Justia.com Opinion Summary: Mark Cookson purchased two homeowner's insurance policies from Liberty Mutual, one to cover his primary residence in West Newfield and another to cover property in Acton, where he was constructing a house. Cookson would drive his tractor along public roads between the properties. Cookson's tractor was subsequently destroyed by fire. Cookson filed a claim for loss of the tractor, which Liberty Mutual denied based on a personal property exclusion in both policies. Cookson filed a complaint seeking, in part, a declaratory judgment that the Liberty Mutual policies provided coverage for his tractor. The superior court granted summary judgment in favor of Liberty Mutual, concluding that Cookson's policies excluded the tractor from loss coverage. The Supreme Court affirmed, holding (1) Cookson's tractor was not the type of vehicle that fell within the limited exception for "vehicles not subject to motor vehicle registration" to the otherwise broad personal property exclusion of all "motor vehicles or all other motorized land conveyances," and (2) Cookson's tractor was not the type a homeowner would commonly purchase and employ simply to service his or her residence.
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MAINE SUPREME JUDICIAL COURT
Decision:
2012 ME 7
Docket:
Yor-11-184
Argued:
December 12, 2011
Decided:
January 24, 2012
Panel:
Majority:
Dissent:
Reporter of Decisions
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR,
JJ.
SAUFLEY, C.J., and ALEXANDER, LEVY, MEAD, and GORMAN, JJ.
SILVER, and JABAR, JJ.
MARK COOKSON
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY
MEAD, J.
[¶1] Mark Cookson appeals from the judgment of the Superior Court (York
County, Brennan, J.) granting Liberty Mutual Fire Insurance Company’s motion
for summary judgment. Cookson argues that the court erred in concluding that his
homeowner’s insurance policies excluded an item of heavy construction
machinery, his Case 590M tractor, from loss coverage. We affirm the judgment.
I. BACKGROUND
[¶2] The facts of this case were not disputed on summary judgment. In
2004, Mark Cookson purchased a home in West Newfield that served as his
primary residence. In May 2005, Cookson purchased a used Case 590M tractor
with front bucket and backhoe attachments for approximately $27,000.
In
2
December 2005, he was given a parcel of land in Acton where he began
constructing a house the following year.
[¶3] Cookson used his Case 590M to dig, move earth, and remove snow at
both properties. The Case 590M had one seat, the operator’s seat, and could reach
a speed of twenty-five miles per hour. Cookson drove the tractor along public
roads between the West Newfield and Acton properties, an estimated distance of
three to four miles, and to his father’s property, also in Acton. On December 22,
2007, the Case 590M was destroyed by fire while it was parked at his father’s
property.
[¶4]
Cookson purchased a homeowner’s insurance policy from Liberty
Mutual in March 2007 to cover his residence in West Newfield. In June 2007,
Cookson purchased a second homeowner’s insurance policy from Liberty Mutual
to cover the Acton property, where he was constructing a house. The relevant
provisions of both policies are identical. The personal property provisions exclude
“[m]otor vehicles or all other motorized land conveyances” from coverage.
However, there is an exception to the exclusion:
“We do cover vehicles or
conveyances not subject to motor vehicle registration which are: a. Used to service
an ‘insured’s’ residence.”
[¶5]
On December 24, 2007, Cookson filed a claim for loss of the
Case 590M with Liberty Mutual pursuant to the West Newfield and Acton policies.
3
Liberty Mutual sent Cookson a letter dated February 29, 2008, denying his claim
based on the personal property exclusion. Later, Cookson filed a complaint in the
Superior Court seeking, in part, a declaratory judgment that the Liberty Mutual
policies provided coverage for his Case 590M.
[¶6] Liberty Mutual filed a motion for summary judgment on August 25,
2010, and the court heard arguments on the motion on March 17, 2011. The court
granted Liberty Mutual’s motion by written order on March 22, 2011. The court
first examined whether Cookson’s Case 590M was a “motor vehicle” or
“motorized land conveyance” within the meaning of the personal property
exclusion. The court noted that 29-A M.R.S. § 101(82) (2011) defined “tractor” as
“a motor vehicle used primarily off the highway” and referenced decisions from
other jurisdictions where items of heavy construction machinery similar to
Cookson’s Case 590M were found to meet the definition of “vehicle” pursuant to
other insurance contracts. The court concluded that Cookson’s Case 590M was a
motorized, self-propelled vehicle for purposes of the personal property exclusion.
[¶7] The court then determined whether Cookson’s Case 590M fell within
the exclusion’s exception for “vehicles or conveyances not subject to motor vehicle
registration which are: a. Used to service an ‘insured’s’ residence.” Citing our
decision in Kimball v. New England Guaranty Insurance Co., 642 A.2d 1347
(Me. 1994), the court concluded that “subject to motor vehicle registration” was an
4
unambiguous phrase that was concerned with specific types of vehicles rather than
a fact-specific inquiry as to whether a given vehicle must be registered based on its
use. The court found that Cookson’s Case 590M was “subject to motor vehicle
registration” because 29-A M.R.S. § 509 (2011) provides for the registration of
tractors and therefore it did not fall within the exclusion’s exception. On that
basis, the court concluded that Cookson’s Case 590M was not covered by his
homeowner’s insurance policies and, as a result, granted Liberty Mutual’s motion
for summary judgment.
II. DISCUSSION
[¶8] We review the grant of summary judgment de novo to determine
whether the prevailing party was entitled to judgment as a matter of law. Jipson
v. Liberty Mut. Fire Ins. Co., 2008 ME 57, ¶ 6, 942 A.2d 1213. “The interpretation
of an insurance contract is also a matter of law reviewed de novo.” Id. Further, we
evaluate the instrument as a whole considering all parts and clauses to determine
“if and how far one clause is explained, modified, limited or controlled by the
others.”
Id. ¶ 10.
Unambiguous language in an insurance contract must be
interpreted “according to its plain and commonly accepted meaning.” Me. Drilling
& Blasting, Inc. v. Ins. Co. of N. Am., 665 A.2d 671, 675 (Me. 1995) (quotation
marks omitted).
5
[¶9] The personal property provision at issue here is an exception that limits
and modifies the broad exclusion of all “[m]otor vehicles or all other motorized
land conveyances” from coverage.
We have expressly held that the phrase
“subject to motor vehicle registration” is unambiguous. Kimball, 642 A.2d at
1348-49. In Kimball, we found that notwithstanding that a pickup truck was
unregistered, unfit for inspection, and intended to be used only to plow snow from
a driveway, it clearly fell within the phrase “subject to motor vehicle registration.”
Id. We explained that “[t]he exception to the policy exclusion defines a type of
vehicle, and is not concerned with fact-specific analyses of whether a particular
vehicle will or will not be registered.” Id. at 1349. In reaching our conclusion, we
noted that a pickup truck “exposes an insurer to risks not contemplated by the use
of a riding lawnmower or a small residential tractor.” Id.
[¶10] Cookson seizes upon the language in the last sentence and argues that
Kimball recognized residential tractors as a specific type of vehicle that would fall
within the exception to the personal property exclusion and therefore his
homeowner’s insurance policies provide coverage for his Case 590M tractor.1
We disagree.
1
The record establishes that the Case 590M tractor bears no resemblance, in appearance or capability,
to riding lawnmowers or small residential tractors. The photograph of a virtually identical Case 590
clearly depicts a substantial piece of heavy-duty construction equipment.
6
[¶11] Whether a vehicle is “subject to motor vehicle registration” within the
meaning of a homeowner’s insurance policy is a determination based on the type
of vehicle at issue; the intended or actual use of that vehicle is irrelevant. Id.
Although 29-A M.R.S. § 351 (2011) generally requires the registration of any
vehicle that is “operated or remains on a public way,” such an all-encompassing
provision does not control whether a vehicle is “subject to motor vehicle
registration” for purposes of a homeowner’s insurance policy.
[¶12] In Kimball we found that the pickup truck at issue was “subject to
motor vehicle registration” regardless of whether it had been or was intended to be
operated or maintained on a public way. Therefore, the proper inquiry in this case
is whether Cookson’s Case 590M tractor with front bucket and backhoe
attachments falls within the class of vehicles that are of the type that are reasonably
understood to be “subject to motor vehicle registration.”
[¶13]
Tractors are commonly operated on public ways in this state.
Cookson’s own use of his Case 590M along public ways for several miles on a
number of occasions is evidence of this reality. Additional support for this notion
is found in title 29-A’s requirement that tractors be registered, with limited
exceptions only for those types of tractors that are used almost exclusively off of
public ways. See 29-A M.R.S. §§ 509-510 (2011). The obvious import of such a
7
statutory scheme is that the operation of tractors on public ways is a reasonably
anticipated occurrence.
[¶14]
Simply because a motorized device can be registered does not
necessarily make it the type that is “subject to motor vehicle registration” within
the meaning of the insurance policy. For example, title 29-A provides that riding
lawnmowers may be operated on public ways at the election of an operator who
applies for and is issued a special registration permit. See 29-A M.R.S. § 501(8)
(2011) (“The Secretary of State may issue, on application and the payment of a fee
of $4, a special registration permit authorizing the limited operation on the
highway of self-propelled . . . lawn mowers.”). A vehicle that can be permitted to
operate in a limited capacity on a public way is distinguishable from a vehicle that
is generally required to be registered on an annual basis because of its frequent
presence on public ways.
Compare id., with 29-A M.R.S. § 509(1) (2011)
(“The annual fee for the registration of a tractor must accompany an application for
registration.”). Whereas the latter is required to be registered on an annual basis,
the former only comes within the purview of the motor vehicle registration laws at
the election of the operator.
[¶15] Furthermore, a Case 590M, with its potential for frequent operation
on public ways at speeds of up to twenty-five miles per hour, “exposes an insurer
to risks not contemplated by the use of a riding lawnmower or a small residential
8
tractor.” Kimball, 642 A.2d at 1349 (emphasis added). The operation of a tractor
on a public way subjects it to dangers that are not associated with the risks and
hazards contemplated by a homeowner’s insurance policy. Cf. Bowen v. Hanover
Ins. Co., 599 A.2d 1150, 1151 (Me. 1991) (explaining that “motor vehicles are
inherently dangerous instrumentalities and homeowners policies generally do not
contemplate coverage of injuries when the vehicle is maintained or used in one of
its inherently dangerous capacities” (quotation marks omitted)).
[¶16]
Moreover, although the trial court did not address the issue, we
recognize that the exception to the personal property exclusion must be read in the
conjunctive—both provisions must be present for Cookson’s Case 590M to be
covered. The exception provides coverage for vehicles “not subject to motor
vehicle registration which are:
a. Used to service an ‘insured’s’ residence.”
Because the first provision defines a type of vehicle, we interpret the second
provision as placing a further qualification on the type of vehicle at issue and do
not engage in a fact specific inquiry as to whether a given vehicle was in fact used
to service an insured’s residence.
[¶17] For purposes of the exception to the personal property exclusion, the
phrase “used to service an ‘insured’s’ residence” includes those motorized devices
not subject to motor vehicle registration that the average homeowner would
commonly employ in servicing his or her residence.
Such examples, though
9
certainly not exhaustive, would include riding lawnmowers, self-propelled
snow-blowers, and similar motorized devices.
[¶18] Although Cookson used his heavy construction machinery to dig,
move earth, and remove snow from his properties, such use is irrelevant in
determining whether his Case 590M is the type of vehicle that is commonly used
to service a homeowner’s residence. Cookson’s Case 590M is an item of heavy
construction machinery that is used almost exclusively for commercial
construction projects. The average homeowner would not purchase an item of
heavy construction machinery for approximately $27,000 simply to remove snow
and earth from their residence. Such use does not transform an item of heavy
construction machinery into the type of motorized device that a homeowner would
commonly employ to service his or her residence. To hold otherwise would allow,
on the one hand, such commercial devices as motorized blueberry harvesters or
construction excavators to fall within the exception to the personal property
exclusion simply because they were employed at one time to service an insured’s
residence in some capacity that is incidental to their primary purpose, and on the
other hand, would prohibit a riding lawnmower from being covered under the
exception if it was destroyed by fire before the homeowner had actually in fact
used it to cut grass at his or her residence. See Bumgardner v. Terra Nova Ins. Co.,
806 So. 2d 945, 949-50 (La. Ct. App. 2002) (finding that a tractor that was
10
occasionally used at the insured’s property was not “used to service an insured’s
residence” within the meaning of an exception to a personal property exclusion in
the insured’s homeowner’s insurance policy and explaining that if a broader
interpretation were applied to the exception, “then the motor vehicle exclusion
would have no applicability to vehicles or conveyances not subject to motor
vehicle registration so long as the insured claimed that he used the vehicle to
service his residence at least one time.”).
III. CONCLUSION
[¶19]
In summary, we conclude that Cookson’s Case 590M tractor,
purchased for approximately $27,000, is not the type of vehicle that falls within the
limited exception for “vehicles not subject to motor vehicle registration” to the
otherwise broad personal property exclusion of all “[m]otor vehicles or all other
motorized land conveyances.” This item of heavy construction machinery is also
not the type a homeowner would commonly purchase and employ simply to
service his or her residence. As a result, it is not covered by the homeowner’s
insurance policies at issue in this case.
The entry is:
Judgment affirmed.
11
SILVER, J., with whom JABAR, J., joins, dissenting.
[¶20] I respectfully dissent. The insurance policy covers motor vehicles and
motorized land conveyances that are (1) not subject to motor vehicle registration
and (2) used to service a residence.
The phrase “subject to motor vehicle
registration” is not ambiguous, and Cookson’s Case 590M is not the type of
vehicle that is subject to motor vehicle registration.
The phrase “service an
insured’s residence,” however, is ambiguous and should be construed in favor of
Cookson. Taken together, these provisions indicate that the Case 590M falls
within the exception to the motor vehicle exclusion. The insurance policy should
cover the loss.
[¶21]
Whether the Case 590M is subject to motor vehicle registration
depends on whether vehicles of the same type are generally required to be
registered. Certain types of vehicles are subject to registration whether or not an
owner actually intends to register his particular vehicle. Kimball v. New England
Guar. Ins. Co., 642 A.2d 1347, 1348-49 (Me. 1994). Although Kimball suggests
that vehicle type is distinct from and paramount to vehicle use, it was unnecessary
to distinguish type from use in that case because pickup trucks are tantamount to
passenger cars; both are presumed to be driven on public ways and both are
subjected to the same registration requirements pursuant to the motor vehicle
statute. See id.; 29-A M.R.S. § 501(1) (2011). Whether a particular driver chooses
12
not to drive a pickup truck on a public way is irrelevant because pickup trucks are
clearly the type of motor vehicles for which the statute contemplates registration.
See 29-A M.R.S. § 501(1).
[¶22] The classification of the type of vehicle at issue here is much less
clear than in Kimball. A Case 590M is a large tractor with backhoe and bucket
attachments that is commonly used for commercial construction projects. The
parties alternately refer to it as a loader, tractor, backhoe, and special mobile
equipment. The majority refers to it as “heavy construction machinery.” A vehicle
of this sort is clearly not akin to an automobile used primarily to transport persons
or property. See 29-A M.R.S. § 101(7) (2011). Determining whether a motor
vehicle that is used less like a car and more like farm or construction equipment is
the type of vehicle that is usually subject to registration requires a closer
examination of the motor vehicle statute than was necessary in Kimball.
[¶23] Pursuant to the motor vehicle statute, whether a certain type of vehicle
must be registered depends on how it is used. The statute explicitly qualifies the
registration requirements for all vehicles by providing that only a “vehicle that is
operated or remains on a public way” must be registered. 29-A M.R.S. § 351
(2011). When the classification of the type of vehicle at issue is less clear than it
was in Kimball, the use to which the vehicle is put becomes more relevant to
determining whether it is a type of vehicle that must be registered. See N.A.
13
Burkitt, Inc. v. Champion Rd. Mach., 2000 ME 209, ¶ 12, 763 A.2d 106 (noting
that one reason graders are not considered “motor vehicles” pursuant to the Motor
Vehicles Dealers Act is that they are usually used off-road at construction sites).
[¶24] Cookson did not use the Case 590M as an on-road vehicle or to
transport himself or his property. Cookson’s deposition testimony indicates that he
only drove the vehicle between his current home, a plot of land on which he was
building a new home, and his father’s house for repairs. These properties were
within three or four miles of each other. Cookson drove the vehicle with one set of
wheels in the ditch along the side of the road and one set of wheels on the
shoulder, and he avoided the road when possible by traveling on wooded
snowmobile trails. The vehicle has a maximum speed of twenty-five miles per
hour. He used the vehicle to perform general site work on his Acton property,
including building a driveway, well, and drainage ditch. He also used it for snow
removal and yard work at his current home in West Newfield. This use of a
Case 590M is more akin to a farm or logging vehicle used on-road only
incidentally to its primary off-road use and only to move to and from premises
where it is kept, work sites, and repair sites. See 29-A M.R.S. § 510 (2011). It
does not render the vehicle the type that must be registered.
[¶25] For the insurance policy to cover the tractor it also must have been
used to “service [his] residence.” This phrase is not defined in the insurance
14
policy.
Servicing in common usage can be limited to maintenance work, or
broadly defined to include assistance with any kind of work done on the property.
See Webster’s II New College Dictionary 1010 (2001). Because the policy does
not make clear which type of servicing it intends to cover, I conclude that this
language is ambiguous. Jipson v. Liberty Mut. Fire Ins. Co., 2008 ME 57, ¶¶ 6,
10, 942 A.2d 1213 (stating that interpretation of an insurance contract is reviewed
de novo and that “[c]ontractual language is ambiguous if it is reasonably
susceptible of different interpretations” (quotation marks omitted)). Cookson’s
deposition testimony established that he bought the vehicle to remove snow and
perform yard work at his home in West Newfield, and he actually used it for these
tasks. He also regularly used the vehicle to perform general site work on his
property in Acton.
Whether these actions constitute servicing, regardless of
whether the average homeowner would have bought the same machinery for this
purpose, is not clear from the policy or from the summary judgment record.
Accordingly, the policy should be construed in Cookson’s favor to include the type
of work he performed with the Case 590M.
See id. ¶ 10 (“Ambiguities in
insurance contracts are to be construed in favor of the insured.”).
[¶26] Because the Case 590M as Cookson used it is not the type of vehicle
that is subject to motor vehicle registration and because the tasks for which
Cookson used it can be considered servicing a residence, I interpret the insurance
15
policy to provide coverage for the loss. I do not, however, agree with Cookson
that he is entitled to a replacement value equal to the purchase price of a brand new
Case 590M. Liberty Mutual argues that the tractor should be considered “outdoor
equipment,” such that Cookson would be entitled to “actual cash value at the time
of loss.”
The insurance adjuster determined that the actual cash value of
Cookson’s tractor is $27,825 based on the retail price, transportation costs, and
sales tax required to purchase a comparable used tractor. Cookson believes that
the tractor is “personal property,” such that he would be entitled to the
“replacement cost with a similar item of like kind and quality at the time of loss.”
Cookson suggests that this entitles him to the purchase price of a brand new Case
590M, which is $106,050.
[¶27] Pursuant to either provision, Cookson is not entitled to recover the full
cost of a brand new Case 590M. Cookson’s Case 590M was used when he bought
it in 2005 for approximately $27,000. The average person would not conclude that
the language of the insurance policy entitles an insured to a brand new tractor to
replace a tractor that he purchased used more than six years ago and that he has
used extensively since then. See Peerless Ins. Co. v. Wood, 685 A.2d 1173, 1174
(Me. 1996) (“[W]e view the contract language from the perspective of an average
person, untrained in either the law or the insurance field, in light of what a more
than casual reading of the policy would reveal to an ordinarily intelligent
16
insured.”). The policy clearly attempts to limit payment by entitling the insured to
the lesser amount of the replacement cost or the cost of repair. In light of this
language, it would be unreasonable for Cookson to expect that the policy entitles
him to a payment of nearly four times the amount he paid for the tractor or the
amount he would have to pay to purchase a similar tractor today. Therefore, I
would find that Cookson is entitled to coverage for his loss, but the amount to
which he is entitled should not exceed the amount it would cost for him to
purchase a used tractor comparable to the one he purchased in 2005.
On the briefs:
Thomas G. Van Houten, Esq., Springvale, for appellant Mark Cookson
John S. Whitman, Esq., and Heidi J. Hart, Esq., Richardson, Whitman, Large
& Badger, Portland, for appellee Liberty Mutual Fire Insurance Company
At oral argument:
Thomas G. Van Houten, Esq., for appellant Mark Cookson
Heidi J. Hart, Esq., for appellee Liberty Mutual Fire Insurance Company
York County Superior Court docket number CV-2009-370
FOR CLERK REFERENCE ONLY
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