USCA1 Opinion
[Not for Publication]
[Not for Publication]
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
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No. 94-1333
TOWN OF FARMINGTON, ET AL.,
Plaintiffs, Appellants,
v.
TUDOR INSURANCE COMPANY
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Morton A. Brody, U.S. District Judge]
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Before
Torruella, Boudin, and Stahl
Circuit Judges.
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Martica S. Douglas with whom Douglas, Whiting, Denham & Rogers
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was on brief for appellants.
Thomas V. Laprade with whom Philip M. Coffin III and Black,
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Lambert, Coffin & Rudman were on brief for appellee.
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September 2, 1994
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Per curiam. Plaintiffs Town of Farmington, its
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Board of Selectmen, and Steven S. Moore, the superintendent
of Farmington's sewage treatment plant (collectively, "the
Town") filed this diversity action seeking a declaration that
Tudor Insurance Co. ("Tudor") has a duty to defend the Town
against a suit brought by Cottle Enterprises ("Cottle").
Cottle, the developer of a mobile home park frustrated by the
Town's refusal to allow more than two sewer hook-ups a year
at the new park, sued the Town in state court seeking damages
because of the hook-up limitation. A magistrate-judge
recommended that the district court grant Tudor's motion for
summary judgment, reasoning that all of Cottle's claims fall
within the "inversion condemnation exclusion" clause of the
municipal liability insurance policy issued to the Town by
Tudor. The district court adopted the recommendation and
entered judgment in favor of Tudor. This appeal followed.
Because our independent analysis leads us to the conclusion
that Tudor is indeed "entitled to judgment as a matter of
law," Fed. R. Civ. P. 56(c), we affirm.
I.
I.
The facts underlying this appeal are undisputed and
adequately laid out in the written opinion of the magistrate-
judge, see Town of Farmington v. Tudor Ins. Co., No. 93-0074-
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B (Jan. 31, 1994). The parties agree that Maine law governs
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the interpretation of the Town's insurance policy. The
language in dispute is the following:
[Tudor] shall not be liable to make
payment for Loss in connection with any
claim made against the Insureds
allegedly, based upon or arising out of .
. . inverse condemnation . . . .
II.
II.
The Town's first argument on appeal is that the
magistrate-judge failed to follow Maine law in determining
that the phrase "inverse condemnation" is unambiguous. We
disagree. Maine law favors the insured in construing
ambiguities in insurance contracts and encourages an
expansive view of the insurer's duty to defend. See, e.g.,
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Union Mut. Fire Ins. Co. v. Inhabitants of Topsham, 441 A.2d
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1012, 1015 (Me. 1982). Nonetheless, even if the boundaries
of "inverse condemnation" are not firmly settled, we believe
the phrase has an unambiguous core meaning, namely, "[a]
cause of action against a government agency to recover the
value of property taken by the agency, though no formal
exercise of the power of eminent domain has been completed,"
Black's Law Dictionary 740 (5th ed. 1979). Cottle's
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"confiscatory taking" claim (Count I of its complaint)
clearly fits within this category.
The Town next suggests that the magistrate-judge
incorrectly determined that the other counts in Cottle's
complaint are "based upon or aris[e] out of . . . inverse
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condemnation." Once again, we cannot agree. Like the
magistrate-judge, we think that Baywood Corp. v. Maine
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Bonding & Casualty Co., 628 A.2d 1029 (Me. 1993), provides
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the relevant framework for analyzing the merits of Tudor's
motion for summary judgment.1 In that case, Baywood, a real
estate developer, sought a declaration that Maine Bonding,
its insurer, had a duty to defend it against a lawsuit by a
condominium association representing buyers of units
developed by Baywood. The association alleged that Baywood
performed faulty work in designing the development's sewer
system, and sought compensation for the cost of replacing or
upgrading the system. While Maine Bonding would have had a
duty to defend Baywood against an allegation of property
damage, the insurance policy at issue specifically excluded
coverage for claims seeking the repair or replacement of
faulty work. See id. at 1031. The court held that because
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the association's claim was qualitatively different from the
type of third party claim covered by the policy at issue,
Maine Bonding had no duty to defend Baywood. See id. In
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reaching this conclusion, the court focused exclusively on
the type of harm alleged, attaching no importance to the fact
that the underlying complaint charged that Baywood's faulty
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1. We note with dismay that, although Baywood was cited
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prominently by the magistrate-judge, see Town of Farmington,
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slip op. at 5 n.2, the Town chose not to mention, much less
distinguish, the case in its brief.
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work amounted to a violation of various legal duties. See
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id. at 1030 (noting that the association had alleged
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"fraudulent misrepresentation, breach of warranty, breach of
contract, negligence, negligent misrepresentation, and a
violation of the uniform fraudulent transfer act").
An analysis of the type of harm alleged in Cottle's
complaint leads to a similar conclusion in this case. Cottle
seeks compensation for the diminution in the value of his
land caused by the Town's regulatory actions. Although the
complaint alleges that the Town's regulatory maneuvers are
violative of a number of constitutional and common law
duties, each count seeks compensation for the same type of
harm alleged in the "confiscatory taking" count. In other
words, Cottle has not alleged any wrongful conduct that does
not "arise[] out of . . . inverse condemnation." Therefore,
the inverse condemnation exclusion clause and Maine law (as
expounded in Baywood) combine to preclude the Town's claim.
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III.
III.
For the foregoing reasons, we affirm the district
court's entry of summary judgment.
So ordered.
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