Fennell v . Commercial Union Ins. CV-96-18-SD 02/26/97

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Ronald Fennell;

Fennell Enterprises, Inc. v. Civil N o . 96-18-SD

Commercial Union Insurance Company;

Christine A . Irving

OPINION AND ORDER

This is a declaratory judgment action, the purpose of which is determination of the coverage of a certain insurance policy issued by Commercial Union Insurance Company (CU) to Kenneth Cabral. The incident which gives rise to the action is a September 1 0 , 1994, motor vehicle accident which occurred while Cabral's vehicle was being operated by Ronald Fennell.

For reasons hereinafter set forth, the court finds and rules that the CU policy affords coverage by reason only of the application of and up to the $25,000 limit of the Financial Responsibility Law of New Hampshire. New Hampshire Revised Statutes Annotated (RSA) 264. 1 floor.^[5] He removed his plates from the vehicle and then drove the borrowed car carrier to Keene, New Hampshire, to transact his business.

There was no communication of any kind between Cabral and Fennell as to the use Fennell might make of the pickup. Cabral expected that the truck might be moved on Fennell's lot, but he did not anticipate it would be operated on a public highway.

On September 1 0 , 1994, although Fennell had a number of other vehicles available on his lot, he decided to use Cabral's pickup to make a trip to the bank in the course of his business.^[6] Accordingly, he put his own transporter plates on the pickup and drove it to the bank. On the return trip, he was involved in an accident. The result has been litigation brought in this court against Fennell by the estate of Robert Irving.

This declaratory judgment action has been brought in Fennell's name and behalf by counsel whose fees are being paid by Seaco Insurance Company, the purported "excess" carrier of Fennell. The claim made is that the CU policy must provide primary coverage for the fatal accident of September 1 0 , 1994. CU denies that its policy provides any coverage for the accident.

Discussion The Cabral vehicle was a "covered auto" within the meaning of the CU policy. That policy described Cabral as an "insured" for "any covered auto," and it extended coverage to "anyone else while using with [Cabral's] permission a covered auto" owned by Cabral. Defendants' Exhibit A , Garage Coverage Form p . 2 , Section II--Liability Coverage, A . 1 . Who Is An Insured, a.(1), ( 2 ) .

Excepted from such permissive use, however, is "someone using a covered auto while he . . . is working in a business of selling, servicing, repairing, parking, or storing 'autos' unless that business is [Cabral's] 'garage operations.'" Id. at (2)(c).

Fennell argues that this policy language is ambiguous, invoking the rule that ambiguous provisions are construed against an insurer. Trombly v . Blue Cross/Blue Shield, 120 N.H. 764, 771, 423 A.2d 980, 985 (1980). While a term is ambiguous if the contracting parties could reasonably disagree about its meaning or application, Smith v . Liberty Mutual Ins. Co., 130 N.H. 117, 122, 536 A.2d 164, 166 (1987), the court will not force an ambiguity simply to resolve it against an insurer. Akerley v . Hartford Ins. Group, 136 N.H. 433, 439, 616 A.2d 511, 514 (1992).

The meaning of the terms of the insurance policy is based on a test which takes the plain and ordinary meaning of the policy words in context and construes them as would a reasonable person in the position of the insured based on more than a casual reading of the policy as a whole. High Country Associates v . New Hampshire Ins. Co., 139 N.H. ^[3] 9 , 4 1 , 648 A.2d 474, 476 (1994). Thus viewed, the CU policy plainly excepts from coverage the use of Cabral's pickup by anyone who lacks permission to operate it or by a permissive user if his use of such vehicle occurs while he is working in a business of selling, servicing, repairing, parking, or storing "autos". The court finds and rules that there is no ambiguity in the CU policy which requires that it be construed against CU.^[7]

The court first turns its attention to whether, without consideration of the possible application of RSA 264, Fennell was entitled to coverage under the CU policy while operating the Cabral pickup on September 1 0 , 1994. Contrary to Fennell's contentions, the court finds that AMICA Mutual Ins. C o . v . Zinck, 130 N.H. ^[3] 5 7 , 361, 540 A.2d 1227, 1230 (1988), properly read, holds that, regardless of the insurance policy language at issue, the "totality of circumstances" applies only to consideration of coverage where RSA 264 comes into play. Accordingly, the court makes such findings as reasonably can be made on the evidence presented. Id.

When Cabral left his pickup without registration plates of any kind attached thereto, Fennell could properly assume entitle- ment to move it about his lot as needed to move other vehicles.

But, with other vehicles under his control available on the lot, Fennell could not reasonably assume that he had permission to operate the vehicle off such lot on the public highway. Additionally, one is engaged in work or working when he is engaged in any form of physical or mental exertion, or both combined, for the attainment of some object other than recreation or amusement. BLACK'S LAW DICTIONARY at 1605 (6th ed. West 1990). In driving to and from the bank on September 1 0 , 1994, Fennell was procuring funds to pay the expenses of one who had made a delivery to his place of business. Such trip, the court finds and rules, equates with working in Fennell's business of auto sales and service, and clearly falls within the exception of the C U policy.

Turning to the applicability of the New Hampshire Financial Responsibility Law, R S A 264, a different outcome is mandated. Section 1 8 , I , of the statute makes absolute the liability of a motor vehicle insurer on the occurrence of an accident, and section I I I thereof removes the defenses of "violation of exclusions, conditions, other terms, or language contained in the policy," together with "unauthorized or unlawful use of the vehicle," with certain exceptions not here applicable.^[8] Therefore, such defenses are not available to defend or avoid the policy within the $25,000 limits of liability established by RSA 259:61. Id.

Accordingly, analysis of the issue of coverage of the CU policy where RSA 264 is in play must be had under the "totality of the circumstances." Government Employees Ins. C o . v . Johnson, 118 N.H. 899, 902, 396 A.2d 331, 333 (1978). So construed, "even where the actual operation giving rise to the insurer's liability was clearly outside the scope of permission," id. at 903, A.2d at 333, the application of RSA 264 mandates the finding, herein made, that the CU policy must provide coverage for the Septem- ber 1 0 , 1994, accident up to the minimum statutory requirements of $25,000.

Finally, the court considers whether, as he claims, Fennell is entitled to an award of attorney's fees pursuant to RSA 491:22-B.^[9] As previously outlined, it is undisputed that Fennell's fees in this action are being paid by Seaco Insurance Company.

The remedial statute designed to protect consumers against wrongful refusal of insurance companies to provide coverage, RSA 491:22-b specifically limits the right to reimbursement to insured persons, not insurers. Liberty Mutual Ins. C o . v . Home Ins. Indemnity Co., 117 N.H. 269, 271-72, 371 A.2d 1171, 1173-74 (1977). In the instant case, the insured person has incurred no fees, as they are being paid by his insurer. Accordingly, Fennell is not entitled to any award of fees pursuant to RSA 491:22-b.

Conclusion

The court finds and rules that CU is not obligated to provide coverage under its policy to Ronald Fennell, with the exception that application of the Financial Responsibility Law of New Hampshire, RSA 264, mandates that such coverage be provided up to the minimum statutory limits of $25,000. No attorney fees are to be awarded Fennell pursuant to RSA 491:22-b.

The foregoing narrative opinion comprises the findings and rulings of the court required by Rule 52(a), Fed. R. Civ. P. All requests for findings and rulings and rulings not hereinabove inferentially granted are herewith denied. SO ORDERED.

Shane Devine, Senior Judge United States District Court February 2 6 , 1997 cc: Doreen F. Connor, Esq.

Andrew D. Dunn, Esq.

Richard A . Freedman, Esq.

Marc R. Scheer, Esq.