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In Massport, Judge Van Gestel decided
cross motions for summary judgment in the “morass
created by the existence of overlapping insurance and
’other insurance’ clauses.” Id. at *13. A
passenger unloading her luggage at Logan Airport was
struck by a car and suffered catastrophic injuries. The
plaintiffs’ claims against Massport were premised at
least in part on the allegation that the construction at
the Airport had narrowed the passenger arrival and
pick-up area and made it unsafe. Massport sought
coverage from both a contractor’s liability policy and a
general airport owner’s liability policy.
The issuer of the general liability
policy assumed the costs of defense, but asserted that
it offered excess coverage only, and that the contractor
policy was primary. The contractor policy declined to
assume the defense, and asserted that it was at most
liable for its rateable share of any liability. Judge
Van Gestel agreed with the issuer of the contractor
policy that under the terms of the policy, it had the
option but not the obligation to undertake the defense
of the action.
The more interesting aspect of the
decision is Judge Van Gestel’s analysis of the effect of
the conflict between the two “other insurance” clauses.
At a fundamental level, because the liability issues had
not yet been resolved, it was impossible to say whether
either or both insurers would be obligated to indemnify
Massport, because the contractor policy |
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would apply only if the plaintiffs
prevailed in their contention that the construction at
the airport contributed to causing the injuries.
Judge Van Gestel nevertheless decided the
issue in order to offer guidance to the parties in time
to be meaningful:
“This Court . . . sees a real need to
sort out this issue, if possible, because one of the
ways in which [the underlying case] may be resolved
against Massport is by pre-trial settlement. In order to
facilitate such settlement, the parties need to know as
much as they can about which carrier will be obligated
to pay the first dollar of liability coverage.”
Id. at *12. On the merits, Judge
Van Gestel concluded that in a conflict between an other
insurance clause that states it will pay only a pro rata
share of any liability when there is other insurance,
and a clause that states the insurance provides only
excess coverage, the excess coverage clause prevails.
“[W]hile the Ace USA Policy is clearly
excess, if the ultimate result of the Bussell Action is
grounded upon something not covered by the OCIP Policy,
there will be nothing for Ace USA to be in excess of.
Whether there is overlapping coverage remains to be
seen.”
Id. at *15. The contractor policy
thus might not apply at all, depending on the resolution
of the underlying case, but if it did, then the
contractor insurer would be responsible for the first
dollar of coverage.
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