When is a Massachusetts’ Insurance Policy Ambiguous? General Legal Principles
1. An insurance contract is to be interpreted “according to the fair and reasonable meaning of the words in which the agreement of the parties is expressed.” Cody v. Connecticut Gen. Life Ins. Co., supra, quoting MacArthur v. Massachusetts Hosp. Serv., Inc., 343 Mass. 670, 672, 180 N.E.2d 449 (1962). Every word in an insurance contract “must be presumed to have been employed with a purpose and must be given meaning and effect whenever practicable.” Jacobs v. United States Fid. & Guar. Co., 417 Mass. 75, 77, 627 N.E.2d 463 (1994), quoting Wrobel v. General Acc. Fire & Life Assur. Corp., 288 Mass. 206, 209–210, 192 N.E. 498 (1934).
Allmerica Financial Corp. v. Certain Underwriters at Lloyd’s, London
Mass. 621 (2007).
2. “[T]he construction of an insurance policy is a question of law ….” Lind-Hernández v. Hosp. Episcopal San Lucas Guayama, 898 F.3d 99, 103 (1st Cir. 2018) . “Under Massachusetts law, we construe an insurance policy under the general rules of contract interpretation, beginning with the actual language of the policies, given its plain and ordinary meaning.” AIG Prop. Cas. Co. v. Cosby, 892 F.3d 25, 27 (1st Cir. 2018). “The responsibility of construing the language of an insurance contract is a question of law for the trial judge, and then for the reviewing court.” Cody v. Conn. Gen. Life Ins. Co., 387 Mass. 142, 439 N.E.2d 234, 237 (1982). We thus must independently determine the construction of the policy. In this inquiry, “doubts about ambiguous insurance policy provisions are to be resolved against the insurance company.” J. D’Amico, Inc. v. City of Boston, 345 Mass. 218, 186 N.E.2d 716, 721 (1962). But when the policy is “plain and free from ambiguity, we do not … construe them strictly against the insurer. Rather, we must construe the words of the policy in their usual and ordinary sense.” Barnstable County Mut. Fire Ins. Co. v. Lally, 374 Mass. 602, 373 N.E.2d 966, 968 (1978).
- As a general matter, in Massachusetts, the insured bears the “initial burden of showing that the case involves a generally covered risk under the policy.” Stor/Gard, Inc. v. Strathmore Ins. Co., 717 F.3d 242, 247 (1st Cir. 2013). Where, as is here, the parties do not dispute that the incident was a generally covered risk, the burden shifts such that the insurer must demonstrate that an exclusion precludes coverage. Clark Sch. for Creative Learning, Inc. v. Phila. Indem. Ins. Co., 734 F.3d 51, 55 & n.1 (1st Cir. 2013). “And if the insurer satisfies that burden, the burden shifts back to the insureds to show an exception to the exclusion holds sway.” Stor/Gard, Inc., 717 F.3d at 247.
- Where “a term is ‘susceptible of more than one meaning and reasonably intelligent persons would differ as to which meaning is the proper one,’ the term is ambiguous.” U.S. Liab. Ins. Co. v. Benchmark Constr. Servs., Inc., 797 F.3d 116, 119-20 (1st Cir. 2015) (quoting Citation Ins. Co. v. Gomez, 426 Mass. 379, 381, 688 N.E.2d 951 (1998) ). To the extent an ambiguity does exist, it is strictly construed against the insurer. See Metro. Prop. & Cas. Ins. Co. v. Morrison, 460 Mass. 352, 362-63, 951 N.E.2d 662 (2011).
- It is also a principle of Massachusetts law that “[m]ore specific contract terms ordinarily control over more general contract terms.” Davis v. Dawson, Inc., 15 F.Supp.2d 64, 109 (D. Mass. 1998) (citing Lawson v. Fed. Deposit Ins. Corp., 3 F.3d 11, 17 (1st Cir. 1993) ). Therefore, if a policy provision is found to provide for coverage, then general exclusion clauses are inapplicable. See id.
- In construing contracts courts often look to dictionaries for assistance in determining ordinary meaning. See, e.g., Norfolk S. Ry. v. James N. Kirby, 543 U.S. 14, –––– – ––––, 125 S.Ct. 385, 397–98, 160 L.Ed.2d 283 (2004). Reference to dictionaries in interpreting contracts of insurance is appropriate. Aschenbrenner v. U.S. Fid. & Guar. Co., 292 U.S. 80, 85, 54 S.Ct. 590, 78 L.Ed. 1137 (1934). In particular, Massachusetts courts refer to dictionaries in interpreting insurance contracts. Ellery v. Merchs.’ Ins. Co., 20 Mass. (3 Pick.) 46, 48 (1825) (using dictionary to define “bilging” in insurance contract).
See Federal Ins. Co. v. Raytheon Co. 426 F.3d 491 (1st Cir. 2005) (use of dictionary to evaluate the meaning of the word “based”)