When “You” Means Your Spouse: Appeals Court Reverses Insureds’ Win

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In the world of insurance litigation, sometimes the meaning of the simplest word can determine liability for substantial damages. That’s exactly what happened in the recent Massachusetts Appeals Court decision in United Financial Casualty Company v. Bell et al., where the definition of “you” became the pivotal issue in determining whether excess coverage was available beyond Liberty Mutual’s $250,000 policy limits payment.

The Collision Course to Litigation

The facts merit careful examination. In June 2013, Angela Bell purchased an automobile insurance policy (number 901381956-00) from United Financial Casualty Company (UFCC), a wholly-owned subsidiary of Progressive Commercial Holdings. At the time of application, Bell was unmarried and residing in York, Maine. The policy covered Bell as the owner and regular driver of a 2005 Hyundai Elantra – the only vehicle listed on the declarations page.

The UFCC policy contained specific provisions that would later become the basis of the Appeals Court’s decision:

Definition of “You” and “Your”: “‘You’ and ‘your’ mean: a. A person shown as a named insured on the declarations page; and b. The spouse of a named insured if residing in the same household at the time of the loss.”

Exclusion 11: “Coverage under this Part I, including our duty to defend, will not apply to an Insured person for bodily injury or property damage arising out of the ownership, maintenance, or use of any vehicle owned by you or furnished or available for your regular use, other than a covered auto for which this coverage has been purchased.”

Duty to Report Changes: The policy required Bell to “promptly notify” Progressive of certain changes, including “a change with respect to the residents in your household or the persons who regularly operate a covered auto” and “an operator’s marital status changes.”

On August 24, 2013, approximately two months after purchasing the policy, Bell married Ellen Helinski. Following their marriage, both resided together in York, Maine. Helinski owned a 2011 Nissan Murano insured through Liberty Mutual. Bell never notified UFFC of her marriage to Helinski, nor did she seek to add the Murano to her UFCC policy.

On October 30, 2013, Bell was driving Helinski’s Murano on Route 128 in Wakefield, Massachusetts, when she was involved in a multi-vehicle collision that resulted in serious injuries to Ashley Wilson. The Wilsons (Ashley, Jonathan, and Cameron) subsequently filed a personal injury action against Bell and Helinski. Liberty Mutual, as the primary insurer of the Murano, provided a defense and ultimately offered its policy limits of $250,000 to settle the claims.

The question then arose whether the UFCC policy provided excess coverage beyond Liberty Mutual’s limits.

UFCC filed a declaratory judgment action in Middlesex Superior Court, arguing that Exclusion 11 precluded coverage because: (1) Helinski, as Bell’s spouse residing in the same household at the time of the accident, met the policy definition of “you”; (2) the Murano was a vehicle owned by “you” (Helinski) but not listed as a covered auto on Bell’s policy; and (3) the accident arose out of Bell’s use of this vehicle.

The Superior Court: Finding Ambiguity in the Interplay

Superior Court Judge Deakin’s 20-page decision acknowledged that “there can be no question that the express language of Exclusion 11 applies in this case.” The judge agreed that a person of ordinary intelligence would understand Exclusion 11 to exclude coverage when driving a spouse’s car not covered by the insured’s policy.

However, Judge Deakin then denied UFCC’s summary judgment motion based on what he termed an “interplay” between the definition of “you” and other policy provisions – specifically the “DUTY TO REPORT CHANGES” and “FRAUD OR MISREPRESENTATION” sections. The judge reasoned:

“[A]n ordinary person might well read the Policy as excluding coverage for an intentional, and therefore fraudulent, withholding of information but not from a good faith failure to update.”

After UFCC stipulated it had no evidence of fraud, a second judge (Judge Barry-Smith) granted the Wilsons’ motion for summary judgment, explicitly adopting Judge Deakin’s reasoning. UFCC appealed the summary judgment decision to the Appeals Court.

Maine Law Governs: A Critical Jurisdictional Point

A crucial aspect of this case, highlighted during oral arguments and explicitly noted in the Appeals Court decision, is that Maine law governed the substantive interpretation of the policy. Page 4 of the Appeals Court decision states: “The parties agree that the substantive law of Maine governs this dispute.” This choice of law provision stemmed from language in Bell’s policy stating that disputes regarding coverage would be governed by the law of the state listed on the application as the insured’s residence—in this case, York, Maine.

During oral arguments, both parties acknowledged this jurisdictional point, with the Appellee’s brief noting that the governing principles of Maine law are “familiar and universal.” Attorney Abraham, representing the Wilsons, suggested during oral arguments that Maine law is “probably not substantively that much different from Massachusetts law when it comes to exclusions.”

Indeed, both jurisdictions follow the principle that exclusions are disfavored and ambiguities in insurance policies are construed strictly against the insurer. As Judge Deakin noted in his Superior Court decision, under Maine law, “[e]xclusions and exceptions in insurance policies are disfavored and are construed strictly against the insurer,” citing Estate of Mason v. Amica Mut. Ins. Co., 153 A.3d 495, 498 (2017).

It’s worth noting that while Massachusetts courts applied Maine’s substantive law to interpret the policy language, they followed Massachusetts procedural rules, as is customary when Massachusetts courts apply another jurisdiction’s substantive law.

Appeals Court: Plain Language Prevails

On February 5, 2025, the Massachusetts Appeals Court reversed the Superior Court’s decision in a Rule 23.0 (unpublished) decision. The court held that the policy language was unambiguous and operated to bar coverage. Writing for the panel, the court emphasized:

“The exclusion applies to bodily injury or property damage arising out of the use of a vehicle owned by ‘you,’ other than a ‘covered auto.’ It is undisputed that Helinski owned the Murano and that she fell within the policy’s definition of ‘you’ because she was ‘the spouse of a named insured [Bell] . . . residing in the same household at the time of the loss.’ It is also undisputed that the Murano was not listed on the declarations page, and so was not a ‘covered auto.’ The exclusion thus unambiguously applies.”

The Appeals Court rejected the Superior Court’s focus on Bell’s duty to report changes, stating:

“The flaw in the defendants’ argument is that it was the underlying change in Bell’s marital status, and not her failure to report the change, that triggered the application of exclusion 11. That is, even had Bell promptly updated her marital status, the exclusion would still have applied — because the Murano would still be a vehicle owned by a spouse living in the same household as the insured — unless additional coverage was purchased for the Murano, making it a ‘covered auto.'”

The court distinguished this case from a Maine case cited by Bell, Patrons Mut. Ins. Co. v. Rideout, noting that in Rideout, the insurer attempted to use the insured’s failure to report changes as a reason to void coverage that the insurer would otherwise be required to provide under the plain terms of the policy. In contrast, “from the day the policy went into effect, Bell was on notice that it excluded coverage if she was involved in an accident while driving a vehicle owned by her spouse but not insured under the policy.”

Judicial Reasoning: Applying Plain Language Principles

Notwithstanding the Superior Court’s concerns, the Appeals Court’s reasoning holds up logically. The application of the exclusion doesn’t depend on whether Bell reported her marriage – it depends on Helinski’s status as Bell’s spouse at the time of the accident. Similarly, coverage depends on the actual household composition at the time of loss and not what the insurer knows about the household.

While the Appeals Court applied Maine precedent, its reasoning reflects general insurance principles that courts in Massachusetts and other jurisdictions typically follow when interpreting similar policy provisions. The court’s reliance on Commercial Union Ins. Co. v. Alves, 677 A.2d 70 (1996) and Maine Mut. Fire Ins. Co. v. Grant, 674 A.2d 503 (Me. 1996) aligns with established interpretative standards for insurance contracts in Massachusetts.

The Appeals Court’s analysis, while conducted under Maine law, reinforces principles that Massachusetts practitioners will recognize: unambiguous policy language will be enforced as written, and courts will not rewrite clear policy terms even when the outcome may seem harsh to policyholders who fail to appreciate the interplay of definitions and exclusions.

When the Basics Still Matter: Excluded Operators and Household Members

This may be old hat to Massachusetts agencies familiar with household member and excluded driver issues, but the Bell decision reinforces fundamental principles that warrant continued vigilance. Massachusetts agents know all too well the potentially devastating consequences that can arise when policyholders fail to understand who is covered – and who isn’t – under their policies.

The Bell case evokes memories of Commerce Insurance Co., Inc. v. Gentile, 472 Mass. 1012 (2015), where insureds were left personally responsible for nearly $1.4 million after permitting an excluded operator to use their vehicle. As Agency Checklists reported on October 6, 2015, the SJC affirmed the insurer’s right to disclaim optional liability coverage for accidents involving excluded operators. See Agency Checklists’ October 6, 2015, article, “SJC Affirms Auto Insurer’s Right To Disclaim Optional Liability For Excluded Operator Accident.”

Notably, while Bell involved Maine law and the automatic application of an exclusion based on household composition, it raises parallel concerns about changes during policy periods. Interestingly, in Gentile, the SJC expressly overruled the Appeals Court on the issue of whether Massachusetts policyholders have “a continuing duty to inform insurers of changed circumstances during the policy period, as opposed to during the application period before the policy issues.” The SJC deliberately left this question unresolved under Massachusetts law.

If anything, decisions like Bell and Gentile reinforce the basics for Massachusetts agencies handling personal lines to check as a standard operating procedure: (1) current marital status of all operators; (2) all vehicles garaged at the residence, regardless of ownership; and (3) all licensed household members, even those who “never drive” client vehicles. Documentation of these discussions remains essential protection against E&O exposure when clients experience adverse coverage determinations based on household membership.

For Massachusetts agencies, the message is clear – ensure your clients understand who “you” includes under their policy. Because in insurance, as in life, “you” might mean more people than you think.