O  T  H  E  R      D  E  C  I  S  I  O  N  S  :

United States Liability Ins. Co. v. Harbor Club, Inc., 2008 WL 2121136
(Mass. Super. May 8, 2008) (Fabricant, J.).

The court granted summary judgment to the issuer of a commercial general liability insurance policy in a dispute regarding the designated premises limitation in the policy. The policy covered a restaurant located in Hyannis and in the application, the restaurant represented that it did not sponsor any “sporting or social events” and did not provide any off premises catering.

The restaurant organized a trip to a Jimmy Buffet concert. It charged participants $20, and provided a bus, grill, frozen drink machine, food and drinks. During the tailgate party, a restaurant employee had trouble lighting the grill and poured gasoline on it, resulting in an explosion that injured both the employee and one of the customers. The insurer denied coverage based on the designated premises clause, and the court agreed.

The court rejected the contention that the trip was “unconnected” to the restaurant’s business, but agreed that “it did not involve the ownership, maintenance or use of the premises, or activities necessary or incidental to the premises.” Where the policy provides coverage for the business premises, “there must be a causal connection between the event giving rise to the injury and the designated premises.”

The court also rejected the contention that the insurer was obligated to defend the claim even if the policy did not provide liability coverage. Although the duty to defend is broader than the duty to indemnify, the allegations in the complaint were “expressly outside the policy coverage and its purpose.” 

MacDonald and Pangione Ins. Agency, Inc. v. MTM Ins. Agency, Inc., 2008 WL 2121061
(Mass. Super. May 6, 2008) (Fabricant, J.).

Three former employees of an insurance agency left voluntarily and started a competitive agency. They had previously executed a series of non compete agreements, which they argued were either superseded and, therefore, ineffective, or overbroad and, therefore, unenforceable. The court agreed that only the most recently executed non compete was effective, and that the applicable provision was overly broad, but disagreed that this meant it could not

be enforced at all. Instead, the court limited the scope of the non compete.

The applicable provision purported to prohibit the defendants from “deriv[ing] income” from “former clients of the EMPLOYER,” without any limitation on time or geography. The court held that the provision applied only to clients with whom the former employees worked while employed by the plaintiff, and that a geographical limitation was not necessary. The court further imposed a five-year time limit on the restriction.