United States Court of Appeals
For the First Circuit
No. 09-2059
PENN-AMERICA INSURANCE COMPANY,
Plaintiff, Appellee,
v.
LEE LAVIGNE,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. George Z. Singal, U.S. District Judge]
Before
Lynch, Chief Judge,
Lipez and Howard, Circuit Judges.
Aaron K. Baltes, with whom Norman, Hanson & DeTroy, LLC was on
brief, for appellant.
H. Peter Del Bianco, Jr., with whom Teresa M. Cloutier and
Lambert Coffin Haenn were on brief, for appellee.
August 24, 2010
LIPEZ, Circuit Judge. This diversity case involves the
interpretation of the language in a commercial general liability
insurance policy. We must address two principal issues: (1) the
applicability to the accident at issue of an endorsement to the
insurance policy that purports to exclude "any and all claims
arising from roofing," and, (2) if that exclusion does apply,
whether the accident involves a claim "arising from roofing."
These issues were presented to the district court when the insurer
filed a declaratory judgment action seeking a judgment that the
insurance policy excluded liability coverage for the accident. On
summary judgment, the district court ruled for the insurer. We
affirm.
I.
Except where noted, the following facts are undisputed.
In 2004, Michael Daigle was hired to put a new roof on a four-unit
apartment building in Westbrook, Maine. The building manager,
Ellen Driscoll, also asked Daigle to make sure that the windows of
the two dormers located above the building's roof line were sealed
properly. Along with his business associate, Charles Raybine,
Daigle removed the existing roof of the building, re-roofed the
structure and performed some work on the dormers above the roof
line. Daigle and his crew also fixed a window that they broke
while working.
-2-
On May 2, 2004, appellant Lavigne, and his friend, Archie
Perry, visited the job site. Perry, who was on his way to Home
Depot, knew that Daigle was working on the roof of the building and
stopped to inquire if Daigle needed any supplies from the store.
In an effort to locate Daigle, Lavigne climbed up on the
scaffolding that Daigle's crew used to access the roof. When a
portion of the scaffolding snapped, Lavigne fell to the ground,
breaking his neck and sustaining other serious injuries. At the
time of the accident, Raybine was also on the scaffolding.1
Daigle, who conducted business as Mike's Carpentry, held
a commercial general liability insurance policy issued by Penn-
America. The policy, which was effective April 20, 2004 through
April 20, 2005, provided coverage for injuries and property damage,
subject to certain terms and conditions. One such condition was
contained in a standard endorsement form ("Endorsement A") attached
to the policy. Endorsement A, described in further detail below,
contained the added phrase, "excluding any and all claims arising
from roofing."
After the accident, Lavigne asserted a claim on Daigle's
insurance; Penn-America denied coverage for the claim. On December
13, 2007, Penn-America filed this federal diversity action against
Daigle and Lavigne in the United States District Court for the
1
The parties dispute whether Raybine was preparing to re-
roof the building or was in the process of fixing the crooked
staging.
-3-
District of Maine,2 seeking a declaratory judgment that Daigle's
insurance policy excluded liability coverage for claims arising
from roofing. After discovery, including the taking of depositions
from Daigle, Lavigne, and Raybine, among others, Penn-America moved
for summary judgment. The court granted the motion on July 7,
2009,3 finding that Endorsement A excluded claims arising from
roofing and that there was no genuine issue of material fact as to
whether Lavigne's accident arose from roofing.4 This appeal
followed.
II.
We review the district court's grant of summary judgment
de novo. Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st Cir.
2009). Summary judgment is properly granted if the record, viewed
in the light most favorable to the nonmoving party, discloses no
genuine issue of material fact, and the moving party is entitled to
judgment as a matter of law. Fed. Ins. Co. v. Commerce Ins. Co.,
597 F.3d 68, 70 (1st Cir. 2010). We review de novo the district
2
Penn-America is a Pennsylvania corporation with its
principal place of business in Bala Cynwyd, Pennsylvania. Daigle
and Lavigne are both residents of Maine.
3
The motion for summary judgment was referred to a magistrate
judge who issued a report and recommendation which the district
court adopted.
4
The court entered a default judgment against Daigle, who did
not appear to defend against Penn-America's claims. He is not a
party to this appeal. Lavigne later asserted a claim against
Daigle based on his fall from the scaffolding. That claim is not
before us.
-4-
court's legal construction of the insurance policy. Pease v. State
Farm Mut. Auto. Ins. Co., 931 A.2d 1072, 1075 (Me. 2007).
A. Insurance policy construction
It is undisputed that Maine law applies to the
interpretation of the insurance contract between Penn-America and
Daigle. In Maine, as in many jurisdictions, the "paramount
principle in the construction of contracts is to give effect to the
intention of the parties as gathered from the language of the
agreement viewed in light of all the circumstances under which it
was made." Greenly v. Mariner Mgmt. Group, Inc., 192 F.3d 22, 26
(1st Cir. 1999) (quoting Whit Shaw Assocs. v. Wardwell, 494 A.2d
1385, 1387 (Me. 1985)).
If a contractual provision is ambiguous, or "'reasonably
susceptible of different interpretations,'" First Specialty Ins.
Corp. v. Am. Home. Assurance Co., 558 F.3d 97, 100 (1st Cir. 2009)
(quoting Apgar v. Commercial Union Ins. Co., 683 A.2d 497, 498 (Me.
1996)), it must be construed liberally in favor of the insured and
against the insurer. Med. Mut. Ins. Co. of Me. v. Indian Harbor
Ins. Co., 583 F.3d 57, 60 (1st Cir. 2009). Exclusionary language
in a contract is not ambiguous, however, if "any ordinary person in
the shoes of the insured" would understand that the policy does not
cover his or her claims. City of South Portland v. Maine Mun.
Ass'n, 953 A.2d 1128, 1130 (Me. 2008).
-5-
B. Interpretation of Endorsement A
Endorsement A is a generic, one-page form that was used
to customize the Penn-America insurance policy taken out by Daigle.
The parties dispute whether Endorsement A effectively excludes from
liability coverage "all claims arising from roofing."
In Daigle's contract, Endorsement A is personalized with
the name of his business, his policy number and the effective date
and time of the endorsement. The preprinted language at the top of
the form offers three alternative introductory phrases, each
preceded by a box for a checkmark. The following introductory
phrase is checked: "In consideration of the premium charged, it is
understood and agreed that . . . ." The form then lists 19
numbered items, such as "Premium," "Classification" and "Coverage,"
each with a line for a checkmark, but none of which is checked.
Beneath the list of categories is a short list of four alternative
courses of action, potentially applicable to any of the items
checked above, including "is corrected to read as listed below" and
"is amended or changed to read as listed below." Again, each
course of action has a line for a checkmark, but none is checked.
Typed in bold beneath the courses of action is the phrase:
"EXCLUDING ANY AND ALL CLAIMS ARISING FROM ROOFING." At the bottom
of the page, there are spaces for a date and initials, both of
which are blank.
Lavigne makes two arguments in support of his claim that
-6-
Endorsement A is ambiguous and therefore could not exclude from the
coverage of Daigle's policy claims arising from roofing. First, he
argues that the exclusion language in Endorsement A is so
"drastically incomplete, ungrammatical and incomprehensible" that
no "ordinary person in the shoes of the insured" would conclude
after reading it that it excluded roofing coverage. Second, he
claims that because the standard form could be filled out either to
add or subtract coverage, and no boxes were checked to indicate a
standard addition or subtraction, the language of Endorsement A is
ambiguous. Both of these arguments fail under basic principles of
contract interpretation.
1. Ambiguity due to fragmented language
There can be no disagreement that the language of
Endorsement A is grammatically defective when read as a whole.
Taken together, the checked and added phrases read: "In
consideration of the premium charged, it is understood and agreed
that EXCLUDING ANY AND ALL CLAIMS ARISING FROM ROOFING[.]" As the
district court succinctly put it, that language is "not a complete
sentence, nor is it a comprehensible fragment of one."
Lavigne's argument that its grammatical defects render
Endorsement A ambiguous is, nevertheless, unpersuasive. As we
noted above, a provision in an insurance contract is ambiguous if
it is "reasonably susceptible of different interpretations." First
Specialty Ins. Co., 558 F.3d at 100 (internal quotation marks
-7-
omitted). Therefore, the relevant question is whether Endorsement
A is reasonably susceptible of different interpretations, not
whether it forms a grammatically complete sentence. After making
the former inquiry, the district court concluded:
Endorsement A, even in the severely
truncated and facially-incomplete form that
appears in the Policy, is reasonably
susceptible of only one interpretation: that
any and all claims arising from roofing are
excluded from coverage under the Policy. In
interpreting what language is provided by the
endorsement, the court need not ignore the
fact that it appears in a liability insurance
policy. What such a policy would "exclude" is
coverage for specified events, injuries or
losses.
To disregard [Endorsement A] entirely,
as [Lavigne] advocate[s], would not be to
construe the endorsement strictly against the
insurer, but rather to render it meaningless,
an approach disfavored by the Maine Law Court,
even when the contract at issue is one of
insurance. See e.g., Pelkey v. General Elec.
Capital Assurance Co., 804 A.2d 385, 388 (Me.
2002). An "ordinary person in the shoes of
the insured" would understand that the
endorsement at issue here excludes coverage
for claims arising from roofing.
We agree fully with this thoughtful analysis.
2. Ambiguity due to empty check boxes on Endorsement A
Lavigne argues in the alternative that the absence of
check marks on Endorsement A rendered the exclusion language
ambiguous. As presented in his brief, his argument is that "there
are ways in which the form could be filled out that would not
exclude roofing coverage. For example, had Box 17, Additional
Insured Endorsement, been checked, the roofing exclusion would have
-8-
been operable against additional insureds, and not against
Defendant Daigle."
The logic of this argument is not apparent. In
construing the meaning of the language added to Endorsement A, we
are not concerned with the boxes on the endorsement that might have
been checked. We will not, as Penn-America sensibly argues,
"create an ambiguity from the fact that other elections could have
been made." Rather, we focus on the "intention of the parties as
gathered from the language of the agreement." Greenly, 192 F.3d at
26; see also Lexington Ins. Co. v. Gen. Accident Ins. Co. of Am.,
338 F.3d 42, 48 (1st Cir. 2003) ("In construing insurance
contracts, courts have no warrant either to convolute the
straightforward meaning of policy language or to endow the words
with a gloss that is belied by the language itself."). The only
language added to Endorsement A plainly expresses the intent of the
parties to exclude claims arising from roofing.5
C. Interpretation of "arising from roofing"
Lavigne claims that even if Endorsement A excludes
coverage for roofing claims, his injuries did not arise from
roofing. Lavigne offers two arguments in support of that claim.
5
Lavigne also points out that Endorsement A is not dated or
initialed, and suggests that somehow that lack of initialing and
dating contributes to the ambiguity of the endorsement. We do not
understand how the lack of a date or an initial on the endorsement
contributes in any way to the ambiguity of the language at issue.
We also note that Daigle's initials and signature do not appear
anywhere on the Penn-America contract.
-9-
First, he argues that the term "roofing" is ambiguous and should
not be interpreted to include Daigle's "re-roofing" work. Next, he
argues that there is a genuine issue of material fact about whether
the accident arose from roofing because Daigle's project involved
both roof and non-roof related repairs and because the work being
done at the time of the accident involved the faulty scaffolding
and not the roof.
1. Re-roofing is roofing
Common sense and the dictionary suffice to refute
Lavigne's argument that the term "roofing" is ambiguous and might
not encompass "re-roofing." One of the definitions that Lavigne
himself proffers for "roofing" is "the act of covering with a
roof." That definition plainly describes the work Daigle's crew
was hired to perform, regardless of whether the building previously
had a roof. Furthermore, as Penn-America points out, from a
liability standpoint, understanding the plain meaning of the term
"roofing" to include "re-roofing" makes sense. The risks an
insurer seeks to avoid by excluding coverage for roofing, such as
the risk of bodily injury caused by the equipment involved and the
height of the work, and the risk of property damage if the roof is
not properly installed, are materially indistinguishable from those
associated with re-roofing.
2. "Arising from roofing" and causation
Under Maine law, as elsewhere, phrases such as "arising
-10-
out of," when used in insurance contracts, do not connote a direct
causal nexus. Rather, such phrases are understood to invoke the
concepts of "originating from, growing out of, flowing from,
incident to or having connection with." Murdock v. Dinsmoor, 892
F.2d 7, 8 (1st Cir. 1989) (internal quotation marks omitted)
(collecting cases from different jurisdictions); see also Acadia
Ins. Co. v. Vermont Mut. Ins. Co., 860 A.2d 390, 393 (Me. 2004)
("[A]n injury arises out of employment when . . . it has its
origin, its source, or its cause in the employment."); Brazas
Sporting Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d
1, 7 (1st Cir. 2000) (applying Massachusetts law and using the same
definition of "arising out of"). The phrase "arising from" is no
exception to the general understanding that such contractual terms
encompass a broad causal nexus. See Spirtas Co. v. Fed. Ins. Co.,
521 F.3d 833, 836 (8th Cir. 2008) (citing cases) (noting that "in
the insurance context courts appear to be unanimous in interpreting
the phrase 'arising out of' synonymously with the term 'arising
from'"); Vigna v. Allstate Ins. Co., 686 A.2d 598, 599 (Me. 1996)
(using "arising out of" and "arising from" interchangeably, without
explicitly ruling on the similarity of the phrases).
There is no dispute that Lavigne's injuries originated
from, grew out of, flowed from or had a connection with, roofing.
As the district court put it:
There can be no dispute that the primary
purpose of the [Westbrook] job was roofing,
-11-
and that the scaffolding from which Lavigne
fell was set up to be used in roofing the
building. That should suffice to make it
clear that Lavigne's injuries "arose from
roofing."
Again, we agree.
Affirmed.
-12-