For 25 years, victims of drunk driving accidents in
Massachusetts have been able to maximize liability insurance
coverage in claims against social hosts by being able to access a
negligent host's homeowner's insurance policy, as well as the auto
policy of the negligent driver. However, a recent Appeals Court
case construing a new version of the auto exclusion means that it
will be increasingly difficult to obtain homeowner's coverage for
The Marnell decision
A typical auto exclusion states that the insurance does not
apply to: "'Bodily injury' or 'property damage' arising out of the
ownership, maintenance, use or entrustment to others of any …
'auto' … owned or operated by or rented or loaned to any insured …
In the landmark decision of Worcester Mut. Ins. Co. v.
Marnell,1 the Supreme Judicial Court held that the
auto exclusion in the insureds' homeowner's policy did not apply to
a claim brought against the insureds for their alleged negligent
supervision of a party where their son (also an insured) became
intoxicated. The tort plaintiff was injured when the son left the
party in his own car and struck the plaintiff.
Despite the language of the auto exclusion, the court held that
the severability clause in the policy required that the insurance
provided by the policy apply separately to each
insured.2Thus, the court held, "the term 'insured' as
used in the motor vehicle exclusion refers only to the person
claiming coverage under the policy … While our interpretation of
the policy makes the word 'any' in the motor vehicle exclusion
superfluous, the construction urged by [the insurer] would render
the entire severability of insurance clause
Because the parents did not "own or operate" the car driven by
their son, the policy's exclusion for injury arising out of "any
insured's" ownership or use of a motor vehicle did not apply to the
claims asserted against the parents. This interpretation of the
exclusion is by no means universal. Instead, the vast majority of
states have applied the exclusion in its literal sense, and denied
coverage where the bodily injury arose from any insured's ownership
or use of a vehicle.4
Even under the Massachusetts interpretation of the auto exclusion,
coverage is not available for every claim of negligent supervision.
For example, there is no coverage if the accident involved a
vehicle that was owned by the insured. This distinction finds its
roots in the Marnell decision itself where the SJC noted: "under
our construction of the policy, the motor vehicle exclusion
prevents the homeowners' policy from providing additional
insurance, without a premium, to an insured when a motor vehicle
owned or operated by that person is involved in an
For similar reasons, the auto exclusion also applies to claims of
negligent entrustment, because the essence of an entrustment claim
involves ownership or control over the use of the
vehicle.6 As a general principle, the court was willing
to override the exclusion if the insured could not have obtained
automobile coverage for the accident.
Implications of different language in the auto
The analysis in Marnell has been called into question
as a result of the recent Appeals Court decision in
Massachusetts Prop. Ins. Underwriting Ass'n v.
Berry.7 In circumstances that were analogous to
those in Marnell, the insureds hosted a party at their home, and
negligently allowed an inebriated guest to operate a vehicle,
resulting in an accident.
However, in Berry, the homeowner's policy contained a
different version of the auto exclusion. In this version, the
homeowner's policy excluded coverage for "Motor Vehicle Liability,"
which was defined as: "Liability for 'bodily injury' or 'property
damage' arising out of the operation or use of a [m]otor
vehicle "by any person." The court observed that, unlike in
Marnell, the exclusion applied as long as the injuries
arose out of the use of the vehicle by any person. Thus,
there was no coverage, even if the insured hosts did not own the
Under this new version of the exclusion, homeowners will be unable
to obtain coverage for claims involving an auto accident regardless
of the theory of liability and regardless of their connection with
the accident vehicle. We can expect that this exclusion will be
added to more policies in the wake of the Berry
Movement away from reliance upon the severability
A recent trend suggests that, quite apart from any change in the
language of the auto exclusion, the scope of its application may
become limited. Several courts have rejected reliance upon the
severability clause in holding that similar exclusions precluded
coverage. Thus, in Yerardi v. Pacific Indem.
Co.,8 the exclusion precluded coverage "for any
loss caused intentionally by you" and "you" was defined as "the
person named in a coverage summary, and a spouse." The court
declined coverage for the innocent spouse, holding that: "There is
nothing ambiguous or inconsistent about providing for separate
coverage determinations, but requiring that certain obligations
In addition, the Appeals Court rejected an effort to apply the
reasoning of Marnell to an exclusion in a homeowner's
policy for harm caused by the intentional act of "an
In Hingham Mut. Fire Ins. Co. v. Smith,9 the
plaintiffs alleged that their children had been sexually abused by
the insureds' son and filed a claim of indecent assault against the
son and claims of negligent supervision against the parents. The
court held that the reasoning in Marnell did not
coverage for the parents because the result in Marnell
turned on the allocation of risks between homeowner's coverage and
With the recent line of cases limiting the impact of the
severance clause on policy exclusions, counsel should be cautious
when evaluating the amount and type of coverage available for an
auto accident. Unless the language of the auto exclusion tracks
that of Marnell, coverage may be limited to the amount
available in the applicable auto policy.
Samuel Furgang is a partner at Sugarman, Rogers, Barshak
and Cohen PC, where he focuses his practice on insurance coverage
litigation and the negotiation of complex coverage disputes and
bad-faith claims. He also has extensive experience litigating a
wide variety of tort and contract claims.
1398 Mass. 240 (1986)
2A typical severance clause states:
Except with respect
to the Limits of Insurance, and any rights or duties specifically
assigned in this policy to the first Named Insured, this insurance
a. As if each Named Insured were
only Named Insured; and
b. Separately to each
against whom claim is made
or "suit" is brought.
3Marnell, 398 Mass. at 245.
4See Windt, Insurance Claims and Disputes (5th Ed.),
5398 Mass. at 245.
6Barnstable County Mut. Fire Ins. Co. v. Lally, 374
Mass. 602, 605-061978).
780 Mass. App. Ct. 598, 604, 954 N.E.2d 584, 588
8436 F.Supp.2d 223, 249 (D.Mass. 2006).
969 Mass. App. Ct. 1 (2007).