Ralph v. Ladd v. Arbella Protection 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-1427

RALPH V. LADD

vs.

ARBELLA PROTECTION INSURANCE COMPANY.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

Ralph V. Ladd appeals from a summary judgment entered in

favor of his insurance carrier, Arbella Protection Insurance

Company (Arbella). Ralph had been joined as a third-party

defendant by Alina Bosch in another lawsuit arising out of

construction work performed by Ralph's son, David.1 After

Arbella refused to defend Ralph in Bosch's suit, Ralph filed a

declaratory judgment action challenging that refusal. A

Superior Court judge allowed Arbella's motion for summary

judgment, concluding that Arbella had no duty to defend Ralph

against Bosch's claims. For the reasons below, we affirm.

1As some of the parties share a surname, we use first names
to avoid confusion.
Background. Ralph is a licensed plumber and the father of

David, who also is a plumber, although the two do not work or

operate together. David filed a breach of contract claim

against Alina Bosch for nonpayment of services related to a

construction project. Bosch filed a counterclaim against David,

as well as a third-party complaint against Ralph, for breach of

contract, breach of the implied covenant of good faith and fair

dealing, negligence, gross negligence, negligent

misrepresentation, fraud and deceit, and violations of New

Hampshire's Consumer Protection Act. Bosch alleged that both

David and Ralph had performed work at her property but had done

so in an unprofessional and unworkmanlike manner. Ralph

maintained that he is a sole proprietor and does not work with

his son David in any capacity, including the project with Bosch.

Ralph made a demand on his insurance company, Arbella, to

defend him against Bosch's third-party complaint. Subject to

additional limitations and exclusions, Arbella's commercial

general liability policy provides coverage for "bodily injury"

or "property damage" that is caused by an "occurrence," which

the policy defines as "an accident." As pertinent here, the

policy specifically excludes from coverage any damage or injury

to "[t]hat particular part of real property on which you or any

contractors or subcontractors working directly or indirectly on

your behalf are performing operations, if the 'property damage'

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arises out of those operations; or . . . that particular part of

property that must be restored, repaired or replaced because

'your work' was incorrectly performed on it" (business risk

exclusions).

After a review of Bosch's complaint, Arbella's coverage

counsel sent Ralph a letter disclaiming coverage under the

policy. Among other reasons, the letter explained that Bosch's

complaint did not allege an "occurrence" as defined by the

policy. Even if the complaint did allege an "occurrence," the

policy specifically excluded coverage for claims for "faulty

workmanship."

In response, Ralph filed a complaint against Arbella,

seeking declaratory relief and alleging a violation of G. L.

c. 93A for failing to comply with its duty to defend him against

Bosch's third-party complaint. Arbella moved for summary

judgment and, following a hearing, a Superior Court judge

allowed the motion. Ralph timely appealed.

Discussion. Standard of review. "The issues in this

appeal are well-suited for summary judgment, since the

interpretation of an insurance contract is a question of law for

the court" (quotation and citation omitted). Lessard v. R.C.

Havens & Sons, Inc., 104 Mass. App. Ct. 572, 574 (2024). We

review the interpretation of the policy and the grant of summary

judgment de novo. Id.

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Arbella's duty to defend. "A liability insurer's duty to

defend is determined by comparing the allegations in the third-

party complaint against the provisions of the insurance policy."

Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass.

741, 744-745 (2013). The duty to defend is also determined

based "on facts known or readily knowable by the insurer that

may aid in its interpretation of the allegations in the

complaint." Billings v. Commerce Ins. Co., 458 Mass. 194, 200

(2010). Where "the allegations in the underlying complaint lie

expressly outside the policy coverage . . . the insurer is

relieved of the duty . . . to defend" (quotation and citation

omitted). Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439

Mass. 387, 394-395 (2003).

The allegations in the underlying third-party complaint and

the facts known by Arbella establish that Arbella did not have a

duty to defend or indemnify Ralph against Bosch. In substance,

Bosch sought damages only for faulty workmanship; she did not

allege an accident such as that the faulty workmanship caused

damage to something other than the work product. Thus, Bosch's

claims alleging (a) failure "to provide construction design,

services, and materials in a workmanlike manner" and (b) that

the project was "critically flawed and fundamentally deficient,"

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do not constitute an "occurrence."2 The fact that Bosch

characterized some of these allegations as "negligence" does not

transform them into occurrences, given that Bosch alleged that

the damage arising from negligence was "for faulty workmanship

that damaged only the resulting work product." All America Ins.

Co. v. Lampasona Concrete Corp., 95 Mass. App. Ct. 79, 82

(2019). See also New England Mut. Life Ins. Co. v. Liberty Mut.

Ins. Co., 40 Mass. App. Ct. 722, 727 (1996) ("It is the source

from which the plaintiff's personal injury originates rather

than the specific theories of liability alleged in the complaint

which determines the insurer's duty to defend").3

In sum, none of Bosch's allegations constitute an

"occurrence" that would be covered by the policy. Nevertheless,

Ralph maintains that Arbella had a duty to defend because he

2 We have stated our approval of such exclusions, called
"business risk" exclusions. See Pacific Indem. Co. v. Lampro,
86 Mass. App. Ct. 60, 66 (2014) ("General liability coverage is
not intended as a guarantee of the insured's work, and for that
reason, general liability policies contain 'business risk'
exclusions" [quotation and citation omitted]). See also
Commerce Ins. Co. v. Betty Caplette Bldrs., Inc., 420 Mass. 87,
92 (1995) ("Repairing or replacing faulty products is a business
expense, ordinarily to be borne by the insured contractor in
order to satisfy customers").

3 "Given our conclusion that coverage did not attach in the
first place, we need not reach [Arbella's] alternative arguments
that other terms in the policies would exclude coverage."
Verveine Corp. v. Strathmore Ins. Co., 489 Mass. 534, 545
(2022). Regardless, we note that the policy contained business
risk exclusions that also barred coverage.

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denied any involvement in the construction project. However, we

have previously held, "[a]n insured's denial of the underlying

allegations has no bearing on whether a duty to defend exists,

because coverage turns on the nature of those allegations, not

on whether they are true." Marculetiu v. Safety Ins. Co., 98

Mass. App. Ct. 553, 560 (2020). The sole issue is whether any

of Bosch's allegations are possibly covered by the policy. For

the reasons stated above, they are not. Accordingly, the judge

properly allowed Arbella's motion for summary judgment.4

Ralph's c. 93A claim. Ralph concedes that his c. 93A claim

against Arbella is, in essence, contingent on whether Arbella

had a duty to defend. This is because "[r]ecovery under G. L.

c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely

when [a]n insurance company . . . in good faith denies a claim

of coverage on the basis of a plausible interpretation of its

insurance policy" (quotation and citation omitted). McGilloway

v. Safety Ins. Co., 488 Mass. 610, 618 (2021). Arbella's

interpretation of its policy was not only plausible, but, as

explained above, correct. Accordingly, we discern no error in

4 We note that Ralph filed an abuse of process claim against
Bosch, prevailed, and was awarded the legal costs of defending
against her false claims. Bosch has appealed from that
judgment.

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the allowance of Arbella's motion for summary judgement on

Ralph's c. 93A claim.

Judgment affirmed.

By the Court (Blake, C.J.,
Neyman & Wood, JJ.5),

Clerk

Entered: February 25, 2025.

5 The panelists are listed in order of seniority.

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