394 A.2d 839 (N.H. 1978), 78-048, Commercial Union Assur. Companies v. Gollan

Docket Nº:78-048.
Citation:394 A.2d 839, 118 N.H. 744
Opinion Judge:DOUGLAS, Justice. BROCK, J.
Party Name:COMMERCIAL UNION ASSURANCE COMPANIES v. William F. GOLLAN et al.
Attorney:Devine, Millimet, Stahl & Branch, Manchester (Andrew D. Dunn, Manchester, orally), for plaintiff., Gallagher, Callahan & Gartrell, Concord (Edward E. Shumaker, III, Concord, orally), for defendant Lloyd G. Reynolds, Inc. Devine, Millimet, Stahl & Branch, of Manchester (Andrew D. Dunn orally), fo...
Judge Panel:LAMPRON, C. J., and GRIMES, J., concur.
Case Date:November 15, 1978
Court:Supreme Court of New Hampshire
 
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Page 839

394 A.2d 839 (N.H. 1978)

118 N.H. 744

COMMERCIAL UNION ASSURANCE COMPANIES

v.

William F. GOLLAN et al.

No. 78-048.

Supreme Court of New Hampshire.

November 15, 1978

Page 840

[118 N.H. 745] Devine, Millimet, Stahl & Branch, Manchester (Andrew D. Dunn, Manchester, orally), for plaintiff.

Gallagher, Callahan & Gartrell, Concord (Edward E. Shumaker, III, Concord, orally), for defendant Lloyd G. Reynolds, Inc.

DOUGLAS, Justice.

This case presents issues concerning the effect of certain clauses in a liability insurance policy purchased by a contractor corporation. The corporation built a home whose roof collapsed shortly after its owners took possession.

In 1974 William and Gloria Gollan bought a parcel of land in Peterborough, New Hampshire, from Lloyd and Margaret Reynolds and hired Mr. Reynolds' construction firm, Lloyd G. Reynolds, Inc., to build a home on the lot. Shortly after the Gollans moved into their new home, the roof collapsed. The Gollans then sued the builder for cost of repair and incidental damages. The declaration alleged negligence and breach of warranty. Commercial Union Assurance Companies (Commercial Union) insured the builder under a liability policy. Claiming that certain coverage exclusions applied, Commercial petitioned the superior court for a declaratory judgment under RSA 491:22. The parties submitted an agreed statement of facts and Batchelder,

Page 841

J., held in favor of the insurer. The builder's exceptions were reserved and transferred to this court. We reverse.

The trial court was correct in finding that the insurer must bear the burden of proving the absence of coverage. RSA 491:22-a (Supp.1977); Merchants Mut. Ins. Co. v. Transformer Serv. Inc., 112 N.H. 360, 248 A.2d 112 (1972). The question before us is whether the ordinary layman in the position of the insured could reasonably be expected to understand that certain exclusions qualified the policy's grants of coverage. See Commercial Union Assurance Cos. v. Derry, 118 N.H. 469, 387 A.2d 1171 (1978); Brown v. Laconia, 118 N.H. 376, 386 A.2d 1276 (1978); Aetna Ins. Co. v. State Motors, Inc., 109 N.H. 120, 125, 244 A.2d 64, 67 (1968).

Insurance policies have long been under attack in this jurisdiction for their confusing language. We recently noted that:

Although insurers have had over one hundred years to hone their policies into forms that would not ferry the [118 N.H. 746] unwary reader on a trip into Wonderland, they regrettably often fully merit the criticism that Chief Justice Doe (deploring the prolixity of complex verbiage in policies, DeLancey v. Insurance Co., 52 N.H. 581 (1873)) levelled at their predecessors. Moreover, as we have recognized, these policies usually are imposed on the consumer on a take-or-leave-it basis. . . . The pretense that the parties had bargained for the resulting contract of insurance is an absurdity.

Storms v. U. S. Fidelity and Guaranty Co., 118 N.H. 427, ---, 388 A.2d 578, 580 (1978).

The policy in the present case is entitled "Comprehensive General Liability Insurance" and is seventeen pages long. The top half of the standard-form first page contains blanks in which are typed the insured's name and...

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