Stupid is as Stupid Does

Policy Must Say What Insurer Meant

In what the First Circuit Court of Appeal found to be an oxymoron: an interesting insurance coverage question, it was called to resolve the claims of an insurer that an exclusion eliminates its duty to defend. In Vermont Mutual Insurance Co. v. Zamsky, 13-1172 (1st Cir. 10/09/2013) the appellate court resolved the dispute.

Andrew Zamsky is an insured under three homeowners’ policies issued to his parents by plaintiff-appellant Vermont Mutual Insurance Company (Vermont Mutual). Each of these policies covered a separate parcel of residential real estate owned by the Zamskys. In relevant part, they require Vermont Mutual to defend and indemnify all persons insured thereunder, including Andrew Zamsky, against claims stemming from “bodily injury” caused by a covered “occurrence, ” subject, however, to various exclusions. One such exclusion appearing in all three policies, refered to as the “UL exclusion,” eliminates coverage for injuries “[a]rising out of a premises” owned by an insured but not itself an “insured location.” The Zamskys owned a fourth piece of residential real estate, not insured by Vermont Mutual.


On the night of November 27, 2008, Zamsky, defendant-appellee Renata Ivnitskaya, and several friends drove to a house in Falmouth, Massachusetts owned by Zamsky’s parents. It is undisputed that the Falmouth house was not an “insured location” as defined in the policies. At some point after their arrival, Zamsky retrieved from a shed on the property a portable fire pit that he had purchased earlier that year. The fire pit was somewhere around 30 inches wide and about 18 inches high. It weighed between 30 and 40 pounds.

The group positioned the fire pit on a deck attached to the house. They tried to start a fire, but the wood that they had collected for that purpose was damp and would not burn readily.

One member of the group, Aaron Bronstein, told Zamsky that he wanted to get something to help the fire along. Zamsky suggested that Bronstein look in either the garage or the shed. Bronstein retrieved a container of gasoline and, proving a total lack of intelligence,  poured it on the fire. The consequent conflagration set at least three of the assembled persons aflame. One of these individuals — Ivnitskaya — suffered especially severe burns.

In due course, Ivnitskaya sued Zamsky for bodily injuries in a Massachusetts state court, alleging a rich mine of negligent acts and omissions. Vermont Mutual and defendant-appellee Massachusetts Property Insurance Underwriting Association (FAIR Plan) have been sharing the cost of defending Zamsky. Vermont Mutual, however, has done so pursuant to a reservation of rights. Defendant-appellee Scottsdale Insurance Company (Scottsdale) has been keeping a watchful eye on the proceedings because it provides umbrella coverage (i.e., excess liability coverage) to the Zamsky family.


The First Circuit was faced with a single issue: Did Vermont Mutual have any duty on its part either to defend or to indemnify Zamsky? Since only the duty to defend was placed before the First Circuit, it limited its analysis to that broad duty.

The parties agreed that, based on the allegations in Ivnitskaya’s complaint and facts known to Vermont Mutual, coverage attaches unless some exclusion operates to defeat it. To this end, Vermont Mutual says that the UL exclusion carries the day. The district court disagreed.

There is no genuine dispute as to any material fact. These undisputed facts tee up a question about the meaning and effect of the UL exclusion. This is a question that the highest court of Massachusetts — the Supreme Judicial Court (SJC) — has yet to answer. In such a situation, it is the federal court’s obligation to make an informed prophecy as to how that court, if confronted with the question, would be likely to rule.

In cases before the state courts they found the UL exclusion’s language “arising out of a premises” language is ambiguous and means arising out of a condition of a premises. If the covered occurrence arises out of a condition of the premises and the exclusion’s other requirements are satisfied, the exclusion applies; otherwise, it does not.

Vermont Mutual has a fallback position. If Zamsky and his cohorts went to the Falmouth house with the pre-formed intention of lighting a fire, the occurrence at issue must have arisen out of the premises. The First Circuit found this argument to be “linguistic legerdemain.”

Insurance policies should be construed, where possible, to conform to the reasonable expectations of the parties. Vermont Mutual drafted the policies at issue here. If it wanted to exclude from coverage all injuries occurring at an owned premises that it did not insure, it would have been child’s play to say so. But Vermont Mutual eschewed this straightforward course.  A court should never countenance an insurer’s revisionist attempt to make a policy exclusion sweep more broadly than its language dictates. When squarely confronted with a case that hinges on the UL exclusion, the highest court in Massachusetts would, the First Circuit concluded, find that the UL exclusion does not apply here.

Although the First Circuit left for another case the exact contours of the phrase “a condition of the premises, “it is nose-on-the-face plain that this portable fire pit — stored on the property for a matter of months and used just once prior to the occurrence (in a different location) — was not a condition of the Falmouth premises. The fact that the fire pit was easily movable is a significant consideration. The fire pit was not a part of the premises. Rather, the fire pit was a portable item of personal property that happened to be stored in a building on the Falmouth premises.

It follows inexorably that the occurrence at issue here did not arise out of a condition of the premises. Consequently, the court below did not err in determining that the UL exclusion did not apply.


The parties whose stupidity caused the fire and burns was the exact purpose for which the Zamsky family bought insurance. Insurance is not purchased to protect against intelligent and safe conduct but against the results of stupid and negligent conduct. The liability insurance is a world wide coverage and is not usually limited to a particular location. If Vermont intended to limit its liability insurance to specific insurance it would have been simple to have written a policy that limited coverage to injuries happening only within the property lines of the property identified in the policy. It did not. It tried to make broader a language that was limited. In so doing it failed and managed to gain the ire of an appellate court who found the arguments unconvincing and humorous.

The stupidity arguing no coverage even outweighed the stupidity of throwing gasoline on a fire.


© 2013 – Barry Zalma

Barry Zalma, Esq., CFE, has practiced law in California for more than 40 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally, for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

Specialty Technical Publishers recently published Mr. Zalma’s new E-Book, “Getting the Whole Truth” which is available at

Mr. Zalma recently published the e-books, “Zalma on California Claims Regulations – 2013″; “Rescission of Insurance in California – 2013;” “Random Thoughts on Insurance” a collection of posts on this blog; “Zalma on Diminution in Value Damages – 2013,”“Zalma on Insurance,” “Heads I Win, Tails You Lose,”  “Arson for Profit”  and others that are available at

Mr. Zalma can also be seen on World Risk and Insurance News’ web based television programing,

About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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2 Responses to Stupid is as Stupid Does

  1. Pingback: First circuit holds that injury from portable fire pit does not arise out of premises; in dicta asserts the issue is interesting |

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