2007-628, MARILYN BATES v. VERMONT MUTUAL INS. CO.

The respondent, Vermont Mutual Insurance by Milford Mill Limited Partnership (MMLP). MMLP was insured through a Mill, the apartment complex where she lived in Milford. Milford Mill is owned December 5, 2004, Bates was injured when she fell down the steps at Milford The record supports, or the trial court found, the following. On

Marilyn Bates’ cross-motion for summary judgment. We affirm.

, J.) of its summary judgment motion, and the grant of petitioner

Dempsey THE SUPREME COURT OF NEW HAMPSHIRE on the brief, and Mr. Burt orally), for the respondent.

orally), for the petitioner.

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as alleging negligence and seeking damages for her injuries. During the discovery p. 2 On February 7, 2006, Bates brought suit against MMLP and Stewart,

arrange a meeting. feel a meeting would be appropriate, pleased contact this writer to [Vermont Mutual] to change their position in this matter and you event that you or your client have information that would cause settlement with your client concerning the injury sustained. In the Accordingly, [Vermont Mutual] will not be making any voluntary

. . . .

causing your client to fall. . . . determined that there was no negligence on the part of [MMLP] in

We have completed our investigation into this accident and have

correspondence to us on April 25, 2005.

meeting with your client and your acknowledgement through This follows our request of March 29, 2005 concerning a possible

One month later, Vermont Mutual’s representative responded:

to discuss a meeting with [Bates]. the information you requested. Thereafter, I intend to contact you I will be meeting with [Bates] in the coming weeks and will obtain

replied: review the circumstances of the accident. On April 25, 2005, Bates’ counsel had been incurred, and that Bates meet with Vermont Mutual in order to responded, requesting that Bates’ counsel forward any medical expenses that By letter dated March 29, 2005, a representative for Vermont Mutual

or other documentation you may have relating to the injury.” they contact us.” He also requested that Stewart provide “any accident reports be forwarded “to the insurance carrier or the appropriate person and ask that nursing home stays. Bates’ counsel requested that the letter and photographs of her injuries, including photographs of the same, and her hospital and Property Management (Stewart) — the management company for Milford Mill — By letter dated March 16, 2005, Bates’ counsel informed Stewart

December 23, 2004. Bates’ medical bills totaled approximately $16,080. Harborside nursing home in Milford; and she returned to Milford Mill on was an in-patient for five days; she was subsequently transferred to the called; Bates was transported to St. Joseph’s Hospital in Nashua, where she businessowners policy (policy) issued by Vermont Mutual. Paramedics were considered clear and unambiguous, two parties cannot reasonably

p. 3 unambiguous policy language. For exclusionary language to be free to limit its liability through an exclusion written in clear and provision or public policy to the contrary, an insurance company is

of the insured and against the insurer. Absent a statutory interpretation favors coverage, the policy will be construed in favor is reasonably susceptible to more than one interpretation and one language its natural and ordinary meaning. However, if the policy favorable to the non-moving party. Philbrick v. Liberty Mut. Fire Ins. Co. the terms of the policy are clear and unambiguous, we accord the 3 the affidavits, and all inferences properly drawn from them, in the light most upon a more than casual reading of the policy as a whole. Where In reviewing the trial court’s grant of summary judgment, we consider as would a reasonable person in the position of the insured based question of law. We construe the language of an insurance policy insurance policy. Interpretation of an insurance policy is a II Resolution of this dispute requires us to interpret the Mutual’s motion and granted Bates’ cross-motion. This appeal followed. no material breach of the policy. The trial court ultimately denied Vermont prejudiced by her alleged failure to provide it with timely notice, and there was complied with the policy’s notice requirements, Vermont Mutual had not been not timely reported her medical expenses to it. Bates countered that she had to provide Bates with the policy’s medical expense coverage because she had for summary judgment. Vermont Mutual contended that it was not obligated coverage for her injuries, under its policy issued to MMLP. Both parties moved establish that Vermont Mutual was required to provide medical payment Bates then brought this petition for declaratory judgment, seeking to

facts de novo. Id. Further: judgment is proper. Id. We review the trial court’s application of the law to the moving party is entitled to judgment as a matter of law, the grant of summary N.H. 389, 390 (2007). If there is no genuine issue of material fact, and if the

payment of the $5,000 medical expense coverage; Vermont Mutual refused. Bates reported her medical expenses to Vermont Mutual and requested included $5,000 of medical expense payment coverage. On June 20, 2006, policy period ran from December 20, 2003, to December 20, 2004, and declarations page of its policy with Vermont Mutual, which indicated that the OneBeacon remitted that amount to Bates. MMLP provided a copy of the

included $10,000 of medical expense payment coverage. On request, Stewart had a policy with OneBeacon Insurance Company (OneBeacon), which phase of that action, MMLP and Stewart disclosed their insurance information. p. 4 (b) The expenses are incurred and reported to us within one

during the policy period;

(a) The accident takes place in the “coverage territory” and (3) Because of your operations; provided that:

the accident, it does not specify who that the medical expenses be reported to Vermont [Mutual] within one year of The trial court initially noted that while the “notice provision requires

(Emphasis added.) (2) On ways next to premises you own or rent; or denying coverage. If the policy is an occurrence-based policy and Vermont [Mutual] cannot claim failure to report as a basis for expenses to Vermont [Mutual] within one year, the Court finds that

However, even if the petitioner was required to report her petitioner.

(1) On premises you own or rent;

[Mutual] cannot assert lack of notice as a defense against the [T]his notice provision would not apply to [Bates], and Vermont

b. We will make these payments regardless of fault. injury” caused by an accident: reasonably require.

The court concluded: expenses is ambiguous, and must be construed against [Vermont Mutual].” “Alternatively, the policy language concerning precisely who must report the required to report the expenses . . . within one year.” The trial court continued, was reasonable to infer that “MMLP . . . [was] the entity who would have been contract, she had not affirmatively agreed to the reporting requirement, and it a. We will pay medical expenses as described below for “bodily subsequently noted that because Bates was not a party to the insurance expense, by physicians of our choice as often as we must report the expenses.” It

coverage form, and reads, in pertinent part: (c) The injured person submits to examination, at our provided in subsection A.2, entitled “Medical Expenses,” of the liability year of the date of the accident; and The language of the Vermont Mutual businessowners policy at issue is

Id

. at 390-91 (citations and quotation omitted).

burden of proving lack of insurance coverage is on the insurer. disagree about its meaning. Pursuant to RSA 491:22-a (1997), the of a negligent act or omission during the coverage period, a

p. 5 occurrence policy in which coverage is triggered by the occurrence

under a claims[-]made policy. This is because, unlike an

insurance company prove it was prejudiced due to lack of notice

during the policy period. There is no requirement that an

that are made against the insured and reported to the insurer . . . Claims-made policies provide liability coverage for claims

must show prejudice to deny coverage under an occurrence policy. or made known to the insurer during the policy period. An insurer claim or occurrence itself is brought to the attention of the insured

event occurring during the policy period, regardless of whether the

insurance, an occurrence policy covers all claims based on an

however, may depend on the type of insurance. In liability

show prejudice to deny coverage. The burden to show prejudice,

Generally, if an insured gives late notice, the insurer must

policy. The trial court determined that the policy at issue is an occurrence

was fatal to her claim. an “occurrence” or “claims-made” policy and whether Bates’ delay in reporting the reporting deadline. We turn our focus, therefore, to whether the policy is expenses to Vermont Mutual on June 20, 2006, less than seven months after accident. It is equally clear, however, that Bates did report her medical medical expenses to Vermont Mutual within one year of her December 5, 2004 With respect to our assumption, it is clear that Bates failed to report her

required to report her medical expenses within one year of the date of her purposes of this appeal only, we assume without deciding that Bates was required to report, or if the notice provision is ambiguous. Instead, and for the giving late notice. Consequently, we need not decide here which party is policy, the insurer must show prejudice in order to deny coverage to a party However, we also agree with the trial court that if the policy is an “occurrence” expenses to Vermont Mutual within one year of the date of the accident. which party — the insured or the injured person — must report the medical We agree with the trial court that the notice provision fails to specify

(Citations and quotation omitted.)

order to deny coverage.

an insured gives late notice, the insurer must show prejudice in centered upon the differentiation in notice requirements outlined in Bianco p. 6 liability policy as either occurrence-based or claims-made has consistently upon the presence or absence of that term. Instead, our classification of a practicable,” our classification of a policy as occurrence-based has not turned Bianco Prof. Assoc. v. Home Ins. Co. policy at issue required that the insured provide notice of a claim “as soon as noted in its brief where we found a requirement of prejudice, the occurrence While we agree with Vermont Mutual’s contention that in those cases

coverage under subsequent policies. claim during the policy period, preventing the insured from seeking after the end of the policy period. but by December 4, 2005 at the latest — a full eleven and one-half months expenses be reported, not by December 20, 2004 (the end of the policy period), unlike a claims-made policy, the medical expenses section required that Bates’ fall occurred on December 4, 2004. As in the case of an occurrence policy, and the policy period ran from December 20, 2003, to December 20, 2004. Bates’ section and the policy are more correctly classified as occurrence-based. Here, and as would a reasonable person, as we must, we believe that, on balance, the occurrence and a claims-made policy. However, reading the policy as a whole the medical expenses section of the policy is somewhat of a hybrid between an We tend to agree with the characterization, noted at oral argument, that prejudice when the insurer does not receive timely notice of the 6

Malpractice Joint Underwriting Assoc., 137 N.H. 680, 683 (1993). Guaranty Assoc., 151 N.H. 590, 591 (2004); Concord Hosp. v. N.H. Medical Executive Risk Indem., 151 N.H. 699, 703-04 (2005); Benson v. N.H. Ins. (claims-made), id. at 296 (emphasis added). See, e.g., Catholic Med. Ctr. v. made against the insured and “reported to the insurer during the policy period” the insurer during the policy period” (occurrence-based), or for claims that are occurrence itself is brought to the attention of the insured or made known to insured provide notice of a claim ‘as soon as practicable.’” occurring during the policy period, “regardless of whether the claim or necessarily include a presumption that the insurer suffers imposed a requirement of prejudice in cases where an insurer requires that an specifically, whether the policy provides coverage for claims based on an event is “the equivalent of a ‘claims-made’ policy,” and that this court “has only: Vermont Mutual contends that the medical expenses section of the policy

of when the act or omission occurred. Claims-made policies

discovered and brought to the attention of the insurer, regardless

quotations and brackets omitted).

claims[-]made policy provides coverage when the act or omission is reporting of her medical expenses, it was required to show that it had been p. 7 policy. As such, for Vermont Mutual to deny Bates coverage due to the late made. In sum, we agree with the trial court that the policy is an occurrence support for the classification of the policy as occurrence-based and not claimsthe “as soon as practicable” time frame of subsection A.2 provides further one year of the date of the accident.” What we do conclude, however, is that practicable” — introduces an ambiguity with that of subsection A.2 — “within required time frame of the notice requirement in subsection E.2 — “as soon as requirements. Perhaps most important, we also need not determine if the party’s medical expenses are included in those items subject to these reporting party subject to the reporting requirements of subsection E.2, or if an injured within one year of her accident, we again need not decide here if MMLP is the earlier assumption that Bates was required to report her medical expenses As in the case of subsection A.2 (“Medical Expenses”), and given our

(2) Notify us as soon as practicable

date received; and (1) Immediately record the specifics of the claim or “suit” and the

(Emphases added.)

must: b. If a claim is made or “suit” is brought against any insured, you

claim or defense against the “suit” . . . . (3) Cooperate with us in the investigation, or settlement of the (2) Authorize us to obtain records and other information; out of the “occurrence” or offense. (3) The nature and location of any injury or damage arising

claim or “suit”;

witnesses; and

summonses or legal papers received in connection with the

(2) The names and addresses of any injured persons and

(1) Immediately send us copies of any demands, notices,

place;

c. You and any other involved insured must: “suit” as soon as practicable. You must see to it that we receive written notice of the claim or (1) How, when and where the “occurrence” or offense took .

a. You must see to it that we are notified as soon as practicable

extent possible, notice should include: an “occurrence” or an offense which may result in a claim. To the

Claim Or Suit,” provides, in pertinent part: form. Subsection E.2, entitled “Duties In The Event Of Occurrence, Offense, And Medical Expenses General Conditions,” of the policy’s liability coverage Further, we note the language contained in section E, entitled “Liability p. 8 [her] that she could

could determine medical expense coverage existed; (2) informed declarations page or any other part of the policy from which she Vermont [Mutual] never (1) provided [her] with a copy of the

Despite corresponding with [Bates] on three separate occasions,

Bates. Instead, we simply concur with the trial court that: information violated an “obligation of good faith and fair dealing,” as argued by Nor do we need to decide if Vermont Mutual’s failure to provide such request encompassed one for information concerning Vermont Mutual’s policy. relating to the injury.” Given our holding above, we need not decide here if that management company, requesting “any . . . other documentation you may have Finally, we note Bates’ counsel’s March 2005 correspondence, via the

of Bates’ cross-motion. court’s denial of Vermont Mutual’s summary judgment motion, and the grant cannot deny her coverage on that basis. Consequently, we affirm the trial prejudiced by the late reporting of Bates’ medical expenses, Vermont Mutual Having failed to meet its burden of demonstrating that it had been

crucial to [Vermont Mutual’s] investigation.” court’s conclusion that this “suggest[s] that [Bates’ medical] expenses were not settlement with Bates concerning her injuries. Again, we concur with the trial accident and that Vermont Mutual would not be making any voluntary informed Bates’ counsel that it had completed its investigation into the but prior to those actions actually occurring, Vermont Mutual’s representative Vermont Mutual’s request for Bates’ medical expenses and a meeting with her, expenses that [Bates] might seek to recover.” In May 2005, subsequent to consequently, Vermont Mutual “had at least some notice of the type of medical 8 forwarded to the insurance carrier. We concur with the trial court that,

and her counsel requested that the correspondence and photographs be nursing home. The correspondence included photographs of Bates’ injuries, Joseph’s Hospital, and her subsequent transfer to and stay at Harborside Mill and informed it of her injuries, her transport to and inpatient stay at St. Bates’ counsel had corresponded with the management company for Milford medical expenses.” Less than four months after Bates’ fall in December 2004, Vermont Mutual “was not prejudiced in any manner by the late disclosure of Based upon our review of the record, we agree with the trial court that

brackets omitted)). case of a claims-made policy is not an appropriate inquiry” (quotation and Bianco to be rebuttable, we specified, “prejudice for an untimely report in the (in denying plaintiffs’ request that we find the presumption of prejudice in prejudiced. Bianco, 144 N.H. at 2 p. 9 96; cf. Catholic Med. Ctr., 151 N.H. at 705 9

DALIANIS, DUGGAN and GALWAY, JJ., concurred.

Affirmed

the one-year reporting requirement. policy; or (3) when requesting [her] medical bills, apprised [her] of