The Hanover Insurance Group Inc. v. Raw Seafoods, Inc. (Lawyers Weekly No. 09-011-18)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss SUPERIOR COURT CIVIL ACTION NO. 12-03503-BLS2 THE HANOVER INSURANCE GROUP INC., Plaintiff vs. RAW SEAFOODS, INC., Defendant MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT This case concerns a dispute over coverage between an insured and its insurer. Defendant Raw Seafoods, Inc. (RSI) is a seafood processor. In 2012, an RSI customer, Atlantic Capes Fisheries, Inc. (Atlantic), filed an action in federal court alleging that RSI’s negligent processing of its scallops resulted in their premature spoilage. RSI’s insurer, plaintiff Hanover Insurance Group, Inc. (Hanover), agreed to defend RSI under a reservation of rights and then filed the present action, seeking a declaration that it had no duty to indemnify RSI for any judgment Atlantic obtained. After the federal court judge granted summary judgment in favor of Atlantic and entered judgment against RSI, the parties filed cross motions for partial summary judgment in the instant action. This Court (Roach, J.) granted summary judgment in favor of Hanover but the Appeals Court reversed. 91 Mass.App.Ct. 401 (2017). RSI now renews it Motion for Partial Summary Judgment. For the reasons that follow, the Motion is Allowed. 2 BACKGROUND RSI is a seafood processing facility in Fall River. Atlantic, a seafood company that sells scallops and other seafood, regularly uses RSI to apportion, pack, and freeze the fresh scallops that it purchases from fishing vessels. Upon delivery of Atlantic’s scallops, RSI staff inspects the scallops for quality, reports the results to Atlantic, and receives processing instructions. After processing, the scallops are transported to a third-party cold storage facility, Arctic Cold Storage (Arctic), from which Atlantic ships its customers’ orders. In July 2011, a batch of scallops that RSI had processed made their way through customs in Denmark where it was observed that the scallops were decomposed and emitting a strong smell of ammonia. They were deemed unacceptable for human consumption and sent back to the United States. Once in the United States, the Food and Drug Administration tested the batch and confirmed that it was spoiled. The batch of scallops was then returned to Arctic’s facility, where representatives from Atlantic and RSI jointly inspected the shipment and again confirmed the damage. They also inspected another batch of scallops processed by RSI around the same time as the rejected batch, and discovered more damaged scallops. At the time, Hanover insured RSI through a Commercial General Liability (CGL) Policy. The Policy provides in relevant part that Hanover “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” The Policy applies to “property damage” that is caused by an “occurrence,” which is […]