John O’Donnell v. Allstate Indemnity Company

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This is Case 2018 0 7 0 6, John O'Donnell versus Allstate Indemnity Company. May it please the court. I, Mark Morris said here on behalf of John O'Donnell, I'm asking the court to review the Superior Court's decision to grant summary judgment. This involves an insurance coverage issue, as you all know, but it more importantly applies to the interpretation of RSA 2 64 15 Roman numeral one. And in that statute, the, there must be the equivalence of uninsured motorist coverage afforded to my client, the legislature in 2015, effective September of 2015, amended the statute again, and I say again 'cause it had done so earlier in 2007, but in 2015, what's important is it changed the verbiage to include amounts or limits and a section above relating to auto policies. And what that means is that the coverage must be equivalent. There were other decisions of this court that pointed out that amounts were required but not the same limits. In 2015 September, the legislature changed that to make it uniform. And I bring that forward because it's important that an insured receive equivalent uninsured motorist coverage under the statute. And that applies also to excess policies in, in this case, it involves an excess policy. The trial court found that a 2011, what I call a dated rejection selection form that was signed by my client, was effective in a policy that began on September 2nd, 2015. On September 2nd, 2015, the coverage terms were materially and significantly altered from $2 million to $1 million. The policy was cut in half, the premium was in essence cut in half, a 48% reduction. And it is the appellant's argument that with a material change, it's not a renewal. A renewal must be a like policy. Why wasn't it an amendment? It It's not an amendment, your Honor. 'cause an amendment can't take place outside of the terms of the contract. More importantly, the term amendment is not defined by the statute. And if you look at an amendment, there are three good and reasonable definitions of an amendment. In this case, we have a new policy term starts on September 2nd. So it can't be an amendment. It must be either a renewal or a new policy. With a new policy, a rejection form is required as far as an amendment goes, an amendment can be a betterment to a preexisting term or contract. It can also be any change or modification. Thirdly, it can also, it can be a, an amendment, but it's only for the betterment, the improvement of the contract. And these are standard dictionary definitions because we have none under the statute. So You're saying an amendment can only improve it for the insured, it can't lessen coverage for the insured. Where does that come from? Sure. It, I I, I just, I'm gonna stand corrected if I misspoke. I think there are three reasonable definitions for amendment including a reduction. The problem is there are three good definitions. What I mean by that is the term amendment or amended is ambiguous. You then must go to the legislative history. And in this case, if you look at the history for guidance, because the dictionary definitions do not provide good and reasonable explanations of coverage, I would start with though an amendment doesn't, is not in play here. And the court didn't say that. What the court said was this was a renewal with amended coverage terms. And so, but the statute allows either renewal or an amendment. What the court did is eliminate the conjunctive term or, and it also broadened unreasonably. So I would add the term renewal to allow amended terms. In other words, beef self, if I can speak, um, in, in, in a rough fashion, the the term renewal requires the same coverage. I've pointed to dictionary definition to support that. I've also pointed to RSA four 17 capital A one, which relates to automobile policies including uninsured motorist coverage. And in that statute, it defines a renewal to require the same coverage terms, at least the same coverage terms. If It's a new policy, why wouldn't there be a new policy number Really that's not controlled by John O'Donnell. If what I would say, there's not a new policy number, but there's new terms and that's controlled and dictated by the insurer. And as we know, insurance companies provide these policies. It's a contract of adhesion, and the policy number shouldn't be construed against them. I I'm not saying ignore it, but that's not, um, necessarily the controlling factor. The terms of the coverage, the amounts and limits of coverage are, are what's at play. But you don't dispute that the carrier notified you that this was a renewal when you, when your client received the policy, the binder, The answer is no, most directly, but I would explain it this way. In June of 2015, they offered him a renewal in first few days of August, I think it was August 5th and or sixth, we know he reached out to the agent and requested a change. He didn't accept their offer of renewal. And he came back with a modification, a change in terms, and the change was a $1 million reduction. I suggest, as a matter of law, that should be deemed a material and substantive change. It's cutting the policy in half that takes place only on at the moment of expiration at 12:01 AM a new policy starts and that's a new policy. Uh, it is literally a new policy. And the court didn't go through that analysis. The court borrowed the term amendment to provide additional terms to, as I mentioned earlier, to default the term renewal. It's not a renewal. The New Hampshire statute defines a renewal, at least equivalent coverages. It's not an amendment most strictly an amendment, though technical, it shouldn't apply. It's outside the contract term. This is not a lifelong policy.

And attorney Connor and the trial court has suggested that the, the policy itself, the policy is not successive, the policy is not September 2nd, 2011 through September 2nd, 2015 and continuing on, they are one year terms, a beginning date and an end date in each document they send says, so the trial court and attorney Connor, in her brief has suggested that the court gave, that the insurer gave notice that he didn't have uninsured motorist coverage. And there's a reference to 13 times. Now I'm gonna reduce some of those because they put that stamped in bold letters when they first offered the policy in 2011, prior to September 2nd, 2011. And after it, but before he actually signed the rejection form, a rejection is only valid once written. The writing takes place September 22nd, 2011. So any stamped statement that you don't have the coverage prior to September 27th of 11 is invalid. And then they do on successive renewals. When the cover, You're saying, you're saying it's invalid, but it certainly gives rise to notice. Sure. It, it does give notice, but the statute requires more. This is not just a contractual interpretation, it's a statutory interpretation. And the statute requires written notice. And it only lives to see another day from policy term policy expiration to a new term and a new contract if it's a, it's a renewal or an amendment. So do you say it's completely irrelevant to our analysis that he got a notice with the new declaration page that, uh, he had rejected the, uh, uninsured motorist coverage at that level? Yes, most directly. But I'd also point out this, when you say you got a new notice, if you're talking about September 2nd, 2015, I am not aware of any such notice prior to September 2nd, 2015, they indicated that they were going to change his policy at his request in August prior to the expiration after September 2nd, 2015, up until the accident on November 12th, 2015, there is no such notice. Attorney Connor was asked by the trial court, was there a new policy? And she said, I don't believe so. I don't know. So the court order says the attached policy declaration again informed the plaintiff that he had rejected uninsured motorist coverage. What's the trial court referring To? If she's talking to it, I, I believe it's the notices in August 5th or August 6th, 2015 prior to the effective date of the new term. And if you look at that notice and the court references, I believe the page in the appendix, there is no reference that this is a new policy. It does say effective September 2nd, 2015. It does not state the terms. It doesn't say this is a $1 million contract versus $2 million contract. And the reason I bring that up is that it wasn't the only thing that changed despite what was in the court's record and what was alleged in the brief, there was an address change also in August of 2015. And there were two notices August five and August 6th that talk about there's going to be a change and there'll be effective nine two of 2015. What is, why does an address change matter? It it, it goes to the risks involved. And also there's a suggestion that there were two notices of uninsured motorist coverage being rejected. I I dispute that. I also say that the policy changed and there was no notice at that point in time. So if there's an, uh, nothing changes except the address, is that a new policy or It would depend on where the address is. That's not been, there's no analysis been done as of yet. If you move from Manchester, New Hampshire or a rural New Hampshire spot in, in rural New Hampshire to Boston or New York as an a rough example, there may be a significant change to the terms, what I call the risk assessment. But that you talk about significant or material change. Is that part of our analysis of It? It it is not at this point, but I say it should be read into the statute from what we understand because the statute says that a, the rejection would continue forward with a renewal or with an amendment. But there's no guidance, there's no interpretation. There's no definitions in courts and other states that do not have statutes that state as a materiality standard have found the material change standard to be a good and reasonable standard. And there are a number of cases I cited to in my brief, Hawaii, Kansas, Washington. But they have different statutory language, don't they? They, they, they do, but they do not contain that material materiality standard. And I also suggest to the court that most of those statutes are more favorable to the insurers than the New Hampshire statute. New Hampshire is very limited that it allows the rejection to carry forward in those two scenarios with a renewal or amendment. And an amendment, if you read it closely, could only reasonably contemplate a change of insureds or a new vehicle. And we know that from the legislative history 'cause that terms ambiguous, Mr. Russo's Testified amendment is ambiguous. Correct. The term amendment is ambiguous. And the legislative history tells us that what they were concerned about is get it in writing, require the named insured to waive for all insureds, and also if a vehicle changes that the rejection carries forward. Those are the only scenarios that were discussed by our legislature. But that would seem to be a material change using your, uh, calculus if you went from a Honda fit to a navigator. It, It, It so does that, that's a new policy in your view. If, if, if it goes from the navigator in, in your example, it may not be a, it would, it may not require a new rejection form. And the reason is there's an exception in our statute for an amendment that relates to an insured insured change or to a vehicle change, but not coverage terms change. We're talking about a million dollar reduction in this Case. So if it were a million dollar increase, would you be making the same argument? I I I would have to make the same argument because there's a material change in the terms. Yes, there wouldn't be a difference. Our statute requires, I say, a new rejection or selection form with any new policy, which includes those scenarios where there's material change to the terms. Ha hasn't this materiality concept been developed in states that don't have the amendment language in their statutes or in their case law? It absolutely has, and it's been pointed out by attorney Connor. But more importantly, those statutes also talk about in their language modifications, replacements, substitutions, con continuations. Many of them have far broader language than our language, which is two terms renewal or amendment. So our statute is actually restrictive as far as when the, the, um, waiver would move forward to the next term. Is it, is it irrelevant from your perspective that it's the same policy number? Is that like we shouldn't even think about that? Well, I, I wouldn't say don't think about it. I, I, I I can't think of a relevant reason to consider the policy number. I just simply can't, we're talking about an insurance company that, that ensures indemnifies or provides coverage for risks. The risk in this case relates to the person, to the vehicles, the circumstances, a policy number is nothing more than an internal identifier issued by the insurance company. I I do not see any strong relevance or good relevance to the equation Without further questions. Thank you. Thank You Ms. Connor. May it please the court. Doreen, Connor, and I represent Allstate Indemnity Company. This appeal asked the court to rewrite Mr. O'Donnell's insurance policy to add coverage he rejected in writing. Mr. O'Donnell did not purchase uninsured motorist coverage in his umbrella. And the summary judgment in Allstate's favor should be affirmed. I will take questions at any time. Why Not just include the waiver in every policy renewal amendment or issuance Because that's unduly cumbersome and it's something that is not required by our statute. Our statute specifically notes that umbrella policies are different in the legislature, reserved the right of individuals to reject umbrella coverage or uninsured motorist coverage in their umbrella. And the legislature made it very clear that once you receive a written rejection from the insured, that that rejection would continue forward with respect to new, new insureds, new vehicles renewals amendments unless rescinded in writing, it was never rescinded in writing. Allstate is in the business of selling insurance, as is the agent in this case. They would've been very happy to sell umbrella uninsured motorist coverage to Mr. O'Donnell, but he did not want to purchase it and he can't purchase it after the fact. I wanna just address briefly a question that was just raised of opposing counsel with regard to the notice. After Mr. O'Donnell reduced his liability coverage, there was a representation that there was no notice to him with regard to either the rejection or the new limits. That's not accurate. If you look at the appendix at 3 27 on August 5th, the Allstate notified him of the upcoming, uh, changes to be effective September 2nd, and it indicates uninsured motors projection on page three 30 of that same notice. It notes that his limits have been reduced as he requested to 1 million. The same occurs a a day later when there was an address change on August six at page 3 33. It says your uninsured motorist is rejected, change is effective September 2nd, and then on page 3 36, it notes his $1 million limits. Mr. O'Donnell had four years of notice that he did not purchase uninsured motorist coverage. He does not dispute that he signed the waiver, a form that was approved by the New Hampshire Insurance Commissioner. Four years of notice under the $2 million policy. Correct. And nothing changed. He never revoked his rejection, which he could have done at any time. Once he changes his liability limits, he then receives two more notices indicating he does not have it and he does nothing. In other words, his conduct ratified, uh, the, the, the con contractual terms. I wanna talk a little bit about this notion that this is not an amendment. Somehow Mr. O'Donnell in the pleadings below at appendix 15 and 16 conceded that had such a change, meaning his liability reduction been made midterm or late in the term of an earlier contractual agreement, then such a change could be construed as an amendment. That's exactly what happened here. All state offered to renew at the $2 million limit in July. Mr. O'Donnell contacted Allstate to reduce the limits of his liability coverage from 2 million to 1 million. Allstate sends out those two deck pages I just referenced in August before the new term started. In other words, it is an an amendment according to their definition. But When, when was the, I'm sorry to interrupt, but when wasn't the amendment to be effective with the expiration of the policy year? That is correct, your honor, but nonetheless, it was an amendment notice in August, late in the term of an earlier contractual agreement. But There was no reimbursement of premium from that prior year. Right? He paid for the 2 million coverage through the end of the term. That is correct. Right? But he never paid for uninsured motorist coverage. We also wanna talk a little bit about the definitions that have been provided to you with regard to renewal because they don't apply this court noted back in Wilkinson. Umbrella policies are different from auto policies because for a relatively modest premium as noted by this court, in that case, you can buy excess coverage that sits not only on top of your auto policy but also your homeowner policy. It is not an auto policy. An umbrella policy is a totally different animal. My opponent talks about the insurance department regulations and he cites 1402 0.02 P, which he quotes, which deals with primary auto policies. What he did not tell you is that at that same insurance regulation 1402 0.02 A, their insurance regulation says that, that those regulations mean primary insurance quote, but does not include umbrella or excess coverage. In other words, that definition, which has been cited to you is something you should apply in this context is recognized by the insurance department not to apply to umbrellas. The same is true with regard to four 17 A. The brief of my opponent, unfortunately, when they deal with the statutes left out a clause. That clause is in our brief and it notes that the definitions in four 17 a only apply to that chapter four 17 A, which again deals with automobile liability policies. That's not what we are construing. We are looking at an umbrella policy that sits on top of an auto policy and a homeowner policy. The applicable statute with regard to forms for umbrella policy is at four 12. If you look at RSA 4 12 6 A, it specifically talks about the fact that you can have amended terms at renewal. And at 4 12 5 it expressly includes that chapter reaching umbrella policies. There was absolutely Four 17 A two does reference uninsured motorist coverage, Correct with regard to a primary auto policy, not an Umbrella policy. It doesn't say that it talks about that portion of policies of automobile insurance providing blah, blah, and two provisions relating to medical payments and uninsured motorist coverage. Correct? In Wilkinson, this court said that an umbrella policy is not an automobile policy because it's provides excess liability for both your personal liability, your home and your auto. I I also wanna talk a little bit about some of the other, uh, states foreign case law that was cited, which has, um, many of them have a materiality standard. Again, different statutes. New Hampshire doesn't have that. But the most important thing for this court to realize every case cited, every foreign case cited by attorney Morissette involves a primary auto policy, not an umbrella. Furthermore, a number of those states in their statutory schemes expressly exempt umbrella policies because umbrella policies are different from motor vehicle policies. So not only should this court not adopt a materiality test, which our legislature has not deemed seemed fit to impose upon, uh, the population, but even if you were, then you should look at those states and realize that even those states treat umbrella policies different. Mr. O'Donnell had ample opportunity to purchase excess under insured motorist coverage he did not do. So it is not the function or the place for this court to rewrite the terms of the policy. The legislature has made it very clear that if an insured wants to purchase excess underinsured motorist coverage, it can do so, but it must do so in writing and that writing is gonna be enforced unless rejected. And I wanna talk just briefly about the legislative history. We believe that the statute is quite clear, so you don't need to get there. So amendment is an ambiguous, in your view. It is not your honor, but if you do go, if you disagree with me in that respect, and you, and you go to the legislative history At page 3 46 of the appendix, uh, the hearing report, when they were talking about how this amendment was going to be drafted and it was drafted by attorney Russos on behalf of the American Insurance Association, he made it very clear that he was interested in three requirements. The third requirement is quote, the consumer must apply to withdraw in writing. In other words, he wanted to make it clear that if the legislature was gonna impose this new requirement and for the first time require a written waiver of excess underinsured motorist coverage, that the carrier only had to do it once unless the insured revoked that waiver in writing. That did not happen here. And therefore the waiver lives on throughout the life of this policy. Does it matter? Does it matter what Mr. O'Donnell requested? Not the paper that was sent, but does it matter what the request was to Allstate's agent? Are you talking about the, when he Requested the reduction in coverage? Do we know whether that conversation also included any reference to underinsured? We do not know, but MR. Coverage under the Umbrella, we do not know, but Mr. O'Donnell submitted an affidavit and I'm unfairly confident that if he had asked for his uninsured motorist coverage to be added to this policy, it would be referenced in the affidavit and it would be referenced in the premium. And neither of those things happened. There are no further questions, but ask that this court affirm the trial court's decision. Thank you. Thank you, counsel. Case submitted. Thank you. Court's adjourn. Thank.