The authority's bill in equity seeks declaratory relief against Perini Corporation (Perini) and also against an insurance company (the insurer, see fn. 1) which had issued to Perini a comprehensive liability insurance policy. The policy named Perini as insured and the authority and the trustee (fn. 1) as additional insureds. A judge of the Superior Court, without making any decision, reserved the case for the determination of this court upon the pleadings and a case stated.
In 1959, the authority (acting under St. 1958, c. 598) made a contract with Perini (drafted by the authority) to construct an additional traffic tunnel (now known as the Lieutenant Callahan Tunnel) under Boston harbor, to modernize the existing Sumner Tunnel, and to combine the two tunnels as a single project. The contract (art. 26) provided that Perini "shall indemnify and save harmless the [a]uthority and ... its officers, ... and employees against all suits, claims or liability of every name and nature, for or on account of any injuries to persons or damage to property arising out of or in consequence of the acts of ... [Perini] in the performance of the work covered by the contract and/or [sic] failure to comply with ... [its] terms... whether by himself or his employees or sub-contractors, but only in respect of such injuries or damages sustained ... prior to the completion and acceptance of the work ... [emphasis supplied in the original
The insurer issued the comprehensive liability insurance policy mentioned above. As amended, the relevant coverage (insuring agreement 1, coverage D, property damage liability) read, "To pay on behalf of the [i]nsured all sums which the [i]nsured shall become legally obligated to pay as damages for: (a) [p]hysical injury to or destruction of tangible property, or (b) [l]oss of use of such tangible property, provided the physical injury thereto was caused by accident."
The authority "acquired by formal eminent domain takings all property and rights deemed by it essential for the construction," thus making available to Perini "those areas and rights deemed essential for the prosecution of the work
During the performance of the contract, "property of landowners was physically injured or destroyed, and in some cases rights of access were impaired. As a result of the takings made and of the alleged injury to or destruction of such property or of impairment of access to such property ... forty-four owners initiated petitions against the [a]uthority" under G.L.c. 79. See St. 1958, c. 598, § 15. The authority in each instance has called on Perini and the insurer to defend the proceeding and to save the authority harmless against the claim. Because Perini and the insurer have declined to defend these cases, the authority has paid (1) the legal expenses in connection with (a) the claims which have been tried and (b) the preparation of other cases, and (2) all judgments against it.
The authority contends (1) that Perini and the insurer "are bound ... jointly and severally, to indemnify it for all judgments ... for damages, other than for takings by eminent domain, caused to property in the course of the construction," and (2) that the insurer "is bound to defend against all petitions heretofore brought against the [a]uthority for [such] damages." Perini and the insurer contend (1) that the contractor has no obligation under the contract with the authority either to defend petitions brought against the authority under G.L.c. 79,
1. Contract and insurance policy provisions much like those here discussed have been the subject of earlier decisions. Like other contracts of indemnity, such provisions are "to be ... reasonably construed" in accordance with the parties' intention, with reference to the parties' situation when the provisions were negotiated, and in a manner "to effectuate the purpose sought to be accomplished." See New York, N.H. & H.R.R. v. Walworth Co. 340 Mass. 1, 3.
Bryne v. Gloucester, 297 Mass. 156, dealt with a situation in many respects similar to that now before us. A contractor agreed with a city to construct a tunnel under certain buildings and (p. 157) to indemnify it against claims "by reason of any act, omission or neglect of the ... [c]ontractor ... in carrying on the work." The contractor performed the work with extreme care and with no negligence. Any damage to the buildings was caused by necessary blasting operations and was inevitable. The city, when it acquired an easement under the buildings, had agreed to restore the buildings in the event of inevitable damage. The trial judge ruled (p. 158) that the word "act" in the contract meant only improper or negligent acts, and that the contractor's obligation to indemnify did not extend to loss which was inevitable by reason of the construction. This court took essentially the same view. It construed the contract "with reference to the situation of the parties when they made it and to the objects sought
In Holbrook v. Massachusetts Turnpike Authy. 338 Mass. 218, it was held that an owner, part of whose land had been taken, might recover under St. 1952, c. 354, § 15, and G.L.c. 79, §§ 10 (see fn. 4) and 12, for "special and peculiar" injury subsequently caused to the remainder of his land as a necessary consequence (p. 224) of construction work. The court pointed out (p. 222) that the Legislature may permit recovery of damages beyond what "the landowner ... [was] entitled to receive as a matter of constitutional right," and said (p. 223) that the court then was "not dealing with a statute [the 1952 statute] which imposes liability only where a taking is involved." At p. 224, it was said, "If, due to the performance of the work as authorized, the [then] petitioner's property suffered injuries ... such damage could be found to have occurred while `carrying out the powers' or `by the exercise of any of the powers' conferred by [St. 1952] c. 354, and to be a necessary consequence of doing the authorized work at that time. In this respect it is immaterial that the work was performed by a contractor." The court stated (pp. 224-226) that there could not be recovery under St. 1952, c. 354, § 15 (and G.L.c. 79), "for damages due to negligence or to other
These decisions largely control the present case. The contract between Perini and the authority, and the policy issued by the insurer, each must be given a sensible, practical construction in the light of these decisions. See United Shoe Mach. Corp. v. Gale Shoe Mfg. Co. 314 Mass. 142, 148; Connecticut Indem. Co. v. Lee, 74 F.Supp. 353, 359 (D. Mass.) affd. 168 F.2d 420 (1st Cir.).
2. We hold, following the Bryne case, that the parties intended by art. 26 (and also the somewhat related provisions of art. 25, fn. 2) of the contract between Perini and the authority to require Perini to indemnify the authority only from claims for Perini's acts and omissions causing damage other than damage attributable to a taking or "inevitable" in carrying out the work. In essence, this means that Perini will be liable only if its acts or omissions were tortious by reason of negligence or strict liability, maintaining a nuisance, participating in wrongful conduct, taking unauthorized action,
Although art. 26 is broadly expressed, the circumstances make plain the intention of the parties. If any reasonable doubt existed concerning the parties' intention, the contract should be construed against the authority which drafted it. See Bowser v. Chalifour, 334 Mass. 348, 352.
3. We treat the policy as furnished in compliance with the contract requirements of art. 19, B 1 (see fn. 2). There would be little occasion for Perini (the principal insured under this policy) to insure itself, except with respect to its own tort liability. As to no other matters is it (Perini) obliged to indemnify the authority. The insurer does not argue that it is not obliged to defend and indemnify Perini and the other insureds with respect to tort claims against each of them (and appears to be doing so with respect to pending tort actions). It is difficult to see any remaining purpose in the requirement of art. 19 that Perini furnish property damage liability insurance except to support Perini's indemnity obligation under art. 26, which, we have
Of an automobile bodily injury policy covering "injury accidentally sustained," it was said in Miller v. United States Fid. & Guar. Co. 291 Mass. 445, 448, "It is common knowledge that protection against liability on the ground of negligence is the principal purpose of such policies." This is also true of the type of contractor's property damage insurance here involved, although, of course, such policies and the term "accident" (and also the term "occurrence" here substituted by endorsement, see fn. 3) will not be given "any narrow construction ... which will limit or defeat any coverage fairly intended to be given by" such a policy (emphasis supplied). See Vappi v. Aetna Cas. & Sur. Co. 348 Mass. 427, 432. See also Appleman, Insurance Law and Practice, § 4497; Couch, Insurance 2d, §§ 1.32, 44:269, 44:337-44:345.
We do not see in the substitution of the word "occurrence" for "accident" in various parts of the policy (fn. 3), or in any other provision of the policy, evidence of an intention to require the insurer to indemnify either Perini or the additional insureds, or to defend them, against claims for injuries for which recovery may be had under G.L.c. 79. One purpose of the substitution of the word "occurrence" for "accident" may have been to include in the coverage a suitable provision for indemnity against injuries (see e.g. American Cas. Co. v. Minnesota Farm Bur. Serv. 270 F.2d 686, 690-692 [8th Cir.]) gradually occurring (as contrasted with an injury arising from a sudden event, an aspect of injuries frequently, but not always, associated with the word "accident"). See Bean, The Accident Versus the Occurrence Concept, 1959 Ins. L.J. 550, 553; Leslie, Automobile and General Liability Insurance, Am. Bar Assn. Section of Insurance, Negligence, and Compensation Law, 1962 Proceedings, 70, 84-85. See also
The naming of additional insureds does not extend the nature of the substantive coverage originally given by the policy but merely gives to other persons the same protection afforded to the principal insured. See Sonoco Products Co. v. Travelers Indem. Co. 315 F.2d 126, 128 (10th Cir.); Refined Syrups and Sugars, Inc. v. Travelers Ins. Co. 136 F.Supp. 907, 910-911 (S.D. N.Y.), affd. per cur. 229 F.2d 439 (2d Cir.).
The insurer's liability to defend Perini and the additional insureds under its policy relates to "any suit ... against the insured alleging such ... injury or destruction and seeking damages ... payable under the terms of this policy." The allegations in the pleadings, of course, determine whether in respect of any particular claim such a liability exists. See Magoun v. Liberty Mut. Ins. Co. 346 Mass. 677, 681. Unless the pleadings show that a claim, if proved, will be within the policy's substantive coverage, the insurer has no obligation to defend.
4. A final decree is to be entered declaring that neither Perini nor the insurer has any obligation to defend petitions