Appeal from Superior Court, Addison Unit, Civil Division
Helen M. Toor, J.
W. Runcie of Ouimette & Runcie, Vergennes, for
Richard Windish of Hayes, Windish & Badgewick, Woodstock,
PRESENT: Reiber, C.J., Skoglund, Robinson and Carroll, JJ.,
and Davenport, Supr. J. (Ret.), Specially Assigned
1. In this insurance dispute, appellant, Rainforest
Chocolate, LLC (Rainforest), appeals the summary judgment
motion granted in favor of appellee, Sentinel Insurance
Company, Ltd. (Sentinel). Rainforest argues that the trial
court erred in its interpretation of the insurance policy and
its conclusion that Rainforest's loss was not covered. We
2. The facts are undisputed. Rainforest was insured under a
business-owner policy offered by Sentinel. In May 2016,
Rainforest's employee received an email purporting to be
from his manager. The email directed the employee to transfer
$19, 875 to a specified outside bank account through an
electronic-funds transfer. Unbeknownst to the employee, an
unknown individual had gained control of the manager's
email account and sent the email. The employee electronically
transferred the money. Shortly thereafter when Rainforest
learned that the manager had not sent the email, it contacted
its bank, which froze its account and limited the loss to
3. Rainforest reported the loss to Sentinel. In a series of
letters exchanged concerning coverage for the loss,
Rainforest claimed the loss should be covered under
provisions of the policy covering losses due to Forgery, for
Forged or Altered Instruments, and for losses resulting from
Computer Fraud. Sentinel denied coverage. In a continuing
attempt to obtain coverage for the loss, Rainforest also
claimed coverage under a provision of the policy for the loss
of Money or Securities by theft. Sentinel again denied
coverage, primarily relying on an exclusion for physical loss
or physical damage caused by or resulting from False Pretense
that concerned "voluntary parting" of the
property-the False Pretense Exclusion.
4. After cross-motions for summary judgment, based on a
statement of agreed facts, the trial court denied
Rainforest's motion, granted Sentinel's motion, and
entered judgment in favor of Sentinel. In its conclusion, the
The complicated nature of this policy, with its layers of
coverages and exclusions, is almost impossible to follow
without a compass and a guide. It took the court many hours
of reading and rereading the policy and the briefs to reach a
clear understanding of how the various provisions fit
together. How any insured, however sophisticated, is supposed
to determine that it is getting what it paid for with a
policy like this is a mystery to the court. Nonetheless, the
court concludes that the terms of the policy, while
confusing, are not ambiguous and must be enforced as written.
court held that Sentinel was correct in denying coverage
under the False Pretense Exclusion. Rainforest timely
5. "This Court reviews summary judgment rulings de novo,
applying the same standard as the trial court."
Jadallah v. Town of Fairfax, 2018 VT 34, ¶ 14,
Vt., 186 A.3d 1111. Summary judgment is appropriate "if
the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." V.R.C.P. 56(a). Here, there is no
dispute over material facts. Instead, this dispute arises
around the interpretation of the insurance policy at issue.
6. When interpreting an insurance policy, this Court follows
well-established principles-our "review is
nondeferential and plenary." Shriner v. Amica Mut.
Ins., 2017 VT 23, ¶ 6, 204 Vt. 321, 167 A.3d 326.
"An insurance policy is construed according to 'its
terms and the evident intent of the parties as expressed in
the policy language.'" Cincinnati Specialty
Underwriters Ins. v. Energy Wise Homes, Inc., 2015 VT
52, ¶ 16, 199 Vt. 104, 120 A.3d 1160 (quoting
Sperling v. Allstate Indem. Co., 2007 VT 126, ¶
8, 182 Vt. 521, 944 A.2d 210). An insurance policy "is
to be strictly construed against the insurer."
Simpson v. State Mut. Life Assurance Co. of Am., 135
Vt. 554, 556, 382 A.2d 198, 199 (1977). "The insurer
bears the burden of showing that an insured's claim is
excluded by the policy." Shriner, 2017 VT 23,
7. Vermont law "requires that policy language be
accorded its plain, ordinary meaning consistent with the
reasonable expectation of the insured, and that terms that
are ambiguous or unclear be construed broadly in favor of
coverage." Towns v. N. Sec. Ins., 2008 VT 98,
¶ 21, 184 Vt. 322, 964 A.2d 1150; see also
Shriner, 2017 VT 23, ¶ 6 ("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."
(quotation and alteration omitted)). "Words or phrases
in an insurance policy are ambiguous if they are fairly
susceptible to more than one reasonable interpretation."
Whitney v. Vt. Mut. Ins., 2015 VT 140, ¶ 16,
201 Vt. 29, 135 A.3d 272. Further, "[w]hen a provision
is ambiguous or may reasonably be interpreted in more than
one way, then we will construe it according to the reasonable
expectations of the insured, based on the policy
language." Vt. Mut. Ins. v. Parsons Hill
P'ship, 2010 VT 44, ¶ 21, 188 Vt. 80, 1 A.3d
1016. However, "the fact that a dispute has arisen as to
proper interpretation does not automatically render the
language ambiguous." Isbrandtsen v. N. Branch
Corp., 150 Vt. 575, 581, 556 A.2d 81, 85 (1988). And,
"we will not deprive the insurer of unambiguous terms
placed in the contract for its benefit."
Shriner, 2017 VT 23, ¶ 6 (quotation omitted).
8. With these interpretation principles in mind, we turn to
the insurance policy at hand.
trial court noted, there are several subsections of the
policy at the center of our analysis. First, the Special
Property Coverage Form (SPC Form) outlines the general
"rights, duties, and what is and is not covered"
and the additional coverage areas in Section A, and then
defines several terms in Section G.
We will pay for direct physical loss of or physical damage to
Covered Property at the premises described in the
Declarations (also called "scheduled premises" in
this policy) caused by or resulting from a Covered Cause of
. . . .
2. Property Not Covered
Covered Property does not ...