
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                                [Not for Publication]                                [Not for Publication]                            United States Court of Appeals                            United States Court of Appeals                                For the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                                 ____________________        No. 94-1333                             TOWN OF FARMINGTON, ET AL.,                               Plaintiffs, Appellants,                                          v.                               TUDOR INSURANCE COMPANY                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                     [Hon. Morton A. Brody, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                             Torruella, Boudin, and Stahl                                   Circuit Judges.                                   ______________                                 ____________________            Martica S.  Douglas with  whom Douglas, Whiting,  Denham &  Rogers            ___________________            ___________________________________        was on brief for appellants.            Thomas V.  Laprade  with whom  Philip  M.  Coffin III  and  Black,            __________________             ______________________       ______        Lambert, Coffin & Rudman were on brief for appellee.        ________________________                                 ____________________                                  September 2, 1994                                 ____________________                      Per  curiam.   Plaintiffs  Town of  Farmington, its                      ___________            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-                   ___ __________________    ______________            B (Jan.  31, 1994).  The parties agree that Maine law governs                                         -2-            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.,                                                               ___  ____            Union  Mut. Fire Ins. Co. v. Inhabitants of Topsham, 441 A.2d            _________________________    ______________________            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            ________________________            "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                                         -3-                                          3            condemnation."    Once  again, we  cannot  agree.   Like  the            magistrate-judge,  we  think  that  Baywood  Corp.  v.  Maine                                                ______________      _____            Bonding &  Casualty Co., 628  A.2d 1029 (Me.  1993), provides            _______________________            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                           ___ ___            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                                                             ___ ___            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                                            ____________________            1.  We  note with  dismay  that, although  Baywood was  cited                                                       _______            prominently by the magistrate-judge,  see Town of Farmington,                                                  ___ __________________            slip op. at 5 n.2,  the Town chose not to mention,  much less            distinguish, the case in its brief.                                          -4-                                          4            work  amounted to a violation  of various legal  duties.  See                                                                      ___            id.  at  1030  (noting   that  the  association  had  alleged            ___            "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.                         _______                                         III.                                         III.                      For the foregoing reasons,  we affirm the  district            court's entry of summary judgment.                      So ordered.                      __________                                         -5-                                          5
