THIS MONTH'S UPDATES:
III. SNOW AND ICE: NATURAL ACCUMULATION REVISITED
IV. FILING OF REJECTION TO COURT-ANNEXED ARBITRATION AWARD ONE DAY LATE DUE TO SECRETARIAL ERROR NOT EXCUSED ON BASIS OF "EXCUSABLE NEGLECT"
FEBRUARY 2010
RECENT LEGAL DEVELOPMENTS IN
MASSACHUSETTS AND RHODE ISLAND
MASSACHUSETTS
I. INSURANCE COVERAGE: POLLUTION EXCLUSION IN COMMERCIAL GENERAL LIABILITY POLICY DOES NOT EXCLUDE COMMON LAW PROPERTY DAMAGE CLAIMS CAUSED BY OIL SPILL
In Clean Harbors Environmental Services, Inc. v. Boston Basement Technologies, Inc., 75 Mass. App. Ct. 709 (2009), the Appeals Court of Massachusetts held that a commercial general liability insurance policy provided coverage for the cleanup costs following an oil spill to the extent that such costs were appropriate and reasonable at common law notwithstanding the policy’s pollution exclusion.
Boston Basement Technologies, Inc. (“Boston Basement”) was hired to install a waterproofing system at a residence. During the installation, a heating oil line was broken causing approximately 150 gallons of heating oil to leak into the residence’s basement and yard. Following the incident, Boston Basement was served with a Notice of Responsibility (“NOR”) from the Massachusetts Department of Environmental Protection pursuant to G.L. c. 21E. The NOR identified Boston Basement as a potentially responsible party under the statute making it strictly liable for the costs of the remedial response actions incurred at the property. Boston Basement retained Clean Harbors Environmental Services, Inc. (“Clean Harbors”) to perform the required cleanup.
Boston Basement forwarded Clean Harbors’ invoices to Admiral Insurance Company ("Admiral”) for payment under its commercial general liability policy. Admiral, however, denied coverage upon receipt of the invoices on the basis that the costs were excluded under the policy’s pollution exclusions. Thereafter, Clean Harbors filed a lawsuit against Boston Basement seeking payment for the cleanup costs. Boston Basement filed third-party complaints against the owner of the residence as well as Admiral seeking defense and indemnification. The owner of the residence filed a counter-claim against Boston Basement for damages and cleanup costs associated with the oil spill.
Admiral moved for summary judgment and argued that Clean Harbors’ services constituted “environmental response costs” that were expressly excluded under the policy. The trial court granted Admiral’s motion and Boston basement appealed.
On appeal, the Appeals Court of Massachusetts reversed and held that the pollution exclusions in the policy did not exclude Admiral’s duty to defend and indemnify Boston Basement for common law property damage caused by the oil spill. The Court noted that the exclusion at issue excluded, in part, any loss, cost, or expense incurred by Boston Basement arising out of any statutory or regulatory requirement to respond to the effect of pollutants as well as any loss, cost, or expense arising out of any claim or suit by or on behalf of a governmental authority for damages as a result of responding to the effects of pollutants. The Court, however, observed that the exclusion did not apply to “liability for damages because of property damage that [Boston Basement] would have in the absence of such request, demand, order or statutory or regulatory requirement or such claim or suit by or on behalf of a governmental authority.”
The Court stated that the exception in the exclusion operated to provide coverage for common law claims of property damage against Boston Basement caused by the oil spill. Accordingly, the Court stated that the Admiral policy provided coverage for the property damage awardable at common law, which could be measured by either the diminution of property value or cost of repairs depending upon the nature of the harm and the feasibility of restoration in relation to the property’s value.
II. WORKERS' COMPENSATION : TEACHER INJURED WHILE ACTING AS A SKI-CLUB CHAPERONE ENTITLED TO WORKERS’ COMPENSATION BENEFITS
In Sikorski’s Case, 455 Mass. 477 (2009), the Supreme Judicial Court (“SJC”) held that a high school teacher injured while chaperoning a ski-trip was acting in the course of her employment, thus eligible for workers’ compensation benefits.
Karen Sikorski (“Sikorski"), a mathematics teacher at Peabody High School, agreed to voluntarily serve as a chaperone for the school’s ski-club trip. Sikorski, however, was injured while skiing and thereafter sought workers’ compensation benefits for her medical expenses. The city of Peabody, however, denied Sikorski’s claim on the grounds that her injury was not compensable pursuant G.L. c. 152, § 1(7A) since it occurred while she was voluntarily participating in a recreational activity.
The reviewing board of the Department of Industrial Accidents awarded benefits to Sikorski finding that the recreational aspects of serving as a chaperone were incidental to her duties in monitoring student safety and behavior. The city subsequently appealed and the SJC transferred the case on its own motion.
In affirming the board’s decision, the SJC conducted a two-part inquiry to determine the employee’s eligibility for benefits. First, the Court examined whether the employee suffered an injury “arising out of and in the course of her employment.” In order to resolve this question, the SJC reaffirmed the five relevant factors to be considered: (1) the customary nature of the activity; (2) the employer’s encouragement or subsidization of the activity; (3) the extent to which the employer managed or directed the activity; (4) the presence of pressure or compulsion to participate; and (5) the employer’s expected or actual benefit from the employee’s participation. Second, provided that the answer to the first inquiry is affirmative, the court evaluates whether the employee’s injury is excluded from compensation as purely voluntary participation in a recreational activity.
Applying the above stated test to Sikorski’s case, the SJC found that her injury did, in fact, arise out of her employment and was sustained during the course of her employment. In so finding, the Court found that it was customary for teachers to serve as chaperones on such ski-trips, that such service was frequently encouraged by the school, and that the ski-trip furthered the school’s broad educational mission.
The court further concluded that Sikorski’s injury was not excluded under § 1(7A) as a voluntary recreational activity. The Court stated that Sikorski’s service as a chaperone substantially benefited the city and required her to perform her regular job duties of supervising students. The Court specifically noted that Sikorski was required to be skiing on the ski slopes to sufficiently supervise the students while they skied.
III. SNOW AND ICE STANDARD RECONSIDERED
In Papadopoulos v. Target Corporation, the Massachusetts Supreme Judicial Court will reconsider the century-old distinction between natural and unnatural accumulation in premises liability cases involving snow and ice. Under current Massachusetts law, liability is only possible where an owner acts or fails to act in some manner that changes the condition of naturally accumulated snow and ice into a dangerous condition to lawful visitors. Lawyers for the plaintiffs argue that Massachusetts should reject the natural accumulation rule in favor of a “reasonableness” standard familiar to most other tort claims. We predict that changing the rule would open up the floodgates to new litigation arising out of slip and falls on snow and ice.
RHODE ISLAND
IV. FILING OF REJECTION TO COURT-ANNEXED ARBITRATION AWARD ONE DAY LATE DUE TO SECRETARIAL ERROR NOT EXCUSED ON BASIS OF "EXCUSABLE NEGLECT"
In Boranian v. Richer, 2009 WL 4016504 (R.I. 2009), the Supreme Court of Rhode Island held that a defendant’s rejection of a court-annexed arbitration award 1 day late could not be accepted on the basis of “excusable neglect.”
The plaintiff filed suit against the defendant for injuries the plaintiff allegedly sustained in a motor vehicle accident. During the course of litigation, the parties participated in court-annexed arbitration after which the arbitrator filed an award in favor of the plaintiff for $45,000 plus interest and costs. Pursuant to Rule 5(a), the defendant filed a rejection of the award, but was advised by the court that the rejection was filed 1day after the expiration of the 20-day deadline. Thereafter, the defendant moved for leave to file the rejection late on the basis of “excusable neglect” due to counsel’s secretary miscalculating the 20-day deadline. After the defendant’s motion was granted, the plaintiff appealed.
On appeal, the Supreme Court of Rhode Island reversed and held that the trial court abused its discretion in allowing the defendant’s motion. In so holding, the court stated that “excusable neglect” has been defined as “failure to take the proper steps at the proper time, not in consequence of the party’s own carelessness, inattention, or willful disregard of the process of the court, but in consequence of some unexpected, unavoidable hindrance or accident, or reliance on the care and vigilance of his counsel or on promises made by the adverse party.” The Court observed that the defendant’s failure to timely file his rejection was not as a result of an “extenuating circumstance of sufficient significance.”