No, a Purchase Order Isn’t Like Insurance, Massachusetts Supreme Court Says in Reversal

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A store may recover costs incurred in defending an automatic door operator against claims against both, but not then return the value received in self-defense under the terms of the buyer’s purchase.

The Massachusetts Supreme Court has reversed a lower court judge’s ruling that Shaw’s Supermarkets was entitled to recover all costs under a duty to protect clause in the injunction. by Stanley Access Technologies. The Supreme Court found this lower court judge wrong in importing the “in for one, in for all” law, also known as the “full protection” law, from insurance to within the context of the command. This law requires an insurer to defend all claims in a complaint against an insured if one claim falls within the scope of the insurer’s duty. insurers to protect.

The plaintiff alleged that he was injured by an automatic door installed by Stanley at Shaw’s Market. The plaintiff argued that Stanley was negligent for improperly installing a motion sensor on the automatic door and that Shaw’s was negligent for failing to conduct a “daily safety check” and security. the door. After Stanley and Shaw’s dismissed each of the claims against them, a Supreme Court jury returned a verdict in their favor.

Shaw requested restitution of all monies involved in this case, as stated in the terms of Stanley’s purchase of the door. Stanley’s purchase included a clause that “indemnifies, defends and indemnifies” Shaw’s “from and against any claims, actions, fines, penalties , liability, damages, injuries, costs and expenses (including, without limitation, costs and expenses for investigations and litigation and reasonable attorneys’ fees) that arise from or in connection with the Seller or any of its employees, agents, subcontractors, or independent contractors in breach of any covenant, warranty or representation contained herein.”

Shaw argued that it was entitled to recover all of its expenses because the purchase order was “analogous” to an insurance contract and forced Stanley to defend the entire claim under the “in for one, in for all” rule. “.

The motion judge concluded that the “in for one, in for all” rule required Stanley to pay for the defense of all of the plaintiff’s claims, even those that “arising out of conduct.” Shaw’s behavior is independent of Stanley’s behavior,” and so was Stanley. liable for the expenses incurred by Shaw in establishing Stanley’s duty to defend.

Shaw requested $127,826.04 in attorney’s fees in opposing plaintiff’s claims, $44,019.67 in attorney’s fees in establishing Stanley’s duty to defend. and $65,592.66 in unadjudicated interest. The motion judge awarded this amount and Stanley appealed.

The Supreme Court noted that appellate courts had never applied the “in for one, for all” rule outside of the general liability insurance context and that Shaw’s case was moot. to start doing it.

“The case before us concerns a simple transaction between Shaw’s and Stanley for the purchase and installation of automatic doors. Stanley’s duty to defend arises from a single, well-printed provision in a sales document and is limited to claims arising out of or related to Stanley’s breach of any his warrants. We see no good reason, and no sense, to extend the ‘in for one, for all’ rule in this context,” the high court wrote.

“To begin with, Stanley is not an insurer, and the sale is not an insurance policy. Although courts sometimes apply insurance policies to commercial contracts, the circumstances “equity generally does not control punitive damages and the duty to protect provisions in business and insurance,” the court continued.

The court said that neither the language of the purchase nor the terms of the parties’ dealings indicated any intention of Stanley to defend against claims unrelated to its breach of its own warranties.

The Supreme Court ruled that only attorney’s fees and costs incurred by Shaw’s could be recovered by contesting the charges. that Stanley was negligent.


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