Cases

Bunis v. Masha Mobile Moving & Storage, LLC

United States District Court for the Eastern District of Pennsylvania

July 12, 2023, Decided; July 12, 2023, Filed

CIVIL ACTION NO. 23-1237

DR. REGINA BUNIS v. MASHA MOBILE MOVING AND STORAGE, LLC

Prior History: Bunis v. Masha Mobile Moving & Storage, LLC, 2023 U.S. Dist. LEXIS 92401, 2023 WL 3689984 (E.D. Pa., May 26, 2023)

Core Terms

storage, damages, preempted, transportation, carrier, state law claim, interstate shipment, state law, containers, breach of contract, customer, shipment, shipping, packing, mover

Counsel: [*1] For DR. REGINA BUNIS, Plaintiff: WILLIAM CARL KATZ, LEAD ATTORNEY, SILVERANG ROSENZWEIG & HALTZMAN LLC, King of Prussia, PA.

For MASHA MOBILE MOVING AND STORAGE, LLC, doing business as, ZIPPY SHELL OF GREATER PHILADELPHIA, Defendant: THOMAS F. REILLY, THE CHARTWELL LAW OFFICES LLP, PHILADELPHIA, PA.

Judges: KEARNEY, J.

Opinion by: KEARNEY

Opinion

MEMORANDUM

KEARNEY, J.

Congress decided over a hundred years ago to preempt breach of contract, fraud, negligence, and related state law claims brought by disappointed customers of interstate moving services against a moving company for property damage when the mover possessed the property set to move across state lines. We must apply an exceedingly broad preemptive mandate inclusive of state law breach of contract, fraud, and negligence claims when the disappointed customer sues the moving company for conduct addressed by Congress in the Carmack Amendment to the Interstate Commerce Act. We today review a customer’s claim for damages caused by loss and damage to valuable personal items while allegedly in the possession of the moving company hired to take her personal items from a Pennsylvania home to a new Illinois home. The customer sues the mover under the Carmack Amendment. But she also [*2] sues the mover for breach of contract, conversion, violating the Pennsylvania Unfair Trade Practices and Consumer Protection Law, unjust enrichment, fraud, and negligent infliction of emotional distress. The mover seeks to dismiss all the claims other than the Carmack Amendment remedies citing Congress’s broad preemptive mandate. We studied the customer’s allegations. We agree with the mover finding Congress preempted these claims. We dismiss these state law claims as presently plead without prejudice.

I. Alleged Facts

Dr. Regina Bunis decided in July 2021 to move from Pennsylvania to Illinois.¹ Dr. Bunis suffers from “physical disabilities resulting from her service [with] an international trauma team responding to the September 11, 2001 terror attacks in New York City.”² Dr. Bunis contracted with Masha Mobile Moving and Storage, LLC to move her possessions including a specialty bed.³ She selected Masha Mobile because of its emphasis on secure storage services.⁴ Dr. Bunis hired Masha Mobile and purchased a series of premium services for “general packing and unpacking services, disassembly, packing and reassembly of several large furniture items, and specialty packaging and packing services for [her] lawn [*3] mowers and tools.”⁵ Dr. Bunis and Masha Mobile signed a bill of lading.⁶

Masha Mobile packaged Dr. Bunis’s possessions into twelve 15′ x 15′ storage containers between July 2021 and August 2022.⁷ Dr. Bunis locked each storage container with her own padlocks before Masha Mobile transported the containers to its Pennsylvania storage facility.⁸ Masha Mobile charges $420 per month for storage before transport.⁹ Dr. Bunis believed “[her] personal property would be safely stored in locked containers untouched by anyone from the moment it left [her] home until it arrived [at her final destination].”¹⁰ Masha Mobile stored Dr. Bunis’s belongings until November 2022 when Dr. Bunis moved to Illinois.¹¹

Masha Mobile’s employees appeared to have tampered with Dr. Bunis’s property and storage containers by the time they arrived in Illinois in November 2022 without padlocks.¹² Masha Mobile lost several of Dr. Bunis’s items of sentimental and monetary value, including antiques, gardening tools, furniture hardware, her specialty bed, and a crystal chandelier.¹³ Masha Mobile damaged Dr. Bunis’s personal property as wel1.¹⁴ Dr. Bunis is unaware of the extent of damages, including items lost. [*4] ¹⁵

Masha Mobile refused to adjust billings despite the apparent damages. It instead charged Dr. Bunis “$29,700.00 in quoted shipping fees.”¹⁶ Dr. Bunis proactively reported damages observed and “made a written demand upon [Masha Mobile] to recompense [her] the value of the property it had damaged, lost or stolen.”¹⁷ Dr. Bunis estimated over $300,000 in damages for lost and damaged items.¹⁸ The Hanover Insurance Company insures Masha Mobile. Hanover denied “Dr. Bunis’s claim asserting [it] did not exceed [Mobile Masha’s] $500.00 deductible.”¹⁹

Dr. Bunis sued Masha Mobile and Hanover for damages relating to Masha Mobile’s mishandling and damaging of her personal property while storing and moving the shipping containers from Pennsylvania to Illinois.²⁰ Dr. Bunis alleged Masha Mobile failed to adequately deliver, unpack, and reassemble Dr. Bunis’s possessions “despite [its] representations, contractual obligations, and statutory obligations.”²¹ Dr. Bunis sued both Masha Mobile and Hanover for violating the Carmack Amendment and for breach of contract.²² Dr. Bunis also sued Masha Mobile for conversion, violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, unjust enrichment, [*5] fraud, and negligent infliction of emotional distress.²³ Dr. Bunis seeks to recover more than $300,000 in damages from Masha Mobile and Hanover.

II. Analysis

Masha Mobile now moves to dismiss Dr. Bunis’s claims for breach of contract; conversion; violations arising under the Pennsylvania Unfair Trade Practices and Consumer Protection Law; unjust enrichment; fraud; and negligent infliction of emotional distress.²⁴ We grant Masha Mobile’s motion to dismiss as Congress preempts these claims under the Carmack Amendment to the Interstate Commerce Act.

Masha Mobile argues the Carmack Amendment‘s preemption provision bars Dr. Bunis “from bringing a suit on the basis of statute or common law action for losses or damages caused by the interstate shipment of household goods by common carriers.”²⁵ Masha Mobile argues Dr. Bunis is preempted from raising claims arising from loss or damage of goods transported and stored solely within Pennsylvania because her goods ultimately shipped interstate.²⁶

Dr. Bunis counters the Carmack Amendment does not preempt her state and common law claims arising from Masha Mobile’s conduct solely within Pennsylvania.²⁷ She argues the intrastate shipment and storage of her goods in Pennsylvania [*6] are an independent transaction from the eventual interstate shipment of those goods to her Illinois home.²⁸ Dr. Bunis also argues Masha Mobile is possibly a broker, and not a carrier as defined by the Carmack Amendment.²⁹ But Dr. Bunis does not allege Masha Mobile is a broker.³⁰ Dr. Bunis only alleges “[Masha Mobile] is a Carrier as defined in the Carmack Amendment and the Household Goods Consumer Protection Regulations.”³¹ We will not consider Dr. Bunis’s broker argument today because she does not allege it.

Congress, through the Carmack Amendment to the Interstate Commerce Act, imposes liability on carriers “for all damages incurred by the shipper while the shipped goods are in the possession and control of the carrier.”³² Masha Mobile is a carrier under the Carmack Amendment.³³ A shipper must prove “(1) delivery of goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) amount of the damages” to establish a prima facie case.³⁴ Dr. Bunis alleged Masha Mobile is a carrier subject to Carmack Amendment liability.³⁵ Dr. Bunis now disputes whether Masha Mobile is a “carrier” or a “broker” who can be held directly liable under the Carmack Amendment.³⁶ But Masha Mobile is not seeking to dismiss Dr. Bunis’s Carmack [*7] Amendment claim today.³⁷ We do not address the merits of Dr. Bunis’s Carmack Amendment claim.

We instead must address whether Congress, through the Carmack Amendment, preempts Dr. Bunis’s other claims. Congress, through the Carmack Amendment, “preempts all state law or common law remedies available to a shipper against a carrier [under a bill of lading] for loss or damage to interstate shipment.”³⁸ Congress defines covered transportation services as “services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, . . . storage, handling, packing, [and] unpacking.”³⁹ Our Court of Appeals instructs the Carmack Amendment has exceedingly broad preemptive force inclusive of state law breach of contract and negligence claims.⁴⁰ The Supreme Court reminds us “the Carmack Amendment is ‘comprehensive enough to embrace all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination. “‘⁴¹ The United States Court of Appeals for the Fifth Circuit instructed, in Moffit v. Bekins Van Lines Company, Congress preempted claims arising from misrepresentation, fraud, and intentional infliction of emotional distress when proceeding under the Carmack Amendment.⁴² The United [*8] States Court of Appeals for the Eighth Circuit instructed, in Fulton v. Chicago, Rock Island & P.R. Company, the Carmack Amendment governs claims arising from failure to fulfill, or negligent performance of an interstate contract for the transportation of goods.⁴³

Temporary storage related to the interstate shipment of goods is covered by the Carmack Amendment. Judge Smith in York v. Day Transfer Company found Congress in the Carmack Amendment preempted a negligence claim alleging a breach of “the duty to exercise care in the storage and delivery” of goods.⁴⁴ Judge Ezra in Tayloe v. Kachina Moving & Storage, Inc. held Congress through the Carmack Amendment preempted state law claims because the bill of lading covered both “transportation and storage” of goods.⁴⁵ A plain reading of the Carmack Amendment also identifies “storage” as a service covered by the preemption clause.⁴⁶

Congress in the Carmack Amendment preempts state law and common law claims for intrastate shipment “if the final intended destination at the time shipment begins is another state.”⁴⁷ Judge Rodriguez found the Carmack Amendment did not apply in BMW Auto Sales, Inc. v. Red Wolf Logistics, LLC when the “complaint alleges a purely intrastate shipment [*9] of property” and the “information before the Court only suggests a shipment within Texas.”⁴⁸

Dr. Bunis hired Masha Mobile for both the storage and transportation of her goods from Pennsylvania to Illinois.⁴⁹ The bill of lading required Dr. Bunis pay $29,700 for moving services and $420 per month for storage services before the interstate shipment of Dr. Bunis’s goods.⁵⁰ We agree with Judge Smith and Judge Ezra’s reasoning Congress preempted state law claims relating to the transportation and temporary storage of Dr. Bunis’s goods in Pennsylvania under the Carmack Amendment.⁵¹

Masha Mobile cannot be held liable for the state law or common law claims, including claims arising under temporary storage of goods in Pennsylvania with the ultimate goal of interstate shipment to Illinois.⁵² We distinguish Judge Rodriguez’s reasoning with admitted shipping solely in one state addressed in BMW Auto Sales, Inc. because Dr. Bunis “engaged” Masha Mobile to “safely and securely pack, store, and then transport her Household Goods from Pennsylvania to her new home in Illinois.”⁵³ Dr. Bunis plainly agreed Masha Mobile would transport her property from Pennsylvania to Illinois.⁵⁴ Congress requires we dismiss Dr. Bunis’s state law claims as [*10] preempted by the broad preemptive force of the Carmack Amendment.⁵⁵

III. Conclusion

We grant Masha Mobile’s Motion to dismiss all claims other than those under the Carmack Amendment. We dismiss Dr. Bunis’s state law and common law claims.

ORDER

AND NOW, this 12th day of July 2023, upon considering Defendant Masha Mobile Moving and Storage, LLC’s Motion (ECF Doc. No. 15) to dismiss the Plaintiff’s state law claims citing Congress’ preemption in the Carmack Amendment, Plaintiffs Response (ECF Doc. No. 16), and for reasons in today’s accompanying Memorandum, it is ORDERED:

1. Defendant’s Motion (ECF Doc. No. 15) is GRANTED requiring it answer Count I (Carmack Amendment) of the Complaint (ECF Doc. No. 1) on or before July 25, 2023; and,

2. We DISMISS the state law claims plead in Counts II through VII of the Complaint (ECF Doc. No. 1) without prejudice.

/s/ Kearney

KEARNEY, J.

End of Document

¹ECF 1 ¶ 31.

²Id. ¶ 58.

³Id. ¶ 31.

⁴Id. ¶ 26.

⁵Id. ¶ 36.

⁶Id. ¶41.

⁷Id. ¶¶ 37, 39.

⁸Id. ¶ 40.

⁹Id. ¶ 43.

¹⁰Id. ¶ 34.

¹¹Id. ¶34, 44.

¹²Id.

¹³Id. ¶¶ 48-51.

¹⁴Id.

¹⁵Id. ¶ 42.

¹⁶Id. ¶ 62.

¹⁷Id. ¶ 65.

¹⁸Id. ¶ 69.

¹⁹Id.

²⁰ECF 1. We granted Hanover’s motion to dismiss because it is not directly liable under the Carmack Amendment or in a contractual relationship with Dr. Bunis. ECF 13, 14.

²¹Id. ¶ 46.

²²Id. ¶¶ 71-88; 49 U.S.C. § 14706; 49 C.F.R. 375.101.

²³ECF 1 ¶¶ 89-118; 73 P.S. § 201-1.

²⁴ECF 15. Dr. Bunis must state a claim upon which relief can be granted to proceed beyond a motion to dismiss. Fed. R. Civ. P. 12(b)(6). The purpose of Rule 12(b)(6) is to test the sufficiency of the factual allegations in a complaint. Sanders v. United States, 790 F. App’x 424, 426 (3d Cir. 2019). If a plaintiff is unable to plead “enough facts to state a claim to relief that is plausible on its face,” the court should dismiss the complaint. Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)); see also Kajla v. U.S. Bank Nat’l Ass’n as Tr. for Credit Suisse First Boston MBS ARMT 2005-8, 806 Fed. Appx. 101, 104 n.5 (3d Cir. 2020) (quoting Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011)). “A claim is facially plausible ‘when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ Klotz v. Celentano Stadtmauer and Walentowicz LLP, 991 F.3d 458, 462 (3d Cir. 2021) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)). While “Nile plausibility standard is not akin to a ‘probability requirement,’ it does require the pleading show “more than a sheer possibility … a defendant has acted unlawfully.” Riboldi v. Warren Cnty. Dep’t of Human Servs. Div. of Temp. Assistance & Soc. Servs., 781 F. App’x 44, 46 (3d Cir. 2019) (quoting Iqbal, 556 U.S. at 678). “A pleading that merely ‘tenders naked assertion[s] devoid of further factual enhancement’ is insufficient.” Id. (quoting Iqbal, 556 U.S. at 668).

In determining whether to grant a Rule 12(b)(6) motion, “we accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the plaintiff’ but “disregard threadbare recitals of the elements of a cause of action, legal conclusions, and conclusory statements.” Robert W. Mauthe, MD., P.C. v. Spreemo, Inc., 806 F. App’x 151, 152 (3d Cir. 2020) (quoting City of Cambridge Ret. Sys. v. Altisource Asset Mgmt. Corp., 908 F.3d 872, 878-79, 69 V.I. 1034 (3d Cir. 2018)). Our Court of Appeals requires us to apply a three-step analysis to a 12(b)(6) motion: (1) we “‘tak[e] note of the elements a plaintiff must plead to state a claim’; (2) we “identify allegations that … `are not entitled to the assumption of truth’ because those allegations ‘are no more than conclusion[s]”‘; and, (3) “[w]hen there are well-pleaded factual allegations,’ we ‘assume their veracity’ … in addition to assuming the veracity of ‘all reasonable inferences that can be drawn from’ those allegations … and, construing the allegations and reasonable inferences ‘in the light most favorable to the [plaintiff …, we determine whether they ‘plausibly give rise to an entitlement to relief.’ Oakwood Labs. LLC v. Thanoo, 999 F.3d 892, 904 (3d Cir. 2021) (internal citations omitted); Connelly v. Lane Constr. Corp., 809 F.3d 780, 787 (3d Cir. 2016).

²⁵ECF 15-2 at 2. See Strike v. Atlas Van Lines, 102 F. Supp. 2d 599, 600 (M.D. Pa. 2000).

²⁶ECF 15-2 at 2.

²⁷ECF 16-1 at 7-9.

²⁸Id. Dr. Bunis “respectfully requests leave to amend the Complaint based upon the “true conversion” exception explained by our Court of Appeals in Certain Underwriters at Interest at Lloyd’s of London v. UPS of Am., Inc., 762 F.3d 332, 335-38 (3d Cir. 2014). Dr. Bunis hopes to amend her Carmack Amendment claims to more clearly plead even if the claim is governed by the Carmack Amendment, because Masha Mobile did not merely damage goods, but appears to have stolen material portions, the true conversion exception applies, excepting this case from the Carmack Amendments limitations on liability. ECF 16-1 at 9. We do not address Dr. Bunis’s “true conversion” exception argument today as she does not plead them. We will afford the parties time to amend consistent with Rule 11 as part of our trial scheduling Order to be entered later this month.

²⁹ECF 16-1 at 9-11.

³⁰See ECF 1.

³¹Id. ¶ 73.

³²49 U.S.C. § 14706; 49 C.F.R. 375.101.

³³49 USC § 13102(3) (“The term ‘carrier’ means a motor carrier, a water carrier, and a freight forwarder.”)

³⁴Paper Magic Grp., Inc. v. J.B. Hunt Transp., Inc., 318 F.3d 458, 461 (3d Cir. 2003) (quoting Beta Spawn, Inc. v. FFE Transp. Servs., 250 F.3d 218, 223 n. 4 (3d Cir. 2001)).

³⁵ECF 1 ¶ 73.

³⁶ECF 16-1 at 9-11.

³⁷See ECF 15.

³⁸Certain Underwriters at Interest at Lloyd’s of London v. United Parcel Serv. of Am., 762 F.3d 332, 335-37 (3d Cir. 2014) (quoting N Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456 (7th Cir. 1996)).

³⁹49 U.S.C. § 13102(23)(B).

⁴⁰Certain Underwriters at Interest at Lloyd’s of London, 762 F.3d 335-37.

⁴¹Glass v. Crimmins Transfer Co., 299 F. Supp. 2d 878, 887 (C.D. Ill. 2004) (quoting Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29, 57 S. Ct. 73, 81 L. Ed. 20 (1936)).

⁴²Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306-07 (5th Cir. 1993).

⁴³Fulton v. Chicago, Rock Island & P.R. Co., 481 F.2d 326, 331 (8th Cir. 1973).

⁴⁴York v. Day Transfer Co., 525 F. Supp. 2d 289, 301 (D.R.I. 2007) (emphasis added).

⁴⁵Tayloe v. Kachina Moving & Storage, Inc., 16 F. Supp. 2d 1123, 1128 (D. Ariz. 1998). See also Newens v. Orna Servs., No. 02-01570, 2002 U.S. Dist. LEXIS 10685, 2002 WL 1310734, at *3 (N.D. Cal. June 10, 2002) (finding the Carmack Amendment preempted conversion, theft, and intentional misrepresentation claims when parties entered “into a single agreement that encompassed the storage and moving of her possessions, with the overall goal of completing a move from Brooklyn to San Francisco”).

⁴⁶See 49 U.S.C. § 13102(23)(B).

⁴⁷Project Hope v. M/V IBN SINA, 250 F.3d 67, 75 (2d Cir. 2001). See also Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042, 1044 (5th Cir. 1976) (“It is elemental that a carrier is engaged in interstate commerce when transporting goods either originating in transit from beyond Texas or ultimately bound for destinations beyond Texas, even though the route of the particular carrier is wholly within one state.”).

⁴⁸BMW Auto Sales, Inc. v. Red Wolf Logistics, LLC, No. 21-14647, 2022 U.S. Dist. LEXIS 36493, 2022 WL 613849, at *2 (D.N.J. Mar. 2, 2022).

⁴⁹ECF 1 ¶¶ 19-70.

⁵⁰Id. ¶¶ 41, 43, 45, 62.

⁵¹York, 525 F. Supp. 2d at 301; Tayloe, 16 F. Supp. 2d at 1128.

⁵²ECF 1 ¶¶ 34-38.

⁵³Id ¶ 3.

⁵⁴Id.

⁵⁵Certain Underwriters at Interest at Lloyd’s of London, 762 F.3d at 335-37.

Pedroso v. Hanover Insurance Company

Luis Pedroso, trustee,¹ vs. Hanover Insurance Company & another.²

Notice: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel’s decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4, 881 N.E.2d 792 (2008).

PUBLISHED IN TABLE FORMAT IN THE MASSACHUSETTS APPEALS COURT REPORTS.

Disposition: Judgment affirmed.

Core Terms

insured, leased premises, coverage, leases, premises, common area, second paragraph, alley, rear, insurance company, tractor trailer, supervision, ownership, rented, snow, motor vehicle, hiring, loaned

Judges: [*1] Henry, Shin &Hodgens, JJ.

Opinion

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This insurance coverage dispute arises out of a tragic accident in which one man was killed and another was injured trying to free a tractor trailer from snow and ice in the rear alley of commercial rental property owned by the plaintiff, Luis Pedroso, as trustee of the LMP Realty Trust (LMP). LMP was sued in connection with the accident, and it sought a defense and indemnification from the defendants, Hanover Insurance Company (Hanover) and Sentinel Insurance Company, Limited (Sentinel), which insured two of LMP’s tenants. Hanover and Sentinel denied that they had a duty to defend or indemnify LMP, and this lawsuit, in which LMP asserted claims for breach of contract and violation of G. L. c. 93A, followed. In the Superior Court, a judgment on the pleadings entered in LMP’s favor on its breach of contract claims.³ Hanover and Sentinel appeal, and we affirm.

Background. LMP alleged the following facts.⁴ LMP owned commercial property that contained fourteen rental units. LMP leased one unit to Hanover’s insured, Do Can Brewery, LLC (Do Can), and another unit to Sentinel’s insured, North East Form Engineering, Inc. (North East). On February 6, [*2] 2015, the owner of Do Can, Patrick Slattery, was expecting the delivery of equipment. When the tractor trailer making the delivery arrived, Slattery directed the driver to the rear alley of the building. There, the tractor trailer got stuck in snow and ice. Slattery and an employee of North East, Jeffrey Sperrey, attempted to extricate the tractor trailer using Sperrey’s pickup truck. During the efforts to extricate the tractor trailer, Sperrey backed the pickup truck into Slattery and Gregg Stevens, an employee of another tenant. Slattery was killed and Stevens was injured. Slattery’s estate and Stevens brought claims against LMP, which LMP’s insurer, Liberty Mutual Insurance Company (Liberty Mutual), settled on LMP’s behalf.

LMP further alleged that Hanover and Sentinel also had a duty to defend and indemnify it where LMP was an additional insured on Hanover’s policy with Do Can and Sentinel’s policy with North East.⁵ In particular, Hanover’s policy with Do Can provided that LMP was an additional insured “only with respect to . . . [p]remises you own, rent, lease or occupy.” Sentinel’s policy with North East provided that LMP was an additional insured “only with respect to liability [*3] arising out of the ownership, maintenance or use of that part of the land or premises leased to you.”

Discussion. 1. Leased premises. In arguing that they had no duty to defend or indemnify LMP, Hanover and Sentinel rely on the fact that LMP was an additional insured (1) under the Hanover policy, only with respect to Do Can’s leased premises and (2) under the Sentinel policy, only with respect to liability arising out of the ownership, maintenance, or use of North East’s leased premises. Hanover and Sentinel argue that they had no duty to defend or indemnify LMP because the accident occurred in the rear alley, which they assert was a common area that was not part of the premises leased by their respective insureds.⁶

In determining whether the rear alley was part of the leased premises, we look to how the leases defined the leased premises, applying the usual rules of contract interpretation. “When the words of a contract are clear, they control, and we must construe them according to their plain meaning, in the context of the contract as a whole.” Lieber v. President & Fellows of Harvard College, 488 Mass. 816, 823, 179 N.E.3d 19 (2022). Here, the words of the contract were clear; the leased premises included the rear alley. Using Do Can’s lease as an example, the leases provided [*4] as follows:

“1. PARTIES . . . LESSEE hereby leases the following described premises:

“2. PREMISES A portion of the premises located at 44 Stedman Street, Lowell, Massachusetts being commonly referred to as Unit 4 . . . together with the right to use in common with others entitled thereto the common areas for ingress and egress and parking.”⁷

Read together, these paragraphs defined the leased premises as including the right to use the common areas for ingress and egress and parking, meaning the rear alley.⁸ While the leases could have been drafted to draw a distinction between the leased units and the accompanying right to use the common areas, identifying only the units as the leased premises, that is not what occurred here.⁹

We are unpersuaded by Hanover and Sentinel’s arguments to the contrary. Hanover and Sentinel argue that the leases distinguished between the premises and the leased premises, with the premises including the common areas and the leased premises not including the common areas. First, Hanover and Sentinel assert that because the second paragraph of each lease, quoted above, had a heading that read “PREMISES,” the language under that heading described the premises, not the [*5] leased premises. We are unpersuaded where the words immediately preceding the “PREMISES” heading stated that that the “LESSEE hereby leases the following described premises,” thereby clarifying that the premises being described were the leased premises. Second, Hanover and Sentinel assert that other lease provisions referred to the leased premises in ways that logically could not have applied to the common areas, and that the leased premises therefore did not include the common areas. It is true that some references to the leased premises logically could not have applied to the common areas, for example a requirement that the leased premises be maintained at a temperature of at least fifty degrees Fahrenheit and a provision making LMP responsible for the “removal of snow and ice from the parking lots surrounding the leased premises.” However, other references to the leased premises logically could have applied to the common areas,¹⁰ and the few instances where that was not true do not overcome the unambiguous definition contained in the second paragraph of each lease.

2. Automobile exclusion. Separately, Sentinel argues that there was no coverage where its policy with North East included [*6] an automobile exclusion, which excluded the following from coverage:

“‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading.’

“This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the ‘occurrence’ which caused the ‘bodily injury’ or ‘property damage’ involved the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft that is owned or operated by or rented or loaned to any insured.”

In addressing Sentinel’s arguments, we are guided by Worcester Mut. Ins. Co. v. Marnell, 398 Mass. 240, 496 N.E.2d 158 (1986), and First Specialty Ins. Corp. v. Pilgrim Ins. Co., 83 Mass. App. Ct. 812, 990 N.E.2d 86 (2013). We conclude that the allegations against LMP do not fall within the automobile exclusion, as that exclusion has been interpreted under the case law.

In Marnell, 398 Mass. at 241-242, two parents sought a defense and indemnification from their insurer for allegations that they negligently supervised a party hosted by their underage son — an unnamed insured on the policy — who left the party in an intoxicated [*7] state, drove his car under the influence, and struck and killed another person. The insurance company argued that the following exclusion barred coverage: “[liability coverages] do not apply to bodily injury or property damage . . . arising out of the ownership, maintenance, use, loading or unloading of . . . a motor vehicle owned or operated by or rented or loaned to any insured” (emphasis added). Id. at 242. The insurance company argued that because the allegations arose out of use of a motor vehicle owned or operated by any insured, namely the son who was an unnamed insured, the parents were not entitled to liability coverages. See id. at 242-243. The Supreme Judicial Court disagreed, noting that because the policy also contained a severability of insurance clause, “the term ‘insured’ as used in the motor vehicle exclusion refers only to the person claiming coverage under the policy.” Id. at 244. Because the motor vehicle involved in the fatal accident was not owned or operated by or rented or loaned to either of the parents who were claiming coverage, the exclusion did not bar coverage. See id. at 244-245.

In response, some insurance companies added clarifying language to their automobile exclusions — specifically, [*8] they added the language that appears in the second paragraph of the Sentinel automobile exclusion quoted above — and that language was addressed in First Specialty Ins. Corp., 83 Mass. App. Ct. at 814 n.3, 818. In First Specialty Ins. Corp., this court noted that “the second paragraph clearly envisions that two different insureds are involved.” Id. at 818. Specifically, the second paragraph of the automobile exclusion bars coverage if “(1) claims are brought against ‘any insured’ alleging negligent supervision or hiring of others by ‘that insured,’ and (2) the occurrence underlying those claims involved an automobile owned or operated by ‘any insured.'” Id. This court concluded that in the first clause, the reference to “any insured” meant only the insured claiming coverage but that in the second clause, the reference to “any insured” actually meant any insured. See id. at 819. In sum, where an automobile exclusion contains this additional language, for each insured claiming coverage, “we must determine whether, according to the complaint, that [insured] negligently hired or supervised another insured person who owned or operated the automobile involved in the occurrence underlying the claim. If so, that claim of negligence is unambiguously excluded from [*9] coverage.” Id.

Here, applying Marnell, the bodily injury did not arise out of the ownership, maintenance, use, or entrustment to others of a motor vehicle owned or operated by or rented or loaned to LMP, and the first paragraph of the automobile exclusion therefore does not bar coverage. Turning to the second paragraph of the automobile exclusion, under First Specialty, we look to whether the claims against LMP alleged negligent supervision or hiring. We conclude that they did not. The allegations against LMP were based on LMP’s failure to properly remove snow and ice from the rear alley. Slattery’s estate alleged that LMP “failed to properly clear the [p]remises of snow and ice,” and that the tractor trailer became “lodged in snow and ice on the [p]remises in the unsafe area created by [LMP’s] negligence.”¹¹ Where the claims against LMP did not allege negligent supervision or hiring, the second paragraph of the automobile exclusion does not apply, and the automobile exclusion does not bar coverage.¹²

Judgment affirmed.

By the Court (Henry, Shin &Hodgens, JJ.¹³,

Entered: June 14, 2023.

End of Document

¹Of the LMP Realty Trust.

²Sentinel Insurance Company, Limited.

³LMP agreed to a voluntary dismissal, with prejudice, of its c. 93A claims.

⁴For purposes of this appeal, Hanover and Sentinel do not dispute the factual allegations regarding the accident or that they insured two of LMP’s tenants. This appeal instead presents legal questions regarding how to interpret the underlying policies. We review the allowance of the motion for judgment on the pleadings de novo. Ridgeley Mgmt. Corp. v. Planning Bd. of Gosnold, 82 Mass. App. Ct. 793, 797, 978 N.E.2d 799 (2012).

⁵The real plaintiff in interest is Liberty Mutual, which brought this action in LMP’s name pursuant to Mass. R. Civ. P. 17 (a), 461 Mass. 1401 (2011). This was not disclosed to the court prior to oral argument and we caution that, going forward, disclosure would be the better practice.

⁶Separately, Sentinel argues that the accident did not arise out of North East’s ownership, maintenance, or use of the back alley. This argument is unavailing where the accident arose out of a North East employee’s use of the back alley to try to free the tractor trailer. See Commerce Ins. Co. v. Theodore, 65 Mass. App. Ct. 471, 476, 841 N.E.2d 281 (2006) (we give “arising out of” broad meaning).

⁷North East’s lease included the same language but specified that North East was leasing Unit 9.

⁸Hanover and Sentinel do not dispute that the areas for ingress and egress and parking included the rear alley.

⁹Hanover and Sentinel suggest that the leased premises could not have included the common areas because, according to Hanover and Sentinel, Massachusetts case law recognizes a distinction between leased premises and common areas. In part, Hanover and Sentinel rely on cases holding that (1) absent a contractual obligation to keep a leased premises safe, a commercial landlord is not liable for personal injuries arising from defects in leased premises but (2) a commercial landlord is liable for personal injuries arising from defects in common areas. See, e.g., Humphrey v. Byron, 447 Mass. 322, 329, 850 N.E.2d 1044 (2006). However, this case presents a different question: where the parties to a commercial lease define the leased premises as including common areas, are those common areas within the leased premises for purposes of determining the scope of an additional insured provision. Hanover and Sentinel do not provide any reason why the definition in the lease would not control.

¹⁰These references included, for example, a requirement that the leased premises be used for the conduct of the tenant’s business, a prohibition on conducting an unlawful trade or occupation in the leased premises, and a prohibition against subletting the leased premises without consent.

¹¹Sentinel points us to an allegation that LMP caused tortious injury and death “through [its] ownership, operation, management, maintenance and control of the Premises,” and suggests that this allegation concerned LMP’s obligation to supervise snow removal contractors or anyone trying to free the tractor trailer. However, when read in the context of the other allegations regarding LMP’s failure to properly remove the snow and ice, the allegation on which LMP relies concerned LMP’s obligation to keep the rear alley free of snow and ice.

¹²LMP’s request for an award of its appellate attorney’s fees and costs pursuant to Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 686 N.E.2d 989 (1997), is denied. The rule in Gamache does not apply here. As explained in John T. Callahan & Sons, Inc. v. Worcester Ins. Co., 453 Mass. 447, 447, 902 N.E.2d 923 (2009),

“It is well settled that an insured is entitled to recover reasonable attorney’s fees and expenses incurred in successfully establishing the insurer’s duty to defend under the terms of the policy. See [Gamache, [*10] supra at 98]. What happens when the party incurring attorney’s fees and expenses to establish the insurer’s obligation to defend is not the insured but a different insurer that has defended and provided coverage to the insured? That is the question raised in this case. We answer that the exception to the American Rule in Gamache and its progeny does not extend to allow the prevailing insurer recovery of its attorney’s fees associated with an action brought to establish the defense and coverage responsibility of another insurer.”

¹³The panelists are listed in order of seniority.