Massachusetts Appeals Court Issues Ruling in Favor of
Keegan Werlin LLP’s Client Verrill Farm LLC
In a 20-page decision issued on November 4, 2014, the Massachusetts Appeals Court has granted the relief sought by Keegan Werlin LLP on behalf of our client, Verrill Farm LLC. The case involves interpretation of a Business owners Special Property Coverage Form issued to Verrill Farm and a claim for reimbursement of more than $300,000 for loss of Business Income that was denied by Farm Family Insurance after a fire in September 2008 destroyed the farm stand facilities at Verrill Farm in Concord, MA.
The Superior Court had granted summary judgment for Farm Family Insurance in August 2013, based on an interpretation that the Policy allowed the insurer to deduct “ordinary payroll expenses” incurred beyond 60 days after the loss from the calculation of net profit and loss for the full year after the fire. Attorney Barry Fogel of Keegan Werlin argued on appeal that the policy should not be interpreted to allow the 60-day payroll limitation to be applied to circumstances like those in this case, where the insured had resumed temporary operations within days after the fire, as required by the Policy, in order to mitigate their loss.
The Appeals Court agreed and vacated the Superior Court judgment, holding:
“The only rational reading of the policy, considering the contract as a whole as well as its purpose of making Verrill Farm whole, is that it requires the loss of business income to be determined by the difference between the amount of net profit or loss earned during the partial resumption of operations and the amount of net profit or loss that Verrill Farm would have earned if no fire had occurred.”
The decision is available at http://www.mass.gov/courts/court-info/sjc/about/reporter-of-decisions/new-opinions.html