Concord Hosp. v. New Hampshire Medical Malpractice Joint Underwriting Ass'n, No. 92-693

• Court: Supreme Court of New Hampshire
• Writing for the Court: JOHNSON
• Citation: 633 A.2d 1384,137 N.H. 680
• Parties: CONCORD HOSPITAL v. NEW HAMPSHIRE MEDICAL MALPRACTICE JOINT UNDERWRITING ASSOCIATION.
• Docket Number: No. 92-693
• Decision Date: 10 November 1993

Page 1384

633 A.2d 1384 137 N.H. 680 CONCORD HOSPITAL
v.
NEW HAMPSHIRE MEDICAL MALPRACTICE JOINT UNDERWRITING ASSOCIATION. No. 92-693. Supreme Court of New Hampshire. Nov. 10, 1993.
As Amended on Denial of Reconsideration
Dec. 23, 1993.

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Upton, Sanders & Smith, Concord (Russell F. Hilliard on the brief and orally and David P. Slawsky, on the brief), for plaintiff.

[137 N.H. 681] Morrison, Mahoney & Miller, of Boston, MA (Michael F. Aylward, on the brief and orally), for defendant.

JOHNSON, Justice.

The plaintiff, Concord Hospital (hospital), appeals the Superior Court's (McHugh, J.) ruling that three professional liability insurance policies issued by the defendant, New Hampshire Medical Malpractice Joint Underwriting Association (JUA), do not cover the expense of defending certain lawsuits filed against the hospital after the policies expired. The issue before us is whether these policies afford such coverage, where the hospital reported the incidents giving rise to the lawsuits to the JUA during the policy periods. We hold that the policies do provide such coverage and, therefore, reverse.

The relevant facts are as follows. The hospital purchased three substantially identical one-year professional liability insurance policies from the JUA for the period of July 29, 1986, through July 29, 1989, and thereafter purchased its insurance from Conn Med. Each JUA policy is labelled, "HOSPITAL PROFESSIONAL LIABILITY COVERAGE FORM--CLAIMS MADE," and at the top of the first page of the policies is a box entitled, "TO OUR POLICYHOLDER," which reads as follows: "This is a claims made policy. It covers claims arising from the performance of professional services subsequent to the retroactive date indicated and first brought against you while the policy is in force. Please review the policy carefully and discuss the coverage with your insurance agent." (Emphasis added.) Under the box is the caption, "INSURING AGREEMENTS," the first of which, "COVERAGE," states in part:

"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of any claim or claims made against the insured during the policy period arising out of the performance of professional services rendered or which should have been rendered, subsequent to the retroactive date, by the insured or by any person for whose acts or omissions the insured is legally responsible...."

(Emphasis added and omitted.) Several words and phrases, such as "insured" and "policy period," are defined in the policy, but the word "claim" is not. Section II of the policies is entitled "COVERAGE PERIOD" and states:

"This insurance applies only to professional services rendered or which should have been rendered after the retroactive[137 N.H. 682] date stated in the declarations and then only if claim is first made during the policy period.

If any claim is first made during the policy period alleging injury to an individual that would be covered by this policy, any additional claims made subsequent to the policy period for damages resulting from the same injury to the same individual shall be considered a claim hereunder. A claim shall be considered to be first made when the company first receives written notice of the claim or occurrence. (See Condition 3 for insured's rights to have extended reporting endorsements issued.)"

(Emphasis added and omitted.) On July 27, 1989, two days before the last JUA policy expired, the hospital notified the JUA in writing of thirty-six "patient events." On August 1, 1989, the hospital declined the JUA's offer to purchase an "extended reporting period endorsement," explaining that "our new policy with Conn Med will pick up prior acts."

Since the JUA policies expired, some of the "patient events" reported to the JUA have resulted in malpractice suits filed against the hospital. Although Conn Med undertook the hospital's defense of these suits, a deductible in the Conn Med policies has left the hospital with $50,000 in out-of-pocket losses. The hospital asked the JUA for coverage, citing the third sentence of section II, but the JUA refused. The hospital then sued the JUA in a declaratory judgment action, and both parties filed motions for summary judgment. The JUA's motion included a plea to dismiss the hospital's action

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as untimely filed. The superior court ruled the action timely, but agreed with the JUA that its policies were "claims made" and thus did not cover claims filed against the hospital after the policies expired. As the court found no evidence of such a claim made during the policy period, it granted the JUA's motion for summary judgment. The hospital appeals, arguing that the trial court misinterpreted the language of the JUA policies.

It is ultimately for this court to interpret the language of insurance policies. See Gagnon v. N.H. Ins. Co., 133 N.H. 70, 73, 573 A.2d 137, 139 (1990). Where disputed terms are not defined in the policy or by State judicial precedent, we construe them in context, see Amica Mut. Ins. Co. v. Morrison, 130 N.H. 250, 252, 255, 536 A.2d 199, 200, 202 (1987), and "in the light of what a more than casual reading of the policy would reveal to an ordinarily intelligent insured,"[137 N.H. 683] Aetna Insurance Co. v. State Motors, 109 N.H. 120, 125, 244 A.2d 64, 67 (1968); see also Coakley v. Maine Bonding & Cas. Co., 136 N.H. 402, 409-10, 618 A.2d 777, 781 (1992). This is an objective standard. Karol v. N.H. Ins. Co., 120 N.H. 287, 290, 414 A.2d 939, 941 (1980). Where the terms of a policy are clear and unambiguous, we accord the language its natural and ordinary meaning. Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 771, 423 A.2d 980, 984 (1980). Ambiguities, however, are construed against the insurer, see Gagnon,...