          United States Court of Appeals
                      For the First Circuit

No. 13-1172

                VERMONT MUTUAL INSURANCE COMPANY,

                      Plaintiff, Appellant,

                                v.

                      ANDREW ZAMSKY ET AL.,

                      Defendants, Appellees.


          APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Nathaniel M. Gorton, U.S. District Judge]

        [Hon. Robert B. Collings, U.S. Magistrate Judge]


                              Before

                     Howard, Selya and Lipez,
                          Circuit Judges.


     Peter C. Kober, with whom Murphy & Riley, P.C. was on brief,
for appellant.
     James T. Scamby, with whom Michael W. Reilly, Tommasino &
Tommasino, and Heifetz Rose LLP were on brief, for appellees Andrew
Zamsky   and   Massachusetts   Property    Insurance   Underwriting
Association (FAIR Plan).
     David W. White, Jr., with whom Breakstone, White & Gluck was
on brief, for appellee Renata Ivnitskaya.
     Kara Thorvaldsen, with whom George C. Rockas and Wilson,
Elser, Moskowitz, Edelman & Dicker LLP were on brief, for appellee
Scottsdale Insurance Company.


                         October 9, 2013
            SELYA, Circuit Judge. It seems self-evident that a story

that involves throwing gasoline on a smoldering fire is unlikely to

have a happy ending.     That is true here, but the parties to this

appeal have sifted through the embers and identified what some

might regard as an oxymoron: an interesting insurance coverage

question.     After careful consideration, we conclude that the

district court properly construed the relevant insurance contracts

and   proceeded    to   answer   the   coverage    question   correctly.1

Accordingly, we affirm.

            Defendant-appellee Andrew Zamsky is an insured under

three homeowners' policies issued to his parents by plaintiff-

appellant Vermont Mutual Insurance Company (Vermont Mutual).         Each

of these policies covered a separate parcel of residential real

estate owned by the Zamskys.           In relevant part, they require

Vermont   Mutual   to   defend   and   indemnify   all   persons   insured

thereunder, including Andrew Zamsky, against claims stemming from

"bodily injury" caused by a covered "occurrence," subject, however,

to various exclusions.     One such exclusion appearing in all three

policies, which we shall refer to as the "UL exclusion," pretermits

coverage for injuries "[a]rising out of a premises" owned by an

insured but not itself an "insured location."        The Zamskys owned a


      1
       The case was decided below on summary judgment. In entering
the dispositive order, the district judge adopted the report and
recommendation of a magistrate judge. For ease in exposition, we
take an institutional view and refer only to "the district court,"
without distinguishing between the two judicial officers.

                                   -2-
fourth piece of residential real estate, not insured by Vermont

Mutual.     The case before us concerns an accident that occurred

there and turns on the applicability vel non of the UL exclusions

contained in the Vermont Mutual policies.

             The background facts are susceptible to succinct summary.

On the night of November 27, 2008, Zamsky, defendant-appellee

Renata    Ivnitskaya,   and   several       friends   drove   to   a   house   in

Falmouth,     Massachusetts   owned     by    Zamsky's    parents.       It    is

undisputed that the Falmouth house was not an "insured location" as

defined in the policies.

             At some point after their arrival, Zamsky retrieved from

a shed on the property a portable fire pit that he had purchased

earlier that year.      The fire pit was somewhere around 30 inches

wide and about 18 inches high.              It weighed between 30 and 40

pounds.

             The group positioned the fire pit on a deck attached to

the house.    They tried to start a fire, but the wood that they had

collected for that purpose was damp and would not burn readily.

             One member of the group, Aaron Bronstein, told Zamsky

that he wanted to get something to help the fire along.                  Zamsky

suggested that Bronstein look in either the garage or the shed.

Bronstein retrieved a container of gasoline and poured it on the

fire.




                                      -3-
             The consequent conflagration set at least three of the

assembled persons aflame.         One of these individuals — Ivnitskaya —

suffered especially severe burns.

             In due course, Ivnitskaya sued Zamsky for bodily injuries

in a Massachusetts state court, alleging a golconda of negligent

acts and omissions. That suit is still pending; Vermont Mutual and

defendant-appellee Massachusetts Property Insurance Underwriting

Association (FAIR Plan) have been sharing the cost of defending

Zamsky.      Vermont Mutual, however, has done so pursuant to a

reservation of rights.           Defendant-appellee Scottsdale Insurance

Company (Scottsdale) has been keeping a watchful eye on the

proceedings because it provides umbrella coverage (i.e., excess

liability coverage) to the Zamsky family.

             After Ivnitskaya's state court suit was brought, Vermont

Mutual filed this declaratory judgment action in the federal court.

It   named    as    defendants    Zamsky,     FAIR   Plan,    Ivnitskaya,     and

Scottsdale;        premised   federal    jurisdiction        on   diversity   of

citizenship and the existence of a controversy in the requisite

amount, see 28 U.S.C. § 1332(a)(1); and prayed for a declaration

that the UL exclusions in its policies pretermitted any obligation

either to continue to defend Zamsky in the negligence suit or to

indemnify him against any damage award.2


      2
       In pertinent part, the text of the UL exclusion (which is
identical in all three Vermont Mutual policies) reads as follows:


                                        -4-
           Once answers were filed and discovery completed, the

parties cross-moved for summary judgment.       The district court

denied Vermont Mutual's motion and granted the appellees' motions,

holding that the UL exclusion did not apply and that Vermont Mutual

owed Zamsky a duty to defend.   See Vt. Mut. Ins. Co. v. Zamsky, 916

F. Supp. 2d 156, 159 (D. Mass. 2012); see also Vt. Mut. Ins. Co. v.

Zamsky, No. 11-11869, 2012 WL 6864702 (D. Mass. Dec. 17, 2012).

This timely appeal followed.

           The question before us is a limited one.   Vermont Mutual

asked the district court to declare nonexistent any duty on its

part either to defend or to indemnify.   The district court did not

take the bait but, rather, restricted its judgment to the duty to

defend.   See Zamsky, 916 F. Supp. 2d at 159.   This makes sense as,

in the ordinary course, "the duty of an insurance carrier to defend

the insured is broader than its duty to indemnify."    B & T Masonry

Constr. Co. v. Pub. Serv. Mut. Ins. Co., 382 F.3d 36, 39 (1st Cir.

2004) (construing Massachusetts law).      Had the appellees been


     1.   Coverage E — Personal Liability and Coverage F —
     Medical Payments to Others do not apply to "bodily
     injury" or "property damage":
     . . .
     e. Arising out of a premises:
           (1) Owned by an "insured";
           (2) Rented to an "insured"; or
           (3) Rented to others by an "insured";
           that is not an "insured location" . . . .

It is conceded that if the occurrence which caused Ivnitskaya's
injuries arose out of the Falmouth premises, the exclusion should
be given effect.

                                 -5-
intent on securing a more complete declaration of their rights

(extending, say, to the duty to indemnify), they could have cross-

appealed.    They did not do so.       In the absence of a cross-appeal,

only the duty to defend is properly before us.          See Haley v. City

of Boston, 657 F.3d 39, 53 (1st Cir. 2011) ("It is black-letter law

that even though an appellee can argue in support of a lower

court's ruling in his favor on any ground made manifest in the

record . . ., he cannot, without a cross-appeal, argue against a

judgment in his favor in an endeavor either to expand his rights or

to diminish the appellant's rights.").         We proceed accordingly.

            This is a diversity case and, with respect to the limited

question    before   us,   the   law    of   Massachusetts   supplies   the

substantive rules of decision.         See B & T Masonry, 382 F.3d at 38;

U.S. Liab. Ins. Co. v. Selman, 70 F.3d 684, 688 (1st Cir. 1995).

In Massachusetts, the duty to defend arises when "the facts alleged

in the complaint and those facts which are known by the insurer,"

Bos. Symph. Orch., Inc. v. Commercial Union Ins. Co., 545 N.E.2d

1156, 1158 (Mass. 1989), demonstrate "a possibility that the

liability claim falls within the insurance coverage," B & T

Masonry, 382 F.3d at 39 (internal quotation marks omitted).             The

initial burden is on the insured to demonstrate that the overall

coverage provisions apply.       If the insured successfully makes that

showing, the burden then shifts to the insurer to demonstrate that

some exclusion defeats coverage.         See id.   At all times, ambiguity


                                       -6-
in the language of the policy must be construed in favor of

coverage or, put another way, in favor of the insured.    See id.

          In this instance, the parties agree that, based on the

allegations in Ivnitskaya's complaint and facts known to Vermont

Mutual, coverage attaches unless some exclusion operates to defeat

it.   We thus proceed directly to the second stage of the inquiry

and ask whether Vermont Mutual has identified such an exclusion.

          To this end, Vermont Mutual says that the UL exclusion

carries the day. The district court disagreed. See Zamsky, 916 F.

Supp. 2d at 158-59.   Our task is to determine the accuracy of the

district court's conclusion that the UL exclusion does not apply.

          Our standard of review is familiar.   We examine district

court rulings on summary judgment de novo.   See Certain Interested

Underwriters at Lloyd's, London v. Stolberg, 680 F.3d 61, 65 (1st

Cir. 2012).   This standard dovetails with the proposition, time-

honored in Massachusetts, that the interpretation of an insurance

policy typically embodies a question of law for the court.      See

id.; Cody v. Conn. Gen. Life Ins. Co., 439 N.E.2d 234, 237 (Mass.

1982).

          In the case at hand, there is no genuine dispute as to

any material fact.3   These undisputed facts tee up a question about



      3
       The parties make a considerable racket about whether Zamsky
and his friends decided to light a fire before or after they drove
to Falmouth.    As we explain infra, this disputed fact is not
material to the resolution of the coverage question.

                                 -7-
the meaning and effect of the UL exclusion.                This is a question

that the highest court of Massachusetts — the Supreme Judicial

Court (SJC) — has yet to answer.           In such a situation, it is our

obligation to make an informed prophecy as to how that court, if

confronted with the question, would be likely to rule.               See Andrew

Robinson Int'l, Inc. v. Hartford Fire Ins. Co., 547 F.3d 48, 51

(1st Cir. 2008).     When making such a prediction, we may look to a

variety of sources, including decisions of the lower courts in

Massachusetts, persuasive adjudications by other courts, scholarly

works,   and   considerations   touching         upon   public    policy.     See

Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir.

1996).

           We start close to home.          "While decisions of a state's

intermediate appellate court are not binding on a federal court

sitting in diversity, such opinions are entitled to some weight."

Andrew   Robinson,    547   F.3d     at    55.      Two    decisions    of     the

Massachusetts    Appeals    Court,   each    of    which   construes    the    UL

exclusion, are instructive here.

           The first of these cases is Callahan v. Quincy Mutual

Fire Insurance Co., 736 N.E.2d 857 (Mass. App. Ct. 2000).                   There,

an insured's dog had bitten a third party at premises owned by the

insured but not covered by Quincy Mutual.               See id. at 858.        The

victim sued the insured for personal injuries.                   In the ensuing

coverage dispute, the court held that the UL exclusion in Quincy


                                     -8-
Mutual's   policy   did    not   pertain    because     the   dog    "was   not   a

condition of the . . . premises."           Id. at 859.         Thus, while the

occurrence "happened [at the uninsured location], . . . it did not

'arise out of'" the premises.        Id.

            The second case is Commerce Insurance Co. v. Theodore,

841 N.E.2d 281 (Mass. App. Ct. 2006). There, a third party entered

premises owned by the insured but not covered by Commerce in order

to minister to a dying tree.        See id. at 282.      Due to the insured's

alleged    negligence,    the    third   party   fell    from    a   ladder   and

sustained injuries.       See id.   He subsequently brought suit against

the insured.   In the ensuing coverage dispute, the court held that

the UL exclusion in Commerce's policy applied.                It reasoned that

"where . . . a third person is on the property to repair a

condition of the property . . . [t]here is a sufficiently close

relationship between the injury and the premises" such that the

injury should be understood to have arisen out of the premises.

Id. at 285.    (internal quotation marks omitted).

            These bookend cases set the parameters of our inquiry.

In both of them, the Appeals Court interpreted the UL exclusion's

ambiguous "arising out of a premises" language to mean arising out

of a condition of a premises.            See id. at 284-85; Callahan, 736

N.E.2d at 859.   Read together, the cases establish a dichotomy: if

the covered occurrence arises out of a condition of the premises

and the exclusion's other requirements are satisfied, the exclusion


                                     -9-
applies; otherwise, it does not.     This dichotomy is faithful to an

interpretive principle long hallowed by the SJC: ambiguities in

insurance policies are to be construed in favor of affording

coverage to the insured.       See, e.g., Hakim v. Mass. Insurers'

Insolvency Fund, 675 N.E.2d 1161, 1165 (Mass. 1997); Rocci v. Mass.

Accident Co., 110 N.E. 972, 974 (Mass. 1916).            This venerable

principle underpins, and is fully consistent with, the SJC's

unwavering insistence that exclusions from coverage should be

strictly construed.    See Hakim, 675 N.E.2d at 1165.

           In an effort to alter the trajectory of the debate,

Vermont Mutual suggests that this principle is trumped (or at least

neutralized) by the SJC's instruction that the phrase "arising out

of" should be construed broadly, regardless of whether that phrase

appears in an exclusion or an insuring agreement.            See, e.g.,

Bagley v. Monticello Ins. Co., 720 N.E.2d 813, 816 (Mass. 1999)

(construing the phrase in the context of a policy exclusion);

Rischitelli v. Safety Ins. Co., 671 N.E.2d 1243, 1245 (Mass. 1996)

(construing the phrase in the context of an insuring agreement).

This suggestion fails because the "arising out of" language only

comes into play if there is some causal link between the covered

occurrence and a condition of the premises. Here, there is no such

linkage.

           The   bookend   cases   illustrate   this   sequencing.   In

Callahan, the court found no causal link between the occurrence and


                                   -10-
a condition of the premises, see 736 N.E.2d at 859, and thus did

not separately address any ambiguity inherent in the interstitial

"arising out of" language.      As the court said, the question before

it was "less one of reach than it [was] of fit."                Id.

             In   Theodore,   however,       the   court   determined    that    a

condition of the premises — a diseased tree — had a sufficient link

with   the    occurrence.       See    841     N.E.2d      at   285   ("[I]t    is

incontrovertible that the insured asked [the victim] to help him

because of the dying tree on the . . . property.").               Only after it

had made that determination did the court proceed to construe

broadly the phrase "arising out of" and conclude that the UL

exclusion applied.      See id.       This second step gave force to the

exclusion even though a more direct cause of the victim's injuries

(the insured's alleged negligence in failing to steady the ladder)

existed.     See id. at 282, 285.

             Vermont Mutual has a fallback position.             It seizes upon

the Theodore court's reference to the victim's purpose in order to

argue that if Zamsky and his cohorts went to the Falmouth house

with the pre-formed intention of lighting a fire, the occurrence at

issue must have arisen out of the premises.                 This is linguistic

legerdemain. The victim's purpose in Theodore was material because

it was inextricably intertwined with a condition of the premises.

Here, however, the group's reason for going to Falmouth was not




                                      -11-
material because that purpose was not related to a condition of the

premises.    That makes all the difference.4

             In   the   last    analysis,      we   think   that   the   dichotomy

delineated by the Appeals Court in Callahan and Theodore — a

dichotomy that focuses the inquiry, in the first instance, on

whether or not the occurrence arose out of a condition of the

premises — is sensible and conforms to general principles long

embedded in Massachusetts jurisprudence.              Moreover, reading the UL

exclusion in this way coincides with the weight of authority

elsewhere.    See, e.g., Kitchens v. Brown, 545 So. 2d 1310, 1311-12

(La. Ct. App. 1989); Westfield Ins. Co. v. Hunter, 948 N.E.2d 931,

932-33 (Ohio 2011); see also Callahan, 736 N.E.2d at 859-60 & n.5

(describing and collecting cases from other jurisdictions).5                  Such

a reading also comports with sound public policy.                  After all, the

dichotomy     draws     an     easily   administered        line   and   enhances


     4
       Vermont Mutual invites us to set aside the judgment because
the district court erred in stating that Zamsky and his friends did
not decide to light a fire until after their arrival in Falmouth.
See Zamsky, 916 F. Supp. 2d at 157. We decline the invitation.
Since the timing of the decision to light a fire is immaterial, the
district court's statement, even if erroneous, is harmless. See
Roche v. John Hancock Mut. Life Ins. Co., 81 F.3d 249, 253 (1st
Cir. 1996) ("[A] fact is 'material' only when it possesses the
capacity . . . to alter the outcome of the lawsuit under the
applicable legal tenets.").
     5
       This is not to say that courts outside Massachusetts are
unanimous in this view. They are not. See, e.g., Maroney v. N.Y.
Cent. Mut. Fire Ins. Co., 839 N.E.2d 886, 889-90 (N.Y. 2005);
Schinner v. Gundrum, 833 N.W.2d 685, 703-04 (Wis. 2013). But we
conclude that the SJC — like the Appeals Court — would be apt to
follow the weight of authority.

                                        -12-
predictability of results — a laudable objective from the vantage

point of both insurers and insureds.         See Langill v. Vt. Mut. Ins.

Co., 268 F.3d 46, 49 (1st Cir. 2001) ("What seems preeminent in

this   insurance   context,    for    both    insurer   and   insured,   is

predictability."); Bos. Gas Co. v. Century Indem. Co., 910 N.E.2d

290, 311 (Mass. 2009) (taking "stability and predictability in the

insurance market" to be an important consideration).

           We add a coda.     Insurance policies should be construed,

where possible, to conform to the reasonable expectations of the

parties.   See Hazen Paper Co. v. U.S. Fid. & Guar. Co., 555 N.E.2d

576, 583 (Mass. 1990) (explaining that it is "appropriate, in

construing an insurance policy, to consider what an objectively

reasonable insured, reading the relevant policy language, would

expect to be covered").       Vermont Mutual drafted the policies at

issue here.   If it wanted to exclude from coverage all injuries

occurring at an owned premises that it did not insure, it would

have been child's play to say so. But Vermont Mutual eschewed this

straightforward course and chose instead to sound an uncertain

trumpet.   Under such circumstances, we do not believe that the SJC

would countenance the insurer's revisionist attempt to make a

policy exclusion sweep more broadly than its language dictates.

See, e.g., Makrigiannis v. Nintendo of Am., Inc., 815 N.E.2d 1066,

1071 (Mass. 2004) (observing that if the insurer "intended to




                                     -13-
exclude coverage" under certain conditions "it could have expressly

stated such an exclusion").

          To say more on this point would be supererogatory.    We

conclude that when squarely confronted with a case that hinges on

the UL exclusion, the SJC will follow the path demarcated by the

Massachusetts Appeals Court.    Using this interpretive model, we

hold that the UL exclusion does not apply here.

          Although we leave for another day the exact contours of

the phrase "a condition of the premises," it is nose-on-the-face

plain that this portable fire pit — stored on the property for a

matter of months and used just once prior to the occurrence (in a

different location) — was not a condition of the Falmouth premises.

The fact that the fire pit was easily movable is a significant

consideration.   See 9 Steven Plitt et al., Couch on Insurance 3d

§ 126:8 (2008); see also Callahan, 736 N.E.2d at 859.   Unlike the

tree in Theodore, 841 N.E.2d at 285, the fire pit was not a part of

the premises.    Unlike the electric fence that the Callahan court

hypothesized would be considered a condition of the premises, 736

N.E.2d at 859, the fire pit was not erected on the property.   Nor

did the fire pit constitute a defect in some part of the premises,

such as "the loose board, the falling roof slate, the defect in the

walkway, [or] the failure of outdoor lighting" mentioned by both

the Theodore and Callahan courts.   See Theodore, 841 N.E.2d at 284

(quoting Callahan, 736 N.E.2d at 860).   Rather, the fire pit was a


                               -14-
portable item of personal property that happened to be stored in a

building on the Falmouth premises.

            It follows inexorably, as night follows day, that the

occurrence at issue here did not arise out of a condition of the

premises. Consequently, the court below did not err in determining

that the UL exclusion did not apply.

            We need go no further. For the reasons elucidated above,

the judgment is



Affirmed.




                                -15-
