Liberty Mutual Fire v. Massarone ( 2003 )

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   /LEHUW\0XWXDO)LUH,QVY0DVVDURQH 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS %$.(5 .5,= s(1.,16  35(:,77 /H[LQJWRQ .HQWXFN\IRU$SSHOOHH21%5,()7KRPDV.+HUUHQ 81,7('67$7(6&28572)$33($/6 &KDUOHV & $GDPV sU +(55(1  $'$06 /H[LQJWRQ .HQWXFN\IRU$SSHOODQW%DUEDUD$.UL]%$.(5.5,= )257+(6,;7+&,5&8,7 s(1.,16 35(:,77/H[LQJWRQ.HQWXFN\IRU$SSHOOHH BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB /,%(57< 0878$/ ),5( ; 23,1,21  BBBBBBBBBBBBBBBBB ,1685$1&( &203$1< 3ODLQWLII$SSHOOHH  ) $ /,77/( s5 'LVWULFW sXGJH  $SSHOOHH /LEHUW\  1R 0XWXDO )LUH ,QVXUDQFH &RPSDQ\ VRXJKW D GHFODUDWRU\  MXGJPHQWWRGHWHUPLQHLILWVGHQLDORIDSSHOODQW&KDUOHV7 Y !  0DVVDURQHjV XQGHULQVXUHG PRWRULVW FRYHUDJH FODLP ZDV LQ  HUURU  2Q WKDW LVVXH WKH GLVWULFW FRXUW JUDQWHG VXPPDU\ &+$5/(6 7 0$66$521(  MXGJPHQW LQ IDYRU RI /LEHUW\ 0XWXDO  )URP WKDW GHFLVLRQ 'HIHQGDQW$SSHOODQW  0DVVDURQHDSSHDOV)RUWKHUHDVRQVWKDWIROORZZH$)),50  WKHGLVWULFWFRXUWjVGLUHFWLYH 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW ,%$&.*5281' 352&('85$/+,6725< IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/H[LQJWRQ 1Rn+HQU\5:LOKRLWsU'LVWULFWsXGJH 7KHHVVHQWLDOIDFWVDUHODUJHO\XQGLVSXWHGDVLVXVXDOLQD VXFFHVVIXO VXPPDU\ MXGJPHQW ILOLQJ  /LEHUW\ 0XWXDO D $UJXHG$XJXVW FRPSDQ\RUJDQL]HGDQGLQFRUSRUDWHGXQGHUWKHODZVRIWKH &RPPRQZHDOWK RI 0DVVDFKXVHWWV SURYLGHG XQGHULQVXUHG 'HFLGHGDQG)LOHG$SULO PRWRULVWm8,0lFRYHUDJHWR0DVVDURQH7KHSROLF\ZDV LVVXHG LQ .HQWXFN\ ZKLFK LV DOVR WKH VWDWH RI GRPLFLOH RI %HIRUH68+5+(,15,&+DQG%$7&+(/'(5&LUFXLW 0DVVDURQH,QsDQXDU\RI0DVVDURQHZDVLQYROYHGLQ sXGJHV/,77/('LVWULFWsXGJH  DQDXWRPRELOHDFFLGHQWZLWK0U:UHVQH\*LOOLQ/H[LQJWRQ .HQWXFN\*LOODQGKLVLQVXUHU6WDWH)DUPRIIHUHGWRVHWWOH BBBBBBBBBBBBBBBBB ZLWK0DVVDURQHIRU6WDWH)DUPjVSROLF\OLPLWRI &2816(/ 3ULRU WR LFLQJ WKH VHWWOHPHQW ZLWK *LOO DQG 6WDWH )DUP FRXQVHOIRU0DVVDURQHVHQWDOHWWHUE\ILUVWFODVVPDLORQ $5*8('  7KRPDV . +HUUHQ +(55(1  $'$06 )HEUXDU\WR/LEHUW\0XWXDOJLYLQJWKDWFRPSDQ\QRWLFH /H[LQJWRQ .HQWXFN\ IRU $SSHOODQW  %DUEDUD $ .UL] RI0DVVDURQHjVLQWHQGHGVHWWOHPHQWZLWKWKHPDOHIDFWRUDQG KLVLQVXUDQFHFDUULHU$SSUR[LPDWHO\RQHPRQWKODWHUKDYLQJ KDGQRUHVSRQVHIURP/LEHUW\0XWXDO0DVVDURQHDFFHSWHGWKH VHWWOHPHQWRIIHUIURP*LOODQG6WDWH)DUP 7KH +RQRUDEOH ) $ /LWWOH sU 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI /RXLVLDQD VLWWLQJ E\ GHVLJQDWLRQ  1R /LEHUW\0XWXDO)LUH,QVY0DVVDURQH   /LEHUW\0XWXDO)LUH,QVY0DVVDURQH 1R $FFRPSDQ\LQJ 6WDWH )DUPjV FKHFN IRU  ZHUH VKRXOGEHJUDQWHGZKHQmWKHSOHDGLQJVGHSRVLWLRQVDQVZHUV VHWWOHPHQW GRFXPHQWV WKDW UHOHDVHG WKH LQVXUDQFH FRPSDQ\ WRLQWHUURJDWRULHVDQGDGPLVVLRQVRQILOHWRJHWKHUZLWKWKH DQGWKHLQVXUHGIURPIXUWKHUFODLPVE\0DVVDURQH7KHFKHFN DIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\ ZDV HQGRUVHG E\ WKH SD\HHV DQG GHSRVLWHG LQWR WKH WUXVW PDWHULDO IDFW DQG WKDW WKH PRYLQJ SDUW\ LV HQWLWOHG WR D DFFRXQWRIWKHDWWRUQH\IRU0DVVDURQH%HIRUHUHWXUQLQJWKH MXGJPHQWDVDPDWWHURIODZl)HG5&LY3F&HORWH[Y VHWWOHPHQW GRFXPHQWV WR 6WDWH )DUP KRZHYHU FRXQVHO IRU &DWUHWW  86    $QGHUVRQ Y /LEHUW\ 0DVVDURQHLQVHUWHGVHYHUDOHPHQGDWLRQVWRWKHGRFXPHQWV /REE\,QF86$GLVSXWHDERXWD 7KHVH FRUUHFWLRQV ZHUH LQWHQGHG WR HOLPLQDWH ODQJXDJH PDWHULDOIDFWLVJHQXLQHLIWKHHYLGHQFHZRXOGDOORZDMXU\WR UHOHDVLQJRWKHUSHUVRQVZKRPLJKWEHOLDEOHWR0DVVDURQHDQG UHWXUQ D YHUGLFW IRU WKH QRQPRYLQJ SDUW\  $QGHUVRQ  WRUHVHUYH0DVVDURQHjVULJKWVDQGFODLPVDJDLQVWXQGHULQVXUHG 86DW7RVXUYLYHDPRWLRQIRUVXPPDU\MXGJPHQWWKH PRWRULVWFDUULHUV QRQPRYLQJSDUW\PXVWSUHVHQWHYLGHQFHFUHDWLQJPRUHWKDQ DmPHWDSK\VLFDOGRXEWDVWRWKHPDWHULDOIDFWVl0DWVXVKLWD 0DVVDURQHWKHQLQLWLDWHGDFODLPDJDLQVW/LEHUW\0XWXDOIRU (OHF,QGXV&RY=HQLWK5DGLR&RUS86 EHQHILWV DFFRUGHG WR KLP DV SURYLGHG LQ WKH XQGHULQVXUHG 7KHQRQPRYLQJSDUW\PXVWSUHVHQWmµVSHFLILFIDFWV PRWRULVW SURYLVLRQ RI KLV SROLF\  /LEHUW\ 0XWXDO GHQLHG VKRZLQJWKHUHLVDJHQXLQHLVVXHIRUWULDOjl,GDWFLWLQJ UHFHLSWRIWKHQRWLFHRI0DVVDURQHjVLQWHQGHGVHWWOHPHQWZLWK )HG5&LY3 H  7KXV VXPPDU\ MXGJPHQW PD\ EH *LOO DQG 6WDWH )DUP DQG UHMHFWHG WKH FODLP DVVHUWLQJ WKDW JUDQWHGZKHQmDSDUW\ZKRKDVWKHEXUGHQRISURRIDWWULDO QRWLFHRIVXFKDVHWWOHPHQWZDVUHTXLUHGE\WKHSURYLVLRQVRI IDLOVWRPDNHDVKRZLQJVXIILFLHQWWRHVWDEOLVKWKHH[LVWHQFHRI WKHXQGHULQVXUHGSROLF\DQGE\.HQWXFN\ODZ)DFHGZLWK DQHOHPHQWWKDWLVHVVHQWLDOWRWKDWSDUW\jVFDVHl+RZDUGY /LEHUW\jV UHMHFWLRQ RI WKH FODLP 0DVVDURQHjV DWWRUQH\ &LW\RI%HDYHUFUHHN)GWK&LU DWWHPSWHGWRXQZLQGWKHVHWWOHPHQWZLWK*LOODQG6WDWH)DUP :KHQWKDWDFWLRQSURYHGXQZRUNDEOH0DVVDURQHFRQWLQXHG ,,,$1$/<6,6 WRSUHVVKLVXQGHULQVXUHGFODLPZLWK/LEHUW\0XWXDO :HILQGQRHYLGHQFHRIDGLVSXWHDVWRDQHVVHQWLDOIDFW $V D UHVXOW /LEHUW\ 0XWXDO SURYRNHG D GHFODUDWRU\ 7KLVPDWWHULVULSHIRUVXPPDU\MXGJPHQWGHWHUPLQDWLRQE\ MXGJPHQWSXUVXDQWWRWKH)HGHUDO'HFODUDWRU\sXGJPHQW$FW DSSOLFDWLRQRIWKHVXEVWDQWLYHODZRIWKH&RPPRQZHDOWKRI 86&†7KH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH .HQWXF\WKHVWDWHLQZKLFKWKHSROLF\ZDVGHOLYHUHGWKHVWDWH (DVWHUQ'LVWULFWRI.HQWXFN\HQWHUHGVXPPDU\MXGJHPHQWRQ ZKHUHWKHDFFLGHQWRFFXUUHGDQGWKHVWDWHRIGRPLFLOHRIWKH EHKDOI RI /LEHUW\ 0XWXDO  /LEHUW\ 0XWXDO ,QV &R Y GHIHQGDQW(ULH5DLOURDG&RY7RPSNLQV86 0DVVDURQH 1R  (' .\ )HE    7KLV  DSSHDOZDVWLPHO\ILOHG6XEMHFWPDWWHUMXULVGLFWLRQLVEDVHG XSRQGLYHUVLW\RIFLWL]HQVKLSRIWKHSDUWLHV7KHDPRXQWLQ 7KHUHLVQRHYLGHQFHWKDW/LEHUW\0XWXDOUHFHLYHGQRWLFHRI FRQWURYHUV\ H[FHHGV  DV UHTXLUHG XQGHU  86& 0DVVDURQHjVLQWHQGHGVHWWOHPHQWZLWKWKHHUUDQWGULYHURUKLV †D LQVXUDQFH FRPSDQ\  5HFHLSW RI QRWLFH E\ WKH LQVXUDQFH FRPSDQ\RILWVSROLF\KROGHUjVLQWHQGHGVHWWOHPHQWZLWKWKH ,,67$1'$5'2)5(9,(: WRUWIHDVRULVDVLQHTXDQRQWRDFODLPIRUEHQHILWVXQGHUWKH XQGHULQVXUHGSURYLVLRQVRIWKHSROLF\6RVD\V.HQWXFN\ODZ /LEHUW\j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jVUHVHUYDWLRQRIULJKWVDJDLQVW/LEHUW\0XWXDOLQ PRWRULVWLQVXUHUWKHQKDVDSHULRGRIWKLUW\GD\VWR WKH UHOHDVH GRFXPHQW VHQW WR 6WDWH )DUP WKH WRUWIHDVRUjV FRQVHQW WR WKH VHWWOHPHQW RU UHWHQWLRQ RI VXEURJDWLRQ OLDELOLW\LQVXUDQFHFDUULHULVRIQRPRPHQW2QFH*LOODQG ULJKWV$QLQMXUHGSHUVRQPD\DJUHHWRVHWWOHDFODLP 6WDWH)DUPZHUHUHOHDVHG/LEHUW\0XWXDOjVVXEURJDWLRQULJKWV ZLWKDOLDELOLW\LQVXUHUDQGLWVLQVXUHGIRUOHVVWKDQWKH ZHUHH[WLQJXLVKHG7KHRSLQLRQLQ&RRWVGLVFXVVHGWKLVLVVXH XQGHULQVXUHGPRWRULVWjVIXOOOLDELOLW\SROLF\OLPLWV,IDQ DQGFRQFOXGHGWKDWWKHQRWLFHUHTXLUHPHQWLVQRWVDWLVILHGE\ XQGHULQVXUHGPRWRULVWLQVXUHUFRQVHQWVWRVHWWOHPHQWRU D UHVHUYDWLRQ LQ WKH UHOHDVH RI WKH WRUWIHDVRU RI WKH LQMXUHG IDLOVWRUHVSRQGWRWKHVHWWOHPHQWUHTXHVWZLWKLQWKH SDUW\jVFODLPVDJDLQVWKLVXQGHULQVXUHGPRWRULVWFDUULHU,G WKLUW\GD\SHULRGWKHLQMXUHGSDUW\PD\SURFHHGWR DW   5LVNLQJ UHSHWLWLYHQHVV RQFH WKH ZURQJGRHU LV H[HFXWH D IXOO UHOHDVH LQ IDYRU RI WKH XQGHULQVXUHG UHOHDVHGZLWKRXWUHVWULFWLRQDQXQGHULQVXUHGPRWRULVWFDUULHUjV PRWRULVWjVOLDELOLW\LQVXUHUDQGLWVLQVXUHGDQGILQDOL]HWKH VXEURJDWLRQ ULJKWV DUH SUHMXGLFHG  6HH :LQH Y *OREH SURSRVHG VHWWOHPHQW ZLWKRXW SUHMXGLFH WR DQ\ $PHULFDQ&DVXDOW\&R6:G.\ XQGHULQVXUHGPRWRULVWFODLP /LEHUW\ 0XWXDO FRUUHFWO\ GHQLHG 0DVVDURQHjV XQGHULQVXUHG PRWRULVWFODLP .56†HPSKDVLVDGGHG7KDWVWDWXWHLVDQ RXWJURZWKIURPDQRIWFLWHG.HQWXFN\6XSUHPH&RXUWFDVH ,9&21&/86,21 &RRWVY$OOVWDWH,QVXUDQFH&R6:G.\ ,QLQWHUSUHWLQJWKH.HQWXFN\0RWRU9HKLFOH5HSDUDWLRQV$FW )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHGHFLVLRQRIWKH WKH FRXUW KHOG WKDW mLW GRHV QRW DEURJDWH 8,0 FRYHUDJH WR GLVWULFWFRXUW VHWWOHZLWKWKHWRUWIHDVRUDQGKLVFDUULHUIRUWKHSROLF\OLPLWV LQKLVOLDELOLW\FRYHUDJHVRORQJDVWKH8,0LQVXUHGQRWLILHV KLV8,0FDUULHURIKLVLQWHQWWRGRVRDQGSURYLGHVWKHFDUULHU DQRSSRUWXQLW\WRSURWHFWKLVVXEURJDWLRQl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