureds concerning an area used as a parking lot. However,
paragraphs 25-26 and 31-32 of the First Amended Counterclaim allege damage to Nadeau's prope1ty and
do not depend on the existence of the agreement.

2
existed because Nadeau's counterclaim seeks recovery, inter alia, for "property damage" for

which the Mass Bay policy provides coverage.

Mass Bay cites three policy exclusions, but those are insufficient to discharge its duty. The

automobile exclusion does not apply to injury caused by the operation of vehicles by guests, as

opposed to vehicles operated by employees. Neither the impaired property exclusion nor the

contractual exclusion applies to property damage that exists independent of a contract. The other

defenses raised by Mass Bay, such as the statute of limitations and its claim that the insureds are

not liable for the actions of its guests or invitees, are defenses that could have been raised on behalf

of the insureds but do not discharge Mass Bay's duty to defend.

Accordingly, summary judgment is granted as to Count I.

Count III

Count II is a claim for equitable contribution in which Continental Western is seeking

reimbursement from Mass Bay for half of the defense costs incurred on the Nadeau counterclaim.

On this claim Continental Western has not offered any evidence as to the actual amounts sought

and is therefore seeking partial summary judgment only on the issue of Mass Bay's liability for

equitable contribution.

The Mass Bay and Continental Western Policies have virtually identical and therefore

conflicting "excess insurance" clauses. Conflicting excess insurance clauses are "disregarded as

mutually repugnant." Carriers Ins. Co. v. Am. Policyholders' Ins. Co., 404 A.2d 216, 220 (Me.

1979). Where no excess insurance clause is operative, insurers share the cost of loss and/or

defense. Id. at 221-222; Home Ins. Co. v. St. Paul Fire & Marine Ins. Co., 229 F.3d 56, 66 (JS'

Cir. 2000). Defense costs are apportioned equally. Home Ins., 229 F.3d at 66.

3
Because Mass Bay had a duty to defend, it must pay for the defense. Mass Bay points out

that its coverage only applied to the years 2004-09 and that Continental Western's policy covered

a later time period with no overlap. However, the court has no information on which to divide the

costs based on either the time period when the claims allegedly arose or the time period in which

the respective insurance policies were applicable. Mass Bay has not offered any evidence to

support anything other than an equal apportionment or that would raise a factual dispute as to how

the defense costs in connection with the Nadeau counterclaim should be apportioned. 2 Moreover,

the Law Court has not instructed on apportioning costs other than equally. As such, partial

summary judgment on Count III is granted.

Remaining Claims

Counts II and IV of Continental Western's complaint seek indemnification from Mass Bay

for half of the amount paid by the insureds in settlement ofNadeau's counterclaim. Those counts

are not the subject of the pending motion and remain to be decided. The amount that Continental

Western is entitled to receive on Count III of its complaint - its equitable contribution claim with

respect to defense costs - also remains to be determined.

The entry shall be:

The motion by plaintiff Continental Western Insurance Co. for summary judgment as to
Count I and partial summary judgment on Count III is granted. The court issues a declaratory
judgment that defendant Massachusetts Bay Insurance Company had a duty to defend the amended
counterclaim brought in Tra-Mir Properties LLC v. Nadeau, CV-17-50 (Superior Court York
County). The court grants partial summary judgment on Count III that defendant is liable for one­
half of the defense costs incurred with respect to that counterclaim.

2 There appears to have been a time period included in the allegations in Nadeau's counterclaims during

which neither Mass Bay nor Continental Western provided coverage. Mass Bay's coverage ended in
September 2009. Continental Westem's coverage began in October of 2015. Mass Bay has not, however,
raised this issue as a possible reason why defense costs should not be equally appo11ioned.

4
The clerk is directed to incorporate this order in the docket by reference pursuant to M.R.
Civ. P. 79(a).

Dated: October 2-0 , 2021

Thomas D. Wanen
Justice, Superior Court

Plaintiff-Liam McCarthy, Esq ..
Defendant-Elizabeth Germani, Esq.

5