The Society for Christian Activities, Inc., doing business as Camp Good News (Camp), and Faith Willard, the Camp's president and director, commenced a declaratory judgment action against Markel Insurance Company (Markel), the Camp's general liability insurer, to recover a settlement amount paid by the Camp that exceeded the limit of the Camp's automobile insurance policy, and to recover attorney's fees and costs allegedly incurred on behalf of Willard. [Note 3] A judge in the Superior Court, relying on Worcester Mut. Ins. Co. v. Marnell, 398 Mass. 240 (1986), allowed Willard's motion for summary judgment and ruled that, notwithstanding the automobile exclusion in the general liability policy, Markel was obligated to defend Willard because of a "severability of interests" clause. The Appeals Court held that the principles of Marnell were inapplicable and vacated summary judgment for Willard. Society for Christian Activities, Inc. v. Markel Ins. Co., 56 Mass. App. Ct. 190 , 193 (2002). We granted Willard's application for further appellate review. We agree with the reasoning and result of the Appeals Court.
In Worcester Mut. Ins. Co. v. Marnell, supra, we held that the automobile exclusion in a homeowners' policy, read in light of the "severability of insurance" clause, did not relieve the insurance company of the duty to defend parents sued for negligent supervision of a party where their son became intoxicated, left in his own car, and caused a fatal accident. Id. at 244-245. Construing the automobile exclusion to apply only to insureds claiming coverage under the homeowners' policy who own or operate the vehicle involved in the accident, we concluded that, because the son owned and operated the car, the automobile exclusion did not apply to the parents. Id.
The case at bar is distinguishable. Unlike the parents in the Marnell case, the Camp owned the vehicle that was involved in the accident. The automobile exclusion thus applies. Compare Ayer v. Imperial Cas. & Indem. Co., 418 Mass. 71 , 74 (1994) (insured owned vehicle); Phoenix Ins. Co. v. Churchwell, 57 Mass. App. Ct. 612 , 616 (2003) (same); Merrimack Mut. Fire Ins. Co. v. Sampson, 28 Mass. App. Ct. 353 , 358 (1990) (same), with Shamban v. Worcester Ins. Co., 47 Mass. App. Ct. 10 , 15 (1999) (insureds did not own vehicle). Moreover, unlike the parents in Marnell, Willard is not the real party in interest. The Camp is the real party in interest. It was the Camp that contributed $135,000 toward the total settlement amount on behalf of both itself and Willard. [Note 4] Willard has not shown that she contributed any amount to the settlement, nor that she incurred any legal fees or costs. Considering that the Camp is the real party in interest, the claim that Willard is personally entitled to recover from Markel amounts to nothing more than a thinly veiled
attempt to circumvent the automobile exclusion. Were we to conclude that the exclusion did not apply, we would in effect allow the general liability policy to provide additional insurance without a premium. See Worcester Mut. Ins. Co. v. Marnell, supra at 245. We decline to do so. Our conclusion "supports the proper allocation of risks between an insured's [general liability] policy and automobile insurance." Phoenix Ins. Co. v. Churchwell, supra at 616.
The judgment is vacated and the case is remanded to the Superior Court, where a judgment is to be entered declaring that Markel is not required to defend or indemnify Willard on the underlying claims against her.
Karen M. Thursby for Faith Willard.
Ethan Warren for the defendant.
[Note 1] Doing business as Camp Good News.
[Note 2] Faith Willard.
[Note 3] For the facts regarding the automobile accident underlying the case, and the relevant details of the Camp's general liability and automobile insurance policies, see Society for Christian Activities, Inc. v. Markel Ins. Co., 56 Mass, App. Ct. 190, 191-193 (2002).
[Note 4] The remaining $500,000 of the settlement was paid by the Camp's automobile insurance policy, a policy that covered both the Camp and Willard. See Society for Christian Activities, Inc. v. Markel Ins. Co., supra at 191 & n.3, 193.