Wilbur L. Shriner
v.
Amica Mutual Insurance Company
On
Appeal from Superior Court, Chittenden Unit, Civil Division
Helen M. Toor, J.
Kevin
E. Brown of Langrock Sperry & Wool, LLP, Middlebury, for
Plaintiff-Appellant.
Gary
R. Kupferer of Webber, Chapman & Kupferer, Ltd., Rutland,
for Defendant-Appellee.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton,
JJ.
EATON,
JUDGE
¶
1. Wilbur Shriner, the holder of a homeowner's insurance
policy from Amica Mutual Insurance Company (Amica), appeals
the trial court's grant of summary judgment to Amica and
denial of his cross-motion for summary judgment. We affirm.
¶
2. This Court reviews a grant of summary judgment de novo and
under the same standard as that applied by the trial court.
Co-op. Ins. Cos. v. Woodward, 2012 VT 22, ¶ 8,
191 Vt. 348, 45 A.3d 89. We will uphold the decision of the
trial court if there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of
law. Id.; see also V.R.C.P. 56(a).
¶
3. The material facts in this case are undisputed. Shriner, a
retired physician, owned a glassblowing studio on Church
Street in Burlington until he sold the property in December
2007 and moved the glassblowing equipment to his home in
Charlotte. He and his friend, also a glassblower, eventually
set up the equipment in the garage at Shriner's property
and began making glass in late 2008 or early 2009. From 2009
to 2012, Shriner and his friend "sometimes made glass
for a week or two, and then would shut down for weeks due to
lack of money." During that three-year period, they made
glassware approximately one time per week on average, and
glassmaking was never more than an occasional or part-time
activity for him. Throughout those three years, Shriner
earned income from glassblowing, as well as from the
redevelopment and rental of investment properties and from an
organic honey and vegetable operation.
¶
4. Shriner and his friend called their enterprise Church and
Maple Glass Studio and maintained a website from which
customers could purchase their glassware. Shriner identified
himself as an "artisan" on his tax forms, and in
all years relevant to this case, he filed a Schedule C form
for business profits or losses with the Internal Revenue
Services (IRS). He described his business type as "blown
glass manufacturing" on the IRS forms and reported sales
ranging from $4036 in 2013 to $30, 350 in 2010. He also
reported business expenses for items including advertising,
contract labor, legal and professional services, office
space, meals, and entertainment.
¶
5. On January 12, 2012, the furnace exhaust system in a piece
of glassmaking equipment malfunctioned and caused a fire that
destroyed the garage and all of the property and equipment
inside it. At the time, Shriner's home was covered by his
homeowner's policy with Amica, which covered losses from
fire and provided replacement coverage for buildings and
personal property. The policy carried a $25, 000 deductible
and contained an exclusion from coverage for structures from
which a business was conducted. Shriner submitted a personal
property inventory for the property destroyed in the fire,
with a replacement cost totaling $88, 354.91. Amica accepted
Shriner's fire-loss claim and determined the replacement
cost of the garage to be $42, 422.97. Amica applied the
policy's $25, 000 deductible and made an actual
cash-value payment of $1460.53 as an advance partial payment
to Shriner for the garage. Amica then changed positions and,
asserting that Shriner's glassblowing activities
constituted a "business" for the purposes of the
policy's exclusion, refused to make any further payments
to replace the garage. Amica paid Shriner $11, 613 for
nonbusiness property that was destroyed in the garage but
capped its payment for other property in the inventory at
$2500, which was the maximum reimbursement permitted under
the policy for "business" personal property.
Shriner brought suit to recover the full amount of his claim,
and the court granted summary judgment to Amica. This appeal
followed.
¶
6. An insurance policy is a contract and its interpretation
is therefore a question of law for which this Court's
review is nondeferential and plenary. Fireman's Fund
Ins. Co. v. CNA Ins. Co., 2004 VT 93, ¶ 8, 177 Vt.
215, 862 A.2d 251. We give effect to the terms in an
insurance policy according to their "plain, ordinary and
popular meaning, " and our interpretation of an
insurance policy is guided by a "review [of] the
language . . . from the perspective of what a reasonably
prudent person applying for insurance would have understood
it to mean." Woodward, 2012 VT 22, ¶ 9
(quotations omitted). Where policy language is ambiguous we
resolve ambiguity in favor of the insured, "but we will
not deprive the insurer of unambiguous terms place in the
contract for its benefit." Fireman's Fund,
2004 VT 93, ¶ 9. Additionally, "[i]nsurance
policies and their endorsements must be read together as one
document and the words of the policy remain in full force and
effect except as altered by the words of the
endorsement." Id. ¶ 20 (quotation
omitted). The insurer bears the burden of showing that an
insured's claim is excluded by the policy. N. Sec.
Ins. Co. v. Perron, 172 Vt. 204, 209, 777 A.2d 151, 154
(2001).
¶
7. With those principles in mind, we look to the language of
the policy at issue here. The policy capped recovery for
"property, on the residence premises, used primarily for
business purposes" at $2500 and excluded entirely from
coverage "structures from which business is
conducted" and "structures used to store business
property." A Vermont-specific amendatory endorsement
attached to the policy deleted the standard-form
homeowner's policy definition of "business" and
replaced it with the following language: "Business
includes trade, profession or occupation."[1]
¶
8. Shriner argues that "the Court must read the policy
and the amendatory endorsement together" and that
reading the deleted language from the standard insurance
provision and the amended language from the endorsement
together creates ambiguity. We cannot accept this attempted
construction of the policy. It is a basic rule of insurance
policy construction that if an endorsement creates or expands
an exclusion and the endorsement language is unambiguous, the
insurer has carried its burden and the exclusion applies.
See, e.g., Clarendon Am. Ins. Co. v. Miami River
Club, Inc., 417 F.Supp.2d 1309, 1317-18 (S.D. Fla. 2006)
(applying Illinois law); Liberty Mut. Ins. Co. v. Lone
Star Indus., Inc., 967 A.2d 1, 28 (Conn. 2009). Language
deleted from a policy by an amendatory endorsement therefore
cannot be considered for purposes of creating an ambiguity
within the policy. See Caudill Seed &
Warehouse Co., Inc. v. Houston Cas. Co., 835 F.Supp.2d
329, 337-38 (W.D. Ky. 2011) (applying Kentucky law); Ryan
v. Mountain States Helicopter, 686 P.2d 95, 98-99 (Idaho
1984). This position is consistent with the general rule of
construction concerning endorsements to insurance policies
that " 'if an endorsement extinguishes a policy
provision or declares it void and of no effect, such
provision cannot be considered in construing the policy.'
" Mountain States, 686 P.2d at 99 (quoting 2 R.
Long, The Law of Liability Insurance, § 16.09 (rev. ed.
1983)); see also 4 E. Holmes, Holmes' Appleman
on Insurance § 20.1, at 155 (2d ed. 2008) ("Such
rules are consistent with the precept that provisions should
not be read in isolation but must be considered as a whole
with any conflicts being first resolved by
applying the terms of the endorsement. Then if the
ambiguity persists, the ambiguity will be construed against
the insurer." (emphasis added)).
¶
9. Shriner argues that although his glassblowing was a
part-time trade, profession or occupation, it nevertheless
falls outside the policy because the Vermont endorsement
"narrowed the definition of 'business' " by
removing "part-time or occasional trade, profession, or
occupation from the definition." However, the limitation
Shriner seeks to apply was never in his insurance policy; the
policy that Shriner purchased always deleted the
standard-form definition of "business" and the
"original" definition from the standard-form policy
was never operative. The only definition of
"business" that applied to Shriner was that in the
Vermont endorsement, and our analysis therefore requires us
to consider only the language of that endorsement. Thus, in
interpreting the insurance policy at issue here, we cannot,
as Shriner urges us to do, compare the language of the
endorsement to the language of the standard-form provision
unless we ...