Dryden Oil Company v. The Travelers

Case Date: 08/06/1996
Court: United States Court of Appeals
Docket No: 95-1608







UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

____________________

No. 95-1608

DRYDEN OIL COMPANY OF NEW ENGLAND, INC., DRYDEN OIL COMPANY,
INC., and DRYDEN OIL COMPANY OF PENNSYLVANIA, INC.,

Plaintiffs, Appellants,

v.

THE TRAVELERS INDEMNITY COMPANY,
THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS, and
AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY,

Defendants, Appellees.

____________________


APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge] ___________________

____________________

Cyr, Circuit Judge, _____________

Bownes, Senior Circuit Judge, ____________________

and Boudin, Circuit Judge. _____________

____________________


Darragh K. Kasakoff, with whom Seder & Chandler was on brief for ___________________ _________________
appellants.
John A. Nadas, with whom Bret A. Fausett, Elizabeth M. McCarron _____________ _______________ _____________________
and Choate, Hall & Stewart were on brief for appellees Travelers _______________________
Indemnity Company and Travelers Indemnity Company of Illinois.
Karl S. Vasiloff, with whom Catherine M. Colinvaux and Zelle & _________________ ______________________ _______
Larson were on brief for appellee American Manufacturers Mutual ______
Insurance Company.

____________________

August 5, 1996
____________________













CYR, Circuit Judge. Plaintiffs-appellants Dryden Oil CYR, Circuit Judge ______________

Company of New England, Dryden Oil Company, and Dryden Oil

Company of Pennsylvania (collectively: "Dryden") challenge a

district court ruling rejecting their claim that defendants-

appellees, The Travelers Indemnity Company, The Travelers Indem-

nity Company of Illinois (collectively: "Travelers") and Ameri-

can Manufacturers Mutual Insurance Company ("American Mutual"),

are obligated to defend and indemnify Dryden in connection with a

lawsuit brought against Dryden by Raymond King, trustee of the

150 Worcester Center Boulevard Trust ("Worcester Trust"),

Dryden's former landlord. We affirm in part, and reverse and

remand in part.

I I

BACKGROUND BACKGROUND __________

A. The Historical Facts A. The Historical Facts ____________________

For the period July 30, 1986, to July 30, 1987, defen-

dant-appellee Travelers issued Dryden (i) a primary comprehensive

general liability insurance policy ("primary liability policy"),

which included "property damage" and "personal injury" coverage,

and (ii) a catastrophic umbrella liability policy ("umbrella

policy"). For the period December 31, 1986, to December 31,

1987, Travelers issued Dryden a property and inland marine

insurance policy ("property insurance policy") as well, affording

coverage "against all risks of direct physical loss or damage."

Travelers provided Dryden with similar primary and umbrella

liability coverage to July 30, 1988. Defendant-appellee American


2












Mutual provided primary comprehensive liability coverage to

Dryden from July 31, 1988, to December 1, 1989.

On December 29, 1986, Dryden had leased 150 Worcester

Center Boulevard (the "Property") from White & Bagley Company

("White & Bagley"). Thereafter, Dryden used the Property for

mixing and manufacturing industrial lubricants and oils, as White

& Bagley had done for many years. On December 30, 1986, Dryden

listed the Property both in its primary and its umbrella liabili-

ty policies with Travelers. Later, Dryden listed the Property in

its property insurance policy with Travelers and its comprehen-

sive liability policies with American Mutual as well.1

On December 31, 1986, White & Bagley conveyed the

Property to the White & Bagley Liquidation Trust. On August 28,

1987, the White & Bagley Liquidation Trust sold the Property to

Worcester Trust, together with an assignment of the Dryden lease.

The latter transfer occurred after Worcester Trust had learned

the results of an environmental assessment of the Property

conducted pursuant to Mass. Gen. L. ch. 21E ("Massachusetts Oil

and Hazardous Material Release Prevention and Response Act"),

which indicated "limited contamination" requiring "minimal

remediation." Dryden continued to lease the Property until

December 31, 1988.

B. The Litigation B. The Litigation ______________
____________________

1As Dryden does not contend that the liability coverages
afforded under the American Mutual and Travelers policies differ
in any respect material to the claims presented on appeal, we
need not discuss either the Travelers umbrella or the American
Mutual primary liability policies.

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In August 1990, Worcester Trust brought suit in

Massachusetts Superior Court against, inter alios, White & _____ _____

Bagley, the White & Bagley Liquidation Trust, Dryden and Prescott

Bagley, President of Dryden Oil of New England (collectively:

"Owners/ Operators"), alleging, among other things, that there

had been "spills or releases of oil, industrial lubricants and/or

hazardous material during the transfer, storing, mixing and

manufacturing process" throughout the time White & Bagley owned

the Property, which continued while Dryden occupied the Property

under its lease with White & Bagley and resulted in severe

contamination from "oil and/or hazardous material."

After the pleadings were closed, three counts remained

against, inter alios, the Owners/Operators, including Dryden. _____ _____

Counts I and II charged Dryden with liability for past and future

response costs imposed upon Worcester Trust, pursuant to Mass.

Gen. L. ch. 21E, for damage to real and personal property, and

for related attorney fees, incurred in connection with alleged

"releases" at the Property. Count III charged Dryden with

liability for damages sustained by Worcester Trust due to the

"improper, unsafe and otherwise negligent manner" in which

Dryden, inter alios, "stored oil, industrial lubricants and/or _____ _____

hazardous materials." Five additional counts, directed against

Dryden alone, demanded damages for past and future losses caused

Worcester Trust due to Dryden's breaches of its lease,2 various
____________________

2The lease obligated Dryden to: (1) pay for all supplies,
materials and labor associated with cleaning and maintaining the
Property; (2) reimburse the lessor for repairs and replacements

4












forms of "waste" committed on the Property,3 conversion of

personal property, and engaging in unfair and deceptive acts or

practices in its leasehold relationship with Worcester Trust in

violation of Mass. Gen. L. ch. 93A, 2 and 11.

In due course, after Travelers and American Mutual

declined to defend or indemnify, Dryden brought a state court

action for declaratory relief, breach of contract, and for

alleged violations of Mass. Gen. L. ch. 93A & ch. 176D. Once

Travelers and American Mutual removed the action to federal

district court pursuant to 28 U.S.C. 1332, 1441, Dryden sought

____________________

necessitated by Dryden's negligent or willful acts; (3) surrender
the Property in rentable condition; and (4) pay all attorney fees
and expenses incurred by the lessor in the event of a breach or
default by Dryden under the lease. The lease allowed Dryden,
with the lessor's approval, to alter the Property in conformity
with all applicable federal, state and local laws, statutes,
ordinances and regulations.

3For example, Count VI alleged as follows:

a. Lessee failed to maintain and re-
pair the property in satisfactory manner;
b. Lessee physically damaged the Prop-
erty;
c. Lessee failed to remove trash which
it left strewn throughout the Property;
d. Lessee made alterations, additions,
improvements or changes to the Property with-
out the consent of the lessor and in viola-
tion of applicable laws, statutes, ordinanc-
es, rules, orders, regulations and require-
ments of federal, state and local government;
e. Lessee willfully and indiscrimi-
nately removed property and fixtures from the
premises causing damage to the realty;
f. Lessee abandoned personal property,
trade fixtures and equipment, making the
premises unrentable; and
g. . . . lessee caused the release of
oil and/or hazardous material.

5












summary judgment on its claim for declaratory relief relating to

the alleged duty to defend. The defendant insurers responded

with cross-motions for summary judgment on all three counts. The

district court ultimately adopted the report of a magistrate

judge and entered summary judgment for Travelers and American

Mutual on all counts. Dryden appealed.

II II

DISCUSSION4 DISCUSSION __________

Under Massachusetts law, a liability insurance carrier

must defend an action against its insured if the allegations "are ___________

`reasonably susceptible' of an interpretation that they state or

adumbrate a claim covered by the policy terms . . . ." GRE Ins. ________

Group v. Metropolitan Boston Hous. Partnership, Inc., 61 F.3d 79, _____ ___________________________________________

81 (1st Cir. 1995) (quoting Liberty Mut. Ins. Co. v. SCA Servs. ______________________ __________

Inc., 588 N.E.2d 1346, 1347 (Mass. 1992)). The "complaint need ____

only show, through general allegations, a possibility that the

liability claim falls within the insurance coverage." SCA ___

Servs., Inc. v. Transportation Ins. Co., 646 N.E.2d 394, 397 ____________ _________________________

(Mass. 1995). The duty to indemnify is defined less generously,

see Travelers Ins. Co. v. Waltham Indus. Labs. Corp., 883 F.2d ___ ___________________ __________________________

1092, 1099 (1st Cir. 1989) (citing Sterilite Corp. v. Continental _______________ ___________

Cas. Co., 458 N.E.2d 338, 341 n.4 (Mass. App. Ct. 1983), rev. ________ ____
____________________

4We review summary judgments de novo, to determine whether __ ____
there is a trialworthy dispute as to any material fact under the
applicable law. Commercial Union Ins. v. Walbrook Ins. Co., 7 ______________________ __________________
F.3d 1047, 1048 n.1, 1050 (1st Cir. 1993). As all claims pose
pure questions of Massachusetts law relating to insurance con-
tract interpretation, our review is plenary throughout. Id. at __
1048 n.1.

6












denied, 459 N.E.2d 826 (Mass. 1984)), as it depends on the ______

evidence, rather than an expansive view of the complaint, id. ________ __

(citing Newell-Blais Post #443 v. Shelby Mut. Ins. Co., 487 _______________________ ______________________

N.E.2d 1371, 1374 (Mass. 1986)).

We interpret the relevant policy language with a view

to whether "`an objectively reasonable insured . . . would expect

to be covered.'" GRE Ins. Group, 61 F.3d at 81 (quoting Trustees ______________ ________

of Tufts Univ. v. Commercial Union Ins. Co., 616 N.E.2d 68, 72 _______________ _________________________

(Mass. 1993)). Unambiguous terms are given their plain meaning,

High Voltage Eng'g Corp. v. Federal Ins. Co., 981 F.2d 596, 600 _________________________ ________________

(1st Cir. 1992) (citing Stankus v. New York Life Ins. Co., 44 _______ ________________________

N.E.2d 687, 689 (Mass. 1942)), and ambiguous terms are construed

against the insurer. Id. (citing August A. Busch & Co. of Mass. ___ _______________________________

v. Liberty Mut. Ins. Co., 158 N.E.2d 351, 353 (Mass. 1959)). ______________________

Once an insured establishes that a claim comes within the terms

of coverage, the insurer must demonstrate "the applicability of

any exclusion." GRE Ins. Group, 61 F.3d at 81 (citing Camp _______________ ____

Dresser & McKee, Inc. v. Home Ins. Co., 568 N.E.2d, 631, 633 ______________________ ______________

(Mass. App. Ct. 1991)).

A. Property Damage Liability Coverage A. Property Damage Liability Coverage __________________________________

The Travelers primary liability policies included,

inter alia, a comprehensive general liability ("CGL") Form and a _____ ____

Broad Form CGL Endorsement. The CGL Form obligated Travelers to

pay "all sums [for] which the [i]nsured shall become legally

obligated . . . because of . . . property damage to which [the

policy] applies, caused by an occurrence . . . ." The CGL Form


7












likewise imposed "[a] duty to defend any suit against the [i]n-

sured seeking damages on account of . . . property damage . . .

."5

Among the relevant property damage exclusions in the __________

CGL Form are (i) a "Contractual Liability Exclusion" for "liabil-

ity assumed by the [i]nsured under any contract or agreement

except an incidental contract" (emphasis added), which includes ______ __ __________ ________ _____ ________

any written lease of premises, and (ii) exclusion (f) relating to ___ _______ _____ __ ________

the "emission, discharge, seepage, release or escape of any

liquid, solid, gaseous or thermal waste or pollutant . . . ." In

the primary liability policies, exclusion (f) is replaced by an

"Absolute Pollution Exclusion" for "property damage arising out

of the actual, alleged or threatened discharge, dispersal,

release or escape of pollutants . . . at or from premises the

named [i]nsured owns, rents or occupies . . . ." Under the

Absolute Pollution Exclusion, "[p]ollutants means any solid, liq-

uid, gaseous or thermal irritant or contaminant, including smoke,

____________________

5"Property damage" is

(1) physical injury to or destruction of
tangible property which occurs during the
policy period, including the loss of use
thereof at any time resulting therefrom, or

(2) loss of use of tangible property which
has not been physically injured or destroyed
provided such loss of use is caused by an
occurrence during the policy period.

"Occurrence" is "an accident, including continuous or
repeated exposure to conditions, which results in . . . property
damage neither expected nor intended from the standpoint of the
insured."

8












vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste

includes materials to be recycled, reconditioned or reclaimed."

The CGL Form also contains an exclusion (k), the Owned

or Leased Premises Exclusion, which bars coverage for damage to: __

"(1) property owned or occupied by or rented
to the [i]nsured, (2) property used by the
[i]nsured, or (3) property in the care, cus-
tody or control of the [i]nsured or as to
which the [i]nsured is for any purpose exer-
cising physical control . . . ."

The Broad Form CGL Endorsement in the primary liability

policies affords further Contractual Liability Coverage by

extending the definition of "incidental contract" to include "any

oral or written contract or agreement relating to the conduct of

the named insured's business." This contractual liability

coverage is exempted from various property damage exclusions in

the CGL Form, but the list of exemptions does not mention exclu-

sion (f), its replacement the Absolute Pollution Exclusion, or

exclusion (k) (Owned or Leased Premises Exclusion). In sum, the

Contractual Liability Coverage provided under the Broad Form CGL

Endorsement is subject to both the Absolute Pollution Exclusion

and Owned or Leased Premises Exclusion (k).

1. The Absolute Pollution Exclusion 1. The Absolute Pollution Exclusion ________________________________

We think the district court correctly determined that

the claims alleged in the Worcester Trust complaint ("property

damage caused by `spills or releases of oil, industrial lubri-

cants and/or hazardous material'") came squarely within the

Absolute Pollution Exclusion. Dryden Oil Co. of New England v. ______________________________

The Travelers Indem. Co., No. 92-40135, slip op. at 10 (D. Mass. ________________________

9












Nov. 18, 1994) (Report and Recommendation) (citing Essex Ins. Co. ______________

v. Tri-Town Corp., 863 F. Supp. 38 (D. Mass. 1994) (under Massa- ______________

chusetts law, Absolute Pollution Exclusion excepts coverage for

physical injury from carbon monoxide releases)). A fair reading

of the Absolute Pollution Exclusion clause bars coverage for

"'any form of pollution.'" United States Liab. Ins. Co. v. ______________________________

Bourbeau, 49 F.3d 786, 788 (1st Cir. 1995) (under Massachusetts ________

law, lead paint chips deposited on land in the course of strip-

ping and painting building constitute a "pollutant").

Dryden nonetheless contends that it cannot now be known

whether the damage allegedly sustained by the Property resulted

from a "pollutant." It relies on inapposite authority, see

Westchester Fire Ins. Co. v. City of Pittsburg, Kan., 791 F. ___________________________ ________________________

Supp. 836 (D. Kan. 1992), for its claim that diesel fuel is not a

"pollutant." There, a sprayed mixture of diesel fuel and the

insecticide malathion was held not to be a "pollutant" within the

meaning of an exclusion clause which defined "pollutants" in a

manner similar to the present exclusion clause. As is readily

apparent from an earlier and related case cited by Dryden,

however, see Westchester Fire Ins. Co. v. City of Pittsburg, ___________________________ ___________________

Kan., 768 F. Supp. 1463 (D. Kan. 1991), aff'd sub nom., Pennsyl- ____ ______________ ________

vania Nat'l Mut. Cas. Ins. Co. v. City of Pittsburg, Kan., 987 ________________________________ ________________________

F.2d 1516 (10th Cir. 1993), and from an earlier and related case

not cited by Dryden, see Westchester Fire Ins. Co. v. City of __________________________ _______

Pittsburg, Kan., 794 F. Supp. 353 (D. Kan. 1992), aff'd sub nom., _______________ ______________

Pennsylvania Nat'l Mut. Cas. Ins. Co. v. City of Pittsburg, Kan., _____________________________________ _______________________


10












987 F.2d 1516 (10th Cir. 1993), the issue in the City of ________

Pittsburg, Kan. trilogy was whether malathion mixed with diesel _______________

fuel not diesel fuel alone is a pollutant. City of _______

Pittsburg, Kan., 987 F.2d at 1517. Moreover, the Tenth Circuit _______________

affirmed the district court on the basis that the "spraying" had

been "sudden and accidental" thereby removing it from the

explicit language of the exclusion clause not on the basis

that the City was spraying a pollutant. Id. at 1519-20. __

Finally, the Massachusetts Supreme Judicial Court, to

which we look in this matter, see Commercial Union Ins., 7 F.3d ___ ______________________

at 1048, n.1, recently assumed that a home heating oil spill "was

comprehended by an exclusion for `loss . . . caused by . . .

release, discharge or dispersal of contaminants.'" Hanover New ___________

England Ins. Co. v. Smith, 621 N.E.2d 382, 383 n.2 (Mass. App. ________________ _____

Ct. 1993) (quoting Jussim v. Massachusetts Bay Ins. Co., 610 ______ ____________________________

N.E.2d 954, 955 (Mass. 1993)). Whether or not oil or industrial

chemicals necessarily constitute pollutants in all forms and

circumstances, however, given the policy definition of "pollut-

ants" and our reasoning in Bourbeau, supra, we think the absolute ________ _____

pollution exclusion language in these policies would not have

permitted an objectively reasonable policyholder to expect

liability coverage for contamination resulting from "spills or

releases of oil, industrial lubricants and/or hazardous material

during the transfer, storing, mixing and manufacturing process"

as alleged in the Worcester Trust complaint against Dryden. At

the very least, an objectively reasonable policyholder would


11












regard spills or releases of oil, industrial lubricants or

hazardous material as "materials to be disposed of or waste."

Bourbeau, 49 F.3d at 788 (internal quotation marks omitted). ________

Thus, we think an objective policyholder reasonably could not

have believed that "`smoke, vapor, soot, [and] fumes' would be

considered pollutants," id. at 788-89 (alteration in original), ___

whereas oil, lubricants and hazardous waste "[were] not." Id. at ___

789.6

2. Owned or Leased Premises Exclusion (k) 2. Owned or Leased Premises Exclusion (k) ______________________________________

Dryden challenges the district court ruling that the

plain meaning of Owned or Leased Premises Exclusion (k) barred

liability coverage for the Worcester Trust breach-of-contract

claims for damages to the Property while Dryden leased and/or

controlled the Property. Dryden argues that the nonpollution-

related claims alleged in counts VI, VII and VIII are neither

comprehended within the Absolute Pollution Exclusion nor Owned or

Leased Premises Exclusion (k), because "[a]t the time the

[Worcester Trust] claims were filed with [the Massachusetts

Superior Court] Dryden [no longer] own[ed], occupi[ed], rent[ed]

____________________

6Our view comports with the position taken in Titan Holdings ______________
Syndicate, Inc. v. City of Keene, N.H., 898 F.2d 265 (1st Cir. _______________ ___________________
1990), where we determined under New Hampshire law that excessive
noise and light from a city sewage treatment plant were not
"pollutants" within the meaning of an absolute pollution exclu-
sion barring coverage for "irritants" and "contaminants." We
noted that though excessive noise and light "may be `irritants,'
. . . they are not solid, liquid, gaseous or thermal irritants. _____ ______ _______ __ _______
Nor are they generally thought of as similar to smoke, vapor,
soot, fumes, acids, alkalis, chemicals, or waste, the illustra-
tive terms used in the policy definition. Noscitur a sociis." ________ _ ______
Id. at 268 (footnote omitted). ___

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or control[led] the property."

Assuming these claims are not within the Absolute

Pollution Exclusion, we are nonetheless persuaded that liability

coverage was barred by Owned or Leased Premises Exclusion (k).

Although exclusions must be strictly construed, Waltham Indus. ______________

Labs. Corp., 883 F.2d at 1097 (citing Quincy Mut. Fire Ins. Co. ___________ __________________________

v. Abernathy, 469 N.E.2d 797, 799 (Mass. 1984)), these primary _________

liability policies explicitly restricted coverage to property

damage occurrences "during the policy period." Consequently, no

reasonably objective policyholder could have believed that Owned

or Leased Premises Exclusion (k), which barred coverage for

"damage to . . . property rented to the Insured," somehow con- ______ _______

verted the policies into "claims-made" policies to which Owned or

Leased Premises Exclusion (k) no longer applied because the lease _________

had lapsed.

A primary function served by Owned or Leased Premises

Exclusion (k) "is to prevent the insured from using a liability

insurance policy as if it provided property insurance." Kenneth

S. Abraham, Environmental Liability Insurance Law 163 (1991). It _____________________________________

likewise insulates against "the `moral hazard' problem where an

insured has less incentive to take precaution owing to the

existence of insurance." Barry R. Ostrager & Thomas R. Newman,

Handbook on Insurance Coverage Disputes 10.03[b], at 441 (8th ________________________________________

ed. 1995) (quoting United States v. Conservation Chem. Co., 653 ______________ _______________________

F. Supp. 152, 199 (W.D. Mo. 1986) (internal quotation marks

omitted)). These recognized aims would be subverted by Dryden's


13












overly inventive reading of Owned or Leased Premises Exclusion

(k).

3. Contractual Liability Coverage 3. Contractual Liability Coverage ______________________________

Next, Dryden advances two grounds for its contention

that the nonpollution-related contract claims alleged by Worces-

ter Trust are comprehended by the "property damage" liability

coverage. First, coverage is provided for an "incidental con-

tract," which is extended by the Broad Form CGL Endorsement to

include not only "any written . . . lease of premises" but also

"any oral or written contract or agreement relating to the

conduct of the insured's business." Second, Dryden says, the

Worcester Trust nonpollution-related contract claims arise from

matters having to do with the written lease of the Property. Its

argument is untenable.

The policies exempt an "incidental contract," viz., a

lease, from the Contractual Liability Exclusion contained in the

CGL Form, but not from Owned or Leased Premises Exclusion (k) in ___

the CGL Form. Under the Broad Form CGL Endorsement, the defini-

tion of "incidental contract" is broadened by the Contractual

Liability Coverage provision, but the Broad Form CGL Endorsement

leaves Owned or Leased Premises Exclusion (k) in full force with

reference to Contractual Liability Coverage. Thus, by clear

implication Owned or Leased Premises Exclusion (k) bars the

extended Contractual Liability Coverage in relation to an "inci-

dental contract."

We therefore conclude, as did the district court, that


14












the property damage coverage described in these liability poli-

cies imposed no duty upon the defendant insurers to defend Dryden

in the Worcester Trust action. Furthermore, since the duty to

indemnify is narrower than the duty to defend under the primary

liability policies, Waltham Indus. Labs. Corp., 883 F.2d at 1099, __________________________

the district court correctly ruled as well that the defendant

insurers were under no duty to indemnify Dryden for any property

damage recoveries by Worcester Trust.7

B. Personal Injury Liability Coverage B. Personal Injury Liability Coverage __________________________________

Under the Broad Form CGL Endorsement, the insurer is

obligated to defend its insured, and to indemnify for any amounts

its insured becomes legally obligated to pay, in any action for

"damages because of personal injury . . . to which [the policy] ________ ______

applies, sustained by any person or organization and arising out

of the conduct of [n]amed [i]nsured's business . . . ." (Emphasis

added.) The term "personal injury" is defined as

(1) false arrest, detention, imprisonment, or
malicious prosecution;
(2) wrongful entry or eviction or other inva-
sion of the right of private occupancy;
(3) a publication or utterance
(a) of a libel or slander or other
defamatory or despairing material,
or
(b) in violation of an individual's
____________________

7We caution, however, that the ultimate resolution of the
Worcester Trust action may affect the duty to indemnify under
these liability policies. That is to say, should the evidence in
the underlying Worcester Trust action against Dryden reveal that
there was a covered occurrence, and should Worcester Trust be
allowed to amend its complaint, Dryden would be entitled to
indemnification for the damages recovered against it and for the
costs of its defense. See Terrio v. McDonough, 450 N.E.2d 190, ___ ______ _________
194 (Mass. App. Ct.), rev. denied, 453 N.E.2d 1231 (Mass. 1983). ___________

15












right of privacy;
except publications or utterances in the
course of or related to advertising, broad-
casting, publishing or telecasting activities
conducted by or on behalf of the [n]amed
[i]nsured shall not be deemed personal inju-
ry.

This personal injury coverage does not apply, however, "to lia-

bility assumed by the [i]nsured under any contract or agreement."

The district court ruled that Dryden had not alleged

claims within the personal injury coverage for "wrongful entry or

eviction or other invasion of the right of private occupancy,"

since "the wrongful eviction/personal invasion provisions of the

applicable insurance could not have been intended to cover the

kind of indirect and incremental harm that results to property

interests from pollution." Dryden Oil Co. of New England, No. _______________________________

92-40135, slip op. at 12 (citing County of Columbia v. Continen- __________________ _________

tal Ins. Co., 634 N.E.2d 946, 950 (N.Y. 1994)). The district _____________

court further noted the apparent incongruity which would obtain

if pollution liability coverage were found under the "personal

injury" clause despite the fact that "property damage" liability

coverage is expressly barred by the Absolute Pollution Exclusion.

Id. ___

Although the Supreme Judicial Court has yet to address

the matter, the Massachusetts Appeals Court has held that "the

definition of personal injury on the [Endorsement] is very ____

limited." LaFrance v. Travelers Ins. Co., 594 N.E.2d 550, 551 _______ ________ ___________________

(Mass. App. Ct.), rev. denied, 598 N.E.2d 1133 (Mass. 1992) (the ____ ______

identically-defined term "personal injury" does not even include


16












"bodily injury") (emphasis added). Moreover, as we have noted,

personal injury liability coverage obligates the insurer to

indemnify for liability incurred for certain intentional acts by ___________

the insured, including:

Group A false arrest, detention or impris-
onment, or malicious prosecution;
Group B the publication or utterance of
a libel or slander or of other defamatory or
disparaging material, or a publication or
utterance in violation of an individual's
right of privacy . . . ;
Group C wrongful entry or eviction or
other invasion of the right of private occu-
pancy[.]

Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d ____________________ _____________________________

370, 373 (1st Cir. 1991) (alteration in original).

In Titan Holdings Syndicate, Inc. v. City of Keene, ________________________________ _______________

N.H., 898 F.2d 265, 267 (1st Cir. 1990) ("Titan"), the insurers ____ _____

Titan Holdings Syndicate, Inc. ("Titan") and Great Global

Assurance Company ("Great Global") contended there was no

duty to defend against claims "characterized as pleas of trespass

and nuisance" brought by homeowners who alleged "continuous[]

bombard[ment] by and expos[ure] to" noxious fumes, loud noise and

bright light emanating from the insured's sewer treatment plant

abutting their land.8 The insured argued that its "plant's
____________________

8The Seventh Circuit has decided, under Illinois and Missou-
ri law, that "personal injury" coverage is not restricted by a
clause which "applies only to the policy's property damage and
bodily injury provisions." Pipefitters Welfare Educ. Fund v. _______________________________
Westchester Fire Ins. Co., 976 F.2d 1037, 1042 (7th Cir. 1992). __________________________
"[The insurer's] attempts to circumvent the plain language of the
pollution exclusion in its policy are disingenuous and misleading
indeed, they are nearly sanctionable and as such do not
warrant any discussion." Id. It came to a similar conclusion ___
under Wisconsin law. Scottish Guar. Ins. Co. v. Dwyer, 19 F.3d _______________________ _____

17












fumes, noise and light" constituted a wrongful entry of, or

eviction from, the abutting homeowners' property, id. at 272, ___

hence came within the insurers' personal injury liability

coverages for "wrongful entry" or "wrongful eviction." Finding

no case law defining "wrongful entry," the Titan panel analogized _____

to an action for trespass under New Hampshire law which requires

an intentional invasion. Id. (citing Moulton v. Groveton Papers ___ _______ _______________

Co., 289 A.2d 68, 72 (N.H. 1972)). As the complaint alleged no ___

intentional invasion of the abutting landowners' property, Titan _____

found no actionable wrongful entry claim under New Hampshire law.

Id. The Titan panel also questioned though it did not decide ___ _____

"whether the alleged spreading of fumes, noise and light falls

within the ordinary meaning of wrongful entry of property." Id. ___

at 272 n.7. Thus, as the Fifth Circuit has noted, Titan "did not _____

hold that the migration of fumes, noise and light constituted a

wrongful entry . . . ." Gregory v. Tennessee Gas Pipeline Co., _______ __________________________

948 F.2d 203, 209 (5th Cir. 1991). Finally, after observing that

a wrongful eviction presupposes a landlord-tenant relationship,

Titan, 898 F.2d at 272 (citing 52 C.J.S. Landlord & Tenant 455 _____ _________________
____________________

307, 309 (7th Cir. 1994) ("[C]overage for personal . . . injuries
. . . is not subject to the pollution exclusion."). The Eleventh
Circuit also has concluded that "[b]y its terms, the pollution
exclusion clause does not apply to coverage under the personal
injury endorsement . . . ." City of Delray Beach, Fla. v. ____________________________
Agricultural Ins. Co., 85 F.3d 1527, 1533 (11th Cir. 1996) _______________________
(Florida law). The Sixth Circuit, on the other hand, has come to
the opposite conclusion under Michigan law. Harrow Prods., Inc. ___________________
v. Liberty Mut. Ins. Co., 64 F.3d 1015, 1021-25 (6th Cir. 1995). _____________________
We need not consider whether the absolute pollution exclusion
applies to the personal injury liability coverage under Massachu-
setts law, since we conclude that the complaint alleges no claim
within the "personal injury" coverage under these policies.

18












& 460(1)), the Titan panel concluded that the personal injury _____

liability coverage under the Titan policy was restricted to

"wrongful entry into, or eviction of a person from, a room,

dwelling or premises that the person occupies." Id. at 271-72. ___

Dryden urges the same analogy, especially since tres-

pass is not necessarily an intentional tort under Massachusetts

law. See Sheppard Envelope Co. v. Arcade Malleable Iron Co., 138 ___ _____________________ _________________________

N.E.2d 777 (Mass. 1956) (airborne emissions of cinders and other

gritty materials, negligent or otherwise, constitute a continuing

trespass). Its analogy simply does not fit. Not only have we

decided that the wrongful conduct comprehended by the "personal

injury" coverage afforded under policies like the present one

amounts to an intentional tort under Massachusetts law, see ___

Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d at ____________________ ____________________________

373, but the Massachusetts tort of wrongful entry has yet to be

extended beyond trespasses by landlords upon the leased premises.

See Gidwani v. Wasserman, 365 N.E.2d 827 (Mass. 1977); Tinkham v. ___ _______ _________ _______

Wind, 65 N.E.2d 14 (Mass. 1946).9 ____
____________________

9Dryden relies on Scottish Guar. Ins. Co. v. Dwyer, 19 F.3d ________________________ _____
307, 311 (7th Cir. 1994), which cites Titan as support for the _____
holding that "wrongful entry" equates with "trespass" under
Wisconsin law, which, like Massachusetts law, does not require
that an actionable trespass have been intentional. Even though
the Dwyer panel did not take issue with the insurer's "as- _____
sert[ion] that the term `wrongful entry' has been used by Wiscon-
sin courts in only one context the improper entry by a land-
lord onto the leased property of a tenant," id., it reasoned ___
that "nothing [in the Wisconsin cases cited by the insurer]
suggests that the tort [of wrongful entry] should be limited to
landlord-tenant disputes." Id. The Dwyer panel went on to say: ___ _____
"When faced with a similar lack of controlling authority under
New Hampshire law, [the First Circuit] concluded that the tort of
wrongful entry `most closely resembles that of trespass.'" Id. ___

19












Although there existed a landlord-tenant relationship

between Worcester Trust and Dryden, the Worcester Trust complaint

alleges claims by Worcester Trust, the landlord, against Dryden,

the tenant. Dryden offers no authority for its unstated premise

that a tenant in possession under a valid lease may be liable to

its landlord for unlawful entry upon the leased premises under

Massachusetts law. Since wrongful eviction likewise contemplates

wrongful conduct by a landlord against its tenant, see Squeri v. ___ ______

McCarrick, 588 N.E.2d 22 (Mass. App. Ct. 1992), the Worcester _________

Trust claims against Dryden plainly do not come within the

personal injury coverage for "wrongful entry or eviction" under

Massachusetts law.
____________________

(quoting Titan, 898 F.2d at 272). In doing so, Dwyer extended _____ _____
Titan beyond its rationale. _____
Titan equated the tort of wrongful entry with trespass under _____
New Hampshire law only because the panel was "unable to find any ___
New Hampshire cases defining a tort of wrongful entry." Titan, _____
898 F.2d at 272 (emphasis added). Whereas Massachusetts case law
has defined the tort of wrongful entry only in the context of an
intrusion by the landlord upon the premises leased by its tenant.
Against this inapposite decisional backdrop, therefore, we
decline to broaden the scope of the Massachusetts tort of wrong-
ful entry absent a clear signal from the Commonwealth courts,
especially in the instant context where the insurance contract
definition for "personal injury" liability is "very limited."
LaFrance, 594 N.E.2d at 551. ________

Absent some authoritative signal from the
legislature or the courts of Massachusetts,
we see no basis for even considering the pros
and cons of innovative theories . . . . We
must apply the law of the forum as we infer
it presently to be, not as it might come to
be. Although Massachusetts authority is
sparse, we see no basis for applying any rule
other than the traditional one.

Dayton v. Peck, Stow and Wilcox Co. (Pexto), 739 F.2d 690, 694-95 ______ _________________________________
(1st Cir. 1984).

20












Dryden nonetheless argues that these Worcester Trust

claims are embraced by the personal injury coverage as "other

invasion[s] of the right of private occupancy." Titan addressed _____

the scope of liability coverage afforded by this clause under New

Hampshire law.10 There, in addition to the policy issued by

Titan, the City had a liability policy issued by Great Global,

which afforded "personal injury" coverage for "`wrongful entry or

eviction or other invasion of the right of private occupancy.'" __ _____ ___________ ___ _____ __ _______ _________

Titan, 898 F.2d at 272 (emphasis in original). _____

The Titan panel first observed that "an invasion of the _____

right of private occupancy need not involve `an appreciable and

tangible interference with the physical property itself.'" Id. ___

(quoting Town of Goshen v. Grange Mut. Ins. Co., 424 A.2d 822, _______________ _____________________

824 (N.H. 1980)).11 Given this "broad[]" construction of the
____________________

10Prior to the Titan decision, the Seventh Circuit had _____
determined, under the ejusdem generis rubric, that the term _______ _______
"other invasion" referred exclusively to invasions upon real
property, not to a conversion of a vehicle. Red Ball Leasing, __________________
Inc. v. Hartford Accident & Indem. Co., 915 F.2d 306 (7th Cir. ____ _______________________________
1990) (applying Indiana law). See also Hartford Accident & ___ ____ ____________________
Indem. Co. v. Krekeler, 491 F.2d 884 (8th Cir. 1974) ("personal __________ ________
injury" coverage for "wrongful entry or eviction, or other
invasion of the right of private occupancy," embraces tort of
trespass under Missouri law).

11The Titan panel noted that in Town of Goshen the New _____ _______________
Hampshire Supreme Court held that a sufficient claim for invasion
of the right of private occupancy had been stated by the allega-
tion that "the Town and its officials had wrongfully refused to
grant a property owner permission to develop a subdivision,
causing him economic hardships and monetary losses, and denying
him the right of free enjoyment of his property . . . ." Titan, _____
898 F.2d at 272. The New Hampshire Supreme Court accordingly
ruled in Town of Goshen that the insurance coverage for 1983 _______________
claims, as distinguished from common-law claims, was unclear,
then went on to construe the policy against the insurer. Town of _______
Goshen, 424 A.2d at 824-25. ______

21












clause "other invasion of the right of private occupancy,"

Gardner v. Romano, 688 F. Supp. 489, 492 (E.D. Wis. 1988) (citing _______ ______

Town of Goshen), the Titan panel concluded, applying New Hamp- ______________ _____

shire law, that "the [homeowners' suit] alleges just such an

invasion, and so is covered by Great Global's policy." Titan, _____

898 F.2d at 273. The panel went on to observe that the matter

might [have been] left there," id., but out of a concern for __

fairness it permitted "Great Global, on remand, to produce the

type of evidence relied on in Town of Epping, if it exists," id., ______________ ___

to demonstrate that the parties to the insurance contract had not

intended that the clause cover such an invasion.12

As the Massachusetts courts have yet to construe the

clause "other invasion of the right of private occupancy," the

only reliable interpretive guides available to us are the state-

ment by the Massachusetts Appeals Court: "the definition of

personal injury is very limited[,]" LaFrance, 594 N.E.2d at 551; ________

see also Losacco v. F.D. Rich Constr. Co., 992 F.2d 382, 384 (1st ___ ____ _______ _____________________

Cir.) (intermediate state appellate court opinion may afford

reliable guidance in "ascertaining state law"), cert. denied, 114 ____ ______
____________________

12Titan noted that in Town of Epping v. St. Paul Fire & _____ _______________ ________________
Marine Ins. Co., 444 A.2d 496, 498 (N.H. 1982), the "[New Hamp- _______________
shire] Supreme Court agreed that the clause `other invasion of
the right of