             United States Court of Appeals
                        For the First Circuit


No. 05-2310

                   AMERICAN HOME ASSURANCE COMPANY,

                         Plaintiff, Appellee,

                                  v.

                     AGM MARINE CONTRACTORS, INC.,

                         Defendant, Appellant.


             APPEAL FROM THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF MASSACHUSETTS

     [Hon. Edward F. Harrington, Senior U.S. District Judge]


                                Before

                          Boudin, Chief Judge,

                  Torruella and Dyk,* Circuit Judges.



     Eric F. Eisenberg with whom Jeremy Blackowicz and Hinckley,
Allen & Snyder, LLP were on brief for appellant.
     Robert J. Murphy with whom Holbrook & Murphy was on brief for
appellee.


                           November 8, 2006




     *
         Of the Federal Circuit, sitting by designation.
            BOUDIN, Chief Judge. This insurance coverage case arises

out   of   the   following    events.      In   fall   2000,   the   Town   of

Provincetown, Massachusetts ("Provincetown"), contracted with AGM

Marine Contractors ("AGM") to reconstruct MacMillan Pier on the

Provincetown waterfront and to procure and install a concrete

floating dock system.          Under AGM's superintendence, Southeast

Floating Docks ("Southeast") agreed to provide floating docks for

MacMillan Pier.    Installation of the new dock system was completed

in June 2003.

            There were two main floating docks (A and B) extending

outward from MacMillan Pier.            These main docks floated on the

surface of the water but stayed in position next to MacMillan Pier

because piles, planted in the ground below the water's surface, ran

though u-brackets on the sides of the floating docks.            A number of

smaller "finger" floating docks extended from the main floating

docks and were held in place by connections to the main docks.

            A strong winter storm occurred during December 5-7, 2003.

Some of the floating docks broke loose; some sank; and most were

irreparably damaged.         Immediately after the storm, Provincetown

directed AGM to retrieve the docks, which it did.              AGM was later

required by the town to provide replacement docks.              AGM incurred

significant costs which it sought to recover from both insurance

and from Southeast (which it accused of having failed to follow

specifications in building the docks).


                                    -2-
            In March 2004, AGM notified American Home Assurance

Company ("American Home") of a claim under the commercial marine

liability policy that American Home had issued to AGM, providing

coverage from January 1, 2003 to January 1, 2004 ("the policy").

The policy is based on the standard Commercial General Liability

Coverage ("CGL") form written by the Insurance Services Office

("ISO"), an organization of insurance companies that prepares

standard form contracts, among other things.

            American Home denied AGM's claim for coverage and on June

17, 2004, filed a petition for declaratory judgment in the federal

district    court    in   Massachusetts     to   establish   that   it    had   no

liability    under    the   policy.       AGM    counterclaimed     and   sought

recovery for the cost of recovering the docks, loss of use of the

docks and for repairing damage to the docks or replacing them.

Both sides moved for summary judgment.

            On July 25, 2005, the district court granted summary

judgment in favor of American Home, concluding that the policy did

not cover the losses for which AGM sought recovery.             American Home

Assurance Co. v. AGM Marine Contractors, Inc., 379 F. Supp. 2d 134,

135 (D. Mass. 2005).        Less than six months later, an arbitrator

granted AGM recovery against Southeast for $389,703, concluding

that Southeast had failed to follow specifications in designing the

docks.   Southeast is currently contesting the arbitration award.




                                      -3-
           AGM   now   appeals   from   the   district      court's    decision

denying insurance coverage. Review on summary judgment is de novo,

drawing inferences in favor of the non-moving party.                  Nicolo v.

Phillip Morris, Inc., 201 F.3d 29, 33 (1st Cir. 2000).                Where, as

is the case here, cross-motions are involved, the court applies

this standard to each motion separately.          Reich v. John Alden Life

Ins. Co., 126 F.3d 1, 6 (1st Cir. 1997).

           Although the case is within the admiralty jurisdiction of

the federal courts because the contract was "maritime in nature,"

Acadia Ins. Co. v. McNeil, 116 F.3d 599, 601, 603 (1st Cir. 1997),

we look to state law (in this case Massachusetts), given the

absence of a federal statute or a federal judicially created rule

governing such contracts. Littlefield v. Acadia Ins. Co., 392 F.3d

1, 6-7 (1st Cir. 2004).     Absent Massachusetts precedent, decisions

elsewhere construing standard CGL language may be useful.

           Generally, the policy provides that American Home "will

pay those sums that [AGM] becomes legally obligated to pay as

damages because of 'bodily injury' or 'property damage' to which

this   insurance   applies."     Such   damages     must    be   caused    by   an

"occurrence," defined as "an accident, including continuous or

repeated   exposure    to   substantially     the    same    general      harmful

conditions."     There are also numerous exclusions to coverage.

           American Home's position is that there was neither an

"occurrence" nor "property damage," and that even if there were,


                                    -4-
two different exclusions apply:           the "damage to Assured's work"

exclusion and the "damage to Assured's product" exclusion.                AGM

takes the opposite position on each issue and, in addition, argues

that there is coverage for damage to the docks under the "product-

completed   operations    hazard"   and    that   public   policy   requires

coverage for the costs of recovering the docks after they broke

loose.

            That there should be doubts about the presence of an

"occurrence"   or   "property   damage"      might   initially   puzzle    an

observer because the storm was obviously an "occurrence" in the

common use of the term, and the breaking loose of the dock and its

subsequent damage is easily described as an "accident" that led to

"property damage."       The doubts that some courts have expressed

arise because CGL coverage is primarily directed to liabilities

other than defects in one's own work. As the Massachusetts Supreme

Judicial Court said, quoting an article on insurance:

            The risk intended to be insured is the
            possibility that the goods, products or work
            of   the   insured,  once   relinquished   or
            completed, will cause bodily injury or damage
            to property other than to the product or
            completed work itself . . . . 1


     1
      Commerce Ins. Co. v. Betty Caplette Builders, Inc., 647
N.E.2d 1211, 1213 (Mass. 1995) (emphasis supplied) (quoting Roger
C. Henderson, Insurance Protection for Products Liability and
Completed Operations: What Every Lawyer Should Know, 50 Neb. L.
Rev. 415, 441 (1971)); see also Farmington Cas. Co. v. Duggan, 417
F.3d 1141, 1142 (10th Cir. 2005); Modern Equip. Co. v. Continental
Western Ins. Co., 355 F.3d 1125, 1129 (8th Cir. 2004); Russ, 9A
Couch on Insurance § 129:1 (3d ed. 1995).

                                    -5-
            A curious split in authority has resulted.            Some courts

have held that faulty workmanship by the insured, so far as damage

is only to its product, does not constitute an "occurrence" under

CGL policies, e.g., Auto-Owners Ins. v. Home Pride Cos., 684 N.W.2d

571, 577 (Neb. 2004); see also Russ, 9A Couch on Insurance § 129:4

(3d ed. 1995); and others have held that faulty workmanship does

not constitute "property damage," e.g., Amtrol, Inc. v. Tudor Ins.

Co., 2002 WL 31194863, at *6 (D. Mass. 2002).           By contrast, other

courts have focused solely upon the exclusions of the CGL policy.

E.g., Caplette, 647 N.E.2d at 1213.

            The cases that have refused coverage at the occurrence or

property damage threshold often involve the discovery of a latent

defect or of an emerging negative condition (like construction

defects,    leaking    water   heaters,    peeling     paint,   or   cracking

floors).2   In such cases a court might well question whether there

is   literally   an   "occurrence"   or    "property    damage"   due   to   an

"occurrence."    But in this case what happened to the docks was far

from a mere latent condition or slow deterioration, so many of the

cases refusing coverage are distinguishable.

            Whether Massachusetts would follow the "occurrence" cases

is not certain.       In Caplette the Supreme Judicial Court bypassed

the issue in a case involving damage to the insured's product,


      2
      Home Pride Cos., 684 N.W.2d at 574; Amtrol, 2002 WL 31194863,
at *2; Indiana Ins. Co. v. Hydra Corp., 615 N.E.2d 70, 73 (Ill.
App. Ct. 1993).

                                     -6-
going instead directly to the exclusions.            This might suggest that

the   SJC    thought    that      the   occurrence    and   property   damage

requirements were satisfied, but the parties did not dispute the

issue.      In all events, one of the exclusions in this case bars

coverage even if we assume arguendo that there was an occurrence

and property damage within the meaning of the policy.

             We deal first with the "Assured's work" exclusion.           The

"Assured's work" exclusion excludes coverage under the policy for

the following:

      "Property damage" to "the Assured's 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 the Assured's behalf by a
      subcontractor.

             Under the definitions section of the policy, "Assured's

work" includes "work or operations performed by the Assured or on

[its] behalf."    So at first blush, the "Assured's work" appears to

include work done by Southeast, assuming that Southeast were a

subcontractor.         But   if   Southeast   were   a   subcontractor,   the

exclusion would not apply by virtue of its second sentence.            And if

instead Southeast were merely a vendor who supplied a product and

not a subcontractor, the docks would not be the "Assured's work" or

work done on "its behalf," so again the exclusion would not apply.

             Of course, the exclusion would apply if the harm arose

out of AGM's own work rather than that of Southeast.            However, the

arbitrator found that the original cause of the breaking away of

                                        -7-
the docks was faulty work by Southeast including failure to follow

specifications.     Conceivably American Home could contest this

finding   and   blame   AGM   (the   insurer   was   not   a   party    to   the

arbitration).     We need not pursue this possibility because the

"Assured's product" exclusion does appear to bar coverage, even if

the "Assured's work" exclusion does not.

           The "Assured's product" exclusion precludes recovery for

"'property damage' to 'the Assured's product' arising out of it or

any part of it." The policy defines "Assured's product" to include

"any goods or products, other than real property, manufactured,

sold, handled, or distributed by . . . [t]he Assured."                       The

"Assured's product" exclusion, like the "Assured's work" exclusion,

is broadly consistent with the limited office of CGL coverage to

protect against liability for harm "other than to the product or

completed work itself."       Caplette, 647 N.E.2d at 1213.

           AGM disputes that the docks were its product, saying that

they were made by Southeast.         But if AGM acquired the docks from

Southeast as a vendor and resold them to Provincetown, "sold"

applies; if they were made by Southeast as a subcontractor and

installed by AGM (and transferred to Provincetown as part of the

overall project), they were at least "handled" by AGM.3                So AGM's


     3
      AGM's argument that case law supports its claim that it did
not "handle" the docks is unavailing. Gulf Miss. Marine Corp. v.
George   Engine  Co.,   697   F.2d  668   (5th   Cir.  1983),   is
distinguishable. In Gulf the insured party was a subcontractor who
merely touched the components while assembling them; here AGM was

                                     -8-
response does not avoid the embracing language of the definition

that triggers the exclusion.

                 Whether the docks come within the real property exception

found       in   the   definition    of   "Assured's    product"   is   a   closer

question.         The exception for real property eliminates from the

exclusion a building constructed on the land and, arguably, a pier

built upon and planted in submerged land (MacMillan Pier itself

likely fits this description).             But the main floating docks were

tethered by the u-brackets and pilings rather than affixed to the

submerged land below and the finger docks were connected to the

main docks even more loosely.

                 The   technical    definition   of    real   property,     in   the

dictionary and some of the case law, covers those things "attached

to, or erected on [the land], excluding anything that may be

severed without injury to the land."4                 Similarly, Massachusetts

case law defines real property as property "so annexed that it

cannot be removed without material injury to the real estate or to

itself." Medford Trust Co. v. Priggen Steel Garage Co., 174 N.E.2d



responsible for procuring the docks and providing them in their
final form to Provincetown.
        4
      Black's Law Dictionary (8th ed. 2004) (emphasis supplied);
see also Wanzek Constr. v. Employers Ins., 679 N.W.2d 322, 327
(Minn. 2004) (citing Black's Law Dictionary in a CGL case);
American Equity Ins. Co. v. Van Ginhoven, 788 So. 2d 388 (Dist. Ct.
App. Fla. 2001) (citing Black's Law Dictionary and stating that
"[t]he term 'real property' is a clearly understandable and defined
legal term").

                                          -9-
126, 128 (Mass. 1930).           There is also good deal of related law

seeking to determine whether an item is a "fixture"–-personal

property that becomes part of the real property, Bernheim, 2

Tiffany Real Property § 606 (3d ed. 1939 & Supp. 2006).

              Case law as to whether floating docks are "real property"

is not uniform-–which is unsurprising because the issue              arises

under various statutes and in different contexts (sales, taxes,

condemnation).       A leading federal tax decision says that floating

docks are not real property, Morgan v. Comm'r of Internal Revenue,

52 T.C. 478, 483 (Tax Ct. 1969); see also Rev. Rul. 75-178, 1975-1

C.B. 9, 1975 WL 34655.       No Massachusetts case involving a floating

dock has been cited to us, and case law in other jurisdictions is

divided.5

              Putting the divided cases to one side, the docks in this

case       were   shipped   to    Provincetown   and--instead   of    being

incorporated physically into the land or ocean bottom--were used as

floating concrete platforms, much like a tied-up barge.         Under the

classic definition of real property, the floating docks do not

qualify as real property.         They could easily be, and were in fact,

severed from MacMillan Pier:          the marine surveyor's report shows


       5
      Compare Newport Island Yacht Club v. Inver Grove Heights
Marina, Inc., 1995 WL 70215, at *2 (Minn. App. Ct. Feb. 21, 1995)
(floating docks are personal property) with Taylor v. Township of
Lower, 13 N.J. Tax 371, 387 (N.J. Tax Ct. 1993) (floating docks are
real property).    Pointlessly, American Home cites cases in its
favor interpreting policies that happen to lack the real property
exception.

                                      -10-
that, without injury to MacMillan Pier, the docks sank or broke

free and others were hoisted onto the pier after the storm.

            One might argue that the docks and piles taken together

comprise AGM's "product" and therefore "real property" for purposes

of the "Assured's product" exclusion--given that the piles are

embedded    in   the   ocean   floor.     But   the    "severability"   aspect

implicit in Black's definition of real property contemplates that

some items which are conceptually or even physically "connected" to

real property may be so readily removable that they never lose

their nature as personal property.

            For example, courts have held that mobile homes, even

where anchored to the ground and attached to utility lines, remain

personal property.       E.g., United States v. Shelby County, Tenn.,

385   F.   Supp.   1187,   1189   (W.D.    Tenn.      1974).   Similarly,   a

Massachusetts court noted that machines may remain chattels where

the attachment to the land "merely stead[ies]" property for "more

convenient use."        Carpenter v. Walker, 5 N.E. 160, 162 (Mass.

1886).     We conclude that the floating docks do not comprise real

property under Massachusetts law.

            Ambiguities in the policy are construed against the

insurer, B & T Masonry Constr. Co. v. Pub. Serv. Mutual Ins. Co.,

382 F.3d 36, 39 (1st Cir. 2004), but the general definition of real

property excludes floating docks that can be removed without damage

and we are offered no coherent counter-definition to set against


                                    -11-
the   classic     definition,   which   has   at   least   the    advantage   of

mechanical application.         That the floating docks may be close to

the line--being big structures that ordinarily are not moved about-

-does not make the line itself uncertain.

            It would be a different matter if there were some obvious

rationale for the real property exception in the policy that would

be frustrated by applying the classic definition.                But, so far as

we can tell, the exception came about almost by happenstance;6 and,

so far as we understand the rationale for the "Assured's product"

exclusion itself, as described in Caplette, it appears to apply

with full force to the floating docks.

            AGM    has   yet   one   more   argument.      It   says   that   the

"products-completed operations hazard" ("PCOH") provides it with

coverage.    PCOH is defined, with exceptions not here relevant, to

include "all . . . 'property damage' occurring away from premises

the Assured owns or rents" where work has been completed.                Within

the policy, several of the exclusions are made inapplicable to



      6
      Earlier CGL policies did not have the real property
exception; and, in construing such policies, courts divided as to
whether the phrase "manufactured, sold, handled, or distributed"
implicitly excluded real property, compare, e.g., Mid-United
Contractors, Ins. v. Providence Lloyds Ins. Co., 754 S.W.2d 824,
826 (a building is not a product "because in ordinary language
buildings are constructed or erected, not manufactured"), with
Caplette, 647 N.E.2d at 1214 (a building is a product of its
builder). The ISO inserted the real property language to resolve
the matter.     Cunningham & Fischer, Insurance Coverage in
Construction--The Unanswered Question, 33 Tort & Ins. L.J. 1063,
1095-1096 (1998).

                                      -12-
coverage found in PCOH.                 For example, the "damage to property"

exclusion has an exception for "'property damage' included in the

'products-completed operations hazard.'"

             Seemingly, the damage to the docks would come within the

clause defining PCOH.             But, contrary to AGM's premise, the policy

does not on its own provide coverage for damage within the PCOH

clause.      The clause merely renders a given exclusion inapplicable

where    that    exclusion         so    provides.       The       "Assured's       product"

exclusion contains no reference to the clause and therefore remains

applicable to PCOH damage.

             Although        we    conclude      that    the       "Assured's       product"

exclusion       does    apply      to    the    damage      suffered     by     the    docks

themselves, this does not quite end the story.                       It means that the

cost of replacing the floating docks (apparently about $230,000) is

not covered by the policy; but AGM's claims were not only for the

cost    of   replacing       the    docks      but   also    for    emergency       work   in

recovering the sunken or loose docks and for the cost of providing

temporary docks in the interim.

             Non-coverage of the temporary docks and the emergency

work follows from non-coverage of the docks themselves.                          The basic

coverage under the CGL policy is for liability incurred "because

of" "property damage" ("bodily injury" is not present in this

case).       Thus,     the   cost       of   temporary      replacement       for     covered

property might well be recoverable.                     But it is hard to see how


                                             -13-
coverage       would     exist    for    temporary    replacement    of    excluded

property.       AGM points to no policy language or rationale for such

coverage.

               Non-coverage is also clear as to the emergency work.

That work on its face is even harder to classify as liability for

property       damage--save       that   courts   have   been   willing    in   some

circumstances to include the cost of emergency efforts on the

premise that the insured is mitigating insured losses that would

otherwise be borne by the insurance company and that it serves

public policy to encourage such mitigation.7

               This rationale fails if the property losses to the

relevant product are themselves not covered and the insured has no

obligation to replace the property.                  To be sure, public policy

might want to encourage mitigation, but not necessarily at the

insurer's expense, and anyway AGM had a substantial self-interest

in mitigating losses itself.             It might be a different case if the

docks had actually threatened bodily injury or third-party property

damage for which American Home could be responsible.

               The rationale for the patchwork coverage provided by the

CGL policy is obscure and especially hard to understand without

more       information    about    other    coverages    available   for    product



       7
      Intel Corp. v. Hartford Accident & Indem. Co., 692 F. Supp.
1171, 1193 (N.D. Cal. 1988), aff'd in part, 952 F.2d 1551 (9th Cir.
1991); Bankers Trust Co. v. Hartford Accident & Indem. Co., 518 F.
Supp. 371, 373-74, vacated, 621 F. Supp. 685 (S.D.N.Y. 1981).

                                           -14-
defects.   All we can do is take the relevant provisions one by one

and match them against the facts of this case.   Having done so we

conclude that coverage was properly denied.

           Affirmed.




                               -15-
