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Safety Insurance Co. v. Day10/28/2005
Suffolk.
March 16, 2005
Present: Greenberg, Cowin, & Green, JJ.
Motor Vehicle, Insurance. Insurance, Motor vehicle insurance, Regular use exclusion, Insurer's obligation to defend. Indemnity. Estoppel. Practice, Civil, Attorney's fees, Costs.
Civil action commenced in the Superior Court Department on June 10, 1999.
The case was heard by Ernest B. Murphy, J., on motions for summary judgment; a motion for attorney's fees and costs was heard by Christopher J. Muse, J., and entry of separate and final judgment was ordered by him.
The defendant Ann B. Day, while driving a motor vehicle owned by her housemate, Donna E. Enberg, collided with a motor vehicle operated by the defendant Noreen Mahan, resulting in personal injuries to Mahan. The insurer of Day's own vehicle, the plaintiff, Safety Insurance Company (Safety), provided Day with a defense in a personal injury action brought against her by Mahan but, after an extended period, declined to indemnify Day on the ground that her use of Enberg's vehicle brought her within the so-called "regular use" exclusion of Safety's policy.
Safety commenced a declaratory judgment action to determine the question of coverage, and a judge of the Superior Court, deciding that Day had not made regular use of her housemate's vehicle, entered summary judgment in Day's favor. Another judge of the Superior Court granted Day's application for an award of attorney's fees and costs, and Safety appealed from a separate and final judgment entered pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974). We conclude that Day's use of Enberg's vehicle constituted regular use excluded from coverage. However, we hold in addition that, on the undisputed facts in the summary judgment record, Safety's unreasonable delay in asserting the exclusion defense, accompanied by prejudice both to Day and her umbrella insurance carrier, estopped Safety from a denial of indemnification. Accordingly, we affirm the judgments, including the portion awarding attorney's fees and costs.
1. Material Facts and Relevant Prior Proceedings
The underlying material facts appear to be undisputed. On September 16, 1996, Day and Enberg shared a house. Each owned an insured motor vehicle, Day owning a 1989 Ford Taurus (insured by Safety with an optional bodily injury limit of $250,000 per person) and Enberg owning a 1994 Ford Taurus (insured by Trust Insurance Company with an optional bodily injury limit of $100,000 per person). Each was listed as an occasional operator on the other's insurance policy. Day had additional coverage under a homeowners policy with a personal umbrella liability endorsement issued by Merrimack Mutual Fire Insurance Company (Merrimack).
While there are minor variations in the parties' characterizations of practices involving Day's use of Enberg's vehicle, they agree on the following. Day primarily used her own vehicle. With Enberg's permission, she used Enberg's vehicle two or three times per month for trips out of town. About twice per month, Enberg would drive her own vehicle with Day as a passenger to Day's out-of-town meetings. Day would also occasionally use Enberg's vehicle for local purposes. Day did not have a set of keys to Enberg's vehicle; however, the keys were often left in a basket by the door and were accessible to Day at the times of her use. Day always informed Enberg when she wanted to use Enberg's vehicle.
On the date in question, Day, operating Enberg's vehicle with Enberg's permission, was involved in a motor vehicle accident with Mahan's vehicle, allegedly resulting in personal injuries to Mahan. On that date, Safety insured Day b
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