Monday, September 5, 2011

Appeals Court holds insurer is full of hot air

John Hanratty and Mary Blake Newman owned adjacent condominium units. Hanratty's air conditioner projected through the wall and into a yard area over which Newman held an exclusive easement. After her complaints were repeatedly ignored, Newman duct taped the air conditioner to make it unusable. Hanratty filed suit against her, seeking to restrain her from interfering with his air conditioner and to require her to stay ten yards away from him and his family. Newman counterclaimed for nuisance, trespass, and defamation, and sought an order that the air conditioner be removed.

Hanratty forwarded the counterclaim to his homeowner's insurer, Citation, which defended him under a reservation of rights. Hanratty exercised his option to select his own attorney, Michael Fee, but Citation was unwilling to agree his $260 per hour rate. Eventually the parties agreed that Fee would bill at $260 an hour, Citation would pay $130 an hour, and Hanratty would retain the right to seek the difference from Citation.

Citation filed a motion for declaratory judgment, seeking a determination that its policy did not provide coverage for the counterclaims. Hanratty counterclaimed, asserting that Citation breached the policy and its duty of good faith and fair dealing by refusing to pay Fee's full rate.

Hanratty and Newman settled the underlying case when Hanratty installed central air conditioning. (Was that so hard?) Hanratty assigned to Newman his counterclaim against Citation.

A Superior Court judge granted summary judgment to Citation on its declaratory judgment action, and a second judge dismissed the counterclaim against Citation. Newman appealed.

In Citation Insurance Co. v. Newman, 80 Mass. App. Ct. 143 (2011), the Appeals Court reversed the summary judgment decision. It held that the incursion of the air conditioner into Newman's yard constituted loss of use of tangible property. It also held that an easement is "tangible property."

1 comment:


An easement is tangible property ? !

Gives a new meaning to noli me tangere(or totally deprives it of meaning.