Tom's Ashland Auto, Inc. v. Safety Insurance Company.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-1099

TOM'S ASHLAND AUTO, INC.

vs.

SAFETY INSURANCE COMPANY.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This appeal requires us to determine whether (1) under part

4 of the Massachusetts Standard Auto Policy (standard policy),

an insurer is obligated to pay loss of use damages to the owner

of a rented car damaged in a collision for which the insured is

responsible; and (2) if not, whether the terms of the standard

policy were within the limits set by G. L. c. 90, § 34O. After

reviewing de novo both the interpretation of the governing

statute, G. L. c. 90, § 34O, and the terms of the standard

policy, see Verveine Corp. v. Strathmore Ins. Co., 489 Mass.

534, 538 (2022), we conclude that (1) the plaintiff was not

entitled to recover for its loss of use of the rented Toyota in

the circumstances alleged in its complaint, and (2) the standard

policy is not in conflict with G. L. c. 90, § 34O. Accordingly,
we affirm the thoughtful decision and order of the Appellate

Division of the District Court.

Background. "We accept the allegations of the amended

complaint as true for purposes of this appeal." Skiffington v.

Liberty Mut. Ins. Co., 93 Mass. App. Ct. 1, 2 (2018). The

plaintiff, Tom's Ashland Auto, Inc.,1 rented a Toyota to a person

insured under the standard policy, issued by the defendant,

Safety Insurance Company (Safety). The insured was using the

Toyota as substitute transportation while her own vehicle was

being repaired at the plaintiff's auto repair shop. In June

2018, the rented Toyota was damaged in a collision while parked

and unoccupied. As a result of this collision, the plaintiff

sought recovery from Safety under the standard policy for

damages related to the rented Toyota.

As relevant here, the 2016 version of the standard policy

included two provisions addressing property damage: part 4,

compulsory coverage for "Damage to Someone Else's Property," and

part 7, optional "Collision" coverage. See G. L. c. 90, § 34O

(first par., fifth par.). The plaintiff made claims under the

policy for both the collision damage to the Toyota and the loss

1 In both its amended complaint and its brief on appeal, the
plaintiff referred to "Tom's Ashland Auto, Inc." and "Tom's Auto
Rental" interchangeably. We assume without deciding that "Tom's
Ashland Auto, Inc." and "Tom's Auto Rental" are alter egos and
refer to the two entities collectively as "the plaintiff."

2
of use of the Toyota during the time it was out of service for

repairs.

Safety paid the plaintiff for collision damage to the

rented Toyota under part 7 of the standard policy, which

provides, as relevant here, "we will pay for any direct and

accidental damage to your auto caused by a collision. . . . It

does not matter who is at fault." Safety did not, however, pay

loss of use damages under part 4 of the standard policy.

Under part 4 of the standard policy,

"[the insurer] will pay for damage or destruction of the
tangible property of others caused by an accident and
arising from the . . . use of an auto. . . . The amount
[the insurer] will pay is the amount the owner of the
property is legally entitled to collect through a court
judgment or settlement for the damaged property. [The
insurer] will pay only if [the insured] . . . is legally
responsible for the accident. The amount [the insurer]
will pay includes, if any, . . . the loss of use of the
damaged property. The amount [the insurer] will pay does
not include compensation for physical damage to . . . your
auto." (Emphasis added).

As relevant here, the coverage under part 4 is limited by

policy exclusion number 6: "[W]e will not pay for damage to an

auto or other property . . . which you or the legally

responsible person rents or has in his or her care."

The plaintiff filed suit against Safety in the District

Court for the loss of use damages and alleged violations of

G. L. c. 93A and G. L. c. 176D for Safety's failure to pay the

loss of use portion of its claim. The complaint was dismissed

3
by a District Court judge for failure to state a claim upon

which relief can be granted. See Mass. R. Civ. P. 12 (b) (6).

A panel of the Appellate Division of the District Court affirmed

the judge's ruling, and this appeal followed.

Discussion. 1. Coverage for loss of use.2 "The

interpretation of an insurance policy is a question of law,

which we review de novo." Chenard v. Commerce Ins. Co., 440

Mass. 444, 445 (2003). "To determine what damages are

compensable under the standard policy, we must interpret the

policy's words 'in light of their plain meaning, giving full

effect to the document as a whole.'" Skiffington, 93 Mass. App.

Ct. at 3, quoting Given v. Commerce Ins. Co., 440 Mass. 207, 209

(2003). In doing so, "[w]e consider 'what an objectively

reasonable insured, reading the relevant policy language, would

expect to be covered.'" Skiffington, supra. "We must also

interpret the provisions of the standard policy in a manner

consistent with the statutory and regulatory scheme that governs

such policies." Given, supra.

Although both part 4 and part 7 of the standard policy

provide coverage for collision-related third-party damage, loss

2 Despite the attention given in the plaintiff's briefing to
the question whether loss of use damages are recognized under
Massachusetts law in the auto insurance context, that is not the
question on which this appeal turns. The relevant inquiry is
whether the loss of use coverage in part 4 applies in the
circumstances of this case. We conclude that it does not.

4
of use coverage is only available under part 4 of the standard

policy. Reading part 4 as a reasonable insured would do, see

Skiffington, 93 Mass. App. Ct. at 3, quoting Given, 440 Mass. at

209, we conclude that it does not apply here for at least two

reasons. First, part 4 does not provide coverage for damage to

"your auto," a category defined in the policy to include "[a]ny

auto while used as a temporary substitute for the [vehicle]

described [on the Coverage Selections page] . . . while the

described auto is out of normal use because of a . . . repair,"

and which, at the time of the collision, included the Toyota.

Second, because the insured was renting the Toyota at the time

of the collision, the Toyota was subject to an express exclusion

from part 4 coverage.

The fact that Safety paid the costs of repairing the Toyota

under the insured's optional "collision" coverage does not

change our view. Coverage under part 7 does not extend to loss

of use damages.3 Nor is Safety's payment under part 7

3 The plaintiff's reliance on McGilloway v. Safety Ins. Co.,
488 Mass. 610 (2021), for the proposition that we can read loss
of use coverage into parts of the standard policy that are
silent on the issue or into any "third-party" claim is
unpersuasive. In McGilloway, the question was whether
consideration of "inherent diminished value" was part of "the
amounts that person is legally entitled to collect for property
damage through a court judgment or settlement." Id. at 614.
Here, as we have noted, our task is not to determine whether
loss of use damages are recoverable (we assume without deciding
that they are), but whether they were available to the plaintiff
under the terms of the insured's policy.

5
inconsistent with its denial of coverage under part 4; part 7

does provide coverage for "your auto" and does not exclude

coverage for rental vehicles.4 Indeed, we agree with the

reasoning of the Appellate Division in Tom's Ashland Auto, Inc.

vs. Mapfre Ins., Mass. App. Div., No.18-ADCV-12NO, (Dist. Ct.

Apr.30, 2018), 2018 Mass. App. Div. 94, a case strikingly

similar to the one at bar, that were we to conclude otherwise,

"Part 4 would provide the equivalent of the Collision coverage

available under Part 7 on temporary rentals even if the insured

had not purchased that coverage as the insured had here." Id.

at 95.

2. G. L. c. 90, § 34O. The plaintiff has not persuaded us

that G. L. c. 90, § 34O, mandates coverage for its loss of use

of the rented Toyota, nor that part 4 of the standard policy

conflicts with the requirements of that section.

Under § 34O,

"Every policy of property damage liability insurance shall
provide that the insurer will pay on behalf of the insured
all sums the insured shall become legally obligated to pay
as damages because of injury to or destruction of property,
including loss of use thereof, caused by accident and
arising out of the ownership, maintenance or use, including
loading and unloading of the insured motor vehicle, subject
to a limit of not less than five thousand dollars because
of injury to or destruction of property of others in any
one accident" (emphasis added).

4 Additionally, where an insured elects to purchase coverage
under part 7, that coverage applies regardless of who is at
fault for a collision.

6
G. L. c. 90, § 34O, second par. "[W]ithin the limits set by

statute, the Commissioner of Insurance (commissioner) decides

what the terms of a standard policy will be, and the

commissioner's interpretation of the relevant statutes, although

not controlling, is entitled to deference" (citations omitted).

Colby v. Metropolitan Prop. & Cas. Ins. Co., 420 Mass. 799, 806

(1995). Here, G. L. c. 90, § 34O, expressly defines "property

damage liability insurance" as "insurance containing provisions

as prescribed in this section, among such other provisions,

including conditions, exclusions, and limitations, as the

commissioner of insurance may approve." G. L. c. 90, § 34O,

first par.

The plaintiff has failed adequately to explain why policy

exclusion number 6 to the coverage under part 4 amounts to an

abuse of the commissioner's discretion. See Colby, 420 Mass. at

806 (the commissioner's interpretation of a statute is entitled

to deference and where the commissioner acted within his

discretion, that interpretation will be upheld). The question

is not, as the plaintiff suggests, whether the language of the

standard policy must be consistent with the terms of the statute

-- we agree that it must be, see id. -- but whether the

exclusion was within the commissioner's authority to approve.

See G. L. c. 90, § 34O, first par. By approving the standard

policy, including part 4 and policy exclusion number 6 in their

7
current form, the commissioner expressed the opinion that G. L.

c. 90, § 34O does not require that the compulsory coverage under

part 4 protect those in the business of renting cars for damage

to their rolling stock.5 See Colby, supra.

3. G. L. c. 93A and G. L. c. 176D. The plaintiff's claims

against Safety under G. L. c. 93A and G. L. c. 176D were

premised on Safety's failure to pay the plaintiff under part 4

of the standard policy. Given our conclusion that the plaintiff

failed to make out a claim to its entitlement to those payments,

its claims under G. L. c. 93A and G. L. c. 176D also fail.

Decision and order of the
Appellate Division
affirmed.

By the Court (Desmond, Hand &
Grant, JJ.6),

Assistant Clerk

Entered: June 21, 2024.

5 We find further support for this view in the fact that the
standard policy also exempts the insurer from paying under part
4 for damages resulting from the insured's use of an auto as "a
public or livery conveyance," while "being used by anyone in the
course of his or her employment in the business of selling,
servicing, repairing or parking autos," and most business uses
of vehicles other than "private passenger autos."
6 The panelists are listed in order of seniority.

8