American Mut. Ins. Co. v. Commercial Union Ins. Co. of New York

• Decision Date: 30 April 1976
• Docket Number: No. 7034,7034
• Citation: 116 N.H. 210,357 A.2d 873
• Parties: AMERICAN MUTUAL INSURANCE COMPANY v. COMMERCIAL UNION INSURANCE COMPANY OF NEW YORK et al.
• Court: New Hampshire Supreme Court

Page 873

357 A.2d 873

116 N.H. 210

AMERICAN MUTUAL INSURANCE COMPANY v. COMMERCIAL UNION INSURANCE COMPANY OF NEW YORK et al.

No. 7034.

Supreme Court of New Hampshire.

April 30, 1976.

Wiggin, Nourie, Sundeen, Pingree & Bigg and William S. Orcutt and Gordon A. Rehnborg, Jr., Manchester, for plaintiff.

Sheehan, Phinney, Bass & Green and James Q. Shirley and Bradford E. Cook, Manchester, for defendant Commercial Union Insurance Company of New York.

Craig, Wenners, Craig & McDowell, Manchester (Vincent A. Wenners, Jr., Manchester, orally), for Paul V. and Theresa Bristol individually and as heirs-at-law of their unborn child, deceased.

Leahy & Denault, Claremont, for the defendant Croft filed no brief.

Frederic T. Greenhalge, Concord, by brief, as amicus curiae.

LAMPRON, Justice.

Petition for declaratory judgment by plaintiff American Mutual seeking a definition of the rights of the parties under a policy issued by defendant Commercial Union to defendant Georgia Croft under her maiden name of Georgia M. Richmond. Her automobile was in a collision at Newport on December 7, 1969, with a car operated by defendant Paul V. Bristol, insured by the plaintiff, in which his wife and their unborn child were passengers. American Mutual also seeks a declaration that it is not obligated to furnish uninsured motorist coverage to the Bristols under its policy.

The matter was heard by a Master (Carl O. Randall, Esq.) who made certain findings and rulings and recommended that a decree be entered that Commercial Union is obligated to pay any claim established by the Bristols up to the limits of the financial responsibility law; and that American Mutual is responsible to the Bristols for any claim in excess of Commercial Union's financial responsibility limits up to the limits of American's uninsured coverage. Flynn, J., so decreed and reserved and transferred the exceptions of American and Commercial thereto.

Georgia M. Richmond, in whose name the Commercial Union policy was issued in February 1969, was married to one Croft in 1957 and divorced in 1963. However, she continued to use the name Croft. On November 6, 1966, she was involved in an automobile accident. Having no liability insurance at that time, she was ordered to post security for that accident and to show proof of financial responsiblity before she could drive again. In April 1967, she applied for an operator's license and a motor vehicle registration under her maiden name Richmond and received both. On February 6, 1969, Georgia applied for and was issued by Commercial Union under her maiden name the family combination automobile policy involved in this case.

The master properly found that Georgia Croft intentionally made false statements in her application for insurance. Among these, she stated that her legal name was Georgia M. Richmond; that she had not been involved in an accident during the past three years; and that financial responsibility filing was not required under the policy. The master ruled that the policy was void from the outset but that Commercial Union was obligated to pay any claim established by the Bristols up to the limits of financial responsibility which were then $10,000 for one person and $20,000 for one accident. Since the policy was still outstanding on the day of the accident this ruling was properly made. RSA 268:16 I, III; Farm Bureau Ins. Co. v. Martin, 97 N.H. 196, 84 A.2d 823 (1951); see Bosse v. Insurance Co., 88 N.H. 440, 190 A. 715 (1937).

We cannot accept the argument of Commercial Union that the provisions of RSA 268:16 I which provide that the liability of an insurer under a motor vehicle policy becomes absolute whenever loss or damage occurs should not apply under the circumstances of this case. It maintains that if its policy had been cancelled for fraud, Croft would have became an uninsured motorist under RSA 268:15-a (Supp.1975) and coverage would be provided by American Mutual under its uninsured motor vehicle coverage. The purpose of the financial responsibility law is to secure the solvency of operators upon the highways and provide funds for the payment of the claims of those injured in an accident. Milwaukee Ins. Co. v. Morrill, 100 N.H. 239, 241, 123 A.2d 163, 165 (1956); see Annot., 83 A.L.R.2d 1104 (1962). The interpretation of RSA 268:16 I advocated by Commercial Union would reduce the funds available to meet the claims of accident victims in derogation of the manifest intent of RSA ch. 268. Its exception to the ruling which held it liable to the limits required by the financial responsibility is overruled. Hartford Ind. Co. v. Wolbarst, 95 N.H. 40, 43, 57 A.2d 151, 153 (1948); Continental Ins. Co. v. Charest, 91 N.H. 378, 380, 20 A.2d 477, 479 (1941).

We consider next that part of the trial court's decree that American Mutual is responsible to the Bristols for any claim in excess of the financial responsibility limits of Commercial Union up to the limits of American's uninsured coverage.

The New Hampshire Uninsured Motorists Law (RSA 268:15) which first provided for protection against uninsured motor vehicles did not define the word 'uninsured.' Its meaning therefore must be defined with regard to the purpose of this type of insurance which is to close the gap in the protection afforded to the public under our financial responsibility act. Maryland Cas. Co. v. Howe, 106 N.H. 422, 423, 213 A.2d 420, 421 (1965); Kirouac v. Healey, 104 N.H. 157, 159, 181 A.2d 634, 636 (1962). In Carrignan v. Allstate Insurance Company, 108 N.H. 131, 229 A.2d 179 (1967), this court held that a motor vehicle whose insurance coverage falls short of the minimums imposed by our financial responsibility law, is an uninsured motorist within the meaning of RSA 268:15. This interpretation was adopted by the legislature and became RSA 268:15-a V (Supp.1975). See Charest v. Union Mut. Ins. Co., 113 N.H. 683, 313 A.2d 407 (1973). Similarly we held that a motor vehicle whose insurer becomes insolvent after an accident is an 'uninsured' vehicle within the terms of RSA 268:15. See RSA 268:16 II, III for legislation in that respect.

The matter of uninsured motorist protection was considered again in Raitt v. National Grange Mutual Insurance Company, 111 N.H. 397, 285 A.2d 799 (1971). The issue was whether an injured party, who had collected $15,000 by settlement with an insured tort-feasor in the collision and whose damages exceeded that amount, could recover under his own uninsured motorist policy coverage when the second tort-feasor, in whose car he was a passenger, was uninsured. We held that in such a situation the injured party may turn to his uninsured motorist carrier to be indemnified within the limits of coverage to the extent that his damages exceed the compensation received from the insured tort-feasor.

This principle was reaffirmed in Gay v. Preferred Risk Mutual Insurance Company, 114 N.H. 11, 314 A.2d 644 (1974). That plaintiff was in an accident involving an automobile owned by Belfiore and driven by Borowski. The latter was uninsured and Belfiore had the minimum coverage required by Massachusetts of $5,000 for one person and $10,000 for one accident....