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18-P-983                                             Appeals Court

  ALEX STYLLER   vs.    NATIONAL FIRE & MARINE INSURANCE COMPANY.


                            No. 18-P-983.

           Essex.        March 7, 2019. - June 26, 2019.

           Present:     Vuono, Ditkoff, & Wendlandt, JJ.


Insurance, Construction of policy, Coverage, Interest. Consumer
     Protection Act. Practice, Civil, Attorney's fees, Costs,
     Interest. Judgment, Interest. Words, "Costs taxed."



     Civil action commenced in the Superior Court Department on
December 7, 2012.

     The case was heard by Joshua I. Wall, J., and motions to
amend the judgment were considered by him.


     Lester E. Riordan, III, for the plaintiff.
     Peter G. Hermes (Kara A. Loridas also present) for the
defendant.


    WENDLANDT, J.      This insurance coverage dispute principally

presents the question whether a supplementary payment provision

of an insurance policy, requiring the insurer to pay "costs

taxed" against an insured, extends to attorney's fees and expert
                                                                      2


fees and expenses awarded against the insured, pursuant to G. L.

c. 93A, § 9.   We hold that it does not.

    Background.      The plaintiff, Alex Styller, brought this

declaratory judgment action against the defendant, National Fire

& Marine Insurance Company (National Fire or insurer), as the

assignee of rights of the insured, FCMNH, Inc. (FCMNH or

insured), under the insurance policy between FCMNH and the

insurer (policy), relating to the underlying action described in

more detail infra.     Briefly, the underlying action stems from

demolition and reconstruction work FCMNH performed on Styller's

house.   Styller alleged that FCMNH performed the work

negligently.   FCMNH was insured by National Fire, which assumed

FCMNH's defense.     Styller prevailed, and National Fire denied

coverage under the insurance policy.     In a subsequent settlement

agreement between FCMNH and Styller, FCMNH assigned its rights

against National Fire to Styller.     In the present insurance

coverage suit, Styller sought an order requiring National Fire

to indemnify him (as FCMNH's assignee) for the judgment he

obtained against FCMNH.

    1.   The underlying action.     In 2004, Styller entered into a

construction contract with FCMNH to demolish and reconstruct his

house.   The relationship soured, and Styller withheld payment.

Ultimately, FCMNH commenced the underlying action in Superior

Court against Styller for, among other things, breach of
                                                                     3


contract.    Styller counterclaimed, asserting breach of contract,

negligence, and violations of G. L. c. 142A and G. L. c. 93A.

Styller's counterclaims for damage caused by FCMNH's allegedly

defective work and violations of G. L. c. 93A and G. L. c. 142A

did not fall within the coverage provided by the policy.

Nonetheless, because Styller also asserted counterclaims for

property damage apart from FCMNH's defective work, the insurer's

duty to defend was triggered.

    When FCMNH notified the insurer of Styller's counterclaims,

the insurer assumed the defense, subject to a reservation of

rights.     Although the insurer initially took the position that

it would not be responsible for any fees and expenses incurred

prosecuting FCMNH's affirmative claims against Styller, the

insurer offered to have its counsel manage the whole case for

FCMNH, including FCMNH's affirmative claims, and to waive all

claims for reimbursement of expenses associated with the case.

FCMNH agreed, and the insurer assumed control of the entire case

on behalf of FCMNH.

    The case was tried to a jury, which found in favor of

Styller on FCMNH's claims.     With regard to Styller's

counterclaims, the jury found by way of answers to special

questions that Styller did not suffer any damage to property

other than FCMNH's defective work.     The jury further found that

FCMNH was not liable for breach of contract, but was negligent
                                                                    4


in performing the work, and awarded Styller $85,409.80 in

damages.   The jury also found that Styller was comparatively

negligent in the amount of twenty-seven percent.

     Following the jury trial, the Superior Court judge

conducted a bench trial on Styller's claim that FCMNH committed

a deceptive and unfair trade practice as a contractor in

violation of G. L. c. 93A (through violations of G. L. c. 142A1),

which as set forth supra was not a claim covered under the

policy.2   The judge determined that G. L. c. 142A applied to the

contract between Styller and FCMNH, FCMNH violated G. L.

c. 142A, and the violation entitled Styller to recover under

G. L. c. 93A.

     The judge awarded Styller the same amount in damages

($85,409.80) on the G. L. c. 93A claim as the jury had awarded

on the negligence claim.   The judge also awarded attorney's fees

and expert fees and expenses to Styller under G. L. c. 93A in

the amount of $105,374.70 (fee award).3   No postjudgment costs




     1 General Laws c. 142A, § 17, outlines acts prohibited by
contractors or subcontractors and states that "[v]iolations of
any of the provisions of this chapter shall constitute an unfair
or deceptive act under the provisions of chapter ninety-three
A."

     2 Styller waived any claim for violation of G. L. c. 93A
apart from his claim of violation of G. L. c. 142A.

     3 The fee award consisted of $80,000 in attorney's fees and
$25,374.70 in expert fees and expenses.
                                                                      5


were allowed.   FCMNH appealed, and this court affirmed.     FCMNH,

Inc. v. Styller, 77 Mass. App. Ct. 1109 (2010).    Following the

appeal, the insurer informed FCMNH that it was declining

coverage under the policy because the jury found FCMNH liable

only for damage to FCMNH's own work, which was property damage

excluded from the policy's coverage.    See note 4, infra.

    2.     Assignment and coverage lawsuit.   Three years later,

FCMNH settled with Styller.   In connection with the settlement,

FCMNH assigned to Styller its rights relating to the underlying

action under the policy.

    Styller then filed this suit against the insurer, seeking a

declaratory judgment under G. L. c. 231A, § 1, that the insurer

must indemnify FCMNH (and by assignment, Styller) for the full

amount of the judgment obtained in the underlying action.     He

also asserted a claim against the insurer under G. L. c. 93A

(alleging violations of G. L. c. 176D) in view of the insurer's

refusal to pay Styller prior to the institution of this coverage

lawsuit.   The matter was tried before a different Superior Court

judge (trial judge) based on a stipulated record; no witnesses

were called.

    The trial judge concluded that the insurer had no duty to

indemnify FCMNH for the full amount of the judgment in the

underlying action because the only claims for which FCMNH was

liable related to repair work caused by FCMNH's defective work.
                                                                   6


As such, those claims were excluded under the policy.4

Nonetheless, the trial judge ruled that the insurer was required

to indemnify FCMNH (and thus, Styller) for the fee award

pursuant to the "Supplementary Payments" provision of the


     4 The insurance policy sets forth various exclusions,
including the following:

     "Damage to Property Exclusion . . .

     . . .

     (j) Damage To Property

     'Property damage' to:

     . . .

     (5) That particular part of real property on which you or
     your 'employees,' 'volunteer workers,' or any contractors
     or subcontractors working directly or indirectly on your
     behalf are performing operations, if the 'property damage'
     arises out of those operations; or

     (6) That particular part of any property that must be
     restored, repaired or replaced because 'your work' was
     incorrectly performed on it.

     . . .

     "Business Risk Exclusions . . .

     . . .

     (l) Damage to Your Work

     'Property damage' to 'your work' arising out of it or any
     part of it and included in the 'products-completed
     operations hazard.'

     This exclusion does not apply if the damaged work or the
     work out of which the damage arises was performed on your
     behalf by a subcontractor."
                                                                   7


policy, which provides that with respect to any "suit" against

the insured that the insurer defends, the insurer "will pay"

"[a]ll costs taxed against the insured in the 'suit.'"    The

trial judge further ruled that the insurer was required to

indemnify Styller for the postjudgment interest on the fee award

pursuant to another provision in the supplementary payments

provision of the policy.   Under that provision the insurer

agreed to pay "[a]ll interest on the full amount of any judgment

that accrues after entry of the judgment and before [the insurer

has] paid . . . the part of the judgment that is within the

applicable limit of insurance."   The judge rejected Styller's

claim under G. L. c. 93A that the insurer's failure to promptly

settle Styller's claim amounted to an unfair or deceptive act

because the question of coverage was a novel one.

    On cross motions to amend the judgment, the trial judge

entered an amended judgment, concluding that the insurer must

indemnify FCMNH for postjudgment interest on the full amount of

the damages awarded in the judgment (as opposed to just

postjudgment interest on the fee award).   The trial judge also

reduced the total amount that the insurer had to pay Styller by

$81,000 -- the amount that Styller received in settlement from

other tortfeasors.   The parties filed cross appeals from the

amended judgment.
                                                                      8


     Discussion.     National Fire maintains that the trial judge

erred in deciding that the policy covers (1) the fee award as a

"cost[] taxed" against the insured, and (2) postjudgment

interest.    Because the construction of an insurance contract is

a question of law, our review is de novo.     See Wilkinson v.

Citation Ins. Co., 447 Mass. 663, 667, 669 (2006).

     An insurance contract is to be interpreted "according to

the fair and reasonable meaning of the words in which the

agreement of the parties is expressed."     Wilkinson, 447 Mass.

at 667, quoting Cody v. Connecticut Gen. Life Ins. Co., 387

Mass. 142, 146 (1982).     "Policies of insurance, like all other

contracts, must be reasonably construed by giving to the words

contained therein their usual and ordinary significance, unless

it appears that they are to be given a peculiar or technical

meaning."    Woogmaster v. Liverpool & London & Globe Ins. Co.,

312 Mass. 479, 481 (1942).     Where, as here, the contract was

written by the insurer, "if the terms of the policy are

ambiguous then every doubt is to be resolved against the

insurer."    Id.   We now apply these principles to each of the

insurer's claims on appeal.

     1.     Attorney's fees and expert fees and expenses as "costs

taxed."     As set forth supra, the parties agree that Styller's

G. L. c. 93A claim against FCMNH in the underlying action was

not itself a claim covered by the policy.     Nevertheless, Styller
                                                                   9


maintains that the fee award -- which was awarded to Styller on

his G. L. c. 93A claim -- is covered.   In contrast, the insurer

contends that because no postjudgment costs were "taxed"

pursuant to G. L. c. 261, §§ 1 et seq., in the underlying

action, it has no obligation to its insured.    The dispute

centers on the construction of the following provision of the

supplementary payments section of the policy:

     "1. We will pay, with respect to any claim we investigate
     or settle, or any 'suit' against an insured we defend:

     . . .

     e.   All costs taxed against the insured in the 'suit.'"

     Styller contends that the fee award falls within the plain

and ordinary meaning of the term "costs" because the term

ordinarily refers to all the expenses incurred during the course

of a litigation, including attorney's fees.5    The policy,

however, does not use the term "costs" in this ordinary sense;

instead, it specifically limits "costs" to "costs taxed"

(emphasis added) in the technical sense -- namely, the meaning

of that term in the context of a legal proceeding.    In


     5 Styller also contends that because the decision in the
underlying action refers to the fee award as "attorneys' fees
and litigation costs," the fee award is a "cost" covered by the
provision. The meaning of "costs taxed" in the insurance
contract does not turn on the phrasing of a decision entered
long after the insurance policy was executed. Instead, as set
forth supra, the insurance contract must be construed by
reference to the words of the agreement itself. See Woogmaster,
312 Mass. at 481.
                                                                   10


particular, the supplementary payments provision refers to the

insurer's obligations to pay for "costs taxed against the

insured in the 'suit.'"   The term "suit" is defined as "a civil

proceeding in which damages because of . . . 'property damage'

. . . to which this insurance applies are alleged."   Thus, the

term "costs taxed" must be construed in light of the meaning

attached to those words in the context of a civil proceeding.6

See Woogmaster, 312 Mass. at 481 (technical meaning of terms

applied where it appears in context that such meaning was

intended).

     In the context of civil proceedings, taxable costs

ordinarily refer to those costs that are recoverable pursuant to

G. L. c. 261, §§ 1 et seq.   See Waldman v. American Honda Motor




     6 Because we conclude that "costs taxed" is used in the
policy in its technical sense, we decline to follow the
reasoning (relied on by Styller) in Mutual of Enumclaw v.
Harvey, 115 Idaho 1009, 1013 (1989) (construing "costs" pursuant
to its plain meaning -- rather than any technical legal meaning
-- to include all expenses of litigation, including reasonable
attorney's fees). See Employers Mut. Cas. Co. v. Donnelly, 154
Idaho 499, 503 (2013), quoting Mutual of Enumclaw, supra (not
using technical meaning of "costs taxed," but instead holding
that supplementary payments provision duty to pay costs taxed
included attorney's fees; "[t]he plain, ordinary and popular
meaning of 'costs' is the expense of litigation which includes
attorney fees"). Indeed, Styller acknowledges that "taxable
costs" has a technical meaning. Cf. G. L. c. 4, § 6 (for
purposes of statutory interpretation, "[w]ords and phrases shall
be construed according to the common and approved usage of the
language; but technical words and phrases and such others as may
have acquired a peculiar and appropriate meaning in law shall be
construed and understood according to such meaning").
                                                                    11


Co., 413 Mass. 320, 321-322 (1992) ("The usual rule in

Massachusetts is that the litigant must bear his own expenses.

. . .     Certain taxable costs, however, are recoverable as a

matter of course by successful litigants [pursuant to] G. L.

c. 261, §§ 1 et seq." [quotation and citations omitted]).        These

"[t]axable costs are deemed full compensation to the prevailing

party for the expense of conducting litigation, even though in

fact such costs do not cover his legal or other expense."

Goldberg v. Curhan, 332 Mass. 310, 311-312 (1955).     "The word

'costs,' as applied to proceedings in court, ordinarily means

only legal or taxable costs, and does not include attorneys'

fees."7    Burrage v. County of Bristol, 210 Mass. 299, 300 (1911).

Similarly, taxable costs do not ordinarily include expert fees

and expenses except as nominally allowed, pursuant to G. L.

c. 262, § 29.    Waldman, 413 Mass. at 322 ("The amount of taxable

witness fees is governed by G. L. c. 262, § 29").     Instead, in

Massachusetts, "[o]ur traditional and usual approach to the

award of attorney's fees for litigation has been to follow the

'American Rule':     in the absence of statute, or court rule, we




     7 "In taxing costs, courts do not seek to compensate
litigants fully for the cost of litigation." Waldman, 413 Mass.
at 322. Thus, "even though such costs are only nominal and
wholly inadequate," they are ordinarily all that may be awarded
to compensate a prevailing party for the expense of conducting
the litigation. Id., quoting MacNeil Bros. v. Cambridge Sav.
Bank, 334 Mass. 360, 363 (1956).
                                                                    12


do not allow successful litigants to recover their attorney's

fees and expenses."    John T. Callahan & Sons, Inc. v. Worcester

Ins. Co., 453 Mass. 447, 449 (2009).    The same traditional rule

governs expert fees and expenses.   See Waldman, supra.

    Acknowledging this traditional rule, Styller nonetheless

contends that the fee award is a "cost[] taxed" because G. L.

c. 93A creates a statutory exception to this rule that alters

the meaning of "costs taxed."   Specifically, Styller maintains

that because G. L. c. 93A, § 9, authorizes a court to award

"attorney's fees and costs" to a prevailing party, the fee award

is a "cost" in a legal sense and thus covered by the

supplementary payments provision.

    Our analysis of Styller's argument is informed by the

Supreme Judicial Court's decision in Jones v. Boykan, 464 Mass.

285, 296-298 (2013).   In Jones the court considered a statute

authorizing the award of "a reasonable attorney's fee as part of

the costs" to a prevailing party in a civil rights action.      Id.

at 296, quoting 42 U.S.C. § 1988(b) (1994 & Supp. II).    The

court rejected the argument that because the statute authorized

the attorney's fee award "as part of the costs," it effected a

substantive change in the law of Massachusetts, pursuant to

which "costs and attorney's fees are treated differently."      Id.

at 297.   Thus, the court held that, even though the statute

permits a prevailing party to recover its attorney's fees "as
                                                                     13


part of the costs," a party's request for "costs" does not

encompass a request for attorney's fees; instead, attorney's

fees must be requested expressly and separately.       Id. at 297-

298.       In other words, the term "costs taxed" in the context of a

legal proceeding does not refer to attorney's fees even where a

statute authorizes a court to award attorney's fees "as part of

the costs."8      Id. at 297.

       Styller's assertion that "costs" include attorney's fees

awarded under G. L. c. 93A stands on even an even shakier

ground.      Chapter 93A authorizes the award of "reasonable

attorney's fees and costs incurred."       G. L. c. 93A, § 9.   Thus,

unlike the statute in Jones, 464 Mass. at 297, which identified

"attorney's fee[s] as part of the costs," G. L. c. 93A

distinguishes between "costs incurred" and "attorney's fees."

This is consistent with the holding in Jones that the term

"costs" in a technical, legal sense does not include attorney's

fees.      464 Mass. at 297-298.   Accordingly, the meaning of "costs



       Accord CIM Ins. Corp. v. Masamitsu, 74 F. Supp. 2d 975,
       8

993 (D. Haw. 1999) ("'Costs taxed' read in context plainly
refers to amounts commonly taxed by courts in suits. The policy
could have also provided for 'attorneys' fees' awarded against
an insured in any suit the insurer defends. It did not");
Polygon Northwest Co. v. American Nat'l Fire Ins. Co., 143 Wash.
App. 753, 788 (2008) ("Having concluded that both the text and
the context of the insurance agreement provide clear indications
that both parties intended the phrase 'costs taxed' to have its
legal meaning, we further conclude that Washington law is
uniform in excluding reasonable attorney fees from that
meaning").
                                                                    14


taxed," construed as that term is used in the policy to refer to

costs taxed in a court proceeding, does not include attorney's

fees awarded pursuant to G. L. c. 93A.

     The same rationale applies to expert fees and expenses.

The fact that the court is authorized to award such fees and

expenses pursuant to G. L. c. 93A to a prevailing party, see

Waldman, 413 Mass. at 324, does not effect a change in the

meaning of the term "costs taxed" in the context of a legal

proceeding.9     See Jones, 464 Mass. at 297.

         2.   Postjudgment interest.   Styller maintains that the

insurer is obligated to pay postjudgment interest on the full

amount of the judgment entered in the underlying action pursuant

to a different supplementary payments provision, which provides

in relevant part:

     "1. We will pay, with respect to any claim we investigate
     or settle, or any 'suit' against an insured we defend:

     . . .

     g. All interest on the full amount of any judgment that
     accrues after entry of the judgment and before we have


     9 Our conclusion that the phrase "costs taxed" in the
technical context of a court proceeding does not include the fee
award is consistent with the parties' agreement that the G. L.
c. 93A claim itself was not covered by the policy. See General
Convention of the New Jerusalem in the U.S. of Am., Inc. v.
MacKenzie, 449 Mass. 832, 835 (2007) ("The words of a contract
must be considered in the context of the entire contract rather
than in isolation"). We need not decide whether a fee award
under G. L. c. 93A is covered in situations where the underlying
claim is also covered.
                                                                    15


    paid, offered to pay, or deposited in court the part of the
    judgment that is within the applicable limit of insurance."

As set forth supra, no part of the judgment (including the fee

award) in the underlying action is covered by the policy.

Because "any obligation to pay postjudgment interest under the

policy is contingent upon an obligation to indemnify the insured

for its liability on the underlying claim," the insurer is not

obligated to pay any postjudgment interest on the judgment.

Athridge v. Aetna Cas. & Sur. Co., 604 F.3d 625, 632 (D.C. Cir.

2010).

    3.    G. L. c. 93A claim.   "When coverage has been correctly

denied, as in this case, no violation of the Massachusetts

statutes proscribing unfair or deceptive trade practices may be

found."   Transamerica Ins. Co. v. KMS Patriots, L.P., 52 Mass.

App. Ct. 189, 197 (2001).

    Conclusion.    The portion of the amended judgment in favor

of Stylla on count I (declaratory judgment) and the declaration

entered thereon is reversed, and the matter is remanded for the

entry of a new declaration that "costs taxed" in the context of

the policy at issue here does not include attorney's fees and

expert fees and expenses, and that the insurer is not obligated

to pay postjudgment interest.   The portion of the amended

judgment in favor of the insurer on count II (violation of G. L.

c. 93A) is affirmed.
              16


So ordered.
