Brouillard v. Prudential Property and Cas. Ins. Co., 95-335

• Decision Date: 08 April 1997
• Docket Number: No. 95-335,95-335
• Parties: Robert P. and Loretta N. BROUILLARD v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY
• Court: New Hampshire Supreme Court

Page 63

693 A.2d 63

141 N.H. 710

Robert P. and Loretta N. BROUILLARD v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY

No. 95-335.

Supreme Court of New Hampshire.

April 8, 1997.

As Amended on Reconsideration

May 16, 1997.

Law Offices of David J. KillKelley, Laconia (David J. KillKelley on the brief and orally), Gilford, for plaintiffs.

Bouchard & Mallory, P.A., Manchester (Mark L. Mallory on the brief and orally), Manchester, for defendant.

THAYER, Justice.

The plaintiffs, Robert P. and Loretta N. Brouillard, appeal a ruling of the Superior Court (Morrill, J.) denying a petition for declaratory judgment. The Brouillards sought to establish their right to underinsured motorist benefits from the defendant, Prudential Property & Casualty Insurance Company (Prudential). We affirm.

The trial court found the following facts. On March 1, 1989, Robert Brouillard was injured while riding as a passenger in an automobile operated by Philip Bourgoine. Mr. Brouillard collected $100,000 from Bourgoine's insurance carrier for his injuries. The Brouillards then sought underinsured motorist benefits from their own insurance carrier, Prudential. After Prudential denied any obligation to provide underinsured motorist coverage to the Brouillards, they filed the instant petition for declaratory judgment. The superior court denied the petition and the Brouillards appeal.

On appeal, the Brouillards argue: (1) that their policy permits "stacking" the insurance coverage on all four of their automobiles to determine the total limits of underinsured motorist benefits; (2) that even if the provisions of the policy prohibit "stacking," they were not properly notified of the anti-stacking provisions as required by RSA 412:2-c (1991); (3) that the limits of coverage, if any, should be based on the "per accident" provision of the policy, rather than the "per person" provision; and (4) that Mrs. Brouillard has a separate claim for loss of spousal consortium with a separate $100,000 limit of underinsured motorist coverage.

In the fall of 1982, when Prudential issued its policy to the Brouillards, a Prudential agent personally delivered a package of materials to their home, including an "Easy Reading Family Auto Policy" (Easy Reading Policy) and a 1980 New Hampshire Automobile Endorsement Booklet (Endorsement Booklet). It was Prudential's routine practice to place the materials in a clear plastic sleeve and fold them together. The Easy Reading Policy contained the primary insurance provisions. The 1980 Endorsement Booklet contained additions, revisions, and clarifications to the Easy Reading Policy, including an anti-stacking provision. The 1980 Endorsement Booklet, however, was not physically affixed to the Easy Reading Policy.

I. Intra-Policy Stacking

The plaintiffs first argue that their policy should be interpreted to allow "stacking" of underinsured motorist coverage.

Intra-policy stacking allows the insured to aggregate the limits of underinsured motorist coverage by multiplying the stated limit of liability by the number of vehicles covered under a policy. Although stacking of underinsured motorist coverage is generally allowed, insurance companies are free to limit their liability and prevent stacking through the use of clear and unambiguous policy language.

United Services Automobile Assoc. v. Wilkinson, 132 N.H. 439, 443, 569 A.2d 749, 751 (1989) (quotations, citations, and brackets omitted).

Like all contracts, "[t]he interpretation of insurance policy language is ultimately an issue of law for this court to decide." Whitcomb v. Peerless Ins. Co., 141 N.H. 149, 150, 679 A.2d 575, 576 (1996). "In construing insurance policy language which purports to limit liability or prevent stacking, we employ a strict construction standard which requires that ambiguities in insurance policies be construed in favor of the insured and against the insurer." Wilkinson, 132 N.H. at 443, 569 A.2d at 751; see Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 770-72, 423 A.2d 980 984-85 (1980). "We will not, however, force an ambiguity simply to resolve it against an insurer." Whitcomb, 141 N.H. at 151, 679 A.2d at 577. In determining whether an ambiguity exists, "we take the plain and ordinary meaning of the policy's words in context, and we construe the terms of the policy as would a reasonable person in the position of the insured based on more than a casual reading of the policy as a whole." Id. at 150, 679 A.2d at 576-77 (quotation and brackets omitted).

The anti-stacking provision contained in Prudential's 1980 Endorsement Booklet is PAC 2219A which provides:

STACKING OF UNINSURED MOTORISTS COVERAGE PROHIBITED

It is agreed that with respect to the Uninsured Motorists Coverage under How We'll Settle A Claim (Part 4), the following is added:

If you or any other person insured under this policy are in an accident while in a car covered by this policy, we won't pay more than the limit of the applicable coverages for that particular car (as shown on the Declarations Page). If you or other insured persons are in an accident while in a car that is not covered under this policy or while a pedestrian, we won't pay more than the limits of applicable coverages which you have on any one of your cars (as shown on the Declarations Page). In neither case can coverages on other cars be added to or stacked upon the coverage on the particular car involved.

The Brouillards argue that PAC 2219A is ambiguous, and therefore, we should construe the provision in their favor and permit stacking. We disagree.

The first and most obvious indication that the policy prohibits stacking is the title of the provision: "STACKING OF UNINSURED MOTORIST COVERAGE PROHIBITED." The plain and ordinary meaning of these words prohibits stacking. See Whitcomb, 141 N.H. at 150, 679 A.2d at 576. The Brouillards argue, however, that Bourgoine was an underinsured motorist, not an uninsured motorist. This interpretation of the provision overlooks its context within the rest of the policy. See id. at 150, 679 A.2d at 576-77.

The 1980 Endorsement Booklet explicitly incorporates PAC 2219A into "Part 4" of the policy. Nowhere does Part 4 distinguish between uninsured and underinsured motorist benefits. Part 4 generally describes the rights of an insured who is injured by a driver who "doesn't have proper insurance." A driver who "doesn't have proper insurance" is defined in the section as a driver with "no liability insurance or ... inadequate ... liability insurance coverage." None of the thirty-five provisions of Part 4 make any distinction between uninsured motorist coverage and underinsured motorist coverage. Additionally, PAC 240 in the 1980 Endorsement Booklet, the provision which determines when Prudential provides underinsured motorist coverage, is titled "SUPPLEMENTARY UNINSURED MOTORIST INSURANCE." (Emphasis added.) The fact that underinsured motorist coverage is provided in a section titled uninsured motorist insurance further indicates that uninsured motorist benefits and underinsured motorist benefits are subject to the same limitations.

There are additional reasons why PAC 2219A prohibits stacking of underinsured motorist coverage. PAC 2219A expressly states, "[i]f you or other insured persons are in an accident while in a car that is not covered under this policy ... we won't pay more than the limits of applicable coverages which you have on any one of your cars." Once again, the plain and ordinary meaning of the phrase "on any one of your cars" demonstrates that an insured may not aggregate the coverages on all of the insured's cars under the policy. See id. at 150, 679 A.2d at 576.

The Brouillards finally argue that PAC 2219A is void because it was not included on a Change Endorsement page provided to the Brouillards when they renewed their policy with Prudential. The Brouillards erroneously conclude that Prudential's failure to list PAC 2219A on the Change Endorsement page signifies that Prudential eliminated the provision from the policy. See Prudential Prop. & Cas. Ins. Co. v. Raymond 138 N.H. 17, 18-19, 634 A.2d 1015, 1016-17 (1993). The Change Endorsement page was issued to the Brouillards to document the new automobile that they added to the policy, not to change the provisions in the Endorsement Booklet. In fact, no endorsements were listed on the "endorsements" line of the change endorsement page. The Change Endorsement page unequivocally states that there were "NO OTHER CHANGES TO POLICY PROVISIONS OR COVERAGES," and therefore, PAC 2219A, along with other basic coverages included in the endorsement booklet, remained in effect.

II. RSA 412:2-c Notice Requirement

The Brouillards next argue that Prudential did not physically affix the 1980 Endorsement Booklet to the Easy Reading Policy as required by RSA 412:2-c, and therefore, Prudential did not properly notify the Brouillards of the anti-stacking provision contained in the endorsement booklet. The trial court ruled, however, that RSA 412:2-c only applies to subsequent revisions to the original policy. We affirm the trial court's ruling on alternative grounds. See In re Trailer and Plumbing Supplies, 133 N.H. 432, 438, 578 A.2d 343, 346 (1990).

"This court ... is the final arbiter of the legislature's intent as expressed in the words of the statute considered as a whole." Pope v. Town of Hinsdale, 137 N.H. 233, 237, 624 A.2d 1360, 1362 (1993). "In determining intent, we draw inferences concerning a statute's meaning from its composition and structure. This court ascribes to statutory words and phrases their usual and common meaning, unless the statute itself suggests otherwise." Stevens v. Town of Goshen, 141 N.H. 219, 221, 683 A.2d 814, 815 (1996) (quotation and brackets omitted).

RSA 412:2-c states:

In the event that a company or filing or rating organization eliminates or reduces coverages, conditions or definitions in its policies issued under this section other than at the request of...