JOSEPH E. BENNETT CO., INC. vs. FIREMAN'S FUND INSURANCE COMPANY & others.

JOSEPH E. BENNETT CO., INC. vs. FIREMAN'S FUND INSURANCE COMPANY & others.

344 Mass. 99

February 5, 1962 - April 5, 1962

Suffolk County

Present: WILKINS, C.J., SPALDING, WHITTEMORE, CUTTER, & KIRK, JJ.

In passing on the propriety of ordering a verdict for the defendant upon the plaintiff's opening to the jury at the trial of an action, the statements made in the opening must be taken to be true. [102-103]

Any ambiguity in a provision of an insurance policy should be resolved in favor of the insured. [103-104]

An open, uncovered, outdoor swimming pool set in a terrace was not a building within the meaning of that word in a policy of vandalism insurance. [104]

A policy of vandalism insurance issued for country club premises, which stated that it covered "additions" to the clubhouse and other buildings specifically covered, was held not to cover under the "additions" clause an open, uncovered, outdoor swimming pool set in a terrace near the rear of the clubhouse and separated from it by a portion of that terrace, by steps leading up to another terrace, and by the upper terrace, although there were certain connections between the pool and the clubhouse with respect to illumination, water supply, a loudspeaker, a telephone, and inclusion of use of the pool in the club membership. [104-106]

In an action upon a policy of vandalism insurance issued for country club premises, where recovery was sought for damage done by boys to an outdoor swimming pool near the clubhouse under a clause in the policy covering "additions" to the clubhouse and other buildings specifically covered by the policy, it was held that there was no ambiguity in the "additions" clause permitting consideration of the fact that the insured in applying for the policy made it known to the insurer's agent that he wanted coverage on the pool and furnished a valuation of the pool for the purpose of such coverage. [106]

CONTRACT. Writ in Superior Court dated July 26, 1960.

The action was tried before Forte, J.

Edward J. Barshak, for the plaintiff.

Francis E. Dooley, Jr., for the defendants.

CUTTER, J. The plaintiff (Bennett) seeks to recover under

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policies of insurance for losses occasioned by vandalism to a swimming pool on country club premises held by Bennett as mortgagee in possession. The insurance companies, among other defences, denied that the policies covered this loss. Bennett's counsel made an extended opening and offered in evidence a sample policy "in the form of each one of the . . . policies . . . issued." After this opening, the trial judge directed a verdict for the defendants. Bennett claimed an exception. The significant facts are stated on the basis of the opening.

The insured premises were on a golf course. At the time of the vandalism, there were in force various policies of fire insurance, all of which included extended coverage and vandalism indorsements ("direct loss caused by [v]andalism and [m]alicious [m]ischief, being only wilful and malicious damage to or destruction of the described property and including damage to the building[s] covered hereunder caused by burglars"). Each policy also contained "[a]lterations and [r]epairs [c]lauses." [Note 1] There was no specific mention of the swimming pool, as such, in the policies. Under the heading "Description & location of property covered" were the following items: "Frame Bldg. (Country Club) . . . Frame Bldg.--Pro Shop Two Frame Bldgs.--Pump Houses ($500 each) Contents of Pump Houses ($1,500

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each) Situated North Street, North Reading, Massachusetts (LRD-12004)." [Note 2]

One other provision is of significance, that defining "[b]uilding [c]overage" in what is entitled the "[g]eneral [f]orm," which reads: "Building Coverage: When this policy covers buildings, it shall cover the basic structure and additions, including foundations . . . and . . . shall include building service equipment . . .; property of the following kinds belonging to the Insured as building landlord [then are listed various types of building parts or equipment, such as refrigerating equipment, window shades, etc.] . . . and all property fastened to and made a part of the building."

Originally there was a small building on the site of the clubhouse. In 1955 Bennett as general contractor reconstructed this building into a much larger country club with clubhouse, terraces, and a swimming pool (40 by 100 feet) set in the middle of a concrete terrace. In the rear of the large building was a concrete terrace extending thirty feet from the building for almost the whole width of the building, where the members would sit and have refreshments. At the outer edge of this, twelve to fifteen steps led down a slight incline to the second concrete terrace containing the swimming pool. The large building and the terraces were used together as a unit by the members, and, from a side view they appeared to be one unit set off from the golf course. [Note 3]

The building reconstruction started in late 1955 and was finished before the summer of 1956. Bennett took a mortgage from the club for money owed to it. On November 8, 1957, Bennett became mortgagee in possession.

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One insurance policy had been issued each spring in 1954, 1955, and 1956. Bennett's president approached Boylston Insurance Agency (Boylston), "an agent for all the defendant insurance companies . . . for the purpose of receiving information for fire and extended coverage and vandalism policies, for writing . . . policies with the approval of the companies, for countersigning the policies." He told Boylston's representatives "that he wanted . . . complete coverage, fire, extended coverage, and vandalism on the . . . [c]lub" as described above. Boylston's representatives informed him that he could not have "vandalism coverage except as part of a fire . . . policy." Bennett's president "told them to . . . write up the fire insurance policies, so long as he ha[d] extended . . . and vandalism coverage to include, among other things, the pool and the pool area." Bennett then "was sent a form, filled out by . . . Boylston . . . to give the valuations . . . for insurance purposes." Bennett's president included approximately $27,000 "for the pool and the pool area" and intended to cover the pool area for vandalism.

The earlier policies were issued as of November 8, 1957, "so far as listing . . . Bennett . . . as . . . owner." In addition to the three policies, already mentioned, issued in 1954, 1955, and early 1956, four more were issued in October, 1956, two in October, 1957, and one in February, 1958.

On the evening of October 15, 1958, when all the policies were in effect, boys "broke into the Pro shop . . . [and] stole some" articles. They then went to the pool and damaged it to the extent of $29,000, and threw articles into the pool. Within two days notice of loss was given. No settlement has been made by the insurance companies of Bennett's claims.

1. In passing upon the motion for a directed verdict upon an opening, the facts stated by counsel must be considered as true. The motion must be denied "if the statements . . . together with all rational inferences of which those facts are susceptible, can, upon any reasonable view . . . be deemed sufficient to support the . . . cause of action."

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Douglas v. Whittaker, 324 Mass. 398 , 399. See Amorosso v. Farina Bros. Co. Inc. 339 Mass. 595 , 596; Singarella v. Boston, 342 Mass. 385 , 386, 389. Cf. Perry v. Carter, 332 Mass. 508 , 509; Mallard v. Waldman, 340 Mass. 288 , 290.

2. The vandalism coverage in these policies is that listed in the fire policies and extended coverage provisions, which do not purport to describe the swimming pool as property covered. Bennett, however, seeks to recover on the theory that the "additions" clauses (footnote 1, supra) and the conversations between Bennett's president and representatives of Boylston (the insurance agency) sufficed to bring all the new construction, including the swimming pool, within the policies. The earlier policies (probably those of 1954, 1955, and May, 1956) were issued before the reconstruction of the clubhouse was completed. Bennett contends that, as to these policies, the swimming pool was an "addition," and that the later policies should be interpreted in the same way. Bennett also contends (largely on the basis of Upper Columbia River Towing Co. v. Glens Falls Ins. Co. 179 F. Supp. 705, 707 [D. Ore.]) that the insurance companies, through the knowledge of their general agents, knew that Bennett wanted vandalism coverage on the swimming pool. This desire, Bennett contends, was verified by the approximately $27,000 valuation placed upon the pool and pool area by Bennett's president.

The policies "must be reasonably construed by giving to . . . [their] words . . . their usual and ordinary significance . . . but if the terms . . . are ambiguous then every doubt is to be resolved against the insurer[s]." Woogmaster v. Liverpool & London & Globe Ins. Co. Ltd. 312 Mass. 479 , 481. See Schroeder v. Federal Ins. Co. 343 Mass. 472 , 475. See also MacArthur v. Massachusetts Hosp. Serv. Inc. 343 Mass. 670 , 672. "Where the language permits two rational interpretations, that more favorable to . . . the insured is to be taken. The insurer chose the words to express the contract of indemnity and whichever of two warranted interpretations . . . best effectuates the

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main manifested design of the parties is to be favored." Rezendes v. Prudential Ins. Co. 285 Mass. 505 , 511.

These policies insure, so far as the clubhouse is concerned, a "Frame bldg. (Country Club)." The additions clauses (footnote 1, supra) permit "additions, alterations and repairs" to the buildings or structures described and the construction of "new buildings on the premises." The policies "in so far as . . . [they] cover buildings or structures" will "also cover such additions . . . and new buildings . . . when not otherwise covered by insurance." If the swimming pool is either a new building or an addition to the clubhouse building, the language of the policies covers it. If the pool is not a new building or an addition, the policies do not cover it.

The pool cannot be regarded as a new building. Although it is below ground, that in itself is not fatal to the contention that it is a building. See Jenney v. Hynes, 285 Mass. 332 , 335. It certainly is not a structure designed for human occupancy or use except for a limited and specialized purpose, it is not covered with a roof, and it does not come within the ordinary concept of a building. See Truesdell v. Gay, 13 Gray 311 , 312.

The term "addition" [Note 4] most aptly describes an enlargement of what previously existed by a piece of construction of the same general character, having some definite connection and community of use with the basic building. In considering whether the swimming pool is an "addition" to this clubhouse, it must be recognized that any connection between the two is only by the tenuous link of the upper thirty foot wide concrete terrace, then some twelve to fifteen

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steps, and the apron portion of the lower concrete terrace in which the pool is set. There is, of course, a very general community of use in that the clubhouse and the pool are both used for recreation. The manner of use of the clubhouse and pool, however, is substantially different; so much so, that in ordinary parlance the use would not be thought to be the same. In at least one case, where a more substantial connection and perhaps greater proximity existed, this court treated each of two buildings resting upon separate foundations as "a separate building." H. W. Robinson Carpet Co. v. Fletcher, 315 Mass. 350 , 353-354. Courts, however, have given a somewhat broader scope to the word "addition." See Marsh v. New Hampshire Fire Ins. Co. 70 N.H. 590 (adjacent engine house and "dryhouse" held "additions"); Marsh v. Concord Mut. Fire Ins. Co. 71 N. H. 253, 255-256 (existence of movable bridge and steam pipes between buildings is of some weight); Agnew v. Sun Ins. Office, 167 Wis. 456, 457 ("`additions thereto,' when used with reference to a building, ordinarily refer to some structure physically attached to or connected with the building itself"). See also Taylor v. Northwestern Natl. Ins. Co. 34 Cal. App. 471, 473-474 (adjacent shed an "addition"); Bickford v. Aetna Ins. Co. 101 Maine, 124, 127 (separate building connected with main building by a platform, an "addition"); Shepard v. Germania Fire Ins. Co. 165 Mich. 172, 175; Gertner v. Glens Falls Ins. Co. 193 App. Div. (N. Y.) 836, 838-841; Philadelphia Manufacturers Mut. Fire Ins. Co. v. Rose, 368 Pa. 363, 368-369; Seeds v. Royal Ins. Co. 75 Pa. Super. 302, 304-305.

Bennett places great reliance on several Federal decisions. See Pearl Assur. Co. Ltd. v. School Dist. No. 1, 212 F.2d 778, 780-782 (10th Cir.), where a large separate gymnasium connected by a steam line, water line, sewer, electric power line, and wooden passageway, was held to be within the "additions" clause of a policy, as applied to the main school building first constructed and first insured; Fidelity-Phenix Fire Ins. Co. v. Farm Air Serv. Inc. 255 F.2d 658, 662-663 (5th Cir.), where extrinsic evidence was admitted

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to explain what the court regarded as a possible ambiguity in a policy; Upper Columbia River Towing Co. v. Glens Falls Ins. Co. 179 F. Supp. 705, 708-709 (D. Ore.). None of the cases, Federal or State, already cited, purports to apply the usual "additions" clause of a fire insurance policy to anything but a building. Adjacent facilities, which were not buildings, do not seem to have been treated as "additions" in the decisions.

Although an open, uncovered swimming pool may be a "structure" (cf. Manchester v. Leahy, 336 Mass. 158 , 160), it does not seem to us to come within the usual meaning of the term "addition," which in ordinary usage refers to buildings or parts of buildings. We perceive no such obscurity in the term "addition" as to warrant extrinsic evidence of negotiations as an aid to interpretation of a standard provision of the complete, integrated expression of the parties' agreement in the policies. See Stoops v. Smith, 100 Mass. 63 , 65-67; Freeman v. Sieve, 323 Mass. 652 , 654-655; Dekofski v. Leite, 336 Mass. 127 , 128-129; Siegel v. Shaw, 337 Mass. 170 , 172; Wigmore, Evidence (3d ed.) Sections 2425, 2452; McCormick, Evidence, Sections 219, 220. See also Whitbeck v. Aldrich, 341 Mass. 326 , 329. Compare Cotty v. Meister, 339 Mass. 202 , 204-205; Caputo v. Continental Constr. Corp. 340 Mass. 15 , 18-19. This is not a suit to reform the contracts contained in the policies (cf. DeVincent Ford Sales, Inc. v. First Mass. Corp. 336 Mass. 448 ), or an action for failure to place requested insurance (cf. Rayden Engr. Corp. v. Church, 337 Mass. 652 ). It is an action at law upon the insurance policies as they were issued. Whatever might be the situation in other types of litigation about these policies, in this action, extrinsic evidence of the negotiations between Bennett and Boylston would not have been admissible. We hold that the statements in the opening in this case with respect to such negotiations were irrelevant, and do not aid Bennett.

Exceptions overruled.

FOOTNOTES

[Note 1] These clauses read: "Alterations and Repairs Clauses: (a) (This clause applies only to such item[s] that cover on or in one building.) Permission granted to make additions, alterations and repairs to the building or structure described; and this policy (in so far as it covers building or structure) shall also cover such additions, alterations and repairs when not otherwise covered by insurance, and shall cover all temporary structures, materials, equipment and supplies therefor on the premises described or within 100 feet thereof, and (in so far as it covers contents) shall also cover contents in such additions. (b) (This clause applies only to such item[s] as cover on or in two or more fire divisions.) Permission granted to make additions, alterations and repairs to the buildings or structures described, and to construct new buildings on the premises described; and this policy (in so far as it covers buildings or structures) shall also cover such additions, alterations and repairs and new buildings on the premises described when not otherwise covered by insurance, and shall cover all temporary structures, materials, equipment and supplies therefor on the premises described or within 100 feet thereof, and (in so far as it covers contents) shall also cover contents in such additions and new buildings. The above alterations and repairs clauses do not waive or modify any of the conditions of the Automatic Sprinkler Clause, if any, applying to this policy." See for discussion of extended and vandalism coverage, Policy, Form & Manual Analysis Service; Fire, Casualty & Surety Analyses, Fire pars. 132.23, 132.47.

[Note 2] One rider, dated December 11, 1957, added references to "1-3 story frame Country Club and Contents" and to "frame fences."

[Note 3] There were other minor connections of the pool with the clubhouse. The night illumination for the swimming pool came from spotlights on the main building, controlled from within that building. Water for the pool was brought by a pipe from the ladies' locker room in the building, controlled by valves in that locker room and at the pool. A loudspeaker near the pool was controlled from the clubhouse. A telephone at the pool connected to telephones within the building. Use of the pool was included in the club membership.

[Note 4] "Addition" in respect of buildings has been defined in various ways. See, e.g., Webster's New Intl. Dictionary (2d ed.) p. 30 ("A part added to a building, either by being built so as to form one architectural whole with it, or by being joined with it in some way, as by a passage, and used so that one is a necessary adjunct or appurtenance of the other, or so that both constitute in use and purpose one and the same building"); Webster's Third New Intl. Dictionary, p. 24 ("a part added to . . . a building to increase available space" and also, "additions pl: facilities, structures, equipment, or other property added to what is already in service"); Black's Law Dictionary (4th ed.) p. 59 ("Structure physically attached to or connected with building itself").