Preview:

REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 226 September Term, 1997

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY

v.

STEPHEN C. TUFTS, ET AL.

Davis, Hollander, Kenney, JJ.

Opinion by Davis, J.

Filed: November 4, 1997

Nationwide

Mutual

Fire

Insurance

Company

(Nationwide

or

appellant) appeals from the judgment of the Circuit Court for Howard County (Kane, J.) denying its motion for summary judgment, motions for judgment, and motion for judgment notwithstanding the verdict. Appellees Stephen C. Tufts and Sandra Tufts filed suit

against Nationwide to recover $24,244.35 in stipulated damages under a homeowner's "golden blanket" insurance policy for the value of their barn which had been destroyed by fire. The court denied

Nationwide's motion for summary judgment, motions for judgment, and motion for judgment notwithstanding the verdict and entered

judgment in favor of appellees.

On January 2, 1997, appellant

timely noted this appeal and raised one question for our review, which we restate below: Did the trial court err when it denied appellant's motion for summary judgment, motions for judgment, and motion for judgment notwithstanding the verdict when the insurance policy excluded coverage of other structures used for "business purposes," and the barn was periodically used for the storage of business property? We answer the question in the negative and affirm the judgment of the trial court.

FACTS
Appellees owned a "golden blanket" homeowner's insurance

policy from appellant.

On November 8, 1994, a fire destroyed At the time of the fire,

appellees' barn and its contents.

appellees stored both personal property and business property in

- 2 the barn. The business property included tools, equipment, and

materials from appellees' business, Dayton Drywall Company, Inc. (Dayton Drywall). Appellees made claims for both types of property Aetna Insurance Company (Aetna),

with their respective insurers.

the insurer of appellees' business, paid its $10,000 limit for the business property damaged and destroyed in the fire. Appellant

made payments for the personal property but denied coverage for the barn structure based on an exclusion contained in the homeowner's policy. The coverage exclusion, under Section I Property

Coverages, Coverage B - Other Structures, provides: We do not cover other structures: a. used in whole or in part for business purposes. The policy defines "business" as follows: trade, profession, or occupation. "`Business' includes

An office, school, studio,

barber or beauty shop of an insured on the residence premises is not a business if its occupancy is described in the policy." The

terms "business purposes" and "purpose" are not defined in the policy. Appellant filed a motion for summary judgment on March 5, 1996, asserting that the undisputed facts and the clear language of the policy entitled it to judgment as a matter of law. Appellees countered, arguing that the policy provision in question was ambiguous giving rise to different permissible inferences. As

such, appellees contended that there was a question as to whether

- 3 appellees' storage of business property in the barn constituted use for "business purposes." The trial court, by memorandum and order,

dated April 8, 1996, denied appellant's motion for summary judgment and the case proceeded to trial on November 4, 1996. During appellees' case, Mr. Tufts testified that, at the time of the fire, he was using the barn partly for storage of business equipment and supplies, as he did on occasion. Ms. Tufts testified

that, at the time of the fire, she and her husband were essentially self-employed, working for Dayton Drywall, which did commercial drywall work in Maryland, Northern Virginia, and the District of Columbia. Ms. Tufts testified that ninety percent of the barn was

used for storage of personal property, but the other ten percent was occupied by left-over business supplies and tools. She claimed

that the business tools and equipment that were in the barn at the time of the fire were a result of the business's impending failure. Mr. Tufts stated that the barn was never used to construct anything used for the company's jobs and that no business was conducted out of the barn. He testified that the company did use

the barn to store some business tools and equipment, but only between jobs. Additionally, he verified that he had made a claim

with Aetna for the business property that had been destroyed by the fire in the barn. At the end of appellees' case, appellant made a motion for judgment, arguing that the evidence and the language of the policy

- 4 entitled appellant to judgment as a matter of law. reserved ruling on the motion. Appellant's case began with the testimony of Mark Pilch, the Aetna claims representative who handled appellees' claim for lost business property. Mr. Pilch testified that Aetna paid the claim The trial court

because the tools and equipment damaged or destroyed in the fire were owned by the appellees' business, Dayton Drywall. Next, James Reilly, appellant's claims representative,

testified regarding the basis for the denial of appellees' claim for the barn structure. He stated that Nationwide believed that

the storage of business property in the barn constituted use for business purposes, and thus, appellant denied the claim. At the conclusion of all the evidence, appellant renewed its motion for judgment and again the court reserved its ruling. The

case was submitted to the jury, which found that appellees were not using the barn, in whole or in part, for business purposes. court denied appellant's subsequent motion for The

judgment

notwithstanding the verdict and this appeal followed.

DISCUSSION I
Appellant argues that the trial court erred when it denied appellant's motion for summary judgment, motions for judgment, and motion for judgment notwithstanding the verdict. As review of the

- 5 motions requires us to apply different standards of review,1 we discuss the motions separately.

Motion for Summary Judgment The standard for appellate review of a trial court's denial of a motion for summary judgment requires us to determine whether the trial court was legally correct. Heat & Power Corp. v. Air Prods.

& Chems., Inc., 320 Md. 584, 590-91 (1990); Barnett v. Sara Lee Corp., 97 Md. App. 140, 146, cert. denied, 332 Md. 702 (1993). In

so doing, we review the same material from the record and decide the same legal issues as the circuit court. Nationwide Mut. Ins.

Co. v. Scherr, 101 Md. App. 690, 695 (1994), cert. denied, Scherr v. Nationwide Mut. Ins. Co., 337 Md. 214 (1995). Motions for summary judgment are governed by MARYLAND RULE 2501, which provides that, "[t]he court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." MARYLAND RULE 2-501(e) (1997). See

also Bagwell v. Peninsula Regional Medical Ctr., 106 Md. App. 470, 488 (1995)(holding trial court to same requirements as MD. RULE 2-

A motion for summary judgment contrasts sharply with motions for directed verdicts (motions for judgment) or a motion for judgment notwithstanding the verdict, as the latter two test the legal sufficiency of the evidence adduced. Coffey v. Derby Steel Co., 291 Md. 241, 247 (1981).

1

- 6 501). In making its determination, the circuit court must view the

facts and all inferences from those facts in the light most favorable to the non-moving party. 710, 717 (1996). When the underlying facts are undisputed, but produce more than one permissible inference, the choice between those inferences should not be made by the court as a matter of law, but should be submitted to the trier of fact. 258 Md. 134, 138 (1970). Fenwick Motor Company v. Fenwick, Brown v. Wheeler, 109 Md. App.

The Court of Appeals has observed that

[t]he jury's function in the interpretation of documents then will arise wherever, in view of the surrounding circumstances and usages offered in evidence, the meaning of the writing is not so clear as to preclude doubt by a reasonable man of its meaning. If the meaning after taking the parol evidence, if any, into account is so clear that no reasonable man could reach more than one conclusion as to the meaning of the writing under the circumstances, the court will properly decide the question of fact for itself as it may any question of fact which is equally clear. Montauk Corp. v. Seeds, 215 Md. 491, 497 (1958) (quoting S. WILLISTON, 4 A TREATISE 1957)). Citing Cheney v. Bell Nat'l Life Ins. Co., 315 Md. 761 (1989), appellant correctly asserts that, when there are no factual disputes, the trial court must interpret insurance policies using the ordinary and accepted meanings of the words set out in the policy. Appellant, however, contends that the undisputed storage
ON THE

LAW

OF

CONTRACTS

Download Nationwide v. Tufts.pdf

Maryland Law