Consolidated Mut. Ins. Co. v. Radio Foods Corp.

• Citation: 240 A.2d 47,108 N.H. 494
• Decision Date: 29 March 1968
• Docket Number: No. 5595,5595
• Parties: CONSOLIDATED MUTUAL INSURANCE COMPANY v. RADIO FOODS CORPORATION et al.
• Court: Supreme Court of New Hampshire

Page 47

240 A.2d 47

108 N.H. 494

CONSOLIDATED MUTUAL INSURANCE COMPANY v. RADIO FOODS CORPORATION et al.

No. 5595.

Supreme Court of New Hampshire.

Argued Oct. 3, 1967.

Decided March 29, 1968.

Sheehan, Phinney, Bass & Green and E. Paul Kelly, Manchester, for plaintiff.

Devine, Millimet, McDonough, Stahl & Branch and Robert A. Backus, Manchester, for defendant Radio Foods Corp.

Wiggin, Nourie, Sundeen, Nassikas & Pingree, Manchester, for defendant, Louis H. Salvage Shoe Company, filed no brief.

LAMPRON, Justice.

This is a petition for a declaratory judgment brought by the plaintiff insurer against its insured, Radio Foods Corporation, and against Louis H. Salvage Shoe Company, plaintiff in a tort action against Radio Foods, to determine the rights and obligations of the parties as a result of a fire on Junly 25, 1963 in the premises occupied by Radio Foods in Manchester which caused water damage to Salvage Shoe, another tenant in the same building. The Trial Court, Leahy, C.J., made certain findings and rulings and decreed that Consolidated was under obligation to defend, and to pay, within the limits of its policy, any judgment obtained in the action of Salvage Shoe against Radio Foods. Plaintiff's exceptions to certain findings and rulings, to parts of the decree, and to the denial of its motions to set aside the decree and for judgment in its favor were reserved and transferred.

On the date of the fire, July 25, 1963, there was in effect a comprehensive general automobile policy with many endorsements by which Consolidated covered various casualty risks of Radio Foods in Lawrence, Massachusetts, its principal place of business, and in Manchester with an endorsement countersigned by a New Hampshire resident agent pertaining to the latter coverage. RSA 405:18. Under '1. Coverage D-Property Damage Liability-Except Automobile' Consolidated agreed, subject to policy terms and conditions, 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident'. Condition 10 of the policy provided as follows: 'Notice of Accident. When an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.'

Consolidated maintains that it is under no obligation to defend and pay in the action of Salvage Shoe against Radio Foods because the latter failed to give it notice until December 12, 1963 of the damage which occurred on July 25, 1963. It also contends that the issue of whether Radio Foods gave notice 'as soon as practicable' within the requirements of condition 10 of its policy should be determined in accordance with the laws of Massachusetts since the policy was issued in Massachusetts, to a Massachusetts Corporation, by an insurance company authorized to do business in that State. The Trial Court ruled that the policy was to be interpreted and construed in accordance with the laws of New Hampshire.

In years gone by, in the absence of a clearly expressed intention of the parties as to what law was to govern (Davis v. Aetna Mut. Fire Insurance Co., 67 N.H. 218, 219, 34 A. 464; Goulet v. Goulet, 105 N.H. 51, 52, 192 A.2d 626), the choice-of-law rule in contracts was based, as in the case of torts, on a rigid and fairly mechanistic approach. Goodrich and Scoles, Conflict of Laws, s. 106, p. 202 (1964). See Clark v. Clark, 107 N.H. 351, 352, 222 A.2d 205. Under this view, exemplified by Restatment, Conflict of Law, ss. 311-376, the contract was to be governed by the law of the place where it was made except as to matters of performance which were governed by the law of the place where it was to be performed. Priddle v. Farm Bureau Mutual Insurance Company, 100 N.H. 73, 75, 119 A.2d 97; Maryland Casualty Co. v. Martin, 88 N.H. 346, 348, 189 A. 162. See N.H.Annots., Restatement, Conflict of Laws, pp. 60-70 (1943). It has been felt that under this approach 'the primacy of the intent of the parties has been lost.' Goodrich and Scoles, Conflict of Laws, s. 106, p. 201.

The American Law Institute has made a change from its earlier dogmatic approach, stated above, to an emphasis on the power of the parties to choose the governing law. It now advocates that, in the absence of an express choice of law validly made by the parties, the contract is to be governed, both as to validity and performance, by the law of the State with which the contract has its most significant relationship. Restatement (Second), Conflict of Laws, Tent. Draft No. 6 (1960), ss. 332, 332a, 332b. In so doing it is 'starting anew with the fundamental contract policy of giving effect to the intention of the parties and their reasonably justified expectations.' Goodrich and Scoles, Conflict of Laws, s. 106, p. 202. 'The present approach is believed to be supported by the majority of the cases and by the majority of the text writers.' Restatement (Second), Conflict of Laws, Tent. Draft No. 6 (1960), p. 5. This approach coincides with a long established rule of law in this State that in such a situation 'the object is to ascertain the real intention of the parties; and to ascertain that intention, regard may be had to the nature of the instrument itself, the situation of the parties executing it, and the purpose they had in view.' Davis v. Aetna Mut. Fire Insurance Co., 67 N.H. 218, 219, 34 A. 464, 465. See Priddle v. Farm Bureau Mutual Insurance Company, 100 N.H. 73, 75, 119 A.2d 97.

Applying these principles to the contract of insurance in this case, a matter of significant concern was the location in New Hampshire of the particular risk with which we are dealing. 'The principal location of the insured risk is the contact that is given the greatest weight in determining the State whose local law is to govern the rights created thereby.' Restatement (Second), Conflict of Laws, Tent. Draft No. 6 (1960), s. 346 i, comment a. Even though the policy also dealt with risks in Massachusetts, where the principal office of the insured was located, the New Hampshire risk insured is to be treated as though it were insured by a separate policy and the validity of and rights under the multiple risk policy as to this risk are to be governed by the laws of this State. Id., comment f.

That the above reflects the actual intent of the parties is borne out by the fact that they did comply with the requirements of RSA 405:18 by having that part of the multiple risk policy pertaining to the risk situated in New Hampshire countersigned by an agent who is a resident of this State and regularly commissioned and licensed to transact business here. Consequently New Hampshire is 'the jurisdiction with which the matter at hand is predominantly or most intimately concerned,' and the Trial Court properly ruled that the contract and its provisions were to be governed by the law of this State in these proceedings. Boston Law Book Company v. Hathorn, 119 Vt. 416, 127 A.2d 120; Davis v. Aetna Mut. Fire Insurance Co., 67 N.H. 218, 219, 34 A. 464. See Priddle v. Farm Bureau Mutual Insurance Company, 100 N.H. 73, 75, 119 A.2d 97; Auten v. Auten, 308 N.Y. 155, 124 N.E.2d 99, 50 A.L.R.2d 246; Peterson v. Warren, 31 Wis.2d 547, 143 N.W.2d 560; Baffin Land Corp. v. Monticello Motor Inn, Inc., 425 P.2d 623 (Wash.1967); 16 Am.Jur.2d, Conflict of Laws, ss. 41, 42, pp. 64-68.

It follows that the finding of the Trial Court that notice was given 'as soon as practicable' under the terms of the policy is to be tested by the laws of New Hampshire. 'A policy requirement that notice of the accident be given 'as soon as practicable' is commonly considered to require notice as soon as is reasonably possible * * * which is generally interpreted to call for notice to be given within a reasonable time in view of all the facts and circumstances of each particular case.' Sutton Mutual Insurance Company v. Notre Dame Arena, Inc., 108 N.H. --, 237 A.2d 676, 678. 'The timeliness of the notice must be determined in the light of the situation existing both when the accident occurred and when the notice was given. * * * In deciding whether notice of the accident was given within a reasonable time, the following...