Articles Posted in Insurance Law

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In this declaratory judgment proceeding, petitioner Exeter Hospital, Inc. (Exeter) appealed a superior court order denying its motion for partial summary judgment as to the amount at which coverage was triggered under an umbrella policy (the policy) issued to Exeter by respondent Steadfast Insurance Company (Steadfast). In the spring of 2012, an outbreak of Hepatitis C infections among patients serviced by Exeter’s cardiac catheterization lab led investigators to discover that a technician had spread the virus to patients “through a clandestine drug diversion scheme.” The technician allegedly injected certain drugs into his body by way of intravenous needles, then reused the needles on patients, thereby infecting them with the virus. Numerous lawsuits were lodged against Exeter by affected patients. Exeter was primarily insured through a Self-Insurance Trust Agreement (SIT), which provided professional liability coverage in the amount of $1 million per medical incident, with a $4 million annual aggregate cap. Exeter also maintained the policy with Steadfast, which provided excess health care professional liability coverage. Steadfast maintained that it would pay damages only in excess of the $100,000 retained limit for each medical incident. Exeter filed this proceeding, seeking a declaration that it was not required to pay $100,000 retained limit per claim. The trial court interpreted the term “applicable underlying limit” as being a variable amount “dependent on the actual coverage remaining under [the] other [limits of] insurance,” here, the limits of the SIT. Because Exeter had paid out the limits of the SIT, the court found that the “applicable underlying limit” was zero, thereby rendering the $100,000 retained limit greater than the “applicable underlying limit.” Thus, the court determined that, pursuant to “Coverage A,” Steadfast was required “to pay damages in excess of $100,000 for each medical incident.” Exeter sought reconsideration of the court’s order, which the court denied. Although the New Hampshire Supreme Court did not agree with every underlying argument pressed by Exeter, it concluded that its overall argument regarding the interpretation of Coverage A was reasonable, and the trial court therefore erred in granting partial summary judgment as to the terms of Coverage A. View "Exeter Hospital, Inc. v. Steadfast Insurance Company" on Justia Law

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Defendants, Markel Corporation, Markel Services, Inc. (Markel Services), and Essex Insurance Company (Essex), appealed a superior court order denying their motions for summary judgment and granting summary judgment to plaintiff Michael Newell, in this insurance coverage action. Newell was allegedly injured in a slip and fall accident at a property owned by Brames, Inc. (Brames) in Laconia. Brames was insured under an Amusement Park General Liability Policy issued by Essex. Essex was a subsidiary of Markel Corporation and Markel Services was Markel Corporation’s claims handling branch. Newell filed two personal injury actions arising from his slip and fall. The first action against Brames' co-owner and treasurer, was settled out-of-court. In the second lawsuit, Newell sued Ivy Banks, the person who allegedly cleaned the floor upon which Newell slipped and injured himself. Defendants received notice of the Banks action, but declined to defend Banks or intervene. Banks, although properly served, filed neither an appearance nor an answer and was defaulted. A default judgment was entered against Banks for $300,000, the full amount of damages sought by Newell. Newell brought suit against defendants to recover the amount of the default judgment, arguing he was a third party beneficiary under the insurance contract between Brames and Markel/Essex. On appeal, defendants argued the trial court erred in determining that the language of the Policy was ambiguous and that Banks was a “volunteer worker” under the Policy. Finding no reversible error, the Supreme Court affirmed denial of defendants' motion for summary judgment. View "Newell v. Markel Corporation" on Justia Law

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Petitioner Thomas Todd, a Massachusetts resident, is a member of the New Hampshire Chapter of the Appalachian Mountain Club (AMC). He was a member of the AMC’s paddling committee since 1989 and was the committee’s co-chair in 2009 and 2010. Sally Leonard was also a member of the AMC’s paddling committee. In January 2014, Leonard filed a stalking petition against Todd, alleging Todd "hacked" her computer and broke her vehicle’s window after she had voiced her opinion at an AMC meeting that Todd should not be allowed to participate in a paddling committee event "due to his history of aggressive behavior toward females." Todd was insured under a homeowner’s insurance policy and an umbrella liability policy issued to him by Vermont Mutual Insurance Company. After the stalking petition was filed, Todd notified Vermont Mutual of the action and requested that it provide a defense under one or both of the policies. Vermont Mutual declined. The AMC was insured by Hanover Mutual Insurance Company under an employment practices liability (EPL) policy and a nonprofit directors, officers and organizations liability (D & O) policy. Todd informed the AMC of the stalking petition and requested that it notify Hanover to provide him with a defense. Hanover declined too. In March 2014, the Circuit Court ultimately found that Leonard “failed to sustain [her] burden of proof,” and, therefore, the court did not issue a restraining order against Todd. Todd incurred approximately $18,000 in attorney’s fees and costs in defending against the stalking petition. In June 2014, Todd filed this declaratory judgment proceeding, seeking a declaration that Vermont Mutual and Hanover owed a duty to defend him against the stalking petition and to reimburse him for the attorney’s fees and costs incurred in defending against the stalking petition. In addition, he sought attorney’s fees and costs for bringing the declaratory judgment proceeding. Todd appealed when cross-motions for summary judgment and summary judgment were granted favor of the insurance companies. Finding no reversible error, the Supreme Court affirmed the circuit court. View "Todd v. Vermont Mutual Insurance Co." on Justia Law

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The United States Court of Appeals for the First Circuit certified a question of New Hampshire law to the New Hampshire Supreme Court. The question arose from a dispute between Old Republic Insurance Company and Stratford Insurance Company as to their respective coverage and defense obligations arising out of a motor vehicle accident involving their insureds. Old Republic and Stratford each provided insurance coverage for a tractor-trailer that collided with a passenger vehicle. The owner of the tractor, Ryder Truck Rentals, had purchased an insurance policy from Old Republic. DAM Express, a for-hire motor company, had leased the tractor from Ryder. Although, pursuant to the lease agreement, Ryder was responsible for obtaining liability insurance for the tractor, DAM also purchased a separate insurance policy from Stratford. When the collision occurred, the driver of the tractor-trailer was employed by DAM, and the trailer was owned by Coca-Cola. The question posed to the New Hampshire Supreme Court was whether, under New Hampshire law, when was an excess insurer’s duty to defend triggered? Did New Hampshire follow the general rule that the excess insurer’s duty to defend is triggered only when the primary insurer’s coverage is exhausted? If not, what rule as to allocation of defense costs and timing of payment did New Hampshire follow? The New Hampshire Court responded that under New Hampshire law, the excess insurer’s duty to defend is triggered only when the primary’s insurer’s coverage is exhausted. View "Old Republic Insurance Co. v. Stratford Insurance Co." on Justia Law

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Plaintiffs Doug and Gayle Mellin brought a declaratory judgment action asserting, in relevant part, that their homeowner’s insurance policy with defendant Northern Security Insurance Company, Inc. required Northern to reimburse them for losses to their condominium caused by cat urine odor. Plaintiffs' downstairs neighbor kept two cats in her condominium. They surmised that the smell entered their unit from the downstairs condominium through an open plumbing chase servicing the kitchen. In December 2010, plaintiffs filed a claim under their homeowner’s insurance policy, which was denied. Epping's building/health inspector examined the unit and sent a letter to plaintiffs stating that they "have a health problem existing" and the odor "is such that [they] need to move out of[] the apartment temporarily and have a company terminate the odor." Remediation proved unsuccessful. Plaintiffs continued to reside in the unit until February 1, 2011. They claimed that, after that time, they "could [not] have tenants," although they occasionally occupied the unit. Ultimately, they sold their condominium. They claimed that the sale price for the unit was significantly less than that for a comparable condominium in the area which was unaffected by cat urine odor. The Superior Court granted summary judgment in favor of Northern. The Supreme Court vacated the Superior Court's grant of summary judgment: plaintiffs were not required to demonstrate a "tangible physical alteration" to the unit to prove that the unit was rendered permanently uninhabitable. "Rather, to demonstrate a physical loss under Coverage A, they must establish a distinct and demonstrable alteration to the unit." The Court also reversed with regard to a "pollution exclusion clause" found in plaintiffs' policy: "pollution exclusion clause is ambiguous when applied to the facts of this case and, as such, does not preclude coverage for the plaintiffs’ claims." And with regard to "Coverage D," the Court concluded that the trial court erred in granting Northern judgment as a matter of law. This was vacated, and the entire case remanded for further proceedings. View "Mellin v. Northern Security Insurance Company, Inc." on Justia Law

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Petitioner Terry Ann Bartlett was injured in a motor vehicle accident in New York in August 2004, when the motorcycle owned and operated by Jeffrey Vilagos on which she was a passenger, was struck by a motor vehicle operated by Myroslaw Mykijewycz. Mykijewycz was insured by Allstate Insurance Company under a policy that provided liability insurance coverage up to $100,000 per person. Vilagos's motorcycle, which was registered and garaged in New Jersey, was insured by respondent Foremost Insurance Company. The Foremost policy was issued in New Jersey and provided uninsured/underinsured motorist (UIM) coverage up to $250,000 per person. Petitioner also owned a motorcycle, which was registered and garaged in New Hampshire, and which was insured by respondent Progressive Northern Insurance Comapny under a policy that also provided UIM coverage up to $250,000 per person. Petitioner's other vehicles, which were both registered and garaged in New Hampshire, were insured by respondent Commerce Insurance Company under a policy that provided UIM coverage up to $250,000 per person. Petitioner's home was also insured by Commerce under a policy that contains a personal umbrella endorsement that provides $1,000,000 of single limited UIM coverage. Petitioner's New York attorney requested coverage information from Foremost, which Foremost provided. In April 2005, petitioner's attorney informed Progressive and Commerce that the petitioner intended to pursue UIM claims. Allstate offered petitioner its policy limit ($100,000). Petitioner's attorney notified Foremost, Progressive and Commerce of this fact and advised the respondent-insurers that, pursuant to New York law, they were either "required to grant [petitioner] permission to collect" the $100,000 from the Allstate policy "or to pay [her] [that] amount] within thirty (30) days." However, the New York law to which the attorney referred did not govern any of the insurers. Only Commerce responded to petitioner's attorney, granting petitioner permission to settle with Allstate. Allstate was thereafter released from liability. Petitioner sued Foremost, Progressive, and Commerce in New York in January 2011, more than six years after the accident. That lawsuit was eventually dismissed. While the insurers' motions to dismiss were pending, petitioner filed the underlying petition in this case for declaratory judgment. She moved, and the insurers cross-moved, for summary judgment. Commerce appealed, and petitioner cross-appealed the Superior Court's order partially granting and partially denying petitioner's summary judgment motion, denying Commerce's cross-motion for summary judgment, and granting cross-motions for summary judgment filed by Foremost and Progressive. Upon review, the Supreme Court affirmed the trial court's determination that petitioner forfeited her right to recover primary insurance coverage under the Foremost policy and her right to recover excess insurance coverage under the Progressive policy and reversed its conclusion that Commerce had to "drop down" to provide primary coverage. The case was remanded for further proceedings. View "Bartlett v. Commerce Ins. Co." on Justia Law

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Petitioner Cogswell Farm Condominium Association filed a declaratory judgment action with respect to two exclusions in insurance policies issued by respondents Tower Group, Inc. and Acadia Insurance Company. The trial court held that the two exclusions at issue precluded coverage for petitioner's underlying lawsuit against Lemery Building Company, Inc. In 2009, Cogswell sued Lemery and others, alleging negligence, breach of contract, and negligent supervision in the construction of 24 residential condominium units. Cogswell asserted that the "weather barrier" components of the units – including the water/ice shield, flashing, siding, and vapor barrier – were defectively constructed and resulted in damage to the units due to water leaks. Because the units were sold at different times and the policies were in effect during two different time periods, the Supreme Court concluded that the trial court erred in holding that one policy exclusion served as a bar for coverage for each unit after it was sold. Furthermore, the Court found that the other exclusion was subject to more than one reasonable interpretation, the Supreme Court concluded the trial court erred in granting respondents summary judgment with respect to that exclusion. The trial court was reversed and the case remanded for further proceedings. View "Cogswell Farm Condominium Ass'n v. Tower Group, Inc." on Justia Law

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Petitioners Susan and Peter White appealed a superior court order denying their petition for a declaratory judgment that respondent Charles Matthews was covered under a homeowner's insurance policy issues to his mother by respondent Vermont Mutual Insurance Company. Matthews' dog bit Mrs. White while Matthews was staying with friends at the mother's home in Moultonborough. The policy defined an "insured" to include "residents of your household who are… your relatives." Matthews’s mother also owns a home in Naples, Florida, where she lives for approximately half of the year, and where Matthews usually visits only at Christmas. The petitioners and Matthews claim that the Florida residence is Matthews’s mother’s primary residence, but they do not claim that Matthews is a resident of the Florida home. Matthews testified that he lived in Massachusetts for 80% or more of the year. However, he had not changed his voting registration since he first registered to vote when he was eighteen, and he was still registered to vote in Moultonborough (he voted in Moultonborough in the 2012 election, a month before the hearing in this case). Matthews also held a New Hampshire driver’s license and his vehicle was registered in New Hampshire (his decision to register his car in New Hampshire was motivated by his desire to avoid buying automobile insurance, which is required in Massachusetts). Matthews typically notifies his mother in advance of using the Moultonborough house for permission to stay there. Following the 2011 incident involving Matthews' dog, petitioners sought a declaratory judgment that Vermont Mutual was responsible for any damages that might recover from Matthews. After a bench trial, the court denied the petition and the subsequent motion for reconsideration, finding that the policy did not contemplate Matthews as a resident of the Moultonborough house. Finding no reversible error, the Supreme Court affirmed the superior court's judgment. View "White v. Vermont Mutual Insurance Company" on Justia Law

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Appellant, Century Indemnity Company (CIC) appealed a Superior Court order that granted Respondent Roger Sevigny, Commissioner of Insurance and Liquidator of the Home Insurance Company (Home) an award of statutory prejudgment interest on certain monies owed to Home by CIC. Home is an insurance company, organized under the laws of New Hampshire, which was declared insolvent and placed in liquidation in 2003. CIC is an insurance company organized under the laws of Pennsylvania. CIC and Home have a set of co-insurance and reinsurance relationships. In prior litigation, the Supreme Court held that an asserted $8 million setoff claim by CIC, which had been waived and then reacquired by CIC in a pair of settlement agreements with PECO, was impermissible under New Hampshire law. The New Hampshire Court explicitly declined, without prejudice, to decide the issue at issue here: whether Home’s estate was entitled to prejudgment interest on the payments CIC wrongfully withheld based upon setoff. The Court denied CIC’s motion for reconsideration in the "Home IV" appeal; after remand, the Liquidator filed a motion in superior court for interest on amounts withheld by CIC based upon improper setoff, to which CIC objected. CIC removed the PECO setoff from its monthly statement to Home and paid the previously withheld $8 million to the Liquidator. The trial court entered an order granting the motion and finding that Home was entitled to prejudgment statutory interest under RSA 524:1-a (2007) accruing from October 2007 (the date of the Liquidator’s letter notifying CIC of his determination to disallow the PECO setoff). This appeal followed. Finding no reversible error in the Superior Court's order, the Supreme Court affirmed.View "In the Matter of the Rehabilitation of the Home Insurance Company" on Justia Law

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Respondents The Local Government Center, Inc. (LGC), Local Government Center Real Estate, Inc., Local Government Center Health Trust, LLC, Local Government Center Property-Liability Trust, LLC, Health Trust, Inc., New Hampshire Municipal Association Property-Liability Trust, Inc., LGC-HT, LLC, and Local Government Center Workers' Compensation Trust, LLC, appealed a final order of a presiding officer of petitioner the New Hampshire Bureau of Securities Regulation (Bureau), finding that they violated RSA 5-B:5, I(c) (2013) and required, among other things, HealthTrust to return $33.2 million to its members, P-L Trust to return $3.1 million to its members, and P-L Trust to transfer $17.1 million to HealthTrust. After its review of the matter, the Supreme Court agreed with one of respondents' arguments with respect to the purchase of reinsurance: the presiding officer erred by requiring HealthTrust to purchase it. The Court affirmed the presiding officer in all other respects, and remanded the case for further proceedings on the reinsurance issue. View "Appeal of the Local Government Center, Inc." on Justia Law