On November 26, 2018, Judge Rya W. Zobel of the United States District Court sitting in Boston entered summary judgment against Cummings Properties (“Cummings”) in its suit to have the Preferred Mutual Insurance Company (“Preferred Mutual”) defend and indemnify it in a state court bodily injury suit. Cummings claimed in its suit against Preferred Mutual it was an additional insured under a tenant’s policy.
In the suit, Cummings Properties, LLC v. Preferred Mutual Insurance Company; Judge Zobel ruled the additional insured endorsement did cover Cummings “with respect to liability arising out of [the tenant’s] operations or premises owned by or rented to [the tenant”].” However, the judge found that the endorsement specifically identified the business suite leased by Cummings to the tenant, and not the parking lot to the building where the accident in question occurred, as the covered premise.
The Preferred Mutual policy and the bodily injury claim
Cummings manages and leases the multi-tenant commercial property located at 100 Trade Center in Woburn, among other commercial properties North of Boston.
In 2010, Cummings entered into a five-year commercial lease for Suite 706, consisting of 21,000 ft. in 100 Trade Center to the Massachusetts Department of Revenue as the using agency of the Commonwealth of Massachusetts (“Mass. DOR”).
Pursuant to the lease, Cummings purchased a Commercial General Liability (“CGL”) policy from Preferred Mutual. The policy issued by Preferred Mutual for the period January 20, 2013, to January 20, 2014, listed the Massachusetts Department of Revenue as an extended named insured. The policy also listed Cummings as an “additional insured” by an endorsement.
In the declarations section, the policy did not identify the whole building but only listed office suites, including Suite 760, in its Schedule of Insured Premises.
Under the policy, Cummings qualified as an “additional insured” “but only with respect to liability arising out of [the Mass. DOR’s] operations or premises owned by or rented to [the Mass. DOR].
The policy also contains an endorsement which provides that the PSIC policy applies to “bodily injury arising out of:
- The ownership maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises.
Cummings seek coverage for Mass. DOR employee’s slip and fall bodily injury suit
On January 30, 2013, an employee of the Mass. DOR, Joyce Barresi, drove her car to 100 Trade Center to work at the Mass. DOR office. She parked her car in the parking lot, but then fell and injured herself when she stepped out of her car onto the ice.
Under the lease between Cummings and the Mass. DOR, Cummings, as the landlord had to:
use reasonable efforts to ensure [that] snow and ice are removed from all …parking areas before the hours of operation and during such hours if snow, ice, or both accumulate.”
On January 28, 2016, two days before her claim’s statute of limitations took effect, Ms. Barresi sued Cummings in the Massachusetts Superior Court for bodily injury resulting from Cummings alleged failure properly maintain the 100 Trade Center parking lot by allowing water and ice to accumulate in the parking lot and thereby causing her to fall and be injured.
Cummings sought coverage for defense and indemnity on the Barresi suit from Preferred Mutual as an additional insured under the Mass DOR’s policy. When Preferred Mutual refused to provide coverage, Cummings filed a federal court action seeking a declaratory judgment that Preferred Mutual had to defend and indemnify Cummings for the Barresi suit in state court and for the damages Cummings suffered from Preferred Mutual’s alleged breach of its insurance contract.
Cummings claims additional insured endorsement extends to injury in the parking lot
In seeking coverage under Preferred Mutual’s policy, Cummings argued that under the lease, the Mass. DOR, as a tenant, had the right to use, as appurtenant to the Suite 760, “all other areas in or about the Building from the time intended for general use by [the Mass. DOR] and other tenants of the Building.”[pullquote]To Cummings, the parking lot at 100 Trade Center was an area generally used by employees of the Mass. DOR, as well as by tenants of other suites at the 100 Trade Center building. Thus, Ms. Barresi’s injuries arose “…with respect to liability arising out of…premises …rented to [the Mass. DOR].”[/pullquote]
To Cummings, the parking lot at 100 Trade Center was an area generally used by employees of the Mass. DOR, as well as by tenants of other suites at the 100 Trade Center building. Thus, Ms. Barresi’s injuries arose “…with respect to liability arising out of…premises …rented to [the Mass. DOR].”
Preferred Mutual’s position, unsurprisingly, was that Cummings had completely misconstrued the breadth of the additional insured endorsement, as courts do not interpret them to include premises that are otherwise not designated in a policy. Preferred Mutual argued that based on the various schedules included in the policy declarations, the express intent of the Preferred Mutual policy was to provide coverage only for the various office suites listed as insured locations, and not the parking lot.
Preferred Mutual argued that while some Massachusetts decisions “appeared inclined” to find coverage triggered when a lessee and an owner contracted for the lessee to rent and/or maintain a portion of the common area or parking lot. In this case, Preferred Mutual argued, the lease made Cummings alone responsible for maintenance of the parking area, and there was no provision in the lease where the Mass. DOR agreed to “rent” or assume any responsibility for the parking lot.
Judge rules on cross-motions for summary judgment in favor of Preferred Mutual
After some discovery, both Cummings and Preferred Mutual moved for summary judgment agreeing that there was no dispute as to the facts involved in Cummings’ suit. Both Cummings and Preferred Mutual agreed that coverage depended on whether Ms. Barresi’s complaint fit within the terms of the Preferred Mutual policy’s additional insured endorsement.
In deciding the summary judgment motions, Judge Zobel first noted that the endorsement in question was restrictive: Cummings was indeed covered by Preferred Mutual’s policy “but only with respect to liability arising out of  [DOR’s] operations or  [the] premises … rented to [DOR].”
The judge acknowledged that Cummings argued that Ms. Barresi’s suit triggered coverage under either the first or second prong of the endorsement. However, the judge ruled that upon “matching [Barresi’s] complaint with the policy provisions,” the Barresi claim fell outside the policy endorsement grant of coverage.
While the judge recognized that Cummings’ argument that Ms. Barresi’s injury occurred during the “course of [her] employment” could apply, she found the point irrelevant. She ruled the additional insured endorsement required a connection to DOR’s operations – i.e., the agency’s work or activities – or its rental of the premises. Ms. Barresi’s arrival in the building’s parking lot and walking to work has nothing to do with the Mass. DOR’s operations.
The judge also rejected Cummings second argument that Ms. Barresi’s claim was one arising out of the premises rented to the Mass. DOR because Barresi was on her way to the leased space, Suite 760 when she fell.
In the judge’s legal opinion, the insurance policy clearly identified the insured location as Suite 760— an individual office suite and nothing more. Since it was undisputed that DOR did not rent the parking lot or any parking spaces, the parking lot was a common area maintained by Cummings. Thus, the court ruled the mere fact that Ms. Barresi was injured in a common area while en route to the rented premises does not automatically make her claim one arising out of the rented premises.
In conclusion, the judge ruled that since Ms. Barresi’s claim arose neither out of DOR’s operations nor DOR’s rented premises, it fell outside the additional insured endorsement’s coverage.
The court’s decision ended by stating:
Preferred Mutual’s duty to defend is not triggered, and neither is its duty to indemnify. Accordingly, [Preferred Mutual] is not liable for breach of contract and [Cumming’s] motion for summary judgment is denied.
Because [Preferred Mutual] does not owe [Cummings]f a duty to defend or indemnify, [ Preferred Mutual] motion for summary judgment is allowed.”
Thirty days to appeal
Cummings Properties has thirty days to appeal to the First Circuit Court of Appeals. Notwithstanding the judge’s clear-cut decision, in this case, an appeal is possible. While in her decision Judge Zobel cited Superior Court decisions in support of Preferred Mutual’s position, there is no Massachusetts appellate decision deciding the issue of whether additional insured coverage under a tenant’s policy extends to common areas.