Dryden Oil Company of New England, Inc. v. Travelers Indemnity Co.

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-1608

DRYDEN OIL COMPANY OF NEW ENGLAND, INC., DRYDEN OIL COMPANY,
INC., and DRYDEN OIL COMPANY OF PENNSYLVANIA, INC.,

Plaintiffs, Appellants,

v.

THE TRAVELERS INDEMNITY COMPANY,
THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS, and
AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Cyr, Circuit Judge,

Bownes, Senior Circuit Judge,

and Boudin, Circuit Judge.

Darragh K. Kasakoff, with whom Seder & Chandler was on brief for

appellants.
John A. Nadas, with whom Bret A. Fausett, Elizabeth M. McCarron

and Choate, Hall & Stewart were on brief for appellees Travelers

Indemnity Company and Travelers Indemnity Company of Illinois.
Karl S. Vasiloff, with whom Catherine M. Colinvaux and Zelle &

Larson were on brief for appellee American Manufacturers Mutual

Insurance Company.

August 5, 1996

CYR, Circuit Judge. Plaintiffs-appellants Dryden Oil
CYR, Circuit Judge

Company of New England, Dryden Oil Company, and Dryden Oil

Company of Pennsylvania (collectively: "Dryden") challenge a

district court ruling rejecting their claim that defendants-

appellees, The Travelers Indemnity Company, The Travelers Indem-

nity Company of Illinois (collectively: "Travelers") and Ameri-

can Manufacturers Mutual Insurance Company ("American Mutual"),

are obligated to defend and indemnify Dryden in connection with a

lawsuit brought against Dryden by Raymond King, trustee of the

150 Worcester Center Boulevard Trust ("Worcester Trust"),

Dryden's former landlord. We affirm in part, and reverse and

remand in part.

I
I

BACKGROUND
BACKGROUND

A. The Historical Facts
A. The Historical Facts

For the period July 30, 1986, to July 30, 1987, defen-

dant-appellee Travelers issued Dryden (i) a primary comprehensive

general liability insurance policy ("primary liability policy"),

which included "property damage" and "personal injury" coverage,

and (ii) a catastrophic umbrella liability policy ("umbrella

policy"). For the period December 31, 1986, to December 31,

1987, Travelers issued Dryden a property and inland marine

insurance policy ("property insurance policy") as well, affording

coverage "against all risks of direct physical loss or damage."

Travelers provided Dryden with similar primary and umbrella

liability coverage to July 30, 1988. Defendant-appellee American

2

Mutual provided primary comprehensive liability coverage to

Dryden from July 31, 1988, to December 1, 1989.

On December 29, 1986, Dryden had leased 150 Worcester

Center Boulevard (the "Property") from White & Bagley Company

("White & Bagley"). Thereafter, Dryden used the Property for

mixing and manufacturing industrial lubricants and oils, as White

& Bagley had done for many years. On December 30, 1986, Dryden

listed the Property both in its primary and its umbrella liabili-

ty policies with Travelers. Later, Dryden listed the Property in

its property insurance policy with Travelers and its comprehen-

sive liability policies with American Mutual as well.1

On December 31, 1986, White & Bagley conveyed the

Property to the White & Bagley Liquidation Trust. On August 28,

1987, the White & Bagley Liquidation Trust sold the Property to

Worcester Trust, together with an assignment of the Dryden lease.

The latter transfer occurred after Worcester Trust had learned

the results of an environmental assessment of the Property

conducted pursuant to Mass. Gen. L. ch. 21E ("Massachusetts Oil

and Hazardous Material Release Prevention and Response Act"),

which indicated "limited contamination" requiring "minimal

remediation." Dryden continued to lease the Property until

December 31, 1988.

B. The Litigation
B. The Litigation

1As Dryden does not contend that the liability coverages
afforded under the American Mutual and Travelers policies differ
in any respect material to the claims presented on appeal, we
need not discuss either the Travelers umbrella or the American
Mutual primary liability policies.

3

In August 1990, Worcester Trust brought suit in

Massachusetts Superior Court against, inter alios, White &

Bagley, the White & Bagley Liquidation Trust, Dryden and Prescott

Bagley, President of Dryden Oil of New England (collectively:

"Owners/ Operators"), alleging, among other things, that there

had been "spills or releases of oil, industrial lubricants and/or

hazardous material during the transfer, storing, mixing and

manufacturing process" throughout the time White & Bagley owned

the Property, which continued while Dryden occupied the Property

under its lease with White & Bagley and resulted in severe

contamination from "oil and/or hazardous material."

After the pleadings were closed, three counts remained

against, inter alios, the Owners/Operators, including Dryden.

Counts I and II charged Dryden with liability for past and future

response costs imposed upon Worcester Trust, pursuant to Mass.

Gen. L. ch. 21E, for damage to real and personal property, and

for related attorney fees, incurred in connection with alleged

"releases" at the Property. Count III charged Dryden with

liability for damages sustained by Worcester Trust due to the

"improper, unsafe and otherwise negligent manner" in which

Dryden, inter alios, "stored oil, industrial lubricants and/or

hazardous materials." Five additional counts, directed against

Dryden alone, demanded damages for past and future losses caused

Worcester Trust due to Dryden's breaches of its lease,2 various

2The lease obligated Dryden to: (1) pay for all supplies,
materials and labor associated with cleaning and maintaining the
Property; (2) reimburse the lessor for repairs and replacements

4

forms of "waste" committed on the Property,3 conversion of

personal property, and engaging in unfair and deceptive acts or

practices in its leasehold relationship with Worcester Trust in

violation of Mass. Gen. L. ch. 93A, 2 and 11.

In due course, after Travelers and American Mutual

declined to defend or indemnify, Dryden brought a state court

action for declaratory relief, breach of contract, and for

alleged violations of Mass. Gen. L. ch. 93A & ch. 176D. Once

Travelers and American Mutual removed the action to federal

district court pursuant to 28 U.S.C. 1332, 1441, Dryden sought

necessitated by Dryden's negligent or willful acts; (3) surrender
the Property in rentable condition; and (4) pay all attorney fees
and expenses incurred by the lessor in the event of a breach or
default by Dryden under the lease. The lease allowed Dryden,
with the lessor's approval, to alter the Property in conformity
with all applicable federal, state and local laws, statutes,
ordinances and regulations.

3For example, Count VI alleged as follows:

a. Lessee failed to maintain and re-
pair the property in satisfactory manner;
b. Lessee physically damaged the Prop-
erty;
c. Lessee failed to remove trash which
it left strewn throughout the Property;
d. Lessee made alterations, additions,
improvements or changes to the Property with-
out the consent of the lessor and in viola-
tion of applicable laws, statutes, ordinanc-
es, rules, orders, regulations and require-
ments of federal, state and local government;
e. Lessee willfully and indiscrimi-
nately removed property and fixtures from the
premises causing damage to the realty;
f. Lessee abandoned personal property,
trade fixtures and equipment, making the
premises unrentable; and
g. . . . lessee caused the release of
oil and/or hazardous material.

5

summary judgment on its claim for declaratory relief relating to

the alleged duty to defend. The defendant insurers responded

with cross-motions for summary judgment on all three counts. The

district court ultimately adopted the report of a magistrate

judge and entered summary judgment for Travelers and American

Mutual on all counts. Dryden appealed.

II
II

DISCUSSION4
DISCUSSION

Under Massachusetts law, a liability insurance carrier

must defend an action against its insured if the allegations "are

`reasonably susceptible' of an interpretation that they state or

adumbrate a claim covered by the policy terms . . . ." GRE Ins.

Group v. Metropolitan Boston Hous. Partnership, Inc., 61 F.3d 79,

81 (1st Cir. 1995) (quoting Liberty Mut. Ins. Co. v. SCA Servs.

Inc., 588 N.E.2d 1346, 1347 (Mass. 1992)). The "complaint need

only show, through general allegations, a possibility that the

liability claim falls within the insurance coverage." SCA

Servs., Inc. v. Transportation Ins. Co., 646 N.E.2d 394, 397

(Mass. 1995). The duty to indemnify is defined less generously,

see Travelers Ins. Co. v. Waltham Indus. Labs. Corp., 883 F.2d

1092, 1099 (1st Cir. 1989) (citing Sterilite Corp. v. Continental

Cas. Co., 458 N.E.2d 338, 341 n.4 (Mass. App. Ct. 1983), rev.

4We review summary judgments de novo, to determine whether

there is a trialworthy dispute as to any material fact under the
applicable law. Commercial Union Ins. v. Walbrook Ins. Co., 7

F.3d 1047, 1048 n.1, 1050 (1st Cir. 1993). As all claims pose
pure questions of Massachusetts law relating to insurance con-
tract interpretation, our review is plenary throughout. Id. at

1048 n.1.

6

denied, 459 N.E.2d 826 (Mass. 1984)), as it depends on the

evidence, rather than an expansive view of the complaint, id.

(citing Newell-Blais Post #443 v. Shelby Mut. Ins. Co., 487

N.E.2d 1371, 1374 (Mass. 1986)).

We interpret the relevant policy language with a view

to whether "`an objectively reasonable insured . . . would expect

to be covered.'" GRE Ins. Group, 61 F.3d at 81 (quoting Trustees

of Tufts Univ. v. Commercial Union Ins. Co., 616 N.E.2d 68, 72

(Mass. 1993)). Unambiguous terms are given their plain meaning,

High Voltage Eng'g Corp. v. Federal Ins. Co., 981 F.2d 596, 600

(1st Cir. 1992) (citing Stankus v. New York Life Ins. Co., 44

N.E.2d 687, 689 (Mass. 1942)), and ambiguous terms are construed

against the insurer. Id. (citing August A. Busch & Co. of Mass.

v. Liberty Mut. Ins. Co., 158 N.E.2d 351, 353 (Mass. 1959)).

Once an insured establishes that a claim comes within the terms

of coverage, the insurer must demonstrate "the applicability of

any exclusion." GRE Ins. Group, 61 F.3d at 81 (citing Camp

Dresser & McKee, Inc. v. Home Ins. Co., 568 N.E.2d, 631, 633

(Mass. App. Ct. 1991)).

A. Property Damage Liability Coverage
A. Property Damage Liability Coverage

The Travelers primary liability policies included,

inter alia, a comprehensive general liability ("CGL") Form and a

Broad Form CGL Endorsement. The CGL Form obligated Travelers to

pay "all sums [for] which the [i]nsured shall become legally

obligated . . . because of . . . property damage to which [the

policy] applies, caused by an occurrence . . . ." The CGL Form

7

likewise imposed "[a] duty to defend any suit against the [i]n-

sured seeking damages on account of . . . property damage . . .

."5

Among the relevant property damage exclusions in the

CGL Form are (i) a "Contractual Liability Exclusion" for "liabil-

ity assumed by the [i]nsured under any contract or agreement

except an incidental contract" (emphasis added), which includes

any written lease of premises, and (ii) exclusion (f) relating to

the "emission, discharge, seepage, release or escape of any

liquid, solid, gaseous or thermal waste or pollutant . . . ." In

the primary liability policies, exclusion (f) is replaced by an

"Absolute Pollution Exclusion" for "property damage arising out

of the actual, alleged or threatened discharge, dispersal,

release or escape of pollutants . . . at or from premises the

named [i]nsured owns, rents or occupies . . . ." Under the

Absolute Pollution Exclusion, "[p]ollutants means any solid, liq-

uid, gaseous or thermal irritant or contaminant, including smoke,

5"Property damage" is

(1) physical injury to or destruction of
tangible property which occurs during the
policy period, including the loss of use
thereof at any time resulting therefrom, or

(2) loss of use of tangible property which
has not been physically injured or destroyed
provided such loss of use is caused by an
occurrence during the policy period.

"Occurrence" is "an accident, including continuous or
repeated exposure to conditions, which results in . . . property
damage neither expected nor intended from the standpoint of the
insured."

8

vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste

includes materials to be recycled, reconditioned or reclaimed."

The CGL Form also contains an exclusion (k), the Owned

or Leased Premises Exclusion, which bars coverage for damage to:

"(1) property owned or occupied by or rented
to the [i]nsured, (2) property used by the
[i]nsured, or (3) property in the care, cus-
tody or control of the [i]nsured or as to
which the [i]nsured is for any purpose exer-
cising physical control . . . ."

The Broad Form CGL Endorsement in the primary liability

policies affords further Contractual Liability Coverage by

extending the definition of "incidental contract" to include "any

oral or written contract or agreement relating to the conduct of

the named insured's business." This contractual liability

coverage is exempted from various property damage exclusions in

the CGL Form, but the list of exemptions does not mention exclu-

sion (f), its replacement the Absolute Pollution Exclusion, or

exclusion (k) (Owned or Leased Premises Exclusion). In sum, the

Contractual Liability Coverage provided under the Broad Form CGL

Endorsement is subject to both the Absolute Pollution Exclusion

and Owned or Leased Premises Exclusion (k).

1. The Absolute Pollution Exclusion
1. The Absolute Pollution Exclusion

We think the district court correctly determined that

the claims alleged in the Worcester Trust complaint ("property

damage caused by `spills or releases of oil, industrial lubri-

cants and/or hazardous material'") came squarely within the

Absolute Pollution Exclusion. Dryden Oil Co. of New England v.

The Travelers Indem. Co., No. 92-40135, slip op. at 10 (D. Mass.

9

Nov. 18, 1994) (Report and Recommendation) (citing Essex Ins. Co.

v. Tri-Town Corp., 863 F. Supp. 38 (D. Mass. 1994) (under Massa-

chusetts law, Absolute Pollution Exclusion excepts coverage for

physical injury from carbon monoxide releases)). A fair reading

of the Absolute Pollution Exclusion clause bars coverage for

"'any form of pollution.'" United States Liab. Ins. Co. v.

Bourbeau, 49 F.3d 786, 788 (1st Cir. 1995) (under Massachusetts

law, lead paint chips deposited on land in the course of strip-

ping and painting building constitute a "pollutant").

Dryden nonetheless contends that it cannot now be known

whether the damage allegedly sustained by the Property resulted

from a "pollutant." It relies on inapposite authority, see

Westchester Fire Ins. Co. v. City of Pittsburg, Kan., 791 F.

Supp. 836 (D. Kan. 1992), for its claim that diesel fuel is not a

"pollutant." There, a sprayed mixture of diesel fuel and the

insecticide malathion was held not to be a "pollutant" within the

meaning of an exclusion clause which defined "pollutants" in a

manner similar to the present exclusion clause. As is readily

apparent from an earlier and related case cited by Dryden,

however, see Westchester Fire Ins. Co. v. City of Pittsburg,

Kan., 768 F. Supp. 1463 (D. Kan. 1991), aff'd sub nom., Pennsyl-

vania Nat'l Mut. Cas. Ins. Co. v. City of Pittsburg, Kan., 987

F.2d 1516 (10th Cir. 1993), and from an earlier and related case

not cited by Dryden, see Westchester Fire Ins. Co. v. City of

Pittsburg, Kan., 794 F. Supp. 353 (D. Kan. 1992), aff'd sub nom.,

Pennsylvania Nat'l Mut. Cas. Ins. Co. v. City of Pittsburg, Kan.,

10

987 F.2d 1516 (10th Cir. 1993), the issue in the City of

Pittsburg, Kan. trilogy was whether malathion mixed with diesel

fuel not diesel fuel alone is a pollutant. City of

Pittsburg, Kan., 987 F.2d at 1517. Moreover, the Tenth Circuit

affirmed the district court on the basis that the "spraying" had

been "sudden and accidental" thereby removing it from the

explicit language of the exclusion clause not on the basis

that the City was spraying a pollutant. Id. at 1519-20.

Finally, the Massachusetts Supreme Judicial Court, to

which we look in this matter, see Commercial Union Ins., 7 F.3d

at 1048, n.1, recently assumed that a home heating oil spill "was

comprehended by an exclusion for `loss . . . caused by . . .

release, discharge or dispersal of contaminants.'" Hanover New

England Ins. Co. v. Smith, 621 N.E.2d 382, 383 n.2 (Mass. App.

Ct. 1993) (quoting Jussim v. Massachusetts Bay Ins. Co., 610

N.E.2d 954, 955 (Mass. 1993)). Whether or not oil or industrial

chemicals necessarily constitute pollutants in all forms and

circumstances, however, given the policy definition of "pollut-

ants" and our reasoning in Bourbeau, supra, we think the absolute

pollution exclusion language in these policies would not have

permitted an objectively reasonable policyholder to expect

liability coverage for contamination resulting from "spills or

releases of oil, industrial lubricants and/or hazardous material

during the transfer, storing, mixing and manufacturing process"

as alleged in the Worcester Trust complaint against Dryden. At

the very least, an objectively reasonable policyholder would

11

regard spills or releases of oil, industrial lubricants or

hazardous material as "materials to be disposed of or waste."

Bourbeau, 49 F.3d at 788 (internal quotation marks omitted).

Thus, we think an objective policyholder reasonably could not

have believed that "`smoke, vapor, soot, [and] fumes' would be

considered pollutants," id. at 788-89 (alteration in original),

whereas oil, lubricants and hazardous waste "[were] not." Id. at

789.6

2. Owned or Leased Premises Exclusion (k)
2. Owned or Leased Premises Exclusion (k)

Dryden challenges the district court ruling that the

plain meaning of Owned or Leased Premises Exclusion (k) barred

liability coverage for the Worcester Trust breach-of-contract

claims for damages to the Property while Dryden leased and/or

controlled the Property. Dryden argues that the nonpollution-

related claims alleged in counts VI, VII and VIII are neither

comprehended within the Absolute Pollution Exclusion nor Owned or

Leased Premises Exclusion (k), because "[a]t the time the

[Worcester Trust] claims were filed with [the Massachusetts

Superior Court] Dryden [no longer] own[ed], occupi[ed], rent[ed]

6Our view comports with the position taken in Titan Holdings

Syndicate, Inc. v. City of Keene, N.H., 898 F.2d 265 (1st Cir.

1990), where we determined under New Hampshire law that excessive
noise and light from a city sewage treatment plant were not
"pollutants" within the meaning of an absolute pollution exclu-
sion barring coverage for "irritants" and "contaminants." We
noted that though excessive noise and light "may be `irritants,'
. . . they are not solid, liquid, gaseous or thermal irritants.

Nor are they generally thought of as similar to smoke, vapor,
soot, fumes, acids, alkalis, chemicals, or waste, the illustra-
tive terms used in the policy definition. Noscitur a sociis."

Id. at 268 (footnote omitted).

12

or control[led] the property."

Assuming these claims are not within the Absolute

Pollution Exclusion, we are nonetheless persuaded that liability

coverage was barred by Owned or Leased Premises Exclusion (k).

Although exclusions must be strictly construed, Waltham Indus.

Labs. Corp., 883 F.2d at 1097 (citing Quincy Mut. Fire Ins. Co.

v. Abernathy, 469 N.E.2d 797, 799 (Mass. 1984)), these primary

liability policies explicitly restricted coverage to property

damage occurrences "during the policy period." Consequently, no

reasonably objective policyholder could have believed that Owned

or Leased Premises Exclusion (k), which barred coverage for

"damage to . . . property rented to the Insured," somehow con-

verted the policies into "claims-made" policies to which Owned or

Leased Premises Exclusion (k) no longer applied because the lease

had lapsed.

A primary function served by Owned or Leased Premises

Exclusion (k) "is to prevent the insured from using a liability

insurance policy as if it provided property insurance." Kenneth

S. Abraham, Environmental Liability Insurance Law 163 (1991). It

likewise insulates against "the `moral hazard' problem where an

insured has less incentive to take precaution owing to the

existence of insurance." Barry R. Ostrager & Thomas R. Newman,

Handbook on Insurance Coverage Disputes 10.03[b], at 441 (8th

ed. 1995) (quoting United States v. Conservation Chem. Co., 653

F. Supp. 152, 199 (W.D. Mo. 1986) (internal quotation marks

omitted)). These recognized aims would be subverted by Dryden's

13

overly inventive reading of Owned or Leased Premises Exclusion

(k).

3. Contractual Liability Coverage
3. Contractual Liability Coverage

Next, Dryden advances two grounds for its contention

that the nonpollution-related contract claims alleged by Worces-

ter Trust are comprehended by the "property damage" liability

coverage. First, coverage is provided for an "incidental con-

tract," which is extended by the Broad Form CGL Endorsement to

include not only "any written . . . lease of premises" but also

"any oral or written contract or agreement relating to the

conduct of the insured's business." Second, Dryden says, the

Worcester Trust nonpollution-related contract claims arise from

matters having to do with the written lease of the Property. Its

argument is untenable.

The policies exempt an "incidental contract," viz., a

lease, from the Contractual Liability Exclusion contained in the

CGL Form, but not from Owned or Leased Premises Exclusion (k) in

the CGL Form. Under the Broad Form CGL Endorsement, the defini-

tion of "incidental contract" is broadened by the Contractual

Liability Coverage provision, but the Broad Form CGL Endorsement

leaves Owned or Leased Premises Exclusion (k) in full force with

reference to Contractual Liability Coverage. Thus, by clear

implication Owned or Leased Premises Exclusion (k) bars the

extended Contractual Liability Coverage in relation to an "inci-

dental contract."

We therefore conclude, as did the district court, that

14

the property damage coverage described in these liability poli-

cies imposed no duty upon the defendant insurers to defend Dryden

in the Worcester Trust action. Furthermore, since the duty to

indemnify is narrower than the duty to defend under the primary

liability policies, Waltham Indus. Labs. Corp., 883 F.2d at 1099,

the district court correctly ruled as well that the defendant

insurers were under no duty to indemnify Dryden for any property

damage recoveries by Worcester Trust.7

B. Personal Injury Liability Coverage
B. Personal Injury Liability Coverage

Under the Broad Form CGL Endorsement, the insurer is

obligated to defend its insured, and to indemnify for any amounts

its insured becomes legally obligated to pay, in any action for

"damages because of personal injury . . . to which [the policy]

applies, sustained by any person or organization and arising out

of the conduct of [n]amed [i]nsured's business . . . ." (Emphasis

added.) The term "personal injury" is defined as

(1) false arrest, detention, imprisonment, or
malicious prosecution;
(2) wrongful entry or eviction or other inva-
sion of the right of private occupancy;
(3) a publication or utterance
(a) of a libel or slander or other
defamatory or despairing material,
or
(b) in violation of an individual's

7We caution, however, that the ultimate resolution of the
Worcester Trust action may affect the duty to indemnify under
these liability policies. That is to say, should the evidence in
the underlying Worcester Trust action against Dryden reveal that
there was a covered occurrence, and should Worcester Trust be
allowed to amend its complaint, Dryden would be entitled to
indemnification for the damages recovered against it and for the
costs of its defense. See Terrio v. McDonough, 450 N.E.2d 190,

194 (Mass. App. Ct.), rev. denied, 453 N.E.2d 1231 (Mass. 1983).

15

right of privacy;
except publications or utterances in the
course of or related to advertising, broad-
casting, publishing or telecasting activities
conducted by or on behalf of the [n]amed
[i]nsured shall not be deemed personal inju-
ry.

This personal injury coverage does not apply, however, "to lia-

bility assumed by the [i]nsured under any contract or agreement."

The district court ruled that Dryden had not alleged

claims within the personal injury coverage for "wrongful entry or

eviction or other invasion of the right of private occupancy,"

since "the wrongful eviction/personal invasion provisions of the

applicable insurance could not have been intended to cover the

kind of indirect and incremental harm that results to property

interests from pollution." Dryden Oil Co. of New England, No.

92-40135, slip op. at 12 (citing County of Columbia v. Continen-

tal Ins. Co., 634 N.E.2d 946, 950 (N.Y. 1994)). The district

court further noted the apparent incongruity which would obtain

if pollution liability coverage were found under the "personal

injury" clause despite the fact that "property damage" liability

coverage is expressly barred by the Absolute Pollution Exclusion.

Id.

Although the Supreme Judicial Court has yet to address

the matter, the Massachusetts Appeals Court has held that "the

definition of personal injury on the [Endorsement] is very

limited." LaFrance v. Travelers Ins. Co., 594 N.E.2d 550, 551

(Mass. App. Ct.), rev. denied, 598 N.E.2d 1133 (Mass. 1992) (the

identically-defined term "personal injury" does not even include

16

"bodily injury") (emphasis added). Moreover, as we have noted,

personal injury liability coverage obligates the insurer to

indemnify for liability incurred for certain intentional acts by

the insured, including:

Group A false arrest, detention or impris-
onment, or malicious prosecution;
Group B the publication or utterance of
a libel or slander or of other defamatory or
disparaging material, or a publication or
utterance in violation of an individual's
right of privacy . . . ;
Group C wrongful entry or eviction or
other invasion of the right of private occu-
pancy[.]

Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d

370, 373 (1st Cir. 1991) (alteration in original).

In Titan Holdings Syndicate, Inc. v. City of Keene,

N.H., 898 F.2d 265, 267 (1st Cir. 1990) ("Titan"), the insurers

Titan Holdings Syndicate, Inc. ("Titan") and Great Global

Assurance Company ("Great Global") contended there was no

duty to defend against claims "characterized as pleas of trespass

and nuisance" brought by homeowners who alleged "continuous[]

bombard[ment] by and expos[ure] to" noxious fumes, loud noise and

bright light emanating from the insured's sewer treatment plant

abutting their land.8 The insured argued that its "plant's

8The Seventh Circuit has decided, under Illinois and Missou-
ri law, that "personal injury" coverage is not restricted by a
clause which "applies only to the policy's property damage and
bodily injury provisions." Pipefitters Welfare Educ. Fund v.

Westchester Fire Ins. Co., 976 F.2d 1037, 1042 (7th Cir. 1992).

"[The insurer's] attempts to circumvent the plain language of the
pollution exclusion in its policy are disingenuous and misleading
indeed, they are nearly sanctionable and as such do not
warrant any discussion." Id. It came to a similar conclusion

under Wisconsin law. Scottish Guar. Ins. Co. v. Dwyer, 19 F.3d

17

fumes, noise and light" constituted a wrongful entry of, or

eviction from, the abutting homeowners' property, id. at 272,

hence came within the insurers' personal injury liability

coverages for "wrongful entry" or "wrongful eviction." Finding

no case law defining "wrongful entry," the Titan panel analogized

to an action for trespass under New Hampshire law which requires

an intentional invasion. Id. (citing Moulton v. Groveton Papers

Co., 289 A.2d 68, 72 (N.H. 1972)). As the complaint alleged no

intentional invasion of the abutting landowners' property, Titan

found no actionable wrongful entry claim under New Hampshire law.

Id. The Titan panel also questioned though it did not decide

"whether the alleged spreading of fumes, noise and light falls

within the ordinary meaning of wrongful entry of property." Id.

at 272 n.7. Thus, as the Fifth Circuit has noted, Titan "did not

hold that the migration of fumes, noise and light constituted a

wrongful entry . . . ." Gregory v. Tennessee Gas Pipeline Co.,

948 F.2d 203, 209 (5th Cir. 1991). Finally, after observing that

a wrongful eviction presupposes a landlord-tenant relationship,

Titan, 898 F.2d at 272 (citing 52 C.J.S. Landlord & Tenant 455

307, 309 (7th Cir. 1994) ("[C]overage for personal . . . injuries
. . . is not subject to the pollution exclusion."). The Eleventh
Circuit also has concluded that "[b]y its terms, the pollution
exclusion clause does not apply to coverage under the personal
injury endorsement . . . ." City of Delray Beach, Fla. v.

Agricultural Ins. Co., 85 F.3d 1527, 1533 (11th Cir. 1996)

(Florida law). The Sixth Circuit, on the other hand, has come to
the opposite conclusion under Michigan law. Harrow Prods., Inc.

v. Liberty Mut. Ins. Co., 64 F.3d 1015, 1021-25 (6th Cir. 1995).

We need not consider whether the absolute pollution exclusion
applies to the personal injury liability coverage under Massachu-
setts law, since we conclude that the complaint alleges no claim
within the "personal injury" coverage under these policies.

18

& 460(1)), the Titan panel concluded that the personal injury

liability coverage under the Titan policy was restricted to

"wrongful entry into, or eviction of a person from, a room,

dwelling or premises that the person occupies." Id. at 271-72.

Dryden urges the same analogy, especially since tres-

pass is not necessarily an intentional tort under Massachusetts

law. See Sheppard Envelope Co. v. Arcade Malleable Iron Co., 138

N.E.2d 777 (Mass. 1956) (airborne emissions of cinders and other

gritty materials, negligent or otherwise, constitute a continuing

trespass). Its analogy simply does not fit. Not only have we

decided that the wrongful conduct comprehended by the "personal

injury" coverage afforded under policies like the present one

amounts to an intentional tort under Massachusetts law, see

Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d at

373, but the Massachusetts tort of wrongful entry has yet to be

extended beyond trespasses by landlords upon the leased premises.

See Gidwani v. Wasserman, 365 N.E.2d 827 (Mass. 1977); Tinkham v.

Wind, 65 N.E.2d 14 (Mass. 1946).9

9Dryden relies on Scottish Guar. Ins. Co. v. Dwyer, 19 F.3d

307, 311 (7th Cir. 1994), which cites Titan as support for the

holding that "wrongful entry" equates with "trespass" under
Wisconsin law, which, like Massachusetts law, does not require
that an actionable trespass have been intentional. Even though
the Dwyer panel did not take issue with the insurer's "as-

sert[ion] that the term `wrongful entry' has been used by Wiscon-
sin courts in only one context the improper entry by a land-
lord onto the leased property of a tenant," id., it reasoned

that "nothing [in the Wisconsin cases cited by the insurer]
suggests that the tort [of wrongful entry] should be limited to
landlord-tenant disputes." Id. The Dwyer panel went on to say:

"When faced with a similar lack of controlling authority under
New Hampshire law, [the First Circuit] concluded that the tort of
wrongful entry `most closely resembles that of trespass.'" Id.

19

Although there existed a landlord-tenant relationship

between Worcester Trust and Dryden, the Worcester Trust complaint

alleges claims by Worcester Trust, the landlord, against Dryden,

the tenant. Dryden offers no authority for its unstated premise

that a tenant in possession under a valid lease may be liable to

its landlord for unlawful entry upon the leased premises under

Massachusetts law. Since wrongful eviction likewise contemplates

wrongful conduct by a landlord against its tenant, see Squeri v.

McCarrick, 588 N.E.2d 22 (Mass. App. Ct. 1992), the Worcester

Trust claims against Dryden plainly do not come within the

personal injury coverage for "wrongful entry or eviction" under

Massachusetts law.

(quoting Titan, 898 F.2d at 272). In doing so, Dwyer extended

Titan beyond its rationale.

Titan equated the tort of wrongful entry with trespass under

New Hampshire law only because the panel was "unable to find any

New Hampshire cases defining a tort of wrongful entry." Titan,

898 F.2d at 272 (emphasis added). Whereas Massachusetts case law
has defined the tort of wrongful entry only in the context of an
intrusion by the landlord upon the premises leased by its tenant.
Against this inapposite decisional backdrop, therefore, we
decline to broaden the scope of the Massachusetts tort of wrong-
ful entry absent a clear signal from the Commonwealth courts,
especially in the instant context where the insurance contract
definition for "personal injury" liability is "very limited."
LaFrance, 594 N.E.2d at 551.

Absent some authoritative signal from the
legislature or the courts of Massachusetts,
we see no basis for even considering the pros
and cons of innovative theories . . . . We
must apply the law of the forum as we infer
it presently to be, not as it might come to
be. Although Massachusetts authority is
sparse, we see no basis for applying any rule
other than the traditional one.

Dayton v. Peck, Stow and Wilcox Co. (Pexto), 739 F.2d 690, 694-95

(1st Cir. 1984).

20

Dryden nonetheless argues that these Worcester Trust

claims are embraced by the personal injury coverage as "other

invasion[s] of the right of private occupancy." Titan addressed

the scope of liability coverage afforded by this clause under New

Hampshire law.10 There, in addition to the policy issued by

Titan, the City had a liability policy issued by Great Global,

which afforded "personal injury" coverage for "`wrongful entry or

eviction or other invasion of the right of private occupancy.'"

Titan, 898 F.2d at 272 (emphasis in original).

The Titan panel first observed that "an invasion of the

right of private occupancy need not involve `an appreciable and

tangible interference with the physical property itself.'" Id.

(quoting Town of Goshen v. Grange Mut. Ins. Co., 424 A.2d 822,

824 (N.H. 1980)).11 Given this "broad[]" construction of the

10Prior to the Titan decision, the Seventh Circuit had

determined, under the ejusdem generis rubric, that the term

"other invasion" referred exclusively to invasions upon real
property, not to a conversion of a vehicle. Red Ball Leasing,

Inc. v. Hartford Accident & Indem. Co., 915 F.2d 306 (7th Cir.

1990) (applying Indiana law). See also Hartford Accident &

Indem. Co. v. Krekeler, 491 F.2d 884 (8th Cir. 1974) ("personal

injury" coverage for "wrongful entry or eviction, or other
invasion of the right of private occupancy," embraces tort of
trespass under Missouri law).

11The Titan panel noted that in Town of Goshen the New

Hampshire Supreme Court held that a sufficient claim for invasion
of the right of private occupancy had been stated by the allega-
tion that "the Town and its officials had wrongfully refused to
grant a property owner permission to develop a subdivision,
causing him economic hardships and monetary losses, and denying
him the right of free enjoyment of his property . . . ." Titan,

898 F.2d at 272. The New Hampshire Supreme Court accordingly
ruled in Town of Goshen that the insurance coverage for 1983

claims, as distinguished from common-law claims, was unclear,
then went on to construe the policy against the insurer. Town of

Goshen, 424 A.2d at 824-25.

21

clause "other invasion of the right of private occupancy,"

Gardner v. Romano, 688 F. Supp. 489, 492 (E.D. Wis. 1988) (citing

Town of Goshen), the Titan panel concluded, applying New Hamp-

shire law, that "the [homeowners' suit] alleges just such an

invasion, and so is covered by Great Global's policy." Titan,

898 F.2d at 273. The panel went on to observe that the matter

might [have been] left there," id., but out of a concern for

fairness it permitted "Great Global, on remand, to produce the

type of evidence relied on in Town of Epping, if it exists," id.,

to demonstrate that the parties to the insurance contract had not

intended that the clause cover such an invasion.12

As the Massachusetts courts have yet to construe the

clause "other invasion of the right of private occupancy," the

only reliable interpretive guides available to us are the state-

ment by the Massachusetts Appeals Court: "the definition of

personal injury is very limited[,]" LaFrance, 594 N.E.2d at 551;

see also Losacco v. F.D. Rich Constr. Co., 992 F.2d 382, 384 (1st

Cir.) (intermediate state appellate court opinion may afford

reliable guidance in "ascertaining state law"), cert. denied, 114

12Titan noted that in Town of Epping v. St. Paul Fire &

Marine Ins. Co., 444 A.2d 496, 498 (N.H. 1982), the "[New Hamp-

shire] Supreme Court agreed that the clause `other invasion of
the right of private occupancy' lacks precise definition," Titan,

898 F.2d at 272, with respect to the coverage for 1983 liabili-
ty, as distinguished from coverage for common-law tort claim
liability. "Explaining that the rule requiring ambiguous clauses
to be construed in favor of the insured is only a presumption
which can be defeated by evidence that the parties did not intend
to provide for coverage for [civil rights and official liability]
claims, [the New Hampshire Supreme Court adverted to] . . .
extraneous evidence of the parties' intentions regarding
coverage." Id. (citing Town of Epping, 444 A.2d at 499).

22

S. Ct. 324 (1993), and the principle of ejusdem generis, which

holds that "`general terms which follow specific ones [are

limited] to matters similar to those specified.'" Powers v.

Freetown-Lakeville Regional Sch. Dist. Comm., 467 N.E.2d 203, 207

n.8 (Mass. 1984) (quoting United States v. Powell, 423 U.S. 87,

91 (1975)); see also Berniger v. Meadow Green-Wildcat Corp., 945

F.2d 4, 8 (1st Cir. 1991).

Under Massachusetts law, then, the phrase "other inva-

sion of the right of private occupancy" would mean "other inva-

sion of the [tenant's] right of private occupancy," since an

actionable "wrongful entry or eviction" claim under Massachusetts

law may be brought only by a tenant against its landlord. See

Gidwani, 365 N.E.2d at 830; Tinkham, 65 N.E.2d at 162; Squeri,

588 N.E.2d at 24. Moreover, it is significant that this narrow-

ing construction nonetheless leaves meaning to the term "other

invasion," see United States v. Tortora, 922 F.2d 880, 887 (1st

Cir. 1990) (doctrine of ejusdem generis applies if "the specific

terms of an enumeration suggest a class which is not exhausted by

the enumeration"), in that it would afford coverage for "personal

injury" or liability claims brought by tenants against their

landlords, claims "that are similar to but not encompassed by

`wrongful entry or eviction.'" Bernstein v. North East Ins. Co.,

19 F.3d 1456, 1458 (D.C. Cir. 1994) (racial discrimination by

private landlord against prospective tenant is not an "other

invasion"). See also Boston Hous. Auth. v. Atlanta Int'l Ins.

Co., 781 F. Supp. 80, 84 (D. Mass. 1992) (racial discrimination

23

by public housing landlord against tenants not an "other invasion

of the right of private occupancy"). We accordingly

conclude that the clause "wrongful entry or eviction or other

invasion of the right of private occupancy" does not comprehend

these Worcester Trust claims, which do not allege wrongful

conduct by a landlord against its tenant. Therefore, as did the

district court, we hold that the applicable "personal injury"

liability coverage imposed no duty to defend or indemnify Dryden

against the Worcester Trust claims. But cf. note 7 supra.

C. The "All Risks" Property Insurance Policy
C. The "All Risks" Property Insurance Policy

The Travelers property insurance policy included a

"Building and Personal Property Special Form" ("Special Form")

that "insures against all risks of direct physical loss or damage

except as otherwise provided in this form and other provisions of

the policy which apply." The Dryden complaint alleges that

Travelers must defend Dryden in the Worcester Trust action

because the "damages sought therein constitute and concern `risks

of direct physical loss or damage' to 150 Worcester Center

Boulevard." It further alleges that Travelers must indemnify

Dryden "for all sums which [Dryden] may become legally obligated

to pay as damages on account of any and `all risks of direct and

physical loss or damage' to the property known as 150 Worcester

Center Boulevard." Dryden contends that the Special Form obli-

gates Travelers to defend and indemnify because "the damages

complained of by [Worcester Trust] are clearly covered by the

policy" and "a consequent risk of any such damage is a lawsuit by

24

[Worcester Trust], as Dryden's landlord, to recover the costs of

such damage[]" from Dryden, its tenant. We do not agree.

The Travelers property insurance policy imposes no duty

to defend Dryden in suits for "physical loss or damage." Al-

though the policy affords Travelers the option to defend its

insured, Dryden does not contend that the option to defend

constituted the requisite agreement, see Aetna Cas. & Sur. Co. v.

Sullivan, 597 N.E.2d 62, 63 (Mass. App. Ct. 1992), upon which

might be predicated a duty to defend. Nor has Dryden demonstrat-

ed reason, see Dayton v. Peck, Stow and Wilcox Co. (Pexto), 739

F.2d 690, 694 (1st Cir. 1984) (court reluctant, sitting in

diversity action, to extend state law), or authority for implying

such a duty under Massachusetts law. Cf. Shell Oil Co. v.

Winterthur Swiss Ins. Co., 15 Cal. Rptr. 2d 815, 848 (Cal. Ct.

App. 1993) (no implied duty to defend under "all risks" policy)

(California law).

We therefore conclude, as did the district court,

though for different reasons, that Travelers assumed no duty

under the property insurance policy to defend Dryden in connec-

tion with the Worcester Trust action. Since defendants have no

duty to defend under their liability policies, and Travelers has

no duty to defend under its "all risks" property insurance

policy, we affirm the district court rulings rejecting Dryden's

motion for partial summary judgment, and granting defendants'

cross-motion for summary judgment, on the duty to defend under

all the defendants' policies. The district court

25

concluded that the property insurance policy required Travelers

neither to defend nor indemnify Dryden, since Worcester Trust

alleges that all damage to the Property was caused by Dryden

itself.

[The property insurance] policy insured
Dryden Oil "against all risks of direct phys-
ical loss or damage" to buildings and person-
al property owned or occupied by Dryden Oil.
This policy provides first-party coverage for
claims by Dryden Oil that its own property
had been damaged by a third party, not for

claims that it had damaged a third person's
property. . . . The simple conclusion is
that the policy in question afforded Dryden
Oil protection for damage to its property
(i.e., Dryden Oil is covered for losses it

suffers as a result of damage to its prop-
erty) and not for damage [Dryden] caused to
the Property.

Dryden Oil Co. of New England, No. 92-40135, slip op. at 14.

Dryden contends, however, that the "all risks" property

insurance coverage does not depend upon who caused the damage to

the Property. Moreover, neither Travelers nor the district court

identifies policy language limiting the "all risks" coverage to

damage caused by third parties.13 Finally, no one has cited, nor

have we found, an unambiguous provision in the Travelers "all

risks" property insurance policy excluding coverage for any

damage to the Property caused by Dryden, the policyholder and

tenant. See High Voltage Eng'g Corp., 981 F.2d at 600. Conse-

quently, we are unable to discern a supportable basis for the

13The Insurance Environmental Litigation Association
("IELA") maintains in its amicus brief that the district court
incorrectly limited the coverage afforded under the Travelers
property insurance policy to property damage caused by a third
party.

26

district court holding.14

We do not mean to suggest that Dryden necessarily can

prevail on its claim for indemnity under the property insurance

policy. The difficulties impeding indemnity coverage determina-

tions involving latent perils, such as accumulations of waste and

hazardous materials, may become almost unmanageable in the

abstract setting preceding a judicial determination as to the

nature and extent of any damage, its causes and timing. See

generally, Dale L. Kingman, First Party Property Policies and

Pollution Coverage, 28 Gonz. L. Rev. 449, 471-72 (1993). Be that

as it may, the declaratory ruling that Travelers had no duty to

indemnify Dryden under the "all risks" property insurance policy

for any damage Dryden may have caused to the Property lacks

discernible record support.15 Therefore, we vacate that portion

of the declaratory judgment and remand for such further proceed-

14The only authority cited by Travelers is inapposite. See

Edward J. Gerrits, Inc. v. National Union Fire Ins. Co. of

Pittsburgh, Pa., 634 So. 2d 712, 713 (Fla. Dist. Ct. App.)

(stating that an "all risk[s]" policy "is a first-party claim
policy which insures [Gerrits] against physical damage or loss to
the property brought about by some external cause other than the
insured.") (per curiam), rev. denied, 645 So. 2d 452 (Fla. 1994).

Unlike the "all risks" property insurance policy issued by
Travelers, however, coverage under the Gerrits policy was ex-

pressly limited to "damage to the property insured from any
external cause . . . ." Id.

15Travelers represents in its appellate brief that "[t]he
duty to defend [is] the issue primarily briefed by the parties to
date" and "the duty to indemnify, if one exists, can be estab-
lished only by further [factfinding] proceedings . . . ."
Defendants-Appellees' Brief at 36 n.18. Regrettably, more
focused advocacy, in the district court and on appeal, may well
have enabled a definitive resolution of this claim in the first
instance.

27

ings, consistent with this opinion and 28 U.S.C. 2201(a), as

the district court in its sound discretion deems appropriate.

III
III

CONCLUSION
CONCLUSION

Under their liability policies, Travelers and American

Mutual have no duty to defend and indemnify Dryden against the

claims asserted in the Worcester Trust action. There is no

"property damage" coverage under the liability policies because

the Worcester Trust claims are expressly excepted from coverage

by the Absolute Pollution Exclusion or the Owned or Leased

Premises Exclusion. There is no coverage under the liability

policies for "wrongful entry or eviction or other invasion of the

right of private occupancy," and thus no "personal injury"

coverage, for the Worcester Trust claims against its tenant,

Dryden, because wrongful entry, wrongful eviction, and "other

invasion[s] of the right of private occupancy," contemplate

wrongful conduct by a landlord against its tenant. Whatever

coverage may be available under its "all risks" property insur-

ance policy, Travelers has no obligation to defend Dryden in the

Worcester Trust action, only an option to defend. Accordingly,

as a matter of law, defendants neither breached a contractual

duty to defend Dryden under any of their policies, nor a duty to

indemnify Dryden under their liability policies.16 Consequently,

16After ruling that defendants were under no duty to defend
or indemnify Dryden under any of their policies, the district
court granted summary judgment for defendants on the dependent
breach-of-contract claim as well. Dryden makes no contention
that its breach-of-contract claim does not depend on the declara-

28

Dryden's claims under Mass. Gen. L. chapter 93A and chapter 176D

fail as well.17

Finally, we are unable to discern a supportable basis

for the district court ruling that there was no duty to indemnify

Dryden under the Travelers "all risks" property insurance policy

since Dryden itself caused the damage for which it seeks indemni-

fication. Consequently, we vacate the declaratory ruling as to

the duty to indemnify under the property insurance policy, as

well as its denial of the breach-of-contract claim which is

dependent on the unsupported declaratory ruling. Accordingly,

these interdependent claims are remanded for such further pro-

ceedings, consistent with this opinion and 28 U.S.C. 2201(a),

as the district court in its sound discretion deems appropriate.

Affirmed, in part, and reversed and remanded, in part;
Affirmed, in part, and reversed and remanded, in part;

the parties shall bear their own costs. SO ORDERED.
the parties shall bear their own costs. SO ORDERED.

tory rulings relating to the duty to defend and the duty to
indemnify under defendants' policies.

17Dryden argues that defendants' "delays in responding to
Dryden's requests for coverage and their changing positions with
respect to their reasons for denying coverage" gave rise to
viable claims for relief under Mass. Gen. L. ch. 93A and 176D.
We do not agree. Under these statutes, "a claimant must estab-
lish both that an unfair trade practice occurred and that the

unfair trade practice resulted in a loss to the claimant." Alan

Corp. v. International Surplus Lines Ins. Co., 22 F.3d 339, 343

(1st Cir. 1994). Even assuming the alleged delays and vacilla-
tions by defendants amounted to unfair trade practices, a matter
we need not address, Dryden has not established that it sustained
a loss as a result of the alleged unfair trade practices, since
defendants were under no duty to defend.

29