Motorists Commercial Mut. Ins. Co. v. Hartwell

549 F.Supp.3d 220

MOTORISTS COMMERCIAL MUTUAL INSURANCE COMPANY, Plaintiff,

v.Roger HARTWELL, et al., Defendants.

Case No. 19-cv-11176-DJC

United States District Court, D. Massachusetts.

Filed July 20, 2021

Ben N. Dunlap, Nancy M. Reimer, Freeman Mathis & Gary, LLP, Boston, MA, Jared Clapper, Pro Hac Vice, Clyde & Co. US LLP, Chicago, IL, John R. Gerstein, Pro Hac Vice, Patrick F. Hofer, Clyde & Co. US LLP, Washington, DC, for Plaintiff.

Louis J. Muggeo, Salem, MA, for Defendants Roger Hartwell, Lynnway Auto Auction.

J. Michael Conley, Kenney & Conley, P.C., Braintree, MA, for Defendant Ruben D. Espaillat.

Paul N. Barbadoro, Susan M. Molinari, Baker, Braverman & Barbadoro, P.C., Braintree, MA, for Defendant Tammy L. Berio.

Michael M. D'Isola, Law Offices of Jeffrey S. Glassman, LLC, Boston, MA, for Defendant Giovanni Santiago.

Timothy C. Kelleher, III, Jones Kelleher LLP, Boston, MA, for Defendants Kenneth Vincent, Maureen Vincent.

Michael S. Lalikos, Lalikos & Lalikos, Peabody, MA, for Defendant Steven Sarkis.

Reza Breakstone, Breakstone, White & Gluck, P.C., Boston, MA, for Defendant Sandra Ortiz.

Steven T. Snow, Law Offices of Steven T. Snow, Mashpee, MA, for Defendant Flavio Januario.

MEMORANDUM AND ORDER

CASPER, United States District Judge

I. Introduction

Plaintiff Motorists Commercial Mutual Insurance Company ("Motorists") filed this lawsuit against Defendants Roger Hartwell ("Hartwell"), Lynnway Auto Auction Company ("Lynnway"), Safety Insurance Company ("Safety"), and the individual Defendants, including Ruben D. Espaillat as Personal Representative of the Estate of Ruben Dario Espaillat, Tammy L. Berio as Personal Representative of the Estate of Elliott Rowlands, Jr., Giovanni Santiago, Steven Sarkis, Kenneth and Maureen Vincent, Sandra Ortiz as Personal Representative of the Estate of Leezandra Aponte, Flavio Januario, Bresmil Robles and Fanny Ramirez, Mark Lee, Shirley Meza Lopez as Personal Representative of the Estate of Brenda Lopez, and Emelly Colon-Santos and Edris M. Santos as Personal Representatives of the Estate of Pantaleon Santos (the "Victim-Defendants"), seeking declaratory judgment under its Commercial Business Insurance Policy No. 6-2360896 (the "Policy") in connection with all civil suits brought in the Middlesex Superior Court (the "Underlying Suits"). D. 65. Defendants and Victim-Defendants have moved for summary judgment as to Motorists’ duty to defend, D. 101; D. 79, 102. Motorists has filed a cross motion for summary judgment as to its duty to defend or indemnify Lynnway or Hartwell, D. 106. For the reasons discussed below, the Court ALLOWS Motorists’ motion for summary judgment, D. 106, and DENIES Defendants’ motions for summary judgment, D. 101; D. 79, 102.

II. Standard of Review

The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "A fact is material if it carries with it the potential to affect the outcome of the suit under applicable law."

Santiago–Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000) ; see Celotex v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in its pleadings, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), but must come forward with specific admissible facts showing that there is a genuine issue for trial. Borges ex rel. S.M.B.W. v. Serrano–Isern, 605 F.3d 1, 5 (1st Cir. 2010). The Court "view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009).

III. Factual Background

Unless otherwise noted, the following facts are undisputed. The following facts are drawn from Motorists’ statement of undisputed material facts, D. 108, Defendants’ statement of undisputed material facts, D. 81; D. 101-2, each party's response to the same, D. 116-1; D. 112; D. 121, the documents attached thereto, and Motorists’ Primary and Umbrella Policies, D. 65-1; D. 65-2.

A. The Policy

Motorists, Nashua Automotive, Inc.’s ("Nashua") insurance company, issued a liability policy ("Motorists’ Primary Policy") to AutoFair that included a Garage Coverage Form (the "Garage Form"). D. 108 ¶ 1. Under Motorists’ Primary Policy, subject to the Policy's terms, conditions and exclusions, Motorists agreed to pay "all sums an ‘insured’ must pay as damages because of ‘bodily injury’ ... caused by an ‘accident’ and resulting from ‘garage operations’ involving the ownership, maintenance or use of covered ‘autos.’ " D. 101-1 at 26; D. 108 ¶ 6. The Motorists’ Primary Policy defines "garage operations" as:

the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations. ‘Garage operations’ includes the ownership, maintenance or use of the ‘autos’ indicated in Section I of this Coverage Form as covered "autos" [i.e., "Any Auto"]. ‘Garage operations’ also include all operations necessary or incidental to a garage business.

D. 101-1 at 27. The Primary Policy covers, under "Who Is An Insured," "[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow except: (c) [s]omeone using a covered ‘auto’ while he or she is working in a business of selling, servicing or repairing ‘autos’ unless that business is your ‘garage operations.’ " D. 65-1 at 26. An endorsement to the Motorists Primary Policy, entitled the New Hampshire Changes in Policy (the "New Hampshire Endorsement") removes this definition of "Who Is An Insured," see D. 101-1 at 26, and states that "[f]or a covered ‘auto’ licensed or principally garaged in, or ‘garage operations’ conducted in, New Hampshire, this endorsement modifies insurance provided under the following: [Garage Coverage Form]." D. 101-1 at 28. The updated definition provides that individuals who use a covered auto that the insured owns, hires or borrows, with the insured's permission, are covered unless the individual is "[s]omeone using a covered ‘auto’ while he or she is working in a business of selling, servicing or repairing ‘autos’ unless that business is yours." Id. at 28-29.

The New Hampshire Endorsement also adds a Suspended License Exclusion excluding coverage for:

[a]ny ‘insured’ for ‘bodily injury’ or ‘property damage’ arising out of the operation of any vehicle by that ‘insured’ and while that ‘insured's’ driver's license is under suspension or revocation.

This exclusion applies except for two conditions not relevant here. Id. at 29. Motorists issued a Commercial Liability Umbrella Policy, No. 6-2362491 (the "Umbrella Policy"), to Tewksbury Automotive LLC and included as a named insured Nashua and AutoFair. D. 65 ¶ 53; D. 65-2. The Umbrella Policy provides that Motorists "will pay on behalf of the insured the ‘ultimate net loss’ in excess of the ‘applicable underlying limit’ which the insured becomes legally obligated to pay as damages because of ‘bodily injury,’ ‘property damage,’ ‘personal injury’ or ‘advertising injury’ to which this insurance applies." D. 65-2 at 9. It does not provide coverage for the "the ownership, maintenance, operation, use, loading or unloading of any automobile while away from premises owned by, rented to, or controlled by" the insured, "[e]xcept as coverage is available to [the insured] in the underlying policies as set forth in the Schedule of Underlying Insurance." Id. at 22. The Umbrella Policy additionally provides that an insured does not include:

(a) Any person employed by or engaged in the duties of an auto sales agency, repair shop, service station, storage garage or public parking place that you do not operate.

Id. at 13.

B. The Underlying Lawsuits

AutoFair is a conglomerate of auto dealerships that includes Nashua's Volkswagen dealership. D. 108 ¶¶ 23-24; D. 116-1 ¶¶ 23-24. Nashua's Volkswagen dealership is located in Nashua, New Hampshire and sells autos through multiple auction businesses, including Auto Auction of New England, "Southern" and Lynnway. D. 108 ¶¶ 30, 79; D. 116-1 ¶ 30, 79. Lynnway is an auto auction facility owned by Jim Lamb ("Lamb") and George Russo ("Russo"). D. 108 ¶¶ 33, 47; D. 116-1 ¶¶ 33, 47. Its customers include several auto dealerships, including Nashua. D. 108 ¶ 35; D. 116-1 ¶ 35. When hired, Lynnway subcontracts a transportation company to pick up autos from the AutoFair dealer and transports the autos to Lynnway's auction facility, where Lynnway then hires independent contractors to clean and provide detail servicing for the vehicles. D. 108 ¶¶ 36-37; D. 116-1 ¶¶ 36-37. Lynnway does not own Nashua nor does Nashua's several affiliated companies have an ownership interest in Lynnway. D. 108 ¶¶ 49-52; D. 116-1 ¶¶ 49-52.

In April 2017, Nashua accepted a 2006 Jeep Grand Cherokee (the "auto") in exchange for a new vehicle at Nashua's auto dealership. D. 108 ¶ 79; D. 116-1 ¶ 79. On May 3, 2017, Hartwell, a driver employed by Lynnway, was seated inside the Jeep at the Lynnway auction facility. D. 108 ¶¶ 81-83; D. 116-1 ¶¶ 81-83. Hartwell was a Lynnway employee tasked with driving vehicles on Lynnway's property in an auction lane. D. 108 ¶¶ 38, 81-83; D. 116-1 ¶¶ 38, 81-83. According to Harwell, while he was seated inside the Jeep, the Jeep accelerated uncontrollably into the crowd, striking and injuring several individuals. D. 108 ¶¶ 82-83; D. 116-1 ¶¶ 82-83; D. 65 ¶ 32. On the day of the accident, Hartwell received a letter from the Registry of Motor Vehicles ("RMV") stating that "effective 05/03/17, [his] license / right to operate a motor vehicle is revoked for an indefinite period for immediate threat," due to the accident. D....