The Supreme Judicial Court (SJC) of Massachusetts has decided what it called a “close” case, Green Mountain Insurance Company v. Wakelin.
The particular difficulty, in this case, resulted from the Court having to decide if the exclusion in a homeowners policy barring coverage for bodily injury—“arising out of premises…owned by an insured…that is not an insured location”—applied to an accident caused by a portable generator located on an uninsured premises owned by an insured.
The death of four people at uninsured premises in Maine
This tragic case involved the accidental death of four persons from carbon monoxide poisoning caused by a portable electric generator in Maine in a cabin. The deceased were all under 23 years old and had been spending the weekend in the cabin celebrating a birthday party for one of them. The owner of the cabin, Mark Wakelin, lost two children, aged 21 and 23.
In 2015, defendant Mark Wakelin [“Mr. Wakelin”] was the owner of the cabin and property in Byron, Maine. The cabin was considered “off the grid,” meaning that it had no town- supplied electricity.
On July 14, 2015, Brooke Wakelin, 21, of Attleboro, Massachusetts, her brother Matthew, 18, of Mansfield, Massachusetts, Keith Norris, 23, of Attleboro, Massachusetts, and Deanna Powers, 22, of Mansfield, Massachusetts, visited the cabin in preparation for a family celebration of Brooke Wakelin’s 22nd birthday on July 19.
A little after 8:30 AM, on July 17, Oxford County sheriff’s deputies responded to a 911 call after Mr. Wakelin had arrived at the cabin and found his two children, their two friends, and a pet beagle they had brought along. All were deceased. A gas-powered electric generator located in the ground level basement of the cabin was plugged into the cabin’s refrigerator but had no gas in its tank.
The Maine medical examiner ruled the deaths as accidental carbon monoxide poisoning caused by the electric generator. The sheriff’s office hypothesized that the group who had arrived on July 14, had started the generator located in the basement to plug in a small refrigerator in the cabin. Instead of moving the generator outside, they left the generator running in the basement and went to bed, with the generator still running. The generator stopped running when its gas ran out, but by that time, all the occupants of the cabin had died.
The Green Mountain homeowners policy and the demand letter from the estate of one of the deceased
Mr. Wakelin had a homeowner’s policy with the Green Mountain Insurance Company, a subsidiary company of the Concord Group (“Green Mountain”) for his home in Braintree, Massachusetts.
The policy had the common liability exclusion for premises owned by the insured, which was not an insured location under the policy. Under this exclusion, there was no coverage for bodily injury arising out of any premises that are either:
a. Owned by an ‘insured;’
b. Rented to an ‘insured;’ or
c. Rented to others by an ‘insured;’ that is not an insured location.
Mr. Wakelin’s Green Mountain homeowners policy did not identify his Maine property as an insured location, and Mr. Wakelin testified that he had never bought any other insurance coverage on the cabin where the tragedy occurred.
Claim from estate leads to declaratory judgment suit by Green Mountain
About three months after Mr. Norris’ accidental death at the cabin, legal counsel for his estate notified Green Mountain by letter of the estate’s wrongful death claim against its insured, Mr. Wakelin. The letter claimed that Mr. Wakelin had negligently failed to instruct his children and their friends on the proper and safe use of the generator and also failed to warn them of the dangers of running the generator in an enclosed area.
Two months later, in December 2015, Green Mountain filed a declaratory judgment action against Mr. Wakelin, the estate of Mr. Norris, and the estate of Ms. Powers in Norfolk Superior Court.
The insurer’s suit assumed that the Norris and Powers’ estates would make claims that its insured, Mr. Wakelin, was negligent and his negligence had caused the deaths of Mr. Norris and Ms. Powers. Based on this reasonable assumption, Green Mountain requested the Superior Court to make an anticipatory declaration that Mr. Wakelin’s policy exclusion for claims arising out of premises owned by the insured, but not an insured location under the policy, barred coverage.
Green Mountain negotiates an agreement protecting its insured from excess liability
Although Green Mountain sought to bar Mr. Wakelin from any liability coverage, it did negotiate with the estates a protective agreement for its insured. Green Mountain proposed, and the estates agreed to a side-agreement. The side-agreement provided that the estates would limit their recovery to the Green Mountain policy limits. This side-agreement protected Mr. Wakelin’s personal assets and made Green Mountain the real-party-in-interest and Mr. Wakelin, a nominal party with no financial interest in the outcome of the coverage suit.
Green Mountain’s appeal taken up directly by the Supreme Judicial Court
In 2018, Green Mountain moved for Summary Judgment in the Superior Court, claiming there was no dispute over the material facts and that it had the right to judgment in its favor as a matter of law.
Green Mountain argued that the deaths arose from the uninsured premises because, since the camp had no other power except for some solar panels, without the generator, then, the house had no lights, no electricity, no refrigerator use, no microwave use and no ability to use any other equipment there which required an electrical source.
Also, Green Mountain relied on an expert electrical engineer who opined that the four deaths had arisen out of a combination of a) using the generator inside the cabin which b) had no adequate ventilation to disperse the carbon monoxide and that the generator was strictly used to provide electrical power for the cabin and its premises because electric utility power was not available.
The Superior Court ruled against Green Mountain, after which Green Mountain appealed to the Appeals Court. After the appeal was entered in the Appeals Court, the Supreme Judicial Court entered an order transferring the appeal to its docket for decision.
The SJC finds coverage depended on whether the generator was a condition of the uninsured premises
The SJC first noted that the liability coverage in a homeowners policy has two distinct liabilities components:
First, there is liability resulting from the condition of the insured premises, and second, there is liability stemming from the insured’s negligent or other tortious conduct that can occur on or off the insured premises.
As to the first type of liability, the Court noted there was no dispute that since the Maine camp did not appear on the policy, there was no coverage if the wrongful death claims arose out of condition of the uninsured camp.
The Court framed the question as to whether the deaths in this case “arose from the uninsured premises” or Mr. Wakelin’s alleged negligence. In approaching the answer to this question, the Court noted that it had never had a prior occasion to interpret the specific exclusionary language involved in Green Mountain’s policy.
Court emphasizes the fact that the generator was portable
The Court recited in its opinion, the undisputed facts in the record of the case concerning the generator in question
In 2012, Mr. Wakelin purchased the Honda generator in Weymouth and paid an extra $250 for a portable model. Portability was an important consideration. Among the features that made portability desirable to Wakelin was his awareness that the generator could be used as a backup power source at home, and that the generator could be used as a power source in a campground.
He transported it to his camp in Maine, where he used it exclusively for powering his tools (and occasionally for running a microwave oven if the generator was powered up anyway.
When using the portable generator, Wakelin would position it outside of the cabin. When not in use, the generator was stored in the cabin’s ground level basement. When he departed the property, Wakelin would chain the generator to the garage door, along with two all-terrain vehicles, to prevent thieves from wheeling it away.
The generator was never permanently attached to the cabin. The generator was never hard-wired into the cabin’s electrical system and could not be since the cabin’s rough electrical wiring was not yet functional.
The Court rules that unattached personal property is not a condition of the premises
The Court, in making their decision, did state that “Whether the personal liability in the instant case arises out of the uninsured premises presents a close question.” However, the judges went on to say:
“We conclude that the generator does not constitute a condition of the uninsured premises, and the accident caused by the generator, therefore, cannot trigger the uninsured premises exclusion.”
The Court based its decision on the facts that “the generator here did not resemble any property condition that typically gives rise to personal liability, such as “the loose board, the falling roof slate, the defect in the walkway, [or] the failure of outdoor lighting” associated with premises liability claims.
The Court pointed out that:
- The generator was portable, and Mr. Wakelin even spent more money on the generator so that it would be portable.
- It was also not hard-wired into the cabin’s rough electrical system to make it a part of the cabin.
- It was only “attached” to the cabin by means of a chain so it would not be stolen. It was not regularly used to provide electricity in the cabin.
- The generator was brought to the cabin to charge power tools used to complete the cabin’s construction and was not continuously run to power everyday appliances inside the camp.
The Court’s example on loaning the generator highlights premise condition vs. personal negligence
In explaining their decision and why the uninsured premise exclusion did not apply, the Court pointed out that the potential claim against Mr. Wakelin arose out of his alleged failure to instruct his children on how to properly use the generator and not because of any alleged defect of the Maine property.
The Court gave as an example of this point that Mr. Wakelin would have had the same potential liability if he had loaned his portable generator to a third person. However, in that case, if a similar tragedy occurred, with similar allegations of a failure to warn about the use of the generator, he would have had coverage.
The Court notes that Green Mountain and other insurers could exclude all liability for an uninsured premise
To the Court, another point for coverage applying was that, to some extent, the exclusion appeared ambiguous and, therefore, had to be construed in favor of the insured.
The Court quoted language in a similar case finding that bodily injury caused by movable personal property located on uninsured premises was covered. In that case, the Court had stated that if the insurer had “wanted to exclude from coverage all injuries occurring at an owned premises that it did not insure, it would have been child’s play to say so.”
The Court then quoted unambiguous language from an Arizona case that would exclude any coverage for occurrences on an uninsured property. This exclusion, with the emphasis added by the SJC, bars coverage for damages “arising out of any act or omission occurring on or in connection with any premises owned . . . by any insured other than an insured premises.”
The Court’s final conclusion
The SJC’s final statement and ruling was:
“The generator that caused the tragic accident in this case when it was improperly used inside the cabin was not a condition of the uninsured premises. The accident, therefore, did not arise out of the uninsured premises.”
Owen Gallagher
Co-Founder & Publisher Agency Checklists
Owen is an experienced insurance litigator as well as a certified mediator and arbitrator who specializes in insurance industry disputes.
Over the course of his career, Owen has argued a number of cases in the Massachusetts Supreme Judicial Court and has helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth. Reach Owen by using one of the links below:
