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Massachusetts Highway
Dept. v. Century Indem. Co., 20 Mass. L. Rep. 180,
2005 Mass. Super. LEXIS 526
(Oct. 24, 2005) (van
Gestel, J.). |
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Century Indemnity insured one of the
parties, Kiewit/Cashman Joint Venture (K/C), who
performed work on the Central Artery Tunnel project. In
2001 K/C sued Century for failing to provide coverage
for certain claims under the policy. In July 2002, K/C
bought claims against two new defendants, J.F. White and
STV, Inc., alleging that these contractors’ negligence
caused damage to K/C’s equipment and property. K/C’s
tort claims were based on events that took place in May
1999, more than three years prior to the filing of the
claims in July 2002.
Century and K/C settled their insurance
coverage dispute. Pursuant to the settlement, Century
expressly reserved its rights to pursue any claims of
K/C in subrogation. Subsequently, the Court issued a
summary judgment decision in favor of J.F. White and STV
on K/C’s claims against them, on the basis that such
claims were barred by the three-year statute of
limitations applicable to tort claims. The claims
against J.F. White and STV, asserted in July 2002, did
not relate back to the original complaint, filed in
2001, because the claims arose out of the contractors’
negligence, whereas the claims against Century arose out
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the alleged breach of the insurance
contract.
At issue in this opinion was J.F. White’s
and STV’s motions for summary judgment as to the claims
of Century Indemnity as subrogee of K/C. The Court held
that Century stood in no better position than K/C and
therefore its claims as subrogee were also time-barred.
The Court noted that by the time Century
and K/C settled in July 2003, the claims of K/C against
J.F. White and STV were time barred. The alleged tort
feasurs did not participate in the settlement and in no
way consented to K/C splitting its claims with Century
by subrogation. The Court also held that Century could
not proceed against J.F. White in subrogation because
J.F. White was an additional named insured under the
policy issued to K/C. It is well settled that
subrogation claims may not be brought against those who
contributed to the payment of premiums. Century argued
that this rule should not apply because J.F. White,
although an insured under the policy, was working on a
different project than the project insured under the
policy. The Court, stating it was a close call, rejected
Century’s argument.
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