Cincinnati Specialty Underwriters Ins. Co. v. Best Way Homes, Inc.
| Decision Date | 27 April 2022 |
| Docket Number | 2021-0280 |
| Court | Supreme Court of New Hampshire |
| Parties | CINCINNATI SPECIALTY UNDERWRITERS INSURANCE COMPANY v. BEST WAY HOMES, INC. & a. |
Argued: March 17, 2022
Hillsborough-northern judicial district
Getman, Schulthess, Steere & Poulin, P.A., of Manchester (Christopher J. Poulin, on the brief and orally), for the plaintiff.
Van Dorn, Curtiss, Rousseau & Ross, PLLC, of Lebanon (Cristina Rousseau on the brief and orally), for defendant Russell Blodgett.
John J. Cronin III, PC, of Bennington, for defendant Best Way Homes, Inc., filed no brief.
Defendant Russell Blodgett appeals an order of the Superior Court (Delker, J.) granting summary judgment in favor of the plaintiff, Cincinnati Specialty Underwriters Insurance Company (CSU). Blodgett argues that the trial court erred by concluding that the terms of a commercial general liability policy issued by CSU clearly and unambiguously excluded coverage for Blodgett's damages in a separate personal injury action against CSU's insured resulting from Blodgett's fall from an alleged negligently constructed staircase. We conclude that, pursuant to the policy's clear and unambiguous language, CSU has no duty or obligation to defend or indemnify its insured in the underlying litigation. Accordingly, we affirm.
The following facts are undisputed or otherwise supported by the record. CSU's insured, defendant Best Way Homes, Inc. (Best Way), is a general contractor. In May 2012, Best Way entered into a contract with a homeowner to perform renovations at his residence (the property). The project included constructing a deck with an attached staircase. Pursuant to an oral agreement, Best Way subcontracted the construction of the deck and staircase to Bob Wood Construction, which completed the project in 2012.
In 2017, the homeowner hired Blodgett to perform plumbing services at the property. Blodgett was injured when the staircase separated from the deck as he was descending it, causing him to fall approximately ten feet and suffer injuries. In April 2020, Blodgett initiated a lawsuit alleging claims against the homeowner for negligence and against Best Way for negligent failure to inspect, warn, and remove hazards, as well as a separate claim against Best Way for negligent hiring and supervision. At the time of the injury, but not at the time of construction, Best Way was the named insured under the CSU policy, which was in effect from June 29, 2016 to June 29, 2017. The CSU policy covered bodily injuries caused by an "occurrence" that happened during the policy period. The policy also contained an exclusionary provision, which provided:
(Emphasis added; bolding in original.)
In October 2020, CSU filed a petition for declaratory judgment, seeking a declaration that it had no duty or obligation to defend or indemnify Best Way with respect to Blodgett's negligence claims. CSU also moved for summary judgment, arguing that Best Way did not obtain a formal written contract from the subcontractor and thus did not satisfy the conditions precedent to coverage set forth in the exclusionary provision. CSU argued that, as a matter of law, the claims against Best Way were excluded from coverage by the unambiguous terms of the exclusionary provision. In response, Blodgett and Best Way argued, among other things, that CSU was not entitled to summary judgment because: (1) the claims asserted against Best Way for negligent supervision and hiring did not arise out of the work of the subcontractor and thus were not precluded from coverage by the exclusionary provision; and (2) CSU suffered no prejudice as a result of Best Way's failure to obtain a written contract with the subcontractor.
The trial court granted CSU's motion for summary judgment. The court found that the terms of the policy's exclusionary provision were "clear and unambiguous" and that Best Way failed to comply with those terms. The court further found that "all claims in the underlying action" arose out of the subcontractor's work and, therefore, were subject to the policy's exclusionary provision. The court reasoned that "there would be no damages under the negligence claims alleged against Best Way absent the alleged negligence of the subcontractor." With respect to the prejudice argument, the court determined that "New Hampshire does not require a showing of prejudice outside of the late notice context." The court concluded that, because CSU did not allege untimely notice of the claims, CSU was not required to prove that Best Way's failure to comply with the terms of the exclusionary provision prejudiced CSU. As a result, the court determined that the policy's exclusionary provision precluded coverage for Blodgett's injuries. This appeal followed.
When reviewing a trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. See Peerless Ins. v. Vt. Mut. Ins. Co., 151 N.H. 71, 72 (2004). If there is no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, the grant of summary judgment is proper. Id. We review the trial court's application of the law to the facts de novo. Id.
This appeal requires that we interpret the parties' insurance policy. "The interpretation of insurance policy language, like any contract language, is ultimately an issue of law for the court to decide." Id. "We look to the plain and ordinary meaning of the policy's words in context." Id. "Policy terms are construed objectively, and [when] the terms of a policy are clear and unambiguous, we accord the language its natural and ordinary meaning." Id.
The insurer asserting an exclusion of coverage bears the burden of proving that the exclusion applies. RSA 491:22-a (2010); Progressive N. Ins. Co. v. Concord Gen. Mut. Ins. Co., 151 N.H. 649, 653 (2005). Any limitation on coverage must be stated in such "clear and unambiguous terms" that the insured can have no reasonable expectation that coverage exists. Santos v. Metro. Prop. & Cas. Ins. Co., 171 N.H. 682, 686 (2019). When determining whether an ambiguity exists, we look to the claimed ambiguity and consider it in its appropriate context. Id. If one of the reasonable meanings of the language favors the policyholder, the ambiguity will be construed against the insurer, in order to honor the insured's reasonable expectations. Id.
On appeal, Blodgett does not dispute that Best Way failed to satisfy the requirements for coverage set forth in the policy's exclusionary provision. Nonetheless, Blodgett argues that the exclusionary provision does not preclude coverage in this case. Blodgett asserts that, based upon the plain meaning of its terms, the exclusionary provision does not apply to negligent acts that occurred before the policy's effective date. He therefore argues that, because the subcontractor constructed the stairs in 2012 - approximately four years before the policy became effective - the exclusionary provision does not apply in this case.
To support his argument, Blodgett points to the language in the exclusionary provision requiring Best Way to "[o]btain a formal written contract with all independent contractors and subcontractors in force at the time of the injury or damage." He argues that this language - written in the present tense - indicates that the exclusionary provision applies only to damages that occur as a result of a subcontractor's work performed during the policy's coverage period. He argues that this interpretation is "further supported by the requirement . . . that completed operations coverage be maintained for a minimum of two years, not indefinitely." Alternatively, Blodgett argues that this language is ambiguous and should...
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