2009-649, Donald Kierstead & a. v. State Farm Fire and Casualty Company

No. 2009-649

Grafton

appeal an order of the Superior Court (Vaughan BRODERICK, C.J. The petitioners, Donald and Marilyn Kierstead, under a policy issued by the respondent, State Farm Fire and Casualty The following facts appear in the record. The petitioners were insured

Bouchard, Kleinman & Wright, P.A.

Sheehan Phinney Bass + Green, P.A.

for declaratory judgment as untimely. We affirm.

respondent. and Kenneth G. Bouchard on the brief, and Ms. Tucker orally), for the

THE SUPREME COURT OF NEW HAMPSHIRE petitioners. and Karyl Roberts Martin on the brief, and Mr. Dunn orally), for the

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 they had retained counsel, State Farm “attempted to schedule the interview p. 2 two scheduled appointments” and that, when they informed State Farm that Farm’s investigation. State Farm explained that the petitioners had “canceled despite repeated attempts, the petitioners had not fully cooperated with State investigative unit “due to a number of suspicious loss indicators” and that, explaining that the petitioners’ claim had been referred to the special State Farm responded to the complaint in a May 14, 2008 letter

. . . asked of [them].” petitioners wrote that they had “complied with everything that [State Farm had] and “whether or not [State Farm] intend[s] to pay the claim or deny it.” The expected its investigation to take, whether additional information was required, February 2008, and asking the department to investigate how long State Farm claim, asserting that State Farm had failed to provide a status report since Hampshire Insurance Department about State Farm’s processing of their On April 30, 2008, the petitioners filed a written complaint with the New

12 months of the date of this notice.” will be forever barred by law if your writ is not served on the company within “Pursuant to New Hampshire Law (RSA 407:15) any action against [State Farm] reservation of rights and which, like the December 12, 2007 letter, stated: explained that State Farm was investigating the petitioners’ claim under a On December 20, 2007, State Farm sent each petitioner a letter, which

notice.” your writ is not served on the company within 12 months of the date of this (RSA 407:15) any action against [State Farm] will be forever barred by law if “under a Reservation of Rights” and stated: “Pursuant to New Hampshire Law demand letter explained that State Farm was handling the petitioners’ claim petitioners submit a sworn proof of loss, as required by their policy. The Also on December 12, 2007, State Farm sent a demand that the

action must be started within one year after the date of loss or damage.” brought unless there has been compliance with the policy provisions. The investigation. The reservation of rights letter also stated: “No action shall be loss, a signed, sworn proof of loss, and to cooperate fully with State Farm’s loss, including the duty to submit to State Farm, within sixty days after the letter explained, in detail, the duties imposed upon the petitioners following a have cooperated with [State Farm] in [its] investigation of th[eir] claim.” This for the petitioners’ loss because “[i]t is questionable whether [the petitioners] was “a question as to whether [State Farm] is obligated under the . . . policy” reservation of rights letter to the petitioners’ attorney, which stated that there “complete fire damage.” On December 12, 2007, State Farm issued a became effective, the petitioners’ residence, which State Farm insured, suffered Company (State Farm). On November 20, 2007, one week after the policy a construction that would permit recovery. Berry v. Watchtower Bible & Tract p. 3 determine whether the allegations in the petition are reasonably susceptible of In reviewing a trial court’s grant of a motion to dismiss, our task is to

granted, and this appeal followed. judgment. State Farm moved to dismiss the petition, which the trial court January 16, 2009, the petitioners filed the instant petition for declaratory and (3) they violated the fraud provisions of the insurance policy. On or about intentionally set; (2) the petitioners failed to cooperate with the investigation; had decided to deny coverage for the claim because: (1) the fire was verbally on September 11, 2008, and in writing on September 15, 2008, that it petitioners may have committed fraud. State Farm notified the petitioners may not have cooperated, the loss may not have been accidental, and the questions about whether it was obligated on the claim because the petitioners On September 2, 2008, State Farm notified Donald Kierstead that it had

in the words of the statute considered as a whole. Zorn v. Demetri 3 interpretation, we are the final arbiters of the legislature’s intent as expressed petition was untimely pursuant to RSA chapter 407. In matters of statutory The petitioners first argue that the trial court erred by ruling that their provisions harmoniously. Id. (1995). Insofar as reasonably possible, we will construe the various statutory their underlying policies. Nashua School Dist. v. State, 140 N.H. 457, 458 the relevant statutes, construing them, where reasonably possible, to effectuate 340 (1996). Our analysis must start with consideration of the plain meaning of the overall statutory scheme. Appeal of Ashland Elec. Dept., 141 N.H. 336, 437, 438 (2009). We interpret statutes not in isolation, but in the context of

dismiss. In the Matter of Lemieux & Lemieux still investigating their claim to determine its validity., 157 N.H. 370, 373 (2008). a basis for legal relief, we must hold that it was improper to grant the motion to nor rejected it. State Farm informed the petitioners in July 2008 that it was petitioners’ proof of loss and informed the petitioners that it neither accepted facts in the petition against the applicable law, and if the allegations constitute petitioners’ favor. Id On June 24, 2008, State Farm acknowledged that it had received the. We then engage in a threshold inquiry that tests the be true and construe all reasonable inferences drawn from those facts in the Soc., 152 N.H. 407, 410 (2005). We assume all facts pleaded in the petition to

May 28, 2008. to do. The insurance department forwarded this letter to the petitioners on petitioners to submit certain additional documentation, which they had failed interviews were finally conducted in February 2008, it had asked the through their attorney without success.” State Farm explained that after the p. 4 RSA 407:22. Janvrin date of the notice, and not from the date of the insured’s loss as set forth in We have also held that the twelve-month period begins to run from the

legislature provided that the twelve months limitation period cannot begin to

108 N.H. at 384. limit because he was ignorant of such a limitation.” Hebert Manufacturing Co., removes the possibility of an insured failing to bring an action within the time Merrimack Mut. Fire Ins. Co., 125 N.H. 269, 271 (1984). “Such specific notice limitation.” Hebert Manufacturing Co., 108 N.H. at 384; see Maguire v. limitation on actions against it only if it gives the insured specific notice of the provision in the standard policy, section 22 . . . .” Hebert Manufacturing Co. v. purpose of RSA 407:15 . . . is to allow the insurer to place a twelve month apparent internal inconsistency in the statute between section 15 . . . and the predecessors were enacted for the benefit of the insured.” Id bring his action at any time.” We have previously recognized that there is “an. “The obvious Janvrin served on the company within 12 months next after such notification, he may, 128 N.H. at 556. We have explained that “RSA 407:15 and its requiring an insurer to give notice of this period before relying upon it. See notify the insured that any action will be forever barred by law if his writ is not 407:22 as setting forth the twelve-month limitations period and RSA 407:15 as RSA 407:15 (2006) provides: “Unless the [insurance] company shall Dev. Co., 146 N.H. 35, 38 (2001) (quotation omitted), we have construed RSA results and effectuate the legislative purpose of the statute,” Nault v. N & L they do not contradict each other, and so that they will lead to reasonable obligation to construe statutes that deal with similar subject matter “so that Northern Assurance Co., 108 N.H. 381, 385 (1967). In keeping with our

found in RSA 407:22 (Supp. 2009). See or delivered” in this state conform “to all the provisions of the policy form” complied with and the action is started within one year after the date of loss.” RSA 407:2 (2006) requires that all fire insurance policies “made, issued stated: “No action can be brought unless the policy provisions have been petitioners’ State Farm policy contained a similarly worded provision, which and unless commenced within 12 months next after inception of the loss.” The equity unless the requirements of this policy shall have been complied with, policy for the recovery of any claim shall be sustainable in any court of law or contains a provision entitled “Suit,” which provides: “No suit or action on this N.H. 555, 556 (1987). The standard policy form set forth in RSA 407:22 Mut. Ins. Co., 146 N.H. 200, 202 (2001); Janvrin v. Union Mut. Ins. Co., 128

chapter 407, we will assume, without deciding, that this is the case. petitioners’ policy was a fire insurance contract within the meaning of RSA and suits thereon. Because the parties do not appear to dispute that the According to its title, RSA chapter 407 governs fire insurance contracts coverage.” Binda v. Royal Ins. Co. p. 5 coverage by an insurer before an insured [may] seek a determination of judgment statute, RSA 491:22 (2010), “does not . . . require an actual denial of necessarily, would have been premature. To the contrary, the declaratory judgment action before State Farm actually denied them coverage, it, The petitioners contend that had they brought their declaratory

more than casual reading of the policy as a whole,” Bates v. Vt. Mut. Ins. Co. “as would a reasonable person in the position of the insured based upon a judgment petitions. Similarly, construing the language of the petitioners’ policy claims for damages, but also applies to claims in equity, such as declaratory 5 “sustainable in any court of law or equity.” Thus, RSA 407:22 is not limited to RSA 407:22, by its express terms, pertains to “any claim” that is at 617. “[T]he statute requires only that the insured know or be able to denial of coverage is not necessary to render declaratory relief justiciable. Id.

merely the notice provision. Janvrin The petitioners’ reliance upon RSA 407:15 is misplaced because it is

action for damages. understood that this limitation applied to any possible action, not just an “within one year after the date of loss.” A reasonable insured would have provision specifically states that “[n]o action” may be brought unless brought applies to all possible legal actions, not just actions at law. The policy provision limiting the time within which an insured may sue State Farm 157 N.H. 391, 394 (2008) (quotation omitted), we conclude that the policy

an action against the insurer was only intended to apply to a writ policy.” They assert that “[r]ead in context, this time limitation on commencing petition for declaratory judgment to determine coverage under a fire insurance governs both actions at law and equity. 407:15 that the 12-month limitation period was not intended to apply to a The petitioners argue that “[i]t is clear from the plain language of RSA period, id., and pursuant to their plain language, this limitations period limitation period. RSA 407:22 and the policy at issue provide the limitations

disputed.” arising from the insurer’s failure to pay a loss for which coverage was not

any of these dates, their January 2009 petition was untimely. December 20, 2007) or from the date of the fire (November 2007) because using date on which State Farm gave notice to the petitioners (December 12, 2007 or In this case, it is immaterial whether the twelve-month period runs from either provisions contained in the form of the policy set out in the new section 22.”). Legislature intended the new section 15 . . . to be controlling over the Hebert Manufacturing Co., 108 N.H. at 385-86 (“It seems probable that the run until the insurer gives the insured proper notice of the limitation.”); see was triggered. See p. 6 latest, therefore, the petitioners’ duty to file their declaratory judgment petition have discovered the facts giving rise to a coverage dispute. By then, at the State Farm’s May 14, 2008 letter, the petitioners knew or reasonably could cooperation, as well as about the fire’s origins. By no later than their receipt of department complaint, State Farm again cited concerns about their level of Similarly, in its May 14, 2008 response to the petitioners’ insurance

constituted a failure to comply with the policy. was incomplete and inadequate and that the failure to provide proof of loss the material they provided in lieu of completing the requisite proof of loss form beyond the statute of limitations deadline,” but “is typically available only if the On May 5, 2008, for instance, State Farm notified the petitioners’ counsel that to equitable tolling. Equitable tolling allows a party “to initiate an action have concerns about the petitioners’ level of cooperation with its investigation. The petitioners next assert that the twelve-month limitation was subject Subsequent correspondence made clear that State Farm continued to

the date of this notice.” This notice complies with RSA 407:15. barred by law if your writ is not served on the company within 12 months of Hampshire Law (RSA 407:15) any action against [State Farm] will be forever letter, on December 12, 2007, and December 20, 2007, that “[p]ursuant to New 6 RSA 407:15. The record shows that State Farm notified the petitioners, by month limitations period because it failed to give proper notice as set forth in The petitioners next argue that State Farm may not rely upon the twelve-

the investigation.” them that “State Farm might deny coverage” if they “failed to cooperate with investigation of th[eir] claim.” The petitioners concede that this letter notified questionable whether [the petitioners] have cooperated with [State Farm] in [its] Farm] is obligated under the . . . policy” for their loss because “[i]t is Farm notified the petitioners that there was “a question as to whether [State In State Farm’s original December 2007 reservation of rights letter, State

In Binda

declaratory judgment petition. alerted to the facts giving rise to a coverage dispute long before they filed their Id. at 616-18. Here, the record shows that the petitioners were sufficiently and, thus, to trigger the insured’s duty to file a declaratory judgment petition. letter sufficed to notify the insured of the facts giving rise to a coverage dispute

, for instance, we held that an insurer’s reservation of rights

short of an insurer’s actual denial of coverage. Id. 616. The statute’s broad language embraces triggering circumstances that fall reasonably discover facts which form the basis of a coverage dispute.” Id. at p. 7 DALIANIS, DUGGAN, HICKS and CONBOY, JJ., concurred.

Affirmed

reasonable. Id

Therefore, we hold that the trial court did not err by failing to apply it. this theory. See Hanover Ins. Co. v. Grondin, 119 N.H. 394, 398 (1979). have not sufficiently alleged the elements required to sustain the application of was either improper, materially incorrect or misleading. Id do so. Petition of Perkins. The petitioners concealment, knew or should have known that the conduct or representation contrary to one previously taken when it would be unfair to allow the party to the time of his or her reliance or at the time of the representation or limitations period. Estoppel precludes one party from asserting a position State Farm was equitably estopped from relying upon the twelve-month. Reliance is unreasonable when the party asserting estoppel, at the reliance upon the representation or concealment must have been Finally, the petitioners argue that the trial court should have ruled that induced to rely upon the representation to his or her injury. Id. In addition, induced the other party to rely upon it; and (4) the other party must have been (3) the representation must have intentionally, or through culpable negligence, representation was made must have been ignorant of the truth of the matter; discovery rule. See material facts made with knowledge of those facts; (2) the party to whom the limitations period for “personal actions,” and which codifies the common law equitable estoppel must prove: (1) a false representation or concealment of construing RSA 508:4, I (2010), which provides a three-year statute of, 147 N.H. 652, 655 (2002). A party claiming coverage under their policy. To support their argument, they rely upon cases discovered that a declaratory judgment action was necessary to determine should not have commenced to run until they knew or reasonably should have The petitioners next contend that the twelve-month limitations period

We, therefore, decline to apply the “discovery rule” under the facts of this case. the limitations periods set forth in RSA chapter 407, and we are aware of none. (2005). The petitioners, however, provide no authority for applying this rule to

waiver of any right to deny them coverage. their claim under a reservation of rights and that its investigation was not a Farm notified the petitioners on numerous occasions that it was investigating Forbes Farm P’ship, 146 N.H. at 204. In fact, the record shows that State “in some extraordinary way” from exercising their rights or misled them. See omitted). Here, the petitioners failed to show that State Farm prevented them is actively misled by the defendant about the cause of action.” Id. (quotation (2005) (quotation omitted). Equitable tolling “applies principally if the plaintiff rights.” Portsmouth Country Club v. Town of Greenland, 152 N.H. 617, 623 claimant was prevented in some extraordinary way from exercising his or her