2010-756 Estate of June M. Day & a. v. Hanover Insurance Company

No. 2010-756

Hillsborough-northern judicial district

Day and Stephanie L. Day, appeal the Superior Court’s (Tucker LYNN, J. The petitioners, the Estate of June M. Day (Estate), Byron S.

Richard J. Joyal ___________________________

Boyle, Shaughnessy & Campo, P.C.

affirm. motorist coverage under its insurance contract with the Estate’s decedent. We Hanover from contesting its liability to provide the Estate underinsured by the petitioners with the insurer of a third party tortfeasor did not preclude respondent Hanover Insurance Company’s (Hanover) consent to settle a claim

respondent. Shaughnessy and Andrew B. Ranks on the brief, and Mr. Ranks 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 issue presented and that, even if the issue was as the petitioners reformulated p. 2 petitioners’ objection and motion, ruling that it had not misunderstood the participated in good faith in the settlement process. The trial court denied the the question it had asked the court to rule upon was whether Hanover entitlement to uninsured motorist coverage.” Rather, the petitioners urged that not assert “that Hanover’s consent to settlement gives the Petitioners a legal the court had “misunderstood the essence of the petition,” and that they did clarification and reconsideration. In the motion, the petitioners argued that The petitioners filed an objection to the dismissal and a motion for

coverage. The court therefore dismissed the action. did not preclude it from contesting its liability to provide underinsured motorist petitioners’ position and concluded that Hanover’s agreement to the settlement parties’ cross-motions for summary judgment, the trial court rejected the instituted this declaratory judgment action in superior court. Ruling on the when Hanover disagreed with the petitioners’ position, the petitioners that the petitioners were “legally entitled to recover” damages from Follett, and, settlement with Follett and Commerce, Hanover was precluded from contesting Thereafter, the petitioners took the position that, by consenting to the

further liability arising out of the accident. from Commerce and executed a release of Follett and Commerce from any had “neither accepted nor denied liability.” The petitioners accepted payment continue the investigation into liability in this matter,” and noting that Hanover accept the settlement offered by Commerce “while reserving [Hanover’s] right to letter dated February 17, 2009, Hanover agreed that the petitioners could Commerce policy, and in November 2008 Commerce offered its policy limit. By Following the accident, the petitioners made a claim against the

bodily injury coverage limit of $100,000. Commerce Insurance Company (Commerce) under a policy that provided a ‘insured’ and caused by an accident.” Follett’s vehicle was insured by the ‘underinsured motor vehicle’ because of ‘bodily injury’ sustained by an legally entitled to recover from the owner or operator of . . . [a]n . . . Hanover was obligated to “pay compensatory damages which an ‘insured’ is and both policies provided underinsured motorist coverage. Specifically, automobile liability policy and a personal umbrella policy issued by Hanover,

At the time of the accident, Day’s vehicle was insured under an

struck Day’s vehicle that was traveling south. operated by Lisa Follett that was traveling north crossed the median and accident. The collision occurred on Route I-93 in Hooksett, when a vehicle September 18, 2007, June M. Day was fatally injured in a motor vehicle The summary judgment record reveals the following pertinent facts. On p. 3 1 A.L. Widiss & J.E. Thomas, Uninsured and Underinsured Motorist Insurance

damages caused by an uninsured motorist. on the ground that an insured is not legally entitled to recover for basis for denying a claim for uninsured motorist insurance benefits

coverage to its insured on the basis that the insured is not legally entitled to 3 tortfeasor’s insurance carrier as a ground for denying underinsured motorist cannot utilize its consent to a settlement with a third party tortfeasor or the merely indicates that an underinsured motorist carrier, such as Hanover, the petitioners with underinsured motorist coverage. Rather, the passage obligated, such a settlement does not provide an insurer with a Follett and Commerce precludes Hanover from contesting its liability to provide provides no support for the view that Hanover’s consent to the settlement with

insured with a tortfeasor or anyone else who may be legally

However, contrary to the petitioners’ argument, the above passage

settlement with Follett and Commerce. that Hanover has attempted to deny coverage on the basis of the petitioners’ highway motor vehicle.” Id. at 363. The record here contains no indication because the injuries were caused by the negligent operation of an uninsured insurance coverage consented to or approved a settlement by an motorist coverage is contingent on the insured being legally entitled to recovery [W]hen the insurer providing uninsured (or underinsured) motorist the statement: “The right of an insured to recover under the uninsured language is found in a section of the treatise entitled “Fault,” which begins with recover damages caused by the underinsured motorist. Indeed, the quoted

§ 7.2, at 368-69 (3d ed. rev. 2005). is the following statement contained in an insurance law treatise: underinsured motorist coverage. The only authority they cite for this position preclude Hanover from disputing its liability to provide the petitioners with ruling that Hanover’s consent to the settlement with Commerce does not The petitioners argue that the trial court erred as a matter of law in

in the light most favorable to the non-moving party. N. Sec. Ins. Co. v. the affidavits and other evidence, and all inferences properly drawn from them, In reviewing the trial court’s grant of summary judgment, we consider

court’s application of the law to the facts de novo. Id. summary judgment. N. Sec. Ins. Co., 161 N.H. at 649. We review the trial party is entitled to judgment as a matter of law, we will affirm the grant of that evidence discloses no genuine issue of material fact, and if the moving Connors, 161 N.H. 645, 649 (2011); see RSA 491:8-a (2010). If our review of

This appeal followed. it, that issue was not the proper subject for a declaratory judgment action p. 4 . . . . .

arbitrated. Either party may make a demand for arbitration.

“underinsured motor vehicle”, then the matter may be From the owner or operator of an “uninsured motor vehicle” or that “insured”; 2. As to the amount of damages which are recoverable by damages; or 1. Whether that “insured” is legally entitled to recover A. If we and an “insured” do not agree:

p. 4 . . . . our written consent is not binding on us. Any judgment for damages arising out of a suit brought without

notification.

the tentative settlement within 30 days after receipt of b. Advance payment to the “insured” in an amount equal to settlement; and a. Have been given prompt written notice of such tentative

and the insurer of the “underinsured motor vehicle” and we: 2. A tentative settlement has been made between an “insured” settlements; or

have been exhausted by payment of judgments or

or policies applicable to the “underinsured motor vehicle” 1. The limits of liability under any bodily injury liability bonds

applies: vehicle,” we will pay under this coverage only if 1. or 2. below

recover from the owner or operator of an “underinsured motor . . . With respect to damages an “insured” is legally entitled to

and caused by an accident; p. 4 . . . .

vehicle” because of “bodily injury” sustained by an “insured” 1. An “uninsured motor vehicle” or “underinsured motor

legally entitled to recover from the owner or operator of: A. We will pay compensatory damages which an “insured” is

PART C. Uninsured Motorists Coverage The Hanover policy contains the following pertinent provisions: p. 5 Under the above policy terms, which are clear and unambiguous, see

after receipt of notification.

amount equal to the tentative settlement within 30 days 2. Fail to advance payment to the “insured” in an “underinsured motor vehicle”; and

settlement between an “insured” and the insurer of an 1. Have been given prompt written notice of a tentative

owner or operator of an “underinsured motor vehicle” if we:

damages an “insured” is legally entitled to recover from the Our rights do not apply under Paragraph A with respect to

. . . .

from another we shall be subrogated to that right . . .

for whom payment was made has a right to recover damages A. If we make a payment under this policy and the person to or

. . . .

of such “underinsured motor vehicle”.

to preserve our rights against the insurer, owner or operator

that “insured” in an amount equal to the tentative settlement

motor vehicle” and allow us 30 days to advance payment to

between the “insured” and the insurer of the “underinsured

In Funai v. Metropolitan Property & Casualty Co.

promptly notify us in writing of a tentative settlement

uninsured motorist carrier to arbitrate the plaintiffs’ claims rather than carrier’s consent to settlement with the tortfeasor’s insurer required the we addressed the closely related question of whether an uninsured motorist

contesting whether its insured is “legally entitled to recover” from Follett. nothing in these terms indicating that such consent bars Hanover from right to pursue a subrogation claim against Follett or Commerce. But there is motor vehicle”, a person seeking coverage must also (2002), Hanover’s consent to the settlement had the effect of waiving Hanover’s Matarese v. N.H. Mun. Assoc. Prop.– Liab. Ins. Trust, 147 N.H. 396, 403

recover from the owner or operator of an “underinsured With respect to damages an “insured” is legally entitled to

ADDITIONAL DUTY p. 6 Id

excess damages. There are many reasons why the

Metropolitan waived its right to trial. plaintiffs to settle with the underinsured motorist, we will not find litigate its dispute with the plaintiffs when it consented to allow the had no reason to anticipate implications regarding its right to expression by a party to do so. Because we find that Metropolitan We will not find waiver of such a right without a clear the tortfeasor’s liability in relation to its coverage of

tortfeasor as a condition of being able later to contest trial by jury. withhold its consent to a settlement with the alleged would imply waiver by Metropolitan of its constitutional right to insurer that provides underinsured coverage to alleged additional damages exceed $1,500.00, such a holding written arguments on the law. Furthermore, if the plaintiffs’ hearing or a trial at which they may produce evidence and submit contested issues of material fact, the parties are entitled to a final

There would be no sound reason to require the

coverage in the arbitration proceeding plaintiffs demanded. plaintiffs were asserting that Metropolitan was precluded from contesting its liability to provide dispute to trial. It is axiomatic that whenever a case involves * Funai implication a waiver by Metropolitan of its right to submit the is not directly on point because in that case, unlike this one, it does not appear the that reached by the Massachusetts Appeals Court in Furukawa v. Arbella tantamount to consent to arbitrate would require us to find by Acceptance of the plaintiffs’ argument that consent to settle is provide underinsured motorist coverage. Our conclusion is consistent with to the settlement with Follett and Commerce and a consent to its liability to Similarly, in this case we find “no correlation” between Hanover’s consent

explained: very argument asserted by the petitioners here, the court in Furukawa Mutual Insurance Co., 794 N.E.2d 1225 (Mass. App. Ct. 2003). In rejecting the

arbitrate. There is no correlation between consent to settle and consent to . at 645-46 (brackets, quotations, and citations omitted).

plaintiffs’ argument, we held: written consent of both parties. See Funai, 145 N.H. at 645. In rejecting the disputes between the uninsured motorist carrier and its insured upon the insisting on a trial in court. The policy at issue provided for arbitration of * p. 7 Furukawa

exposure limits?

to contest its own liability, with, as here, far larger

beneficial to its own policyholder to preserve its right

challenge the court’s ruling on item (3). See not provided us with their pleadings related to items (1) and (2), and do not legal issue as the only matter to be decided in the case. The petitioners have summary judgment hearing in which the court again described the aforesaid the petitioners’ failure to dispute the order issued by the court following the factual issues in dispute but only the single issue of law just recited; and (3) remove the case from the jury trial list, wherein they stated that there were no recover damages caused by the tortfeasor’”; (2) the petitioners’ motion to uncovered damages be forced to oppose a settlement coverage benefits on the ground that its insured is not legally entitled to underlying tortfeasor, can ultimately deny a claim for uninsured motorist ‘whether Hanover, after having consented to settlement by its insured with the petitioners represented that “‘[t]he singular issue of law before the Court’ is Bean v. Red Oak Prop. Mgmt., 151 objection to Hanover’s cross-motion for summary judgment, in which the In support of this ruling, the trial court relied upon: (1) the petitioners’

clarify and reconsider the trial court’s order, i.e. The petitioners also return to the theme they presented in their motion to

defense. Why should the victim’s own insurer of

from contesting its liability to provide underinsured motorist coverage. Hanover’s consent to the settlement had the legal effect of precluding Hanover parties had agreed the only issue to be decided in this case was whether clarification or reconsideration, the trial court specifically found that the short answer to this argument is that, in ruling on the petitioners’ motion for summary judgment motions, the court erred in dismissing the action. The is small in relation to the likely cost of a successful issue remained alive even after the trial court ruled in Hanover’s favor on the underinsured motorist coverage. The petitioners suggest that because this because it delayed in either acknowledging or disputing its liability to provide that Hanover did not participate in good faith in the settlement process complaint was not that Hanover was precluded from contesting its liability, but

a result. that inure to the benefit of their policyholders. We refuse to countenance such discourage first party insurers such as Hanover from agreeing to settlements tortfeasor’s liability would be to foster an unsound public policy that would contest liability, particularly where the coverage limit settlement with the tortfeasor precludes that carrier from contesting the To hold, as the petitioners urge, that the underinsured carrier’s consent to

, 794 N.E.2d at 1228. We are in full agreement with this reasoning.

alleged tortfeasor’s liability insurer might choose not to p. 8 8

Affirmed

DALIANIS, C.J.