Markline Co., Inc. v. Travelers Ins. Co.
424 N.E.2d 464, 384 Mass. 139, 1981 Mass. LEXIS 1366 (1981)
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Rule of Law:
An unambiguous provision in a burglary insurance policy requiring 'visible marks' of forcible entry or exit will be strictly enforced, and the insured's 'reasonable expectation' of coverage cannot override the clear language of the contract.
Facts:
- Travelers Indemnity Co. issued a 'Storeowners 700' insurance policy to Markline Company for the period of May 1, 1974, to May 1, 1975.
- The policy provided coverage for 'burglary,' which was defined as felonious entry or exit evidenced by 'visible marks made by tools, explosives, electricity or chemicals' or other physical damage.
- On June 15, 1974, Markline's president and an employee closed and locked the store.
- Later that day, the store's burglar alarm was activated, and police responded.
- An inventory conducted in early July revealed that merchandise valued at $19,380 was missing.
- A physical inspection of the premises revealed no visible marks of forcible entry or exit.
Procedural Posture:
- Markline Company sued its insurer, Travelers Indemnity Co., in the trial court to recover for an inventory loss.
- After a bench trial, the trial court judge found in favor of Markline Company and awarded damages of $19,380 plus costs.
- The defendant, Travelers Indemnity Co., appealed the trial court's judgment to this appellate court.
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Issue:
Does a burglary insurance policy that explicitly requires 'visible marks of force and violence' at the point of entry or exit cover a loss where no such marks exist?
Opinions:
Majority - Nolan, J.
No. A loss is not covered under a burglary policy requiring visible marks of forcible entry if no such marks are found. The court must enforce the unambiguous language of an insurance contract as it is written. The policy clearly defines burglary as requiring visible marks of forced entry, and it is undisputed that no such marks were present. The plaintiff purchased 'burglary' coverage, not the broader 'theft' coverage, which was a separate option in the policy. The court declines to adopt the 'reasonable expectation' doctrine, which is not the law in Massachusetts, as there is no ambiguity in the policy to resolve. Even if the doctrine were applied, the plaintiff's evidence of merely 'understanding' he had complete coverage is insufficient to prove a reasonable expectation that this specific loss would be covered.
Dissenting - Liacos, J.
No, under a strict textual analysis, but the court should adopt the doctrine of reasonable expectations and remand the case. The majority ignores the strong possibility that the trial judge based his ruling on the insured's reasonable expectations, not on a misreading of the policy. The 'visible marks' requirement is a fine-print exclusion that negates the dominant purpose of the burglary policy, especially since the insurer required the plaintiff to install a burglar alarm. An insured’s objectively reasonable expectation of coverage should be honored, even if a painstaking study of the policy would negate it. To enforce such an obscure exclusionary clause against an insured who was assured of comprehensive coverage is unconscionable, and the case should be sent back for the trial judge to clarify if the judgment was based on this more equitable doctrine.
Analysis:
This decision solidifies a strict, textualist approach to insurance contract interpretation in Massachusetts, explicitly rejecting the more policyholder-friendly 'reasonable expectations' doctrine adopted in other jurisdictions. It establishes a clear precedent that unambiguous terms, even if they seem harsh or technical to the insured, will be enforced as written. This outcome places a significant burden on insured parties to read and fully understand the specific definitions and exclusions in their policies, diminishing their ability to rely on general understandings or an agent's assurances. For insurers, it provides strong protection against claims that fall outside the precise letter of the policy.
