Northern Security Insurance Co. v. Rossitto

Northern Security Insurance Co. v. Rossitto (99-188); 171 Vt. 580; 762 A.2d 861 

[Filed 18-Oct-2000]

 
                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 99-188

                               JUNE TERM, 2000


Northern Security Insurance Company, Inc.    }    APPEALED FROM:
                                             }
                                             }
     v.	                                     }   Washington Superior Court
                                             }	
                                             }
Mary L., Joseph and Anthony Rossitto	     }    DOCKET NO. 664-11-97 Wncv

                                                  Trial Judge: David A. Jenkins


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


       Defendants, the Rossittos, appeal from the grant of summary judgment
  by the Washington  Superior Court in favor of Plaintiff Northern Security
  Insurance Company.  Northern Security instituted a  declaratory judgment
  action seeking a determination that they did not owe homeowner's liability
  insurance  coverage to defendants for an accident involving all terrain
  vehicles (ATVs) that occurred on or near  defendants' property.  Defendants
  claim that the trial court erred by (1) deciding a disputed issue of 
  material fact regarding where the accident occurred in reaching summary
  judgment, (2) finding the  insurance contract unambiguous, and (3) failing
  to address their affirmative defenses.  We reverse and  remand.

       The undisputed facts are as follows: In June 1974, Paul and Mary
  Rossitto, residents of New  York, purchased a camp at Neal's Pond in
  Lunenberg, Vermont.  They accessed this camp by a deeded  right-of-way. 
  Mr. Rossitto purchased a Northern Security homeowner's insurance policy on
  the  Lunenberg property with Poulos Insurance of St. Johnsbury.  Mr.
  Rossitto died in 1989, and Mrs. Rossitto  became the sole owner of the
  Vermont property.  On September 3, 1994, Mrs. Rossitto's sons, Joseph and 
  Anthony, had an accident while the two were riding their ATVs.  Apparently,
  Joseph struck Anthony,  injuring Anthony's leg and requiring his
  hospitalization.

       The parties dispute, however, the exact location of the accident.  The
  Rossittos contend that the  accident occurred on their property because the
  accident occurred on their right-of-way; Northern Security  contends that
  the right-of-way is not "property" within the meaning of the policy or, in
  the alternative, that  the accident occurred completely off the Rossittos'
  right-of-way.

 

       Anthony filed a personal injury lawsuit against his mother and Joseph
  in Queens County, New  York, on August 8, 1995.  This underlying action has
  yet to be decided.  Northern Security, a Vermont  corporation, first
  received notice of the accident on September 13, 1995.  Mrs. Rossitto and
  Joseph signed  a non-waiver agreement at their New York home on September
  24, 1995, to allow Northern Security to  investigate the claim while
  simultaneously defending them in the New York action.

       On November 10, 1997, Northern Security requested that Washington
  County Superior Court  declare that its liability policy with the Rossittos
  did not cover the accident, joining Anthony as a  defendant in the action. 
  Both parties moved for summary judgment.  On March 22, 1999, the court 
  granted Northern Security's motion on the ground that the ATV at the time
  of the accident was excluded  from personal injury liability coverage. 
  This appeal followed.

                                     I.

       In its decision, the trial court assumed there were no disputed issues
  of material fact.  This was  error because there exists a dispute with
  regard to where the accident actually occurred.  Defendants assert  that
  the accident occurred on their right-of-way.  Northern Security contends
  that the accident occurred  completely off defendants' property, including
  the right-of-way.  Furthermore, Northern Security asserts  that defendants
  attempted to create a "sham issue" to oppose its motion for summary
  judgment by  presenting an affidavit that conflicted with an earlier
  deposition.

       During his deposition, Anthony described the accident as occurring in
  an area that was not  accessible by automobiles.  Northern Security argues
  that the necessary implication is that the accident  did not happen on the
  right-of-way, which is accessible by automobiles.  In contrast, Anthony's
  affidavit  states that the accident did occur on the right-of-way. 
  Northern Security's "sham issue" argument is not  determinative, however,
  because an affidavit may not be excluded solely on the ground that it
  conflicts  with a deposition.  See Pierce v. Riggs, 149 Vt. 136, 139, 540 A.2d 655, 657 (1987).  The Court must,  "[i]n reviewing a decision to grant
  summary judgment, . . . regard all allegations made in opposition to 
  summary judgment as true, if supported by affidavits or other evidence." 
  Peters v. Mindell, 159 Vt. 424,  426, 620 A.2d 1268, 1269 (1992).

       Summary judgment should be granted only where there is no disputed
  issue of material fact and  the movant is entitled to judgment as a matter
  of law.  See Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905
  (1996).  The issue is material only if it might affect the outcome. 
  Anderson v. Liberty  Lobby, Inc., 477 U.S. 242, 248 (1986).  Here, the
  disagreement over the location of the accident creates a  disputed issue of
  material fact.  As discussed more fully below, if the defendants'
  contentions are true and  the right-of-way is considered "property," then
  the accident occurred on their property and the ATVs  would not have been
  "subject to motor vehicle registration" and, thus, would be exempted from
  the  exclusion to liability coverage contained in Northern Security's
  policy.  The trial court, therefore,  improperly decided a disputed issue
  of 

 

  material fact on summary judgment.  The case is remanded to the trial court
  to determine this factual issue  of where the accident occurred.

                                     II.

       The next issue is whether the trial court erred by concluding that the
  policy unambiguously  excluded liability coverage for a personal injury
  arising out of the ATV accident.  Defendants argue that  there exists an
  ambiguity as to whether the policy's liability coverage extends to the
  accident involving  their ATVs, relying on the principle that any ambiguity
  in an insurance contract must be construed in  favor of the insured.  To
  answer this question, we turn to the language of the policy.  

       The policy excludes from coverage personal injuries connected to
  certain motorized vehicles and  motorized land conveyances, which include
  ATVs.  The exclusion provides that liability coverage does  not apply to
  bodily injury or property damage arising out of:

    [T]he ownership, maintenance, use, loading or unloading  of motor
    vehicles or all other motorized land  conveyances, including
    trailers, owned and operated by  or rented or loaned to an
    "insured" . . . .

  (Emphasis added.)  Exempted from this exclusion, however, is:

    [A] motorized land conveyance designed for recreational  use off
    public roads, not subject to motor vehicle  registration and:
    (a) not owned by an "Insured"; or 
    (b) owned by an "Insured" and on an "Insured location."

  (Emphasis added.)  Thus, in order to qualify for either of the exemptions
  to the "motorized land  conveyance" exclusion, an ATV cannot be "subject to
  motor vehicle registration."  

       A full understanding of the exclusion requires reference to the
  Vermont motor vehicle registration  statute,  23 V.S.A. § 3502.  The
  statute provides:

    (a) An all-terrain vehicle may not be operated unless  registered
    pursuant to this chapter or any other section of  this title, by
    the state of Vermont except when operated: 
        (1) on the property of the owner of the all-terrain 
    vehicle; or 
        . . . .

 

         (4) solely on privately owned land when the  operator is
    specifically invited to do so by the owner of  that property and
    has on his person the written consent  of the owner.

  23 V.S.A. § 3502.  Defendants assert that the interplay between the
  registration statute and the policy is  complicated and renders the meaning
  of the exclusion far from obvious.  Essentially, they argue that the 
  policy, when read as a whole, should be construed as covering the ATV
  accident.  

       An insurance contract "must be interpreted according to its terms and
  the evident intent of the  parties as expressed in the policy language" and
  all "[d]isputed terms are to be read according to their  plain, ordinary
  and popular meaning."  Northern Sec. Ins. Co. v. Hatch, 165 Vt. 383,
  385-86, 683 A.2d 392, 394 (1996).  It is the policy of this Court to favor
  complete coverage when interpreting insurance  contracts.  Cooperative Fire
  Ins. Ass'n of Vermont v. Bizon, 166 Vt. 326, 333, 693 A.2d 722, 727 (1997). 
  We interpret ambiguities in favor of the insured.  Northern Sec. Ins. Co.,
  165 Vt. at 386, 683 A.2d  at 394. 
 
       The threshold issue is whether the ATVs were subject to registration
  under § 3502(a)(1).   Subsection (a)(1) exempts the ATV from the
  registration requirement if the ATV was operated "on the  property of the
  owner of the all-terrain vehicle."  The question becomes, therefore,
  whether the  defendants' right-of-way is such "property," because that is
  where the defendants assert that the accident  occurred.  Northern Security
  contends that a right-of-way is not "property."  Their interpretation is
  that the  right-of-way is a limited, non-possessory property interest and
  that it is unreasonable to include a right-of-way in the ordinary
  definition of property.  Defendants contend that their right-of-way,
  because it is  included in their deed, is "property" under the statute.  

       Rights-of-way are easements, legally recognized property interests, of
  which the owner is entitled  to "reasonable" use.  See, e.g., Baker v.
  Koslowski, 117 Vt. 124, 126, 85 A.2d 500, 502 (1952); Thurston 
  Enterprises, Inc. v. Baldi, 519 A.2d 297, 300 (N.H. 1986); Cote v. Eldeen,
  403 A.2d 419, 420 (N.H. 1979)  (applying "doctrine of reasonable use");
  Birdsey v. Kosienski, 101 A.2d 274, 278 (Conn. 1953).  

       If this Court were to hold "property" did not encompass a "property"
  right such as an easement, it  would create an absurdity.  Under §
  3502(a)(4), if a person operated his ATV on property not his own, the 
  vehicle would not be subject to registration so long as he had written
  authorization from the property  owner.  Likewise, the ATV would not be
  subject to registration if used solely within the metes and  bounds of his
  own property.  It would indeed create an anomalous distinction to either of
  the above  locations, if the person were to operate his ATV on an easement
  and the vehicle would be subject to  registration.  Therefore, we construe
  the term "property" within the purposes to be served by the law, to 
  encompass an easement.  Thus, if the 

 

  accident occurred on defendants' right-of-way, the "not subject to
  registration" component of the  exemption would have been satisfied.

       The next requirement for coverage is that the ATV be "on an insured
  location."  There is no  dispute that defendants owned both ATVs involved
  in the accident.  The dispute involves whether the  ATVs were "on an
  insured location."  The majority of the cases have held that the phrase
  refers to the  physical location of the accident.  See, e.g. Safeco Ins.
  Co. of America v. Clifford, 896 F. Supp. 1032, 1037 (D. Or. 1995)
  (accident occurred on neighboring property and was not considered on
  "insured  location."); Nationwide Mut. Ins. Co. v. Prevatte, 423 S.E.2d 90,
  92 (N.C. Ct. App. 1992) (accident  occurred on neighboring property and was
  considered "on  an insured location."); Safeco Ins. Co. v.  Brimie, 516 N.E.2d 577, 581 (Ill. App. Ct. 1987) (accident occurring on neighboring
  school grounds not  considered "on an insured location."); Illinois Farmers
  Ins. Co. v. Coppa, 494 N.W.2d 503, 506 (Minn. Ct.  App. 1993) (accident
  occurring in neighboring hayfield not considered "on an insured
  location.").

       We find no ambiguity in whether the term "insured location"
  encompasses defendants' right-of-way.  Defendants' policy defines insured
  location as the "residence premises" or "any premises used by  [insured] in
  connection with [residence premises]."  Based on this definition, we have
  no difficulty in  concluding the right-of-way is an "insured location." 
  Case law attempting to define "insured location"  supports our conclusion. 
  See, e.g., Uguccioni v. U.S. Fidelity and Guar. Co, 597 A.2d 149, 150 (Pa. 
  Super. Ct. 1991) (holding that a private roadway used by the insured to
  access their property was used "in  connection" with the property and,
  thus, was an "insured location."); Clifford, 896 F. Supp.  at 1036; 
  Prevatte, 423 S.E.2d at 92-93; Coppa, 494 N.W.2d  at 506.

       We hold that, if the accident took place on defendants' right-of-way,
  the ATVs would not have  been subject to registration, would have been
  owned by an insured on an insured location, and,  consequently, would have
  been covered by the personal injury liability coverage in the homeowner's 
  policy.

                                    III.

       Defendants finally argue that the trial court failed to address their
  affirmative defenses and that  New York law governs the analysis of those
  defenses.  Specifically, they argue that the court did not  address their
  affirmative defenses of estoppel and laches.

       Because we are remanding for a trial to determine the disputed issues
  of fact, the trial court will  have an opportunity to address defendants'
  affirmative defenses to Northern Security's denial of coverage  if
  necessary.  Notably, if the location of the accident is resolved in
  defendants' favor, consideration of the  affirmative defenses to Northern
  Security's declaratory judgment action will be unnecessary.

 

       With respect to the choice of law governing the analysis of these
  defenses, should it be necessary  to reach the question, the trial court
  should be given the first opportunity to address it.  Cf. Parker v. Town 
  of Milton, 169 Vt. 74, 77, 726 A.2d 477, 480 (1998) (noting this Court
  lacks the constitutional authority  to issue advisory opinions).  Although
  the trial court concluded that Vermont law governed a discovery  dispute
  between the parties that potentially implicated the asserted defenses, it
  has not had the opportunity  to address the choice of law question
  specifically in the context of defendants' affirmative defenses  following
  a full development of the underlying facts giving rise to those defenses. 
  On remand, it will  have the opportunity to do so.


       Reversed and remanded.


                                       BY THE COURT:


                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice