On March 27, in the case of Big Wheel Truck Sales v. Safety Insurance Company, Case #16-P- 318, the Massachusetts Court of Appeals held that the removal of a vehicle from the site of a single-vehicle crash, without more, does not constitute a repair, or “remediation,” of the property on which the crash occurred and, therefore, is not payable under a policy of liability insurance issued on the wrecked vehicle.
In August 2009, a 2000 Ford Explorer being driven by David Raposa left the roadway, went through a guardrail, and traveled about 75 feet down an embankment before it came to rest at the bottom of a ravine on state-owned property. Big Wheel, sponsor of the Recovery Billing Unlimited (RBU) seminars, was called to assist with the successful recovery of the single-vehicle accident.
Raposa did not have collision or towing insurance. The only insurance coverage he had was a liability policy issued by Safety Insurance Company’s (“Safety Insurance”). Under the terms of that policy, Safety Insurance was obligated to pay the cost to repair any property damage caused by Raposa.
Big Wheel submitted its $5,470 recovery invoice to Safety Insurance seeking payment under Raposa’s “liability-only” coverage. Big Wheel claimed that because the presence of a wrecked vehicle hindered the owner’ use of the property, the property was “damaged.” According to Big Wheel, by removing the vehicle it repaired, or “remediated” the site for the property owner, which in this case was the Commonwealth of Massachusetts. Big Wheel claimed that because it “repaired” the “damaged” property it was entitled to payment under the vehicle owner’s liability policy. That convoluted theory has been advanced in the RBU classes for many years.
Safety Insurance refused to pay Big Wheel’s recovery invoice. It pointed out that Big Wheel did nothing other than remove Raposa’s SUV from the accident site. There was no indication of any damage to the property — no cargo spill or environmental issue resulting from the accident necessitating repairs to the property or debris cleanup. Therefore, according to the insurer, Big Wheel had no legitimate claim under the liability insurance policy.
Big Wheel filed a lawsuit against Safety Insurance seeking payment under the Massachusetts unfair insurance settlement practices. The towing firm won in the trial court, but Safety Insurance appealed to the District Court Appellate Division. The Appellate Division reversed the trial court decision, ruling in favor of the insurance company and tossing out Big Wheel’s claim. Big Wheel then appealed that ruling to the next appellate level – the Massachusetts Court of Appeals. Late last month the Court of Appeals issued its opinion affirming the ruling from the lower appellate court. It dismissed Big Wheel’s claim against the liability insurance carrier.
The issue, according to the Court of Appeals, was whether the mere removal of a vehicle from the property upon which it rests after a wreck constitutes repair, or remediation, of property damage simply because it restores the property owner to the full use of their property. The Court of Appeals held that it does not, thereby outright rejecting the RBU-promoted theory:
The mere presence … of Raposa’s damaged car on the Commonwealth’s property is not a loss of use so sufficient to constitute property damage under [the liability insurance clause]. Were that the case, every damaged or disabled vehicle on the Commonwealth's roadways would be entitled to towing at the expense of an auto insurer under the compulsory coverage …. We agree with Safety that such an interpretation stretches the language of the policy in this case.
Big Wheel presented the court with case law precedent in which it and another Massachusetts towing company had prevailed against Canal Insurance in 2007 and 2013, but the court found those cases unpersuasive. Unlike the Raposa recovery, those prior cases involved “documented property damage in the form of debris strewn on the roadway,” said the court.
Big Wheel also pointed out that Safety Insurance made a direct payment to an outside contractor to repair the Commonwealth’s guardrail. It argued that its claim for vehicle recovery services was similar. But the court saw a distinct difference. It noted that there was actual damage done to the Commonwealth’s guardrail. There was no damage done to the ravine from which Big Wheel recovered the SUV. The court said that Big Wheel needed to look to vehicle owner Raposa for payment of its invoice.
There are good and bad take-aways from this court ruling. The bad is that mere vehicle recoveries, no matter how complicated, do not in and of themselves constitute property remediation so as to support a claim under the vehicle owner’s liability insurance coverage. The good is that debris clean-up and site remediation necessitated by a crash, such as re-grading or hazmat spill remediation, remain payable under a vehicle owner’s liability policy notwithstanding the fact that the damage occurs to or on property not owned by the towing company.