Appeals Court addresses exclusion for residential construction work

FSS Automatic Sprinkler Corporation subcontracted with CB Construction Company to install fire protection sprinklers at the Stoneleigh Condominium project. The project converted the former Norfolk County Jail into a building of luxury condominium units. (I find that to be the most interesting thing about this case.)

In April, 2003, a sprinkler pipe leaked and caused water damage. FSS's insurer, Tudor, declined coverage, citing an exclusion for residential construction work.

In FSS Automatic Sprinkler Corp. v. Tudor Ins. Co. 77 Mass. App. Ct. 1122, 2010 WL 3629579 (unpublished), the Massachusetts Appeals Court held that the exclusion was ambiguous and therefore does not exclude coverage.

The decision does not quote the entire exclusion, and its discussion of it is so confusing that I can't figure out what the exclusion actually says. (That appears to be a result of the court's drafting, not the policy's.)

So, I can't provide an analysis. If you're dealing with an exclusion for residential construction work, this case might provide guidance in context.

Superior Court declines to interpret against insurer policy language that was not part of preprinted form

In Dulac v. Chicago Title Ins. Co., 2009 WL 3838999 (Mass. Super.), the owner of a two-family home sued his title insurer for declining coverage when a prospective buyer backed out of the sale because of a perceived defect in the title.

The policy included an exclusion with an exception that stated:

Exception for Notice of Land Court Petition recorded with the Worcester Registry of Deeds at Book 13029, Page 124. Note: This policy affirmatively insures against loss or damage as a result of the attempted assertion of paramount title due to any matter set forth in said petition.

The insured attached to the complaint an opinion by a land court examiner which identified a likely defect in the title. At issue was whether that opinion came within the exception.

Judge Kaplan held that the exclusion was ambiguous. However, he declined to interpret it against the insurer and held that a question of fact existed as to what the parties understood the exclusion to mean at the time the policy issued. He wrote:

Although an ambiguity is generally construed against an insurer, this exclusion is not part of a preprinted form and it is possible that Dulac [the insured] understood the exclusion in the manner that Chicago Title now explains it