In a case brought in the United States District Court for Massachusetts involving one of our south shore clients, Keystone Elevator and Modernization, Inc., McGowan & Lavin successfully established an insurer’s duty to defend against claims advanced in an underlying personal injury matter. In summary, the insurer sought to deny our client coverage, claiming the building was being converted to condominiums, and therefore an exclusion buried within the policy applied. With insurance coverage disputes, ambiguities in the insurance policy are strictly construed against the drafter. Christopher J. Greeley moved for judgment on the pleadings after identifying multiple possible interpretations of the wording of an exclusionary provision. In April of 2018, Chris presented arguments favoring insurance coverage, explaining in detail the ambiguities and multiple interpretations of the policy provision. On May 21, Massachusetts Lawyers Weekly published the below article regarding Judge Sorokin’s decision, affording our client Judgment on the Pleadings and the legal expenses incurred as a result of the declaratory Judgment action:
Where an employee of a subcontractor was injured while performing elevator decommissioning work on a building being converted into a condominium, the contractor is entitled to judgment on the pleadings regarding a commercial lines policy issued by an insurance company, as the policy’s condominium conversion exclusion does not apply.
“All parties agree for present purposes that the exclusion’s language — ‘has been converted, changed or modified at any time … to condominiums’ — would preclude coverage of liability arising in relation to work on a building that already had been converted from apartments to condominiums. The parties also agree that the apartment building in which [Gary F.] O’Brien’s injuries occurred had not yet been so converted. Rather, the parties dispute whether the exclusion encompasses an apartment building that is in the process of being converted to condominiums and, if so, whether the construction project here involved a building being converted to condominiums at the time of Keystone’s work. …
“The Court interprets the exclusion strictly to encompass structures already converted to condominiums, and not structures in the process of being converted to condominiums. Therefore, Admiral [Insurance Company]’s complaint fails to state a claim for declaratory relief, because it does not allege an exclusion that plausibly could apply to Keystone’s work on the structure in this case. It is therefore dismissed.
“Separately, Keystone requests that the Court award its legal expenses incurred as a result of this declaratory judgment action. … Here, by establishing the inapplicability of the exclusion that Admiral invoked, Keystone has ‘establish[ed] [Admiral’s] continuing duty to defend’ and is thus entitled to recover its legal expenses from Admiral.”
Admiral Insurance Company v. Keystone Elevator Service & Modernization, LLC, et al. (Lawyers Weekly No. 02-264-18) (6 pages) (Sorokin, J.) (Civil No. 17-11524-LTS) (May 16, 2018).