MAINE	SUPREME	JUDICIAL	COURT	                                    Reporter	of	Decisions	
Decision:	 2017	ME	57	
Docket:	   Cum-16-105	
Argued:	   December	14,	2016	
Decided:	  March	28,	2017	
	
Panel:	    ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                    CITY	OF	SOUTH	PORTLAND	et	al.	
                                  	
                                 v.	
                                  	
       MAINE	MUNICIPAL	ASSOCIATION	PROPERTY	&	CASUALTY	POOL	
	
	
HUMPHREY,	J.	

      [¶1]	 	 The	 City	 of	 South	 Portland	 and	 its	 Code	 Enforcement	 Officer	

Patricia	 Doucette	 appeal	 from	 a	 summary	 judgment	 entered	 in	 the	 Superior	

Court	(Cumberland	County,	L.	Walker,	J.).		The	court	concluded	that	the	Maine	

Municipal	Association	Property	&	Casualty	Pool	had	no	duty	to	defend	the	City	

of	South	Portland	and	Doucette	in	a	federal	lawsuit	challenging	an	ordinance.		

We	 agree	 that	 the	 Pool	 had	 no	 duty	 to	 defend,	 not	 because,	 as	 the	 court	

concluded,	 the	 complaint	 requested	 only	 nonmonetary	 relief,	 but	 rather	

because	 any	 potential	 damages	 would	 be	 excluded	 from	 coverage.	 	 We	

accordingly	affirm	the	judgment.		
2	

                                    I.		BACKGROUND	

       [¶2]	 	 The	 following	 facts,	 developed	 in	 the	 summary	 judgment	 record,	

are	undisputed.		See	N.	E.	Ins.	Co.	v.	Young,	2011	ME	89,	¶	5,	26	A.3d	794.	

       [¶3]	 	 On	 July	 21,	 2014,	 the	 City	 Council	 of	 South	 Portland	 enacted	

Ordinance	#1-14/15.		The	Ordinance	prohibits	the	bulk	loading	of	crude	oil	on	

marine	 tank	 vessels	 in	 South	 Portland.	 	 On	 February	 6,	 2015,	 the	 Portland	

Pipeline	 Corporation	 and	 American	 Waterways	 Operators	 (PPLC)	 filed	 suit	

against	 the	 City	 of	 South	 Portland	 and	 Doucette	 in	 the	 United	 States	 District	

Court	 for	 the	 District	 of	 Maine.	 	 The	 suit	 challenged	 the	 legality	 of	 the	

Ordinance,	 arguing	 that	 the	 Ordinance	 was	 unconstitutional,	 preempted	 by	

state	 and	 federal	 law,	 and	 otherwise	 beyond	 the	 legislative	 authority	 of	 the	

municipality.		The	complaint	and	prayer	for	relief	requested	declaratory	and	

injunctive	 relief	 and	 attorney	 fees	 pursuant	 to	 42	 U.S.C.S.	 §	1988	 (LEXIS	

through	 Pub.	 L.	 No	 115-9).	 	 In	 Count	 VII,	 PPLC	 alleged	 that	 the	 Ordinance	

“deprives	 [PPLC]	 of	 [its]	 rights	 secured	 by	 the	 United	 States	 Constitution	 .	 .	 .	

under	 color	 of	 state	 law,	 thereby	 violating	 42	U.S.C.	 §	 1983.”	 	 PPLC	 further	

alleged	in	Count	VII	that	it	is	“suffering	and	will	suffer	irreparable	harm	as	a	

result	 of	 being	 deprived	 of	 [its]	 Constitutional	 rights	 and	 [is]	 entitled	 to	
                                                                                                        3	

declaratory	 and	 injunctive	 relief	 against	 the	 City	 and	 Doucette	 in	 her	 official	

capacity.”			

	        [¶4]	 	 The	 Maine	 Municipal	 Association	 Property	 &	 Casualty	 Pool	 is	 a	

public	 self-funded	 pool	 established	 pursuant	 to	 30-A	 M.R.S.	 §§	 2251-2256	

(2016).		The	Pool	provides	liability	coverage	to	the	City	of	South	Portland	and	

its	 public	 officials	 pursuant	 to	 a	 Coverage	 Certificate.	 	 The	 City	 notified	 the	

Pool	 of	 the	 PPLC	 lawsuit,	 tendered	 the	 complaint,	 and	 requested	 a	 defense,	

which	 the	 Pool	 declined	 to	 provide.1	 	 The	 City	 has	 therefore	 funded	 its	 own	

defense	in	the	PPLC	litigation.			

         [¶5]		Agreement	H	of	the	Coverage	Certificate	provides	that	the	Pool	will	

“pay	 those	 sums	 which	 the	 Member	 shall	 be	 obligated	 to	 pay	 by	 reason	 of	

liability	 imposed	 upon	 the	 Member	 by	 law	 for	 damages,	 direct	 or	

consequential,	 as	 defined	 by	 the	 term	 ‘Ultimate	 Net	 Loss’	 on	 account	 of	 any	

‘Wrongful	 Act’	 of	 the	 Member.”	 	 Included	 within	 the	 definition	 of	 “Wrongful	

Act”	 is	 a	 “violation	 of	 civil	 rights	 protected	 under	 42	 U.S.C.	 §	 1981	 et	seq.	

committed	by	a	Member	.	.	.	solely	in	the	course	of	duties	or	activities	for	or	on	

behalf	of	the	Named	Member.”		Excluded	from	the	definition	of	“Ultimate	Net	

Loss”	are	“punitive	or	exemplary	damages	.	.	.	or	injunctive,	non-monetary	or	

    1	
     	 Unless	 otherwise	 noted,	 this	 opinion	 refers	 to	 the	 City	 of	 South	 Portland	 and	 Doucette	
collectively	as	“the	City.”	
4	

restitutionary	relief.”		There	is	an	additional	exclusion	for	“any	claim	or	‘suit’	

seeking	 injunctive	 or	 non-pecuniary	 relief.”	 	 “Suit”	 is	 defined	 as	 “[a]	 civil	

proceeding	 in	 which	 damages	 because	 of	 ‘bodily	 injury,’	 ‘property	 damage,’	

‘personal	 injury,’	 ‘advertising	 injury,’	 or	 ‘wrongful	 acts’	 to	 which	 this	

Certificate	applies	are	alleged.”		Exclusion	C,	titled	the	“TAKING	AND	OTHER	

GOVERNMENTAL	CONDUCT	AFFECTING	LAND	AND	PROPERTY	RIGHTS	AND	

INTERESTS	EXCLUSION,”	provides:	

      This	 Certificate	 does	 not	 cover,	 and	 does	 not	 apply	 to,	 any	 loss,	
      damage,	 injury,	 claim,	 “suit”	 or	 liability	 directly	 or	 indirectly	 (1)	
      caused	 or	 occasioned	 by,	 happening	 through,	 because	 or	 in	
      consequence	 of,	 resulting	 from,	 arising	 out	 of	 or	 in	 any	 way	
      connected	with	the	operation	of	the	principles	of	eminent	domain,	
      condemnation,	 inverse	 condemnation,	 adverse	 possession,	
      prescription,	 dedication	 by	 adverse	 use,	 or	 any	 other	 similar	
      principle,	 by	 whatever	 name	 called;	 or	 (2)	 caused	 or	 occasioned	
      by,	 happening	 through,	 because	 or	 in	 consequence	 of,	 resulting	
      from,	arising	out	of,	in	any	way	connected	with,	or	constituting	an	
      impairment	of	title,	diminution	of	value,	loss	of	value,	inability	to	
      realize	 or	 obtain	 full	 value,	 diminution	 of	 use,	 loss	 of	 use,	 or	
      inability	to	realize	or	obtain	full	use,	of	land	or	any	property	right	
      or	 property	 interest	 therein,	 allegedly	 or	 actually	 caused	 by	 or	
      resulting	 from	 governmental	 action,	 omission	 or	 conduct	 of	 any	
      nature,	by	whatever	name	called.		This	exclusion	applies	whether	
      or	 not	 any	 such	 loss,	 damage,	 injury,	 claim,	 “suit,”	 or	 liability	 is	
      asserted	 against	 any	 Member	 directly	 or	 by	 virtue	 of	 because	 of	
      any	agreement	entered	into	by	or	on	behalf	of	any	Member.		
      	
	     [¶6]		On	May	8,	2015,	the	City	brought	the	present	action	in	the	Superior	

Court	(Cumberland	County).		The	amended	complaint	alleged	a	breach	of	the	
                                                                                                             5	

duty	to	defend.		The	City	moved	for	summary	judgment	on	September	4,	2015,	

and	 the	 Pool	 moved	 for	 summary	 judgment	 on	 October	20,	 2015.	 	 The	 court	

(L.	 Walker,	 J.)	 denied	 the	 City’s	 motion	 and	 granted	 the	 Pool’s	 motion	 by	

written	 order.	 	 The	 court	 concluded	 that	 the	 Pool	 had	 no	 duty	 to	 defend	

because	 the	 complaint,	 as	 drafted,	 requested	 only	 declaratory	 and	 injunctive	

relief,	not	damages,	and	therefore	there	was	no	potential	that	the	City	could	be	

liable	for	damages	within	the	scope	of	coverage.		The	City	timely	appealed.	

                                            II.		DISCUSSION	

        [¶7]	 	 Whether	 an	 insurer2	 owes	 a	 duty	 to	 defend	 is	 a	 question	 of	 law	

that	 we	 review	 de	 novo.	 	 See	 York	 Ins.	 Grp.	 v.	 Lambert,	 1999	 ME	 173,	 ¶	 4,	

740	A.2d	 984.	 	 If	 the	 material	 facts	 are	 not	 in	 dispute,	 we	 “review	 the	

summary	judgment	for	errors	of	law,	including	errors	in	the	interpretation	of	

the	 insurance	 policy.”	 	 Harlor	 v.	 Amica	 Mut.	 Ins.	 Co.,	 2016	 ME	 161,	 ¶	 7,	

150	A.3d	 793.	 	 We	 compare	 the	 insurance	 policy	 with	 the	 complaint	 against	

the	 insured,	 reading	 the	 documents	 broadly,	 to	 determine	 whether	 there	 is	

   2		Although	the	Pool	argues	that	it	is	not	an	insurer,	we	join	several	other	jurisdictions	that	have	

treated	similar	risk	pools	as	insurers	for	the	purposes	of	analyzing	coverage	issues.		See	Wash.	Hous.	
Auth.	v.	N.C.	Hous.	Auths.	Risk	Retention	Pool,	502	S.E.2d	626,	629	(N.C.	Ct.	App.	1998)	(“[W]e	hold	
that	policies	or	coverage	documents	issued	by	 risk	pools	such	as	defendant	to	their	members	are	
subject	 to	 the	 same	 standard	 rules	 of	 construction	 as	 traditional	 insurance	 policies	 issued	 by	
insurance	 companies	 to	 their	 customers.”);	 Ohio	 Gov't	 Risk	 Mgmt.	 Plan	 v.	 Cty.	 Risk	 Sharing	 Auth.,	
719	N.E.2d	992,	996	(Ohio	Ct.	App.	1998)	(analogizing	risk	pool	to	insurance);	S.D.	Pub.	Entity	Pool	
for	Liab.	v.	Winger,	566	N.W.2d	125,	128	n.5	(S.D.	1997)	(applying	same	general	principles	to	risk	
pools	as	to	insurance	policies	because	coverage	concepts	are	similar).	
   	
6	

“any	 legal	 or	 factual	 basis	 that	 could	 potentially	 be	 developed	 at	 trial	 and	

result	in	an	award	of	damages	covered	by	the	terms	of	the	policy.”		Id.	¶	8.		A	

factual	 allegation	 in	 the	 complaint	 that	 would	 give	 rise	 to	 damages	 may	 not	

trigger	the	duty	to	defend	if	the	allegations	fall	within	an	applicable	exclusion.		

See	York	Golf	&	Tennis	Club	v.	Tudor	Ins.	Co.,	2004	ME	52,	¶¶	17-18,	845	A.2d	

1173.		The	insurer	has	the	burden	to	establish	that	an	exclusion	applies.		See	

Patrons	Oxford	Ins.	Co.	v.	Harris,	2006	ME	72,	¶	19	n.6,	905	A.2d	819.	

         [¶8]		The	City	concedes	that	the	only	claim	alleged	in	the	complaint	that	

could	give	rise	to	damages	triggering	the	Pool’s	duty	to	defend	is	Count	VII—a	

claim	 pursuant	 to	 42	 U.S.C.S.	 §	 1983	 (LEXIS	 through	 Pub.	 L.	 No.	 115-9).		

Agreement	 H	 of	 the	 Coverage	 Certificate	 expressly	 provides	 coverage	 for	 an	

“Ultimate	Net	Loss,”	which	includes	a	“Wrongful	Act,”	which	in	turn	includes	

an	 action	 pursuant	 to	 section	 1983	 alleging	 a	 civil	 rights	 violation.	 	 The	 City	

further	 concedes	 that	 the	 only	 allegation	 in	 the	 complaint	 that	 provides	 a	

factual	basis	for	an	award	of	damages	is	paragraph	25.		Paragraph	25	alleges	

that	 the	 Ordinance	 “immediately	 and	 currently	 reduces	 the	 current	 market	

value	 of	 PPLC’s	 pipelines	 and	 hinders	 its	 ability	 to	 engage	 in	 interstate	 and	

international	 commerce.”3	 	 Compensatory	 lost-profits	 damages	 are	 an	


     3		The	City	reiterated	at	oral	argument	that	lost	profits	is	the	factual	basis	in	the	complaint	that	

could	give	rise	to	damages	that	it	contends	triggered	the	Pool’s	duty	to	defend.			
                                                                                         7	

available	remedy	for	a	section	1983	claim.		See	Carey	v.	Piphus,	435	U.S.	247,	

255-57	 (1978)	 (stating	 that	 Congress	 intended	 to	 permit	 compensatory	

damages	for	section	1983	violations	as	a	deterrent).			

       [¶9]		Assuming,	however,	that	the	section	1983	claim	could	give	rise	to	

the	potential	for	an	award	of	money	damages	that	would	otherwise	trigger	the	

Pool’s	duty	to	defend,	those	damages	would	fall	squarely	within	one	of	several	

applicable	exclusions	in	the	Coverage	Certificate.			

       [¶10]	 	 In	 paragraph	 25,	 PPLC	 alleges	 that	 the	 Ordinance	 has	 caused	 it	

damage	 by	 impairing	 the	 use	 and	 value	 of	 a	 property	 right:	 namely,	 that	 the	

Ordinance	 leaves	 PPLC	 unable	 to	 realize	 full	 use	 of	 its	 pipelines	 to	 generate	

profits,	 resulting	 in	 decreased	 market	 value	 of	 the	 property.	 	 Any	 damages	

awarded	pursuant	to	paragraph	25	would	therefore	be	entirely	encompassed	

within	Exclusion	C,	which	excludes,	in	relevant	part,	“any	loss,	damage,	injury,	

claim,	‘suit,’	or	liability”	that	is		

       caused	 or	 occasioned	 by,	 happening	 through,	 because	 or	 in	
       consequence	 of,	 resulting	 from,	 arising	 out	 of,	 in	 any	 way	
       connected	with,	or	constituting	an	impairment	of	title,	diminution	
       of	 value,	 loss	 of	 value,	 inability	 to	 realize	 or	 obtain	 full	 value,	
       diminution	of	use,	loss	of	use,	or	inability	to	realize	or	obtain	full	
       use,	 of	 land	 or	 any	 property	 right	 or	 property	 interest	 therein,	
       allegedly	 or	 actually	 caused	 by	 or	 resulting	 from	 governmental	
       action,	 omission	 or	 conduct	 of	 any	 nature,	 by	 whatever	 name	
       called.			
       	
8	

Paragraph	25	would	therefore	not	trigger	the	Pool’s	duty	to	defend.	

          [¶11]	 	 The	 City	 emphasizes	 other	 claims	 in	 the	 complaint	 that	 allege	

constitutional	 violations	 for	 which	 it	 argues	 nominal	 damages,	 outside	

Exclusion	C,	would	be	available	pursuant	to	the	section	1983	claim	alleged	in	

Count	VII.4		See	Farrar	v.	Hobby,	506	U.S.	103,	112-13	(1992)	(concluding	that	

nominal	 damages	 are	 available	 to	 section	 1983	 litigants);	 see	 also	 Baker	 v.	

Farrand,	 2011	 ME	 91,	 ¶	 11	 n.3,	 26	A.3d	 806	 (“Nominal	 damages	 are	

recoverable	 for	 a	 violation	 of	 a	 plaintiff’s	 legal	 right—that	 is,	 an	 ‘injury’—

when	 that	 injury	 is	 not	 accompanied	 by	 actual	 loss	 or	 harm,	 or	 when	 the	

extent	of	the	loss	or	harm	is	not	proven.”).		

          [¶12]	 	 Nominal	 damages,	 however,	 awarded	 pursuant	 to	 Count	 VII	 if	

PPLC	 prevailed	 on	 one	 or	 more	 of	 its	 claims	 seeking	 declaratory	 and	

injunctive	 relief	 alleging	 that	 the	 Ordinance	 violates	 its	 constitutional	 rights,	

would	 similarly	 fall	 within	 Exclusion	 C	 and	 would	 therefore	 not	 trigger	 the	

duty	 to	 defend.	 	 PPLC	 would	 have	 no	 standing	 to	 bring	 those	 constitutional	

claims	 in	 federal	 court	 without	 a	 threshold	 showing	 that	 the	 Ordinance	


     4	 	 The	 City	 focuses	 entirely	 on	 Count	 VII	 in	 arguing	 that	 the	 complaint	 gives	 rise	 to	 potential	

damages.	 	 Standing	 alone,	 Counts	 I-VI	 and	 VIII-IX	 would	 not	 give	 rise	 to	 an	 award	 of	 damages	
because	 those	 counts	 bring	 claims	 that	 would	 entitle	 PPLC	 only	 to	 injunctive,	 declaratory,	 and	
otherwise	nonmonetary	relief.		Those	counts	would	not	trigger	the	duty	to	defend	because	claims	
for	 injunctive	 and	 nonmonetary	 relief	 are	 not	 only	 excluded	 from	 the	 definition	 of	 “Ultimate	 Net	
Loss,”	but	are	also	subject	to	a	separate	exclusion	from	coverage.			
                                                                                              9	

impinges	 upon	 PPLC’s	 rights	 in	 a	 way	 that	 distinguishes	 it	 from	 members	 of	

the	general	public.		See	Madore	v.	Me.	Land	Use	Regulation	Comm’n,	1998	ME	

178,	 ¶	 13,	 715	 A.2d	 157	 (“It	 is	 well	 established	 .	 .	 .	 that	 to	 have	 standing	 to	

seek	injunctive	and	declaratory	relief,	a	party	must	show	that	the	challenged	

action	 constitutes	 ‘an	 invasion	 of	 a	 legally	 protected	 interest	 which	 is	 (a)	

concrete	 and	 particularized,	 and	 (b)	 actual	 or	 imminent,	 not	 conjectural	 or	

hypothetical.’”	 (quoting	 Lujan	 v.	 Defenders	 of	 Wildlife,	 504	 U.S.	 555,	 560	

(1992))).	 	 PPLC’s	 challenge	 to	 the	 constitutionality	 of	 the	 Ordinance	 turns	

entirely	 upon	 the	 alleged	 impairment	 of	 PPLC’s	 property	 rights	 in	 the	

pipeline;	 without	 this	 showing,	 PPLC	 would	 lack	 standing	 to	 bring	 those	

claims.		See,	e.g.,	Madore,	1998	ME	178,	¶	13,	715	A.2d	157.		Exclusion	C	would	

thus	 preclude	 any	 potential	 award	 of	 nominal	 damages	 to	 vindicate	 the	

alleged	 constitutional	 violations	 for	 the	 same	 reasons	 that	 any	 damages	

pursuant	to	paragraph	25	would	be	excluded	from	coverage.		Ultimately,	the	

very	injury	that	gets	PPLC	through	the	courthouse	door	nullifies,	pursuant	to	

Exclusion	C,	any	duty	on	the	part	of	the	Pool	to	defend	the	suit.			

       [¶13]		We	conclude	that	the	Pool	has	no	duty	to	defend	the	City	because	

any	 potential	 damages	 for	 which	 the	 City	 would	 be	 liable	 in	 the	 federal	 suit	

would	 be	 excluded	 from	 coverage	 pursuant	 to	 the	 terms	 of	 the	 Coverage	
10	

Certificate.		See	York	Golf,	2004	ME	52,	¶¶	17-18,	845	A.2d	1173	(concluding	

that	 the	 only	 factual	 basis	 alleged	 in	 the	 complaint	 that	 could	 support	 a	

damage	award	was	subject	to	an	applicable	exclusion	and	there	was	therefore	

no	 duty	 to	 defend).	 	 Because	 the	 complaint	 could	 not	 give	 rise	 to	 damages	

within	 the	 scope	 of	 coverage,	 the	 Pool	 had	 no	 duty	 to	 defend	 the	 City.5	 	 The	

Pool	was	entitled	to	a	summary	judgment.	

         The	entry	is:	

                            Judgment	affirmed.		
	
	    	      	      	      	      	
	
	
Roy	T.	Pierce,	Esq.,	(orally)	and	Sally	J.	Daggett,	Esq.,	Jensen	Baird	Gardner	&	
Henry,	Portland,	for	appellants	City	of	South	Portland	and	Patricia	Doucette	
	
James	 M.	 Bowie,	 Esq.,	 (orally)	 and	 Hillary	 J.	 Bouchard,	 Esq.,	 Thompson	 &	
Bowie,	 LLP,	 Portland,	 for	 appellee	 Maine	 Municipal	 Association	 Property	 &	
Casualty	Pool	
	
	
Cumberland	County	Superior	Court	docket	number	CV-2015-196	
FOR	CLERK	REFERENCE	ONLY	   	




   5		We	affirm	the	judgment	on	this	ground	and	need	not	address	the	trial	court’s	conclusion	that	a	

complaint	 artfully	 drafted	 to	 specifically	 request	 only	 non-monetary	 relief	 can	 foreclose	 the	
potential	for	an	award	of	damages	that	would	otherwise	trigger	the	duty	to	defend.		See	York	Golf	&	
Tennis	 Club	 v.	 Tudor	 Ins.	 Co.,	 2004	 ME	 52,	 ¶	 8,	 845	 A.2d	 1173;	 Travelers	 Indem.	 Co.	 v.	 Dingwell,	
414	A.2d	220,	226	(Me.	1980).	
