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Dilbert v. Hanover Insurance Co.4/27/2005
Norfolk.
December 16, 2004.
Insurance, Defense of proceedings against insured. Contract, Performance and breach. Real property, Trespass.
Civil action commenced in the Superior Court Department on January 5, 2001.
The case was heard by Ernest B. Murphy, J., on motions for summary judgment.
The plaintiffs, Susan B. Dilbert and Seth D. Kilgore, purchased a condominium residence from Ellen Remsen and two years later a dispute arose as to the ownership of the condominium's parking space. Remsen filed a complaint against the plaintiffs in consequence of the dispute. The plaintiffs demanded that the Hanover Insurance Company (Hanover) defend them with respect to the Remsen complaint, on the basis of their homeowner's insurance policy with Hanover (the policy). After Hanover refused, the plaintiffs settled the Remsen action without the participation of Hanover and then commenced the present action against Hanover seeking damages for breach of contract and declaratory judgment that under the policy Hanover was required to defend and indemnify them against the Remsen action. A Superior Court judge allowed Hanover's motion for summary judgment and denied the plaintiffs' motion for summary judgment. We reverse.
1. Background
The facts are not in dispute for purposes of the judge's decision and this appeal.
a. The Real Estate Transaction Between Remsen and the Plaintiffs
In 1988, Remsen as seller and the plaintiffs as buyers executed a purchase and sale agreement for the purchase of the condominium unit, excluding the parking space. The purchase and sale agreement specifically stated that the space would not be conveyed with the unit. Remsen then executed the unit deed conveying the unit together with the parking space to the plaintiffs, even though the purchase and sale agreement did not require her to include the space in the deed. Contemporaneously with the execution of the deed, Remsen and the plaintiffs executed a separate purchase and sale agreement for the parking space, by which the plaintiffs sold the space to Remsen for one dollar (and acknowledged receipt of payment). The transaction included Remsen's right, for the period of one year (with an option for an additional year) to sell the parking space to a third party and the plaintiffs' agreement to transfer the deed to a third party if asked to do so. Remsen rented the space to another condominium resident, but did not sell it within the allotted two years.
b. The Dispute and the Remsen Complaint
When the two year period elapsed, the plaintiffs determined that Remsen no longer had any claim to the parking space, and that they were free to use it. Remsen disagreed and demanded that they cease its use. When the plaintiffs failed to comply, Remsen commenced an action against the plaintiffs in Superior Court alleging, among other things, that the plaintiffs were using the parking space in derogation of her rights and to her exclusion, as she had retained "equitable title" to the space. Remsen's verified complaint recited five separate causes of action: declaratory judgment, specific performance, unjust enrichment, rescission, and resulting trust. She sought damages for the unauthorized use of the space, and in her complaint she explicitly alleged her loss of use of the space as the result of the plaintiffs' use. As discovery progressed, in her answers to interrogatories, Remsen made specific allegations of loss of use, wrongful entry, and wrongful eviction.
c. The Policy Language
The insurance policy provides the following in pertinent part:
"If a claim is made or a suit is b
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