In Dorchester Mutual Insurance Co. v. Krusell, No. SJC-12856 (Mass. Aug. 13, 2020), the Supreme Judicial Court of Massachusetts recently demonstrated what can happen when an insurer, in a coverage dispute that started with a fish tale, tries to make an exclusion bigger than it is really is.  The insurer lost the case.  I’m not ever sure that having Gronk as their lawyer would not have made a difference.  The decision offers a lesson in policy drafting.

While the decision is lengthy, the facts and coverage issues can be described briefly.   

Just after midnight on September 13, 2014, Timothy Krusell, a 23-year old college student and a companion were walking in Newport, Rhode Island.  They stopped to speak to 62-year old Robert Haufler and his companion.  The two companions were acquaintances. 

Krusell and Haufler had never met.  According to Krusell, the two began discussing a record-breaking sword fish that Haufler said he caught.  Haufler raised his cell phone to Krusell’s face to show him a photograph.  Krusell said that he instinctively pushed the device away, causing Haufler to lose his balance, fall onto a parked car and strike the pavement, sustaining serious injuries. 

Haufler’s account is that Krusell, from five to six feet away, overheard Haufler talking to the others about a record breaking sword fish that he had caught.  Krusell said “that’s not your fish,” then ran at Haulfer, body slamming him with both fists out, causing him to fly through the air.  

[This story reminds me of a cartoon that I saw years ago. // A guy walks into his bedroom and sees another man in bed with his wife.  The husband says to the guy – I hear you’re telling people that you have a 6-handicap.  There’s no way you do. //  I love that cartoon.  I so regret not saving it.]

Anyway, back to the case.  Haufler sued Krusell for his injuries.  Dorchester Mutual, which issued a homeowner’s policy to Krusell’s parents, undertook Krusell’s defense under a reservation of rights.  Dorchester filed a coverage action.  The Krusell’s settled the claim for $750,000 and sought coverage in the amount of $500,000.   

Putting aside various procedural machinations, the case made its way to Massachusetts’s top court.  At issue was the applicability of the following “Sexual Molestation, Corporal Punishment or Physical or Mental Abuse” exclusion in the Dorchester policy, which precluded coverage for: “[b]odily injury” or “property damage” arising out of sexual molestation, corporal punishment or physical or mental abuse.”

The parties saw the exclusion differently.  For Dorchester, “physical abuse” encompasses any form of physically harmful treatment.  Therefore, the exclusion applies since Krusell pushed Haufler into a parked car.

The court had no trouble concluding that “physical” is not ambiguous.  It means of or pertaining to the body.  This took all of one sentence in the opinion to address.

Then the court turned to the meaning of “abuse,” which took page after page after more pages to figure out.  I could write a lot about the court’s analysis of the meaning of this term, but its substance can be addressed briefly.  
 
As advanced by Dorchester, “abuse” is interpreted broadly to mean any form of physically harmful treatment.  Alternatively, the term contemplates conduct that is more circumscribed than any form of physically harmful treatment.  It involves a qualitative aspect to the treatment, beyond the fact that it causes harm.  It is a subset of physically harmful conduct characterized by an “abusive” quality, such as cruelty or a disposition to inflict pain or suffering on the part of the abuser.

After looking a several opinions nationally addressing the issue, the court concluded that the term had two meanings.
  
The court proceeded to the next step in the analysis – whether a reasonable insured, in the Krusells’ position, would construe the phrase “physical abuse” as encompassing the conduct at issue.  Having determined that he phrase has two meanings, you can guess what the court’s decision was on the reasonable expectations question.

Following lots to say on the question, the court summed up the answer as follows: “We conclude that a reasonable insured would interpret ‘physical abuse’ to apply only to a limited subset of physically harmful treatment, where the treatment is characterized by an ‘abusive’ quality such as a misuse of power or, perhaps, conduct so extreme as to indicate an abuser’s disposition towards inflicting pain and suffering. As the conduct at issue in this case involves no such hallmarks of abuse, a reasonable insured would interpret the term ‘physical abuse’ in the policy as not precluding coverage here. Accordingly, Dorchester Mutual cannot rely upon the exclusion to deny liability for indemnification, and the allowance of summary judgment in its favor was error.” 
 
As obvious lesson in policy drafting – and not just with this exclusion.