Maine Mutual Fire Insurance Co. v. Tinker

Maine Mutual Fire Insurance Co. v. Tinker (2003-562); 178 Vt. 522;
872 A.2d 360

2005 VT 35

[Filed 16-Mar-2005]

                                 ENTRY ORDER

                                 2005 VT 35

                      SUPREME COURT DOCKET NO. 2003-562

                            OCTOBER TERM, 2004

  Maine Mutual Fire Insurance Company  }	APPEALED FROM:
                                       }
                                       }
       v.	                       }	Rutland Superior Court
                                       }	
  Robert Tinker and John Charles Fedor }
                                       }	DOCKET NO. 530-0-01

                                                Trial Judge: Richard W. Norton

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Maine Mutual Fire Insurance Company appeals from a superior
  court order concluding that it has an affirmative duty to provide counsel
  and liability coverage to Robert Tinker in a suit arising from his actions
  as a professional surveyor.  Maine Mutual contends that the court erred in
  refusing to decide the coverage issues as a matter of law, and,
  alternatively, in failing to submit several issues to the jury.  We
  conclude that, as a matter of law, the business liability policy excludes
  coverage for damages arising from Tinker's professional services, and
  therefore we reverse the superior court's order denying judgment as a
  matter of law in favor of Maine Mutual.  Given this disposition, we do not
  reach the questions regarding the issues submitted to the jury.

       ¶  2.  In late 1999, Wayne and Timothy Kenney retained Tinker to
  survey a boundary line on property they were considering buying from
  Laurence and Barbara Schuvert.  The Kenneys were particularly interested in
  resolving the ownership of a 19.9 acre parcel that the Schuverts' neighbor,
  John Fedor, claimed title to through adverse possession.  Tinker concluded
  that the parcel in fact belonged to the Schuverts, and he then went on to
  the property and cut trees and altered the existing boundary markers.  In
  April of 2001, Fedor filed suit against Tinker, the Kenneys, and others
  alleging that Tinker's actions damaged Fedor's property and called his
  title into question.
   
       ¶  3.  Tinker asked Maine Mutual to defend and indemnify him
  pursuant to a business owner's liability policy he purchased from an agent
  in Vermont.   Maine Mutual provided an initial defense, but immediately
  sought a declaratory judgment absolving it of the duty to defend and
  indemnify.  Tinker sought a jury trial on the issue, and the superior court
  set a trial date in September  2003.  On the morning of trial, Maine Mutual
  moved the court for judgment as a matter of law based on a clause in
  Tinker's policy excluding coverage for " '[b]odily injury,'' property
  damage,''personal injury' or 'advertising injury' due to rendering or
  fail[ing] to render any professional service."  (Emphasis added).  In
  support of its motion, Maine Mutual presented Tinker's deposition
  testimony, in which he conceded that he undertook all of his actions on the
  disputed property in the course of rendering professional services. 
  Nonetheless, the court rejected Maine Mutual's arguments and submitted the
  case to the jury for a determination of the parties' reasonable coverage
  expectations at the time the parties entered into the insurance contract.

       ¶  4.  At trial, Tinker testified that he had previously
  held a malpractice insurance policy, but had stopped renewing it on the
  belief that he was largely judgment proof because he and his wife jointly
  own the major business assets.  Tinker explained, however, that he then
  purchased the Maine Mutual policy on the understanding that it would cover
  him for damages he might unintentionally inflict on third parties.  He
  expressed the belief that, while his malpractice insurance had protected
  him in the event of a dispute with a paying client, his current business
  liability policy covered suits such as that brought by Fedor. 

       ¶  5.  At the close of evidence, the court indicated that it
  would submit only the question of the parties' reasonable coverage
  expectations to the jury.  Maine Mutual then moved the court to present
  several additional questions to the jury, including whether Tinker's
  actions were an "occurrence" within the policy definition, and whether
  Tinker intentionally damaged the property, thereby precluding coverage. 
  The court found that Maine Mutual had not presented evidence on these
  additional issues, and asked the jury to decide only whether Tinker's
  "expectation of coverage [was] reasonable under these circumstances."  The
  jury answered in the affirmative, and the court entered judgment for
  Tinker.  This appeal followed.

       ¶  6.  We construe a provision of an insurance contract according to
  its terms to determine the parties' intent.  See Hous. Vt. v. Goldsmith &
  Morris, 165 Vt. 428, 430, 685 A.2d 1086, 1088 (1996) (interpreting basic
  contractual provisions as a matter of law).  If we find the terms
  ambiguous, we may admit direct evidence of the parties' intentions at the
  time of formation.  We do not find the exclusionary language at issue in
  this case ambiguous, however, and therefore we review the language of the
  contract de novo "from the perspective of what a reasonably prudent person
  applying for insurance would have understood it to mean."  Towns v. Vt.
  Mut. Ins. Co., 169 Vt. 545, 546, 726 A.2d 65, 67 (1999) (mem.).  Judgment
  as a matter of law is proper when " 'there is no legally sufficient
  evidentiary basis for a reasonable jury to find for [the nonmoving] party.'
  "  Gero v. J.W.J. Realty, 171 Vt. 57, 59, 757 A.2d 475, 476 (2000) (quoting
  V.R.C.P. 50(a)(1)). Given Tinker's deposition testimony, which the trial
  court had available to it when deciding Maine Mutual's pre-trial motion for
  judgment as a matter of law, we cannot agree that sufficient evidence
  existed to submit this case to a jury. 

       ¶  7.  In that deposition, Tinker engaged in the following colloquy:

    Q:   Did you do anything on or about the [disputed property] other
         than in the course of your professional survey services that you
         were rendering to Mr. Kenney?
     
    A:  Could you repeat that?

    Q:  Sure.  The survey work that you were doing here was as part of
        your rendering  professional survey services to Mr. Kenney,
        correct?

    A:   Yes, correct.

    Q:   Did you do anything to [the property] other than in the
         course of the services you were providing to Mr. Kenney?

    A:  No, not that I'm aware of.

       Tinker's answers make it clear that the damages at issue in this case
  arose from his actions as a professional surveyor.  The Maine Mutual policy
  plainly excludes coverage for damages  that results from "rendering or
  fail[ing] to render any professional service," and therefore Tinker could
  not reasonably have expected coverage under these circumstances.

       ¶  8.  Tinker argues, however, that he expected the policy to cover
  him for damages he might inflict on a third party, and that he understood
  the exclusion as precluding only coverage for damages he might cause to his
  paying clients. He further contends that our interpretation of the
  exclusionary language "would negate all coverage under a business liability
  policy when the insured business consisted solely of the rendering of
  professional services."  Tinker's understanding is not a reasonable one,
  however, because the exclusionary language draws no distinction between
  damages caused to paying clients and those done to third parties.  Rather,
  the policy clearly distinguishes between damages that arise from the
  rendering of professional services, and those arising from other
  occurrences.  Contrary to Tinker's contentions, this language does not
  exclude coverage for any and all damages he or his employees might
  cause-for example, it would presumably cover damages arising from a slip
  and fall on business property-but it does not cover damages that result
  from his professional judgments and actions as a surveyor. 

       ¶  9.  Tinker further relies on our decision in Concord General Mutual
  Insurance Co. v. Woods to suggest that we should give great weight to his
  coverage expectations and strictly construe the exclusion in his favor. 
  2003 VT 33, ¶ 13, 175 Vt. 212, 824 A.2d 572.  In particular, Tinker calls
  attention to the following language: "The reasonable expectations of the
  parties are important in considering the scope of coverage provided in
  insurance contracts because such contracts, largely adhesive in nature,
  often contain boilerplate terms that are not bargained for, not read, and
  not understood by the insureds."  Id. (quotations omitted) (emphasis
  added).  This language only underscores the point, however, that the
  insured's coverage expectations must be reasonable, otherwise a willfully
  ignorant policy holder might claim coverage for all manner of explicitly
  excluded damages.  Here, Tinker was well aware of the coverage that
  professional liability insurance could provide, and he chose to drop that
  coverage in the belief that he was judgment proof.  It is unreasonable to
  then expect a business liability policy - adhesive or not - to provide
  coverage for damages arising from actions he undertook based on judgments
  he made as a professional surveyor when the policy explicitly excludes
  coverage for professional services.  Concord General, therefore, lends
  nothing to Tinker's cause.
    
       ¶ 10.  A trial court may grant judgment as a matter of law "at any
  time before submission of the case to the jury, if the [nonmoving] party's
  claim cannot be maintained under controlling law."  Gero, 171 Vt. at 59,
  757 A.2d  at 476 (quotations and citations omitted); accord V.R.C.P. 50(a). 
  Here, Tinker does not dispute that the damages for which he seeks coverage
  arose from his rendering of professional services, and his policy clearly
  and unambiguously excludes coverage under these circumstances.  It was
  unreasonable, therefore, for him to expect coverage in this case. 
  Accordingly,  there is no legal basis for his claims, and the trial court
  should have entered judgment as a matter of law in favor of Maine Mutual. 
  Given our disposition of this issue, we do not reach the other arguments
  raised on appeal.

       Reversed.


                                       BY THE COURT:



                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Paul L. Reiber, Associate Justice

                                       _______________________________________
                                       Frederic W. Allen, Chief Justice (Ret.),
                                       Specially Assigned