THE STATE OF NEW HAMPSHIRE SUPREME COURT. Docket No Terry Ann Bartlett

Transcription

1 THE STATE OF NEW HAMPSHIRE SUPREME COURT Docket No Terry Ann Bartlett v. The Commerce Insurance Company, Progressive Northern Insurance Company and Foremost Insurance Company APPEAL FROM FINAL ORDERS ON MOTIONS FOR SUMMARYJUDGMENT HILLSBOROUGH COUNTY SUPERIOR COURT, NORTHERN DISTRICT BRIEF FOR PETITIONER TERRY ANN BARTLETT Gordon A. Rehnborg, Jr., #2123 McDowell & Osburn, P.A. PO Box 3360 Manchester, NH Gordon A. Rehnborg, Jr. will represent the Petitioner at oral argument

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii QUESTIONS PRESENTED... v STATUTE... vi STATEMENT OF THE CASE... 1 STATEMENT OF THE FACTS... 3 SUMMARY OF ARGUMENT... 6 ARGUMENT... 8 I. THE TRIAL COURT CORRECTLY RULED THAT IF THE UNDERINSURED MOTORIST COVERAGE CONTAINED IN THE FOREMOST AND/OR PROGRESSIVE POLICIES IS FORFEITED THEN THE UNDERINSURED MOTORIST COVERAGE PROVIDED BY COMMERCE IS REQUIRED TO DROP DOWN AND FILL THE RESULTING GAPS IN COVERAGE II. COMMERCE IS NOT ENTITLED TO REDUCE ITS COVERAGE ON ACCOUNT OF THE EXISTANCE OF THE PROGRESSIVE POLICY A. THIS COURT SHOULD DECLINE TO CONSIDER THIS ISSUE AT THIS TIME B. THE ANTI-STACKING PROVISION IN THE COMMERCE AUTO POLICY IS AMBIGUOUS AND UNENFORCEABLE III. IV. THE TRIAL COURT ERRED WHEN IT HELD THAT BARTLETT WAS BARRED FROM PURSUING HER PETITION FOR DECLARATORY JUDGMENT BECAUSE OF NEW JERSEY S STATUTE OF LIMITATIONS THE TRIAL COURT ERRED WHEN IT RULED THAT PROGRESSIVE DID NOT HAVE TO PROVIDE UNDERINSURED MOTORIST COVERAGE TO TERRY ANN BARTLETT CONCLUSION RULE 16 (3)(I) CERTIFICATION CERTIFICATE OF SERVICE REQUEST FOR ORAL ARGUMENT i

3 TABLE OF AUTHORITIES New Hampshire Cases American Ins. Co. v. Nationwide Mut. Ins. Co., 110 N.H. 192 (1970) Binda v. Royal Ins. Co., 144 N.H. 613 (2000) Brickley v. Progressive N. Ins. Co., 160 N.H. 625 (2010)... 15, 22 Charest v. Union Mut. Ins. Co., 113 N.H. 683 (1973)... 33, 36 CNA Ins. Co. v. Hartford Ins. Co., 129 N.H. 243 (1987) Colony Ins. Co. v. Dover Indoor Climbing Gym, 158 N.H. 628 (2009) Contoocook Valley School Dist. v. Graphic Arts Mut. Ins. Co., 147 N.H. 392 (2001) Coutemanche v. Lumbermens Mut. Cas. Co., 118 N.H. 168 (1978) EnergyNorth Nat l Gas, Inc. v. Certain Underwriters at Lloyd s, 156 N.H. 333 (2007)... 9, 10 Gianola v. Continental Cas. Co., 149 N.H. 213 (2003) Great American Dining, Inc. v. Philadelphia Indem. Ins. Co., 164 N.H. 612 (2013) Green Mt. Ins. Co. v. Bonney, 131 N.H. 762 (1989) Hudson v. Farm Family Mut. Ins. Co., 142 N.H. 144 (1997)... 15, 36 Keating v. Hustler Magazine, Inc., 113 N.H. 6 (1988) Leavitt v. Town of North Hampton, 98 N.H. 193 (1953) Logic Assocs., Inc. v. Time Share Corp., 124 N.H. 565 (1984) Merchants Mut. Cas. Co. v. Kennett, 90 N.H. 253 (1939) Metropolitan Property & Liability Ins. Co. v. Walker, 136 N.H. 594 (1993) Peerless Ins. v. Vermont Mut. Ins. Co., 151 N.H. 71 (2004)... 9, 10 Portsmouth Hospital v. Indemnity Ins. Co. of North America, 109 N.H. 53 (1968) Progressive Northern Ins. Co. v. Argonaut Ins. Co., 161 N.H. 778 (2011)... 9 Radkay v. Confalone, 133 N.H. 294 (1990) ii

4 U.S. Fid. & Guar. Co. v. Kancer., 108 N.H. 450 (1968) Universal Underwriters Ins. Co. v. Allstate Ins. Co., 134 N.H. 315 (1991)... 9 Villars v. City of Portsmouth, 100 N.H. 453 (1957) Vlahos Realty Co. v. Little Boar s Head Dist., 101 N.H. 460 (1958) Warner v. Clarendon Ins. Co., 154 N.H. 331 (2006) Waterfield v. Meredith Corp., 161 N.H. 707 (2011)... 25, 26 Wuelper v. University of New Hampshire, 112 N.H. 471 (1972) New Hampshire Federal Cases Bunker v. Midstate Mut. Ins. Co., 2014 W.L (D.N.H. Aug. 25, 2014) Groleau v. American Express Financial Advisors, Inc., 2011 WL (D.N.H. October 11, 2011) Other Cases Auto-Owners Ins. Co. v. Leefers, 203 Mich. App. 5, 512 N.W.2d 324 (1993) Beddingfied v. Vaughn, 2012 WL (Mich. Ct. App. 2012) Benzer v. Iowa Mut. Tornado Ins. Ass n., 216 N.W.2d 385 (Iowa 1974)... 14, 16 Brasco v. Nationwide Mut. Ins. Co., 283 A.D.2d 492, 724 N.Y.S.2d 488 (App. Div. 2001) Breitenbach v. Motor Club of America Ins. Co., 295 N.J. Super 328, 685 A.2d 36 (1996) Continental Ins. Co. v. Richt, 253 A.D.2d 818, 677 N.Y.S.2d 634 (1998) Davis v. Kramer Bros. Freight Lines, Inc., 316 Mich. 371, 105 N.W.2d 29 (1960) Gordon v. Mupin, 469 S.W.2d 848 (St.L.Mo. App. 1971)... 14, 16 Hamilton v. Farmer s Ins. Co. of Washington, 107 Wash.2d 721, P.2d 213 (1997) Hoffman v. United Services Automobile Assoc., 671 F.Supp. 922 (D. Conn. 1987)... 14, 15, 16 Hutnick v. ARI Mut. Ins. Co., 391 N.J. Super. 524, 918 A.2d 729 (2007) Kirby v. Barletto, 209 WL (Ohio Ct. App. 2009) iii

5 Kraft v. Allstate Ins. Co., 6 Ariz. App. 276, 431 P.2d 917 (1967) Murriel v. Alfa Ins. Co., 697 So.2d 370 (Miss. 1997)... 33, 34 Price v. New Jersey Manufacturers Ins. Co., 182 N.J. 519, 867 A.2d 1181 (2005) Rutherford v. Tennessee Farmer s Mut. Ins. Co., 608 S.W.2d 843 (Tenn. 1980) Safeco v. Ins. Co. of America v. Robey, 399 F.2d 330 (8 th Cir. 1968)... 14, 16 Travelers Indemn. Co. v. Wells, 209 F.Supp 784 (D.C. 1962) Vrabel-Kilby v. Nationwide Mut. Ins. Co., 2012 WL (Ill.App. 4 Dist 2012) Wittmer v. Rquegemer, 419 N.W.2d 493 (Minn. 1988) Woodall v. Travelers Indemnity Co., 699 So.2d (Fla. 1997) Statutes RSA 491: ,31 Other Authorities Black Law s Dictionary, 7 th Ed C.J.S. Insurance 1616 (2013)... 7, 9 15 R. Segalla, Couch On Insurance 219 (3 Ed. 2005)... 9, 10, 12, 13 Widess and Thomas, Uninsured and Underinsured Motorist Insurance, 3 rd ed (2005).21 iv

6 QUESTIONS PRESENTED 1. Whether the trial court was correct when it held that if Foremost and/or Progressive are not obligated to provide underinsured motorist coverage to Bartlett, then the coverage contained in those policies is neither available nor collectible within the meaning of the Other Insurance clause in the Commerce Auto policy? Issue presented for review by Commerce Insurance Co. 2. Whether the trial court was correct when it held that if the underinsured motorist coverage contained in the Foremost policy is not available to Bartlett then the Commerce Auto policy is required to drop down and fill any gap which might otherwise result from the absence of the Foremost coverage? Issue presented for review by Commerce Insurance Co. 3. Whether the trial court was correct when it held that if the underinsured motorist coverage contained in the Foremost and Progressive policies is unavailable to Bartlett, then the Commerce Umbrella policy must pay damages to which Bartlett is entitled to recover in excess of $250,000? Issue presented for review by Commerce Insurance Co. 4. Whether the trial court erred when it held that New Jersey s statute of limitations bars Bartlett s claim against Foremost notwithstanding the fact that Bartlett was a resident of New Hampshire when her cause of action accrued against Foremost? Issue preserved in Plaintiff s Motion for Summary Judgment (App. at 97) and accompanying Memorandum of Law (App. at 101) and in Plaintiff s Motion for Partial Reconsideration (App. at 1014) and during oral argument on Motions for Reconsideration (App. at 1069 and 1100). 5. Whether the trial court erred when it held that Progressive has no obligation to provide underinsured motorist coverage since Bartlett settled her claim against the underinsured tortfeasor without Progressive s written consent notwithstanding the fact that Progressive failed and refused to respond to Bartlett s request for permission to settle? Issue preserved in Plaintiff s Motion for Summary Judgment (App. at 97) and accompanying Memorandum of Law (App. at 101) and in Plaintiff s Objection to Progressive Insurance Company s Motion for Partial Reconsideration (App. at 1031). v

7 STATUTE RSA 491:22 Declaratory Judgments. I. Any person claiming a present legal or equitable right or title may maintain a petition against any person claiming adversely to such right or title to determine the question as between the parties, and the court s judgment or decree thereon shall be conclusive. The taxpayers of a taxing district in this state shall be deemed to have an equitable right and interest in the preservation of an orderly and lawful government within such district; therefore any taxpayer in the jurisdiction of the taxing district shall have standing to petition for relief under this section when it is alleged that the taxing district or any agency or authority thereof has engaged, or proposes to engage, in conduct that is unlawful or unauthorized, and in such a case the taxpayer shall not have to demonstrate that his or her personal rights were impaired or prejudiced. The preceding sentence shall not be deemed to convey standing to any person (a) to challenge a decision of any state court if the person was not a party to the action in which the decision was rendered, or (b) to challenge a decision of any board, commission, agency, or other authority of the state or any municipality, school district, village district, or county if there exists a right to appeal the decision under RSA 541 or any other statute and the person seeking to challenge the decision is not entitled to appeal under the applicable statute. The existence of an adequate remedy at law or in equity shall not preclude any person from obtaining such declaratory relief. However, the provisions of this paragraph shall not affect the burden of proof under RSA 491:22-a or permit awards of costs and attorney s fees under RSA 491:22-b in declaratory judgment actions that are not for the purpose of determining insurance coverage. vi

8 STATEMENT OF THE CASE This is an appeal from Orders dated December 4, 2013 and April 9, 2014, issued by the Hillsborough County Superior Court, Northern District (Garfunkel, P.J.) entering judgment in favor of Foremost Insurance Company ( Foremost ) and Progressive Northern Insurance Company ( Progressive ). App. at 993, The trial court held that neither Foremost nor Progressive is required to provide underinsured motorist coverage to the petitioner, Terry Ann Bartlett ( Bartlett ), with respect to injuries she sustained in a motor vehicle accident on August 14, 2004, in Rockland, New York. This brief is also in opposition to the appeal filed by Commerce Insurance Company ( Commerce ) from the Order of December 4, 2013 (App. at 993) in which the trial court ruled that to the extent any gaps in coverage are created as a result of the unavailability of the underinsured motorist coverage contained in the Foremost and/or Progressive policies, the Commerce policies are required to drop down and fill those gaps. Bartlett initiated legal proceedings to recover underinsured motorist benefits when she filed a Verified Complaint in the Supreme Court of the State of New York, County of New York, styled Terry Ann Bartlett v. The Commerce Insurance Company, Progressive Northern Insurance Company and Foremost Insurance Company of Grand Rapids, Michigan, which was docketed in that court as Index No App. at 159. The defendant insurance companies filed a motion in the New York court to dismiss that action on the grounds of forum non conveniens. App. at 191. In response to the filing of the Motion to Dismiss in New York, Bartlett commenced this action in New Hampshire with a Petition for Declaratory Judgment dated March 28, 2012 filed in the Hillsborough County Superior Court, Northern District. App. at 5. By Order dated October 31, 2012, the New Hampshire action was stayed pending 1

9 resolution of the New York action. App. at 83. By Order dated March 12, 2013, the Supreme Court of the State of New York granted the defendant insurance companies Motion to Dismiss. App. at 86. On April 5, 2013, the Hillsborough County Superior Court, Northern District, granted the Petitioner s Motion to Reactivate the New Hampshire case. App. at 88. The parties, after participating in discovery, filed cross motions for summary judgment. By Order dated December 4, 2013, the Hillsborough County Superior Court, Northern District (Garfunkel, P.J.) entered an order on the various summary judgment motions. App. at 993. The court dismissed Bartlett s claim against Foremost ruling that her claim was barred by operation of New Jersey s statute of limitations. App. at The court held that Commerce was obligated to provide underinsured motorist coverage to Bartlett under both of the Commerce policies at issue and that the Commerce coverage dropped down to fill any gaps in coverage caused by Bartlett s inability to access the coverage contained in the Foremost policy as well as any gaps in coverage that would exist if it were determined that Progressive s policy is also unavailable to Bartlett. App. at 1009, Finally, the court held that it had insufficient evidence before it to rule on the coverage issues between Bartlett and Progressive. Bartlett, Progressive and Foremost filed motions for reconsideration. App. at 1014, 1036, A hearing on the motions was held on February 24, On April 9, 2014, the trial court issued an Order on the various motions for reconsideration and/or clarification. App. at The court denied Bartlett s motion to reconsider its ruling as to the applicability of New Jersey s statute of limitations barring Bartlett s claim against Foremost. App. at It granted Progressive s motion for reconsideration and held that Progressive has no obligation to provide underinsured motorist coverage to Bartlett in connection with this accident. App. at The court made no further rulings as to Commerce s obligations in this matter. 2

10 On May 2, 2014, Commerce filed a Rule 7 Notice of Mandatory Appeal challenging the trial court s rulings with respect to the impact on Commerce s coverage if Bartlett is ultimately unable to access the coverage contained in the Foremost and/or Progressive policies. App. at On May 7, 2014, Bartlett filed a Rule 7 Notice of Mandatory Appeal contesting the trial court s orders dismissing her claims for underinsured motorist coverage against Foremost and Progressive. App. at The two appeals have been consolidated. By Order dated August 15, 2014, and amended by Order dated September 9, 2014, this Honorable Court directed Bartlett to file her brief on or before October 15, 2014 addressing the issues raised by Commerce as well as the issues raised in her notice of cross-appeal. STATEMENT OF THE FACTS None of the underlying facts has ever been in dispute. Bartlett was involved in a motor vehicle accident in Rockland, New York on August 14, She was a passenger on a motorcycle owned and operated by Jeffrey Vilagos. The Vilagos motorcycle was struck by a motor vehicle operated by Myroslaw Mykijewycz. Bartlett sustained serious injuries as a result of the accident. Mykijewycz was insured by Allstate Insurance Company ( Allstate ) with a policy providing liability insurance coverage with limits in the amount of $100,000. App. at 138. At the time of the accident, Bartlett was a resident of New Hampshire living in Londonderry. App. at She owned three motor vehicles that were registered and garaged in New Hampshire. They included a Toyota automobile, a Ford pick-up truck and a Harley- Davidson motorcycle. 3

11 Bartlett had a personal automobile insurance policy issued by Commerce insuring her Toyota automobile and Ford pick-up truck. App. at 225. That policy contains uninsured/underinsured motorist coverage with limits of liability in the amount of $250,000 per person and, subject to the per person limitation, $500,000 per accident (App. at 228) and will be referred to hereinafter as the Commerce Auto policy. Bartlett also insured her home in New Hampshire with Commerce. App. at 253. The homeowner s policy contains a Personal Umbrella Endorsement which, among other things, provides $1,000,000 of single limit uninsured/underinsured motorist coverage. App. at 256. That policy will be referred to hereinafter as the Commerce Umbrella policy. Bartlett insured her motorcycle with Progressive. App. at 311. That policy contains uninsured/underinsured motorist coverage with limits in the amount of $250,000 per person and, subject to the per person limitation, $500,000 per accident. App. at 354. The Vilagos motorcycle, on which Bartlett was a passenger at the time of the accident, was insured by Foremost. App. at 357. The Foremost policy was issued to Jeffrey Vilagos in the State of New Jersey insuring his motorcycle which was registered and garaged in that state. It also contains uninsured/underinsured motorist coverage with limits in the amount of $250,000 per person and, subject to the per person limitation, $500,000 per occurrence. App. at All three of the uninsured/underinsured motorist carriers were put on notice of the accident in a timely fashion. On March 25, 2009, Allstate offered its policy limits of $100,000. By letters dated March 27, 2009, Jason S. Krakower, Esq., Bartlett s New York attorney, notified all three of the uninsured motorist carriers that Allstate had offered its policy limits and advised the three insurers that pursuant to New York Insurance Department Regulation 35(d) they were required 4

12 to either grant permission to settle with Allstate or pay Bartlett an equivalent amount of money within thirty days. App. at 147, 149, 151. On April 10, 2009, Commerce responded granting permission to settle with Mykijewycz and his insurance carrier for $100,000. App. at 153. Neither Foremost nor Progressive ever responded to the March 27, 2009 letters. Attorney Krakower prepared a release which Bartlett signed on April 14, App. at 155. The release running in favor of Mykijewycz and Allstate was held by Attorney Krakower until thirty days had passed from March 27, He then delivered the release to Allstate and collected Allstate s settlement monies. App. at The trial court ruled that Progressive does not have to provide underinsured motorist coverage to Bartlett because she settled her claim against the tortfeasor and Allstate without Progressive s permission. The court made that ruling notwithstanding the fact that Progressive never responded to the March 27, 2009 letter advising Progressive of the tentative settlement, never offered to advance an amount of money equal to the tentative settlement in order to protect its subrogation rights, and never offered an explanation for its failure to respond to the March 27, 2009 letter. The trial court ruled that Foremost does not have to provide uninsured/underinsured motorist coverage because Bartlett did not commence her action against Foremost within six years of the date of the automobile accident giving rise to the claim and that New Jersey s statute of limitations is controlling and barred the claim. The trial court ruled that the New Jersey statute of limitations was controlling as to Bartlett s claim against Foremost notwithstanding the fact that at the time of the accident and at the time Bartlett settled her case against Allstate and at the time Foremost advised Bartlett that her insurance coverage was in jeopardy she was a resident of New Hampshire. 5

13 The trial court also ruled that any gaps created by the inability of Bartlett to access the underinsured motorist coverage in the Foremost and/or Progressive policies was to be filled by the coverage contained in the Commerce policies which are required to drop down. SUMMARY OF ARGUMENT The trial court correctly ruled that if the underinsured motorist coverage contained in the Foremost policy is unavailable to Bartlett, either because of the operation of New Jersey s statute of limitations or as a result of any of the other defenses asserted by Foremost, then the underinsured motorist coverage contained in the Commerce Auto policy is required to drop down and provide primary coverage since the Foremost coverage is no longer either available or collectible within the meaning of the Other Insurance provision of the Commerce Auto policy. The word available in the context of the Other Insurance clause has been found to be ambiguous by virtually every other court that has considered the issue. New Hampshire has long held that ambiguities in insurance policies are to be strictly construed in favor of the insured. When insurance coverage contained in other policies cannot be accessed by the insured, that coverage is neither available to nor collectible by the insured. That is so regardless of whether that other coverage is rendered unavailable because of something the insured did or failed to do in order to properly access that coverage. Commerce could easily have added additional language to its policies to cure the ambiguity but it neglected to do so. Similarly, the trial court was correct in ruling that if the underinsured motorist coverage in the Foremost and/or Progressive policies is unavailable to Bartlett then the Minimum Retained Limit of $250,000 applicable to the Commerce Umbrella policy will have been met and that policy is required to pay any damages in excess of that amount. As with the Commerce 6

14 Auto policy, coverage that cannot be accessed by the insured is not available to the insured, as required by the Commerce Umbrella policy. The trial court, however, erred when it held that New Jersey s statute of limitations is controlling as to Bartlett s claim against Foremost. The rule in New Hampshire is clear. New Hampshire courts are to utilize New Hampshire s statute of limitations if either party is a resident of New Hampshire when the cause of action accrues. In uninsured motorist cases, the cause of action accrues either when the accident giving rise to the claim occurs or, at the latest, when the liability insurance coverage available to the underinsured tortfeasor is exhausted. Since Bartlett was a resident of New Hampshire at the time of the accident and when the underinsured tortfeasor s liability coverage was exhausted, New Hampshire s statute of limitations is applicable and New Jersey s is not. Furthermore, an insured has a justiciable claim sufficient to satisfy the adverse claim prerequisite of New Hampshire s declaratory judgment statute as soon as there is a genuine threat of prejudice to the plaintiff s interests in an insurance policy. When Foremost, on June 22, 2010, notified Bartlett that there was an issue regarding her compliance with the terms and conditions of its policy and how that policy interacted with the other insurance policies providing coverage, the cause of action with respect to the coverage claim accrued. Accordingly, the claims asserted by Bartlett against Foremost are not barred by the statute of limitations and those claims should be remanded to the Superior Court for resolution of the remaining coverage defenses asserted by Foremost. Finally, the trial court erred when it ruled that the coverage contained in the Progressive policy was not available to Bartlett because of her failure to obtain Progressive s consent to settle with the underinsured tortfeasor and his liability insurance carrier. The undisputed evidence is that Bartlett gave Progressive timely notice of the tentative settlement that had been reached with 7

15 Allstate and Progressive failed and refused to respond to that request for almost four years without any explanation or justification for its inaction. ARGUMENT I. THE TRIAL COURT CORRECTLY RULED THAT IF THE UNDERINSURED MOTORIST COVERAGE CONTAINED IN THE FOREMOST AND/OR PROGRESSIVE POLICIES IS FORFEITED THEN THE UNDERINSURED MOTORIST COVERAGE PROVIDED BY COMMERCE IS REQUIRED TO DROP DOWN AND FILL THE RESULTING GAP(S) IN COVERAGE. There are four insurance policies which potentially provide underinsured motorist coverage to Bartlett to compensate her for the injuries she sustained in the August 14, 2004 accident. Foremost, the insurer of the motorcycle on which Bartlett was a passenger, had a policy in effect containing $250,000 of underinsured motorist coverage. App. at 357. Progressive, the insurer of Bartlett s own motorcycle, had a policy in effect containing $250,000 of underinsured motorist coverage. App. at 311. Bartlett also had $250,000 of underinsured motorist coverage in her Commerce Auto policy. App. at 225. Finally, Bartlett had $1,000,000 of underinsured motorist coverage through the Commerce Umbrella policy. App. at 253. The parties are in agreement that the coverage contained in the Foremost policy, to the extent it is available, provides $250,000 of primary coverage. The parties also agree that the coverage in the Progressive motorcycle policy and the coverage contained in the Commerce Auto policy provide the first layer of excess underinsured motorist coverage. There is a disagreement as to whether the coverage contained in the Commerce Auto policy and the Progressive motorcycle policy, to the extent both are available and collectible, can be stacked for a total of $500,000 of second layer coverage or whether the Other Insurance clause in the Commerce Auto policy either prohibits or adversely affects the stackability of the coverage 8

16 contained in this second layer of coverage. That issue was, however, never addressed by the trial court as it became moot when the trial court determined that neither Progressive nor Foremost was obligated to provide any underinsured motorist coverage. The final layer of coverage available to Bartlett consists of the $1,000,000 of underinsured motorist coverage contained in the Commerce Umbrella policy. App. at 256. When the trial court concluded that the insurance contained in the Foremost policy was not available to or collectible by Bartlett because of the operation of New Jersey s statute of limitations that created a potential gap in coverage. Another potential gap resulted when the trial court held that the insurance contained in Progressive s policy was also unavailable to Bartlett. The trial court correctly ruled that the two Commerce policies are required to drop down and fill the gaps created by the unavailability of the coverage contained in the Foremost and Progressive policies. 1 Insurance policies, such as the ones at issue here, commonly contain Other Insurance clauses that either limit or affect the priority of the coverage contained in those policies when other insurance policies cover the same loss. 15 R. Segalla, Couch On Insurance 219:1(3 Ed. 2005). A common Other Insurance provision is an excess clause. See, Progressive Northern Ins. Co. v. Argonaut Ins. Co., 161 N.H. 778, 782 (2011); EnergyNorth Nat l Gas, Inc. v. Certain Underwriters at Lloyd s, 156 N.H. 333, 336 (2007); Universal Underwriters Ins. Co. v. Allstate Ins. Co., 134 N.H. 315, (1991). These excess clauses turn an otherwise primary insurance policy into an excess provider when other insurance covers the same damages. 46 C.J.S. Insurance 1616 (2013); see also, Peerless Ins. v. Vermont Mut. Ins. Co., 151 N.H. 71, 73 (2004). 1 If this Court determines that the coverage contained in the Foremost and Progressive polices are available to Bartlett, as she argues in her cross-appeal, then no gap will exist and this issue will become moot. 9

17 As the trial court correctly noted (App. at 1006), [o]ther insurance clauses commonly condition application of the clause to the existence of valid and collectible insurance. Segalla, supra. 219:9; see also, EnergyNorth Nat l Gas, Inc., supra, 156 N.H. at 336; Warner v. Clarendon Ins. Co., 154 N.H. 331, 332 (2006); Peerless Ins., supra, 151 N.H. at 72. Generally, an Other Insurance excess clause reads: this insurance shall apply only as excess insurance over any other valid and collectible insurance which would apply in the absence of this policy.... Segalla, supra., 219:33. This language is meant to exclude invalid or illegal insurance, such as insurance which is voidable for misrepresentation and uncollectible insurance, such as insurance of an insolvent company, from the effect of the other insurance clause. Id. 219:9. The Foremost policy s Other Insurance clause provides that its underinsured motorist coverage is primary unless that coverage is provide[d] with respect to a vehicle you [named insured] do not own in which case the Foremost coverage will be excess over any other collectible insurance. App. at 377. Since whatever coverage Foremost might have to provide, or which it might have had to provide but for the statute of limitations issue, is indisputably primary coverage. The Progressive Other Insurance provision provides that any insurance we provide shall be excess over any other uninsured or underinsured coverage, except for bodily injury to you or a relative when occupying an insured vehicle. App. at 331. The provision clearly makes the coverage contained in the Progressive policy, if available, excess over that provided by Foremost. The Commerce Auto policy contains an Other Insurance clause is similar to the one in the Progressive policy, but with a critical exception. It reads: 10

18 If there is other applicable insurance available under one or more policies or provisions of coverage that is similar to the insurance provided under this Part of the policy: 2. Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing such coverage on a primary basis. (emphasis added). App. at 234. Accordingly, the coverage contained in the Commerce Auto policy, like that in the Progressive policy, is excess over the Foremost coverage. The Commerce Umbrella policy provides that its coverage is, with respect to a vehicle you do not own excess to the total limits of any underlying insurance or any other primary insurance that applies. App. at 309. Furthermore, being a true umbrella policy, the Commerce Umbrella policy is to be considered excess over the other policies in this case. CNA Ins. Co. v. Hartford Ins. Co., 129 N.H. 243 (1987). The Other Insurance clause in the Commerce Auto policy, unlike the same provision in the Progressive policy, specifically limits its applicability to other insurance that is available to the insured. Furthermore, its claim to excess status expressly requires that the other insurance be collectible. If it is ultimately determined that Foremost is not obligated to provide primary underinsured motorist coverage then its coverage is neither available nor collectible. There being no available or collectible primary insurance, the coverage contained in the Commerce Auto policy, by its own terms, becomes primary and fills whatever gap might have been created by the absence of the Foremost coverage. The fact that Bartlett might bear some responsibility for the fact that the coverage contained in the Foremost and Progressive policies is neither available nor collectible is irrelevant. The coverage is either available and collectible or it is not. As Professor Segalla 11

19 stated where the insured s failure to comply with the policy conditions rendered coverage inapplicable to the accident, there was no valid other insurance. Segalla, supra., 219:9. Accordingly, if it is ultimately determined that the primary coverage contained in the Foremost policy is not available or collectible by Bartlett, then the coverage contained in the Commerce Auto policy is obligated to drop down and provide $250,000 of primary coverage. If it is ultimately determined that Progressive has to provide coverage but Foremost does not, the coverage in the Progressive policy would not drop down as that policy s Other Insurance section does not require the other insurance to actually be available or collectible. It now becomes necessary to determine how the absence of the coverage contained in the Foremost policy and/or the coverage contained in the Progressive policy impacts Commerce s obligations under its umbrella policy. The Commerce Umbrella policy provides true excess underinsured motorist coverage with limits in the amount of $1,000,000. The Insuring Agreement in the Commerce Umbrella policy obligates the company to pay compensatory damages, in excess of the retained limit which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle.... App. at 308. While the phrase retained limit is not defined in the Excess Underinsured Motorists Endorsement, that endorsement is part of the Personal Umbrella Liability Endorsement (App. at 295) attached to the Commerce Homeowners policy. App. at 255. The definitions purport to apply through out the endorsement. App. at 295. The term Minimum Retained Limit is defined as being greater of: 1. The total limits of any other insurance that applies to the occurrence which: a. Are available to an insured; or 12

20 b. Would have been available except for the bankruptcy or insolvency of the insurer providing underlying insurance ; or 2. The applicable deductible amount, as provided in Condition H. Deductibles of this Endorsement. (emphasis added). App. at 296. The Condition H Deductibles required by the policy are, with respect to uninsured motorist coverage, $250,000 per person. App. at 303, 306. The Commerce Umbrella policy effectively defines the term retained limit as being the greater of either the total of any insurance coverage available to the insured or the applicable deductible amount which is $250,000. In the context of insurance policies, the term available requires that the other coverage be actually available to the insured. Segalla, supra., 219:11; see also Beddingfied v. Vaughn, 2012 WL at *2 (Mich. Ct. App. 2012) ; Kirby v. Barletto, 209 WL at *3 (Ohio Ct. App. 2009) (defining the term available to mean the amounts actually accessible to and recoverable by an underinsured motorist claimant). If it is ultimately determined that the only other coverage available to Bartlett is that contained in the Commerce Auto policy, then the total amount of the available coverage underlying the Commerce Umbrella policy totals $250,000 which is an amount equal to the minimum retained limit in the umbrella policy and the umbrella policy is obligated to pay all damages in excess of $250,000 up to its limits of $1,000,000. If, however, the Progressive policy is also available to Bartlett, then the retained limit becomes $500,000. In either event, the coverage contained in the umbrella policy attaches immediately following that underlying coverage. Commerce argues that this Court should not require its coverage to drop down because the absence of coverage in the Foremost and Progressive policies is Bartlett s fault for either not 13

21 complying with New Jersey s statute of limitations or obtaining permission to settle with the underinsured tortfeasor. In support of this argument Commerce relies extensively on the case of Hoffman v. United Services Automobile Assoc., 671 F.Supp. 922 (D. Conn. 1987). In that case the insurance policy at issue provided that it was excess over any other similar coverage available to the insured. The insured accepted the limits of liability of the coverage contained in the primary policy but failed to predict that if he had challenged the anti-stacking provision in that policy he would have been successful in having it ruled unenforceable. Accordingly, since the insured failed to challenge the position the company took with respect to stacking, the Connecticut court held that the stacked coverage limits were in fact available to the insured. Id. at The court, however, noted that: The word available could mean anything from in hand or actually received to within reach or conceivably obtainable. What is available, or accessible or obtainable, can range widely depending on what conduct or events are necessary to bring the tangible object into possession or the intangible objective to fruition. As the extent of those events or conduct is not defined, the word is ambiguous. The court then went on to note that a number of courts in other jurisdictions had come to the same conclusion and, because of this ambiguity, had construed the term strictly against the insurance company. Specifically, he cited to Benzer v. Iowa Mut. Tornado Ins. Ass n., 216 N.W.2d 385 (Iowa 1974); Safeco v. Ins. Co. of America v. Robey, 399 F.2d 330 (8 th Cir. 1968); Kraft v. Allstate Ins. Co., 6 Ariz. App. 276, 431 P.2d 917 (1967) and Gordon v. Mupin, 469 S.W.2d 848 (St.L.Mo. App. 1971). All four of those courts found in favor of the insured and construed the term to mean that the other insurance was actually available to the insured. The Hoffman court, however, refused to follow the lead of those other courts and instead decided to 14

22 fix the ambiguity by gratuitously inserting the term reasonably in front of the word available. The court refused to follow the generally accepted rule that ambiguities in insurance policies are to be construed against the insurance company and in favor of the insured. The other two cases cited by Commerce in support of its position are Vrabel-Kilby v. Nationwide Mut. Ins. Co., 2012 WL (Ill.App. 4 Dist 2012) and Auto-Owners Ins. Co. v. Leefers, 203 Mich. App. 5, 512 N.W.2d 324 (1993). Both cases follow the Hoffman, supra., case without any independent analysis. Commerce suggests in its brief (pg. 18) that by adding judicial gloss to the word available as the court in Hoffman did advances the purpose of excess coverage which is to provide excess coverage when the primary policies do not fully compensate the insured. While that argument might have some merit with respect to true excess or umbrella policies its does not have any merit with respect to basic motor vehicle policies. True excess or umbrella policies are written with the expectation by both parties that they will always be excess over a certain required amount of underlying coverage. 2 The Commerce Auto policy is a basic motor vehicle policy and it only finds itself in an excess position in certain fortuitous situations. New Hampshire has long followed the rule that ambiguities are to be construed against the insurer. If more than one reasonable interpretation is possible, and an interpretation provides coverage, the policy contains an ambiguity and will be construed against the insurer. Brickley v. Progressive N. Ins. Co., 160 N.H. 625 (2010). See Great American Dining, Inc. v. Philadelphia Indem. Ins. Co., 164 N.H. 612, 616 (2013); Colony Ins. Co. v. Dover Indoor Climbing Gym, 158 N.H. 628, 613 (2009); Hudson v. Farm Family Mut. Ins. Co., 142 N.H. 144 (1997). This is so even if both interpretations of the phrase are reasonable. Contoocook 2 In this case the Commerce Umbrella policy was written with the expectation that there would be underlying coverage of $250,

23 Valley School Dist. v. Graphic Arts Mut. Ins. Co., 147 N.H. 392, 394 (2001). Courts are not free to add their own judicial gloss to insurance policies to cure ambiguities created by the drafter of the policy. Apparently every court that has reviewed the term available in the context of the Other Insurance clause has found the word to be ambiguous. Hoffman, supra., Benzer, supra., Safeco, supra., and Gordon, supra. With few exceptions, those courts have gone on to construe the term strictly against the insurance company and adopt the interpretation that results in coverage. As the court held in Travelers Indemn. Co. v. Wells, 209 F.Supp 784, 790 (D.C. 1962) the term available must be construed to mean actually available for the use of the injured party. Commerce could easily have avoided this ambiguity. If it intended the term available to mean reasonably available or potentially available or available at the time of the accident or available but for some act or failure to act on the part of the insured it could have said so. Commerce clearly is capable of qualifying the term available. In its Umbrella policy Commerce defined the term Minimum Retained Limit to mean underlying coverage that is available to the insured or that coverage which would have been available except for the bankruptcy or insolvency of the insurer providing that coverage. App. at 296. Commerce could have added a similar provision in its auto policy and talked about other insurance available to the insured or which would have been available except for an act or the failure to act on the part of the insured. It did not do so and cannot now be heard to complain. If Foremost is relieved of its obligation to provide underinsured motorist coverage, then the coverage contained in the Commerce Auto policy must drop down and provide primary underinsured motorist coverage as there would then be no other primary underinsured motorist 16

24 coverage either available to or collectible by Bartlett. In the event that it is determined that Foremost does not have to provide any coverage and the Commerce Auto policy is required to drop down and provide primary coverage and if it is determined that Progressive has to provide coverage then there will only be one policy providing first layer excess coverage and the second issue raised by Commerce having to do with whether multiple excess policies can be stacked will become moot as there will simply be one primary policy, one excess policy and one umbrella policy. Similarly, if the only basic underinsured motorist coverage available to Bartlett is the $250,000 of coverage contained in the Commerce Auto policy then the Commerce Umbrella policy is required to provide the next $1,000,000 of coverage as the Minimum Retained Limit in that policy is the greater of the underlying insurance available to the insured (the $250,000 in the Commerce Auto policy) or the applicable deductible in Condition H ($250,000). App. at 296. Again, it should be noted that when referring to the available underlying insurance Commerce included that coverage which would have been available had the underlying carrier not become insolvent or bankrupt. It could have easily added a provision that included the coverage that would have been available but for some act or failure to act that on the part of the insured. It did not do so. Of course, if this Court agrees with Bartlett and determines that the Foremost and Progressive policies are obligated to provide underinsured motorist coverage then the drop down issue becomes moot. II. COMMERCE IS NOT ENTITLED TO REDUCE ITS COVERAGE ON ACCOUNT OF THE EXISTANCE OF THE PROGRESSIVE POLICY The trial court ruled that the underinsured motorist coverage in the Progressive policy is not available to Bartlett because she settled her claim against the underinsured tortfeasor without 17

25 Progressive s express written permission. The trial court concluded that neither the coverage in the Progressive policy nor the coverage in the Foremost policy was available to or collectible by Bartlett. Accordingly, the trial court held that the Commerce Auto policy was required to drop down and provide primary coverage with the Commerce Umbrella policy providing excess coverage to the extent Bartlett s damages are determined to exceed $250,000. As a result, the trial court never reached the issue of how to reconcile the Other Insurance provision in the Progressive policy, which makes no attempt to limit stacking, with that portion of the Other Insurance clause in the Commerce Auto policy which purports to limit stacking when two or more policies provide excess underinsured motorist coverage. App. at 331. The Progressive policy s Other Insurance clause provides: If there is other applicable uninsured or underinsured motorist coverage, we will pay only our share of the damages. Our share is the proportion that our Limit of Liability bears to the total of all available coverage limits. Any insurance we provide shall be excess over any other uninsured or underinsured motorist coverage, except for bodily injury to you or a relative when occupying a covered vehicle. The relevant portions of the Commerce Auto policy provide: If there is other applicable insurance available under one or more policies or provisions of coverage that is similar to the insurance provided under this Part of the policy: 1. Any recovery for damages under all such policies or provisions of coverage may equal but not exceed the highest applicable limit for any one vehicle under any insurance providing coverage on either a primary or excess basis. 2. Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing such coverage on a primary basis. 18

26 (emphasis added) App. at If the coverage under this policy is provided:... b. On an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our Limit of Liability bears to the total of all applicable limits of liability for coverage provided on an excess basis. A. THIS COURT SHOULD DECLINE TO CONSIDER THIS ISSUE AT THIS TIME. 3 In order for it to be necessary to resolve the conflict between the Progressive policy that permits stacking and the Commerce Auto policy, which Commerce claims prohibits stacking when there are multiple policies providing excess coverage, it first must be determined that there in fact are several policies providing coverage on an excess basis. Commerce does not claim that the anti-stacking language in the auto policy has any relevance with respect to the primary coverage that Foremost might or might not have to provide or any relevance with respect to its Umbrella policy. Therefore, if this Court determines that neither Foremost nor Progressive is obligated to provide underinsured motorist coverage and the Commerce policies are required to drop down to fill whatever gaps that might result this issue becomes moot. If this Court determines that Foremost is not obligated to provide coverage but that Progressive is the issue is moot. Similarly, if this Court determines that Foremost is required to provide coverage but that Progressive is not the issue will also be moot. In any of those scenarios there will not be 3 This is the issued addressed in section IV of the Argument section of the Commerce brief at pg

27 multiple policies providing coverage on an excess basis. 4 This issue will only need to be resolved in the event it is ultimately determined that all three of the basic motor vehicle policies are obligated to provide coverage. Commerce offers no guidance by way of case law or the opinion of commentators as to how these conflicting provisions should be reconciled in the event that this issue need be decided. As it will be moot unless both Foremost and Progressive are required to provide coverage there is no reason why this Court should decide the issue now and without the benefit of the analysis of the Superior Court. In the event that this Court determines that the New Jersey statute of limitations does not bar Bartlett s claim against Foremost, the case will necessarily have to be remanded as Foremost has raised other defenses to coverage which the trial court never addressed. Foremost claims that Bartlett never sent the letter of March 27, 2009 (App. at 151) notifying it of the tentative settlement with Allstate and that even if she did, she did not wait the required thirty days before settling with Allstate and the underinsured tortfeasor. App. at While Bartlett does not believe that these defenses have any merit, she recognizes Foremost s right to have these issues subjected to judicial scrutiny. If that occurs, the Superior Court would also have the opportunity to decide the issue of the conflict between the conflicting language in the Progressive and Commerce Auto policies. B. THE ANTI-STACKING PROVISION IN THE COMMERCE AUTO POLICY IS AMBIGUOUS AND UNENFORCEABLE. There can be no doubt but that the two policies contain conflicting provisions regarding stacking. The Progressive policy contains no prohibition against the inter-policy stacking of 4 The Commerce Umbrella policy provides true excess or umbrella coverage and is always the final layer of coverage regardless of what happens as to the other three policies at issue and Commerce does not claim otherwise. It is only the Commerce Auto policy and the Progressive policy that provide coverage that could be considered excess in regard to this issue. 20

28 underinsured motorist coverage. The policy states that if there is other applicable underinsured motorist coverage we will pay our share of the damages. Our share is the proportion that our Limit of Liability bears to the total of all available coverage limits. App. at 331. That, according to Professor Widiss, is the classic language found in policies which operates to estop the insurer from challenging the insurer s right to stack coverage. Widiss and Thomas, Uninsured and Underinsured Motorist Insurance, 3 rd ed (2005). In fact, Progressive acknowledges that its coverage is stackable and that if it has to provide coverage its entire $250,000 is available along with the $250,000 of coverage in the Commerce Auto policy on an excess basis. App. at The Commerce Auto policy contains conflicting provisions. First, in paragraph 3.b it provides that when it is obligated to provide coverage on an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our Limit of Liability bears to the total of all applicable Limits of Liability for coverage provided on an excess basis. App. at 550. That is essentially the same language found in the Other Insurance clause of the Progressive policy that unambiguously permits stacking. There is, however, conflicting language in the Commerce Auto policy upon which Commerce relies. Section 1 of the Other Insurance clause provides that when multiple policies provide coverage on a primary or excess basis then [a]ny recovery for damages under all such policies or provisions may equal but not exceed the highest applicable limit for any one vehicle. App. at 549. In New Hampshire there is a presumption that uninsured and underinsured motorist coverage contained in multiple polices can be stacked. Green Mt. Ins. Co. v. Bonney, 131 N.H. 21