2009-169, Kimberly Balamotis v. H. Dexter Hyland, II d/b/a State Farm Agent

The plaintiff, Kimberly Balamotis, appeals a decision of the

Kenneth G. Bouchard on the brief, and Mr. Maxwell orally), for the defendant. Bouchard, Kleinman & Wright, P.A., of Hampton (Sabin R. Maxwell and

Thomas Morgan, of Salem, on the brief and orally, for the plaintiff. to press. Errors may be reported by E-mail at the following address:

H. DEXTER HYLAND, II d/b/a STATE FARM AGENT

page is: http://www.courts.state.nh.us/supreme. KIMBERLY BALAMOTIS

No. 2009-169 editorial errors in order that corrections may be made before the opinion goes Rockingham Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

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

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as premises and make appropriate insurance adjustments so that the plaintiff p. 2 loss which occurred on July 27, 2005. or which hereafter may be sustained by me in consequence of a fire injury and all consequential damage, which heretofore have been

adequate”; that the defendant advised the plaintiff that “he would review the

demands whatsoever for, upon or by reason of any damage, loss or

coverage and was advised by the defendant that the insurance coverage was plaintiff “specifically questioned the defendant about the adequacy of insurance purchase an appropriate amount of insurance; that during construction, the assigns, from any and all action, causes of action, claims and

then being constructed; that the plaintiff arranged through the defendant to said claim above referenced. Companies, its heirs, administrators, executors, successors and the undersigned under policy number 29-J022-618 arising out of age) do hereby release and forever discharge State Farm Insurance whereof is hereby acknowledged, I, Kim Balamotis (being of lawful

the claim against an insurance agent for failure to procure requested coverage

building. The release provided:

the insurance on her property through the defendant to cover a new residence solely as one in tort. The writ averred, in essence, that the plaintiff purchased release is executed in full settlement and satisfaction of rights of (Md. 1986). We note that on appeal, however, the plaintiff refers to her action and other good and valuable considerations to me paid, the receipt cert. denied, 510 A.2d 260

essentially contractual because the tort is derived from a contractual relation, Assoc., 506 A.2d 268, 271 (Md. Ct. Spec. App.) (noting that “[a]lthough asserting claims in contract and in tort. Cf. University Nurs. Home v. Brown & specified amount for loss of use, in addition to the claimed value of the In July 2008, the plaintiff instituted this action against the defendant, $447,340.90, which included the cash value of the building’s contents and a were $357,839.20. The total amount claimed in the proof of loss was

liability, but is a compromise of a disputed claim and that this payment of said amount is not to be construed as an admission of Thousand Three Hundred Forty and 90/100 Dollars ($447,340.90) IT BEING FURTHER AGREED AND UNDERSTOOD, that the

actual cash value and the replacement cost of the building at the time of loss

IN CONSIDERATION of the sum of Four Hundred Forty seven

a second proof of loss and a release. The proof of loss stated that both the State Farm eventually settled, and on January 19, 2007, the plaintiff executed plaintiff sued State Farm for failing to pay under the policy. The plaintiff and claim for, inter alia, $675,000 for damage to the building. In July 2006, the On November 22, 2005, the plaintiff executed a proof of loss making a distinct cause of action against” him. Nevertheless, we address this issue as it

defendant states in his brief that “it is unquestioned that [the plaintiff] alleges a contract action against State Farm, does not appear to be disputed, as the suit against the defendant is “a separate and distinct action” from her prior

judgment is proper. We review the trial court’s application of the summary judgment for the defendant based upon the proof of loss because, entitled to judgment as a matter of law, the grant of summary is no genuine issue of material fact, and if the moving party is

We first address the release. The plaintiff’s initial contention, that her

Bates v. Vt. Mut. Ins. Co. through its exclusive agent for this fire loss., 157 N.H. p. 3 391, 394 (2008) (citations omitted). Hampshire Rule of Evidence 408. disingenuous to attempt to obtain more money from State Farm

in the release. The plaintiff also argues that the trial court erred in granting contract action” against State Farm, and because the defendant is not named them, in the light most favorable to the non-moving party. If there this action. The trial court found both grounds “meritorious,” concluding: action against the defendant “is a separate and distinct action from the [prior] [W]e consider the affidavits, and all inferences properly drawn from loss for an amount less than the available coverage precludes her recovery in proof of loss filed by the plaintiff; and (2) the plaintiff’s submission of a proof of standard of review: In an appeal of a grant of summary judgment, we employ the following

admission; and (2) introduction of settlement evidence is prohibited by New might make against her agent. . . . It would in fact now be inter alia: (1) the court did not allow for explanation of an evidentiary

summary judgment for the defendant based upon the release because her tort On appeal, the plaintiff argues that the trial court erred in granting (1) as an exclusive agent of State Farm, he was covered under the release or

underinsured.” exclude from any release or proof of loss any future claim that she for was inadequate, then she had an affirmative obligation to If the plaintiff truly believed that the amount that she was settling

The defendant moved for summary judgment, arguing essentially that:

not review or otherwise correct what the plaintiff recognized as being would be fully insured”; and, that despite such assurances, “the defendant did of the plaintiff’s uninsured loss. p. 4 exceed her insurance coverage, the defendant is allegedly liable for some or all under the policy; in other words, assuming that the plaintiff’s actual damages

the portion of the plaintiff’s damages from the fire loss that were not covered

liability for failure to adequately insure the property theoretically encompasses settled for those limits as she understood them to be. The defendant’s alleged rendered against the defendant, is not before us and, in any event, does not the policy extends only to the policy limits, and the plaintiff avers that she

has been released from liability for, any negligence judgment that may be alleged wrongs. In other words, State Farm’s liability for failure to pay under failure to procure a policy in conformance with plaintiffs’ request.

the issues presented herein. Whether State Farm could be held liable for, or those damages are attributable to State Farm’s and the defendant’s separate defendant’s and State Farm’s respective liability for purposes of our analysis of We have addressed only the theoretical bases for and extent of the and distinct from the injury which resulted in [the broker’s] alleged

all of the plaintiff’s damages arise from the same fire loss, distinct portions of inadequate insurance policy). While the defendant repeatedly points out that the insurance policy caused injury to plaintiffs that was separate N.E.2d at 368 (insurer and agent not joint tortfeasors on claims related to 156 N.H. 110, 116 (2007) (quotation omitted); see Clear-Vu Packaging, 434 not cause a “single, indivisible harm.” Tiberghein v. B.R. Jones Roofing Co., injuries is that they cannot be considered joint tortfeasors, as their conduct did One implication of the insurer and agent causing separate and distinct

Clear-Vu Packaging, 434 N.E.2d at 368 (citation omitted).

claim against the insurer for payment under the policy. As stated in procure insurance as instructed by the insured is separate and distinct from a on breach of contract. The alleged failure of [the insurer] to pay on A suit for failure to pay under a policy of insurance is one founded

Packaging: University Nurs. Home, 506 A.2d at 276. To the same effect is Clear-Vu entire loss. . . . Clearly, these would give rise to two separate damage claims.” written and [the agent’s] failure to procure insurance adequate to cover the to pay the damages claimed under the inadequate insurance contract as Nursing Home: “Two separate wrongs were alleged . . . : [the insurer’s] failure

(Ill. App. Ct. 1982), that a claim against an insurance agent for failure to and Clear-Vu Packaging v. National Union Fire Insurance Co., 434 N.E.2d 365 We agree with the cases cited by the plaintiff, University Nursing Home

to bar this action. is relevant to our discussion of whether the release operates as a matter of law to that in

p. 5 without some support or proffered explanation. that such a result necessarily follows, nor are we willing to make such a leap

administrators, executors, successors and assigns.” Thus the release is similar

this proposition. He cites

purport to release anyone other than ‘National, its successors and assigns.’” a release of State Farm would necessarily encompass” him. We cannot say

of State Farm, exclusive or otherwise, but rather refers only to “its heirs,

release.” Neither of the cases the defendant cites, however, provide support for Farm” and, therefore, “is part and parcel of the entity specifically named in the the release.” Specifically, he contends that he is an “exclusive agent of State Id. The court held that the release did not, by its terms, release the plaintiff’s

National Union Fire Insurance Company of Pittsburgh, PA (National), did “not He then asserts, without authority, that “[g]iven the nature of this relationship, Packaging, 434 N.E.2d at 367. There, a release given to the plaintiff’s insurer,

Clear-Vu Packaging, upon which the plaintiff relies. See Clear-Vu

We further note that the release does not even purport to cover “agents”

releases the others). (explaining logic behind common law rule that release of one joint tortfeasor with State Farm, [he] must be considered part of State Farm for purposes of Cf. Wheat, 79 N.H. at 151

establish that as an exclusive agent of State Farm, his primary duties are to it. (Mich. Ct. App. 2008), appeal denied, 762 N.W.2d 165 (Mich. 2009), solely to (7th Cir. 1996), and Genesee Foods v. Meadowbrook, 760 N.W.2d 259, 263

[his] relationship with State Farm, and the context of the [p]laintiff’s settlement Am. Jur. 2d defendant. The defendant argues, however, that “[b]ased on both the nature of As the plaintiff correctly notes, the release does not explicitly name the

Lakes Region Gen’l Hosp., 123 N.H. 760, 764-65 (1983). release bars later suit against a party not named in the release.” Gagnon v. against unspecified strangers, is not dispositive of the question whether the comprehend all claims arising from a particular incident, including claims Wheat, 79 N.H. at 152. We have also held that even a release that “purports to him loss where the additional tortfeasors “were not parties to the release.” injured party’s suit against additional tortfeasors whose successive acts caused we held that the release of one tortfeasor did not “in and of itself” bar the

Release § 34 (2001). Thus, in Wheat v. Carter, 79 N.H. 150 (1919),

subject to exception, a party is not released unless named in the release.” 66 the defendant because he is not named therein. “[G]enerally speaking and We now turn to the plaintiff’s assertion that the release does not cover

insurance company releases the agent”). there are two wrongs giving rise to two separate damages, a release of the judgment against [the agent] . . . did not support the conclusion that where case that “may be the basis for [the insurer] being ultimately liable for any affect our decision. See University Nurs. Home, 506 A.2d at 277 (noting that joint tortfeasors, who by definition were liable for a “single, indivisible harm.” the claim for the injury sustained which bars further actions.” p. 6 relates follows as [a] matter of law.” The rule most clearly applied in the case of

We disagree. of the issue of full compensation”). minds of the parties. the full measure of whatever damages she may have against [the defendant].”

to a subsequent suit against a joint wrongdoer. It is rather the satisfaction of it was given in exchange for full compensation for the damages to which it

twice for the same loss, recover in the second suit” and it would be “inequitable” to allow him to recover

release of one joint tortfeasor should work a discharge of the others, regardless the release so broadly as to defeat a valid claim not then in the fire loss, the [p]laintiff has also effectively represented that she has recovered at 283; have on the insurance policy. We cannot interpret the language of see Colby, 86 N.H. at 572 (expressing no opinion upon “[w]hether a intended to release only National Union from any liability it might Stacy, 83 N.H.

must constantly be borne in mind that the release is not in and of itself a bar in the release from which a different intent may be inferred, the conclusion that Company, 83 N.H. 281 (1928) (superseded by statute on other grounds), “It (altering rule for joint tortfeasors). Nevertheless, we cautioned in Stacy v.

the plaintiff “has been fully compensated for the loss for which he is seeking to a bar to a suit against the others,” Wheat, 79 N.H. at 150, on the theory that Wheat that it was “settled in this state that the release of one joint tort-feasor is Tiberghein, 156 N.H. at 116 (quotation omitted). We therefore broadly stated in representing [therein] that she recovered the full amount in satisfaction of the against all potential parties, we believe it is clear that the parties

“It appears to be a rule established by several decisions that if there is nothing to the theory expressed in Colby v. Walker, 86 N.H. 568, 572 (1934): Although the defendant does not explicitly cite it, his argument adverts

“necessarily arise from the same fire loss addressed by the release” and “by action because any damages the plaintiff may claim against the defendant nor does it state it is in full satisfaction of all of plaintiffs’ claims The defendant also contends that the release subsumes the instant

case so broadly as to cover the defendant here. Id. at 368. We similarly decline to interpret the language of the release in this

Since the document in question does not mention the Alper Agency

insurance: insurance broker, Alper Agency, from a claim for failure to procure requested release her claims against the defendant as a matter of law. p. 7 satisfaction of the plaintiff’s claims under the policy, it does not operate to not provide full coverage.” Because the release purports only to be in

under the policy . . . based on the fact that [her] insurance was limited and did

settling [her] fire loss for the maximum amount that they were obligated to pay she relied upon representations by the defendant and State Farm that she “was loss exceed the amount she received in settlement from State Farm, but that

that it does not support the trial court’s grant of summary judgment. It is of

position, as explained in her affidavit, is that her actual damages from the fire

defendant or purport to be in full satisfaction of the plaintiff’s loss, we conclude

limits, which may be less than the amount of the loss. Indeed, the plaintiff’s fairly excludes all that does not come within the scope of the statement”).

wrongdoers only to the extent of such amount.” release did not bar suit, but “the amount paid for it discharges the other

Having determined that the release does not, by its terms, cover the summary judgment was erroneous. discussed, the rights of the plaintiff under the policy extend only to the policy under policy number 29-J022-618 arising out of” the fire loss. As previously at 573 (noting that “a specific statement [in the release] of what is dealt with loss, but rather “in full settlement and satisfaction of rights of the undersigned See Colby, 86 N.H.

tortfeasors. release either written or oral does not imply full satisfaction for the injury,” the First, as we previously noted, State Farm and the defendant are not joint

issue of material fact remains on that claim, and, therefore, the grant of

accordance with does not purport to be in full satisfaction of the damages sustained in the fire release of [the insurer] did not act as a release of [the agent]”). Thus, in 190, 192 (1927) (general rule superseded by RSA 507:7-h). The release here

Moreover, even in cases of joint tort liability, the rule was that “when a plaintiff to State Farm does not operate as a matter of law to bar this action.

the second, and in fact received no compensation therefor. Because the plaintiff presented evidence of her actual damages, a genuine her settlement with State Farm did not fully compensate her for her loss.

Wheat, it would be open to the plaintiff to prove her claim that

[were] not concurrently liable for a single indivisible injury to plaintiffs, the because the insurer and the agent in that case were “not joint-tortfeasors and

Cf. Clear-Vu Packaging, 434 N.E.2d at 369 (concluding that

With these principles in mind, we conclude that the release given by the

evidence that he made no claim upon the first wrongdoer for damage caused by the release at bar was not conclusive and that the plaintiff could show by parol necessarily a bar to a second suit.” Wheat, 79 N.H. at 151. We then held that of two or more persons, most courts hold that the release of one is not stated in Wheat that “when the releasor’s loss is caused by the successive acts Where the wrongdoers are not joint tortfeasors, the case is less clear. We establishes that the plaintiff has been fully compensated.

p. 8 the real issue in whether the proof of loss bars this action is whether it

an intent or attempt to defraud the insurer.

the policy limits” is “immaterial.” We agree, since as the defendant contends, defendant now maintains that “whether her loss was in excess of or less than increase, we need not consider it a disputed issue of fact because the

not a binding admission and is open to explanation. We agree. against him. The plaintiff, on the other hand, asserts that the proof of loss is to the claimant, provided they were made in good faith and without liabilities. Statements made in proofs of loss are not conclusive as fraud, and to form an intelligent estimate of its rights and

the defendant arise from the same fire loss, she has no outstanding damages

the insurer an adequate opportunity to investigate, to prevent

coverage,” and that with that increase, her coverage exceeded the settlement a standard “increased dwelling coverage, equal to 20% of the initial dwelling claims representative for State Farm stating that the plaintiff’s policy contained

loss from the July 27, 2005 fire and, because any damages she claims against

surrounding the loss for which a claim is being made, and to afford The purpose of a proof of loss is to advise the insurer of facts

As the Court of Appeals of Texas has explained,

policy. Apparently informing the court’s conclusion was an affidavit by a

document establishes that the plaintiff was fully compensated for her entire said loss was . . . Building $357,839.20.” The defendant contends that this (3) “THE ACTUAL LOSS AND DAMAGE to the described property as a result of described property at time of loss was . . . $357,839.20” for the building; and . . . $357,839.20” for the building; (2) “THE REPLACEMENT COST of the (1) “THE ACTUAL CASH VALUE of the described property at time of loss was The proof of loss signed by the plaintiff on January 19, 2007 represented:

for the loss he is seeking to recover”). release would be barred if the injured party “ha[d] already been compensated the plaintiff filed a proof of loss for less than her coverage under the State Farm at 152 (noting that injured party’s suit against a tortfeasor not party to a prior

compensation.” intended to discharge [him] or that the plaintiff has received full

The second basis for the trial court’s grant of summary judgment is that

defense as a matter of law. however, the release is insufficient to establish either of these theories of

Gagnon, 123 N.H. at 765. At the summary judgment stage,

trial, to meet his burden of proving the affirmative defense that “the release was course open to the defendant, through the introduction of sufficient evidence at show by their proofs of loss the existence of same, nor is such a p. 9 defendant. that matter, detrimentally changed position in reliance upon the proof of loss. for the same loss,” he fails to identify any way in which he, or State Farm for

failed to obtain sufficient insurance” coverage.

limits, at the time the settlements were entered into they did not conclusive admission precluding her from proving greater damages against the

compensated under her policy, and now attempt to hold the [d]efendant liable

their insurers and agent on grounds that the agent “negligently and carelessly

this case, persuasive. In

greater amount”). While plaintiffs now assert a loss in excess of the policy erred in treating the plaintiff’s statement of damages in the proof of loss as a The court found the proof of loss executed by the plaintiffs fatal to their claim: submitted in the proof of loss from State Farm, an indication that she was fully Omscolite, 132 N.W.2d at 155.

policy limits under their policies, sought to recover an additional amount from prejudice.” Omscolite, the plaintiffs, after having been paid the N.W.2d 154 (Mich. 1965), which the defendant considers “strikingly similar” to Finally, we do not find Omscolite Corp. v. Federal Insurance Co., 132

action [against the bailee allegedly responsible for the coat’s loss] to recover a

court did not first find estoppel as a matter of law on summary judgment, it Olszak v. Peerless Ins. Co., 119 N.H. 686, 690 (1979). Thus, where the trial prejudicial to the [d]efendant for the [p]laintiff to have accepted the amount it, and its existence is a question of fact to be resolved by the trier of fact.” In addition, “[t]he burden of proving estoppel is upon the party asserting

concealment of material fact induced the other party “to act upon it to his disadvantage”). court was “unable to see in what way [the insurer] ha[d] acted to [its] 1932) (insured not estopped to deny or explain statement in proof of loss where Cf. A. W. Sewell Co. v. Commercial Casualty Ins. Co., 15 P.2d 327, 330 (Utah

[with the insurer], while an admission against interest, does not preclude an

omitted). Although the defendant argues that “it is fundamentally unfair and

Hodge v. Allstate Ins. Co., 130 N.H. 743, 746 (1988) (quotation

Estoppel requires, among other things, that the representation or

fact that [the plaintiff] valued her coat at $765 when filing her proof of loss Harry Braunstein, Inc., 77 A.2d 206, 208 (Del. Super. Ct. 1950) (noting “[t]he (involving proof of death in a claim on a life insurance policy); see Steenburg v. explanation and correction.” Giroux v. Insurance Co., 85 N.H. 355, 356 (1932) estoppel is involved, such statements are not conclusive, but are open to interest are ordinarily admissible as admissions[,] . . . where . . . no question of omitted). Accordingly, while statements by the insured “against his own In re Republic Lloyds, p. 10 104 S.W.3d 354, 359 (Tex. App. 2003) (citations damages.”

Hampshire Rule of Evidence 408. previously agreed.

admission against [the plaintiff’s] interests with regard to the amount of concurred.

remaining argument that the proof of loss is inadmissible under New assert what is in effect a greater claim than that to which they not dispute plaintiffs’ proofs of loss and plaintiffs cannot now Once accepted and agreed upon, the insurance companies could

summary judgment against her, but, “at most, [could] be considered an BRODERICK, C.J., and DALIANIS, DUGGAN and CONBOY, JJ.,

separate tortfeasor. Reversed and remanded.

In light of our foregoing conclusions, we need not address the plaintiff’s their contract claim if the insurers were released. is not a beneficiary of any “agreement” therein. upon a figure which was subject to negotiation by the parties. Id. We conclude the defendant is a stranger to the proof of loss and

of loss did not bar the action against the tortfeasor or support a grant of

no language prohibiting [the plaintiff] from pursuing an action against” a proof of loss was “between [the insured plaintiff] and her insurer and contains in Powers v. Latimer, 450 S.E.2d 295 (Ga. Ct. App. 1994), which noted that the case, against the defendant agent only, we find more persuasive the reasoning

plaintiffs conceded below that the agent would be released from liability on separately discuss the negligence claim against the agent and noted that the insurers as to the amount of the loss. policies as being plaintiffs’ loss thereunder constituted agreement Id. at 154-55. The court did not well as the agent and focused upon an agreement between the plaintiff and the acceptance by the insurance companies of the face amounts of the excess of the policy limits or less than the policy limits, the Omscolite involved claims directly against the insurance companies as

Id. at 155.

In any event, whatever plaintiffs’ loss may have been, whether in total loss acknowledged and accepted by the insurance companies.