Courtemanche v. Lumbermens Mut. Cas. Co.

• Decision Date: 31 March 1978
• Docket Number: No. 7758,7758
• Citation: 118 N.H. 168,385 A.2d 105
• Parties: . LUMBERMENS MUTUAL CASUALTY COMPANY and Home Insurance Company. Supreme Court of New Hampshire
• Court: New Hampshire Supreme Court

Page 105

385 A.2d 105

118 N.H. 168

Marc H. COURTEMANCHE v. LUMBERMENS MUTUAL CASUALTY COMPANY and Home Insurance Company.

No. 7758.

Supreme Court of New Hampshire.

March 31, 1978.

Berj H. Seron, Cambridge, Mass. and Donald W. Cushing, Franklin (Mr. Seron orally), for plaintiff.

Augustine J. McDonough Professional Association, Manchester, by brief and orally for Lumbermen's Mut. Cas. Co.

Wadleigh, Starr, Peters, Dunn & Kohls, Manchester (E. Blake Redding, Manchester, orally), for Home Ins. Co.

DOUGLAS, Justice.

In Maryland Casualty Co. v. Howe, 106 N.H. 422, 213 A.2d 420 (1965), we held that an insured could not stack the uninsured motorist coverages provided by two insurers when neither insurer's policy afforded him adequate compensation for his damages. This case involves the question of the continued validity of that rule.

The plaintiff, Marc Courtemanche, suffered serious injuries when an auto he was driving with the permission of its owner was struck by a hit-and-run driver in Massachusetts. Lumbermen's Mutual Casualty Company insured the car that Courtemanche drove. That policy contained coverage against uninsured motorists. He was also covered by Home Insurance Company under a similar provision in a policy issued to his father. Although each insurer agreed that the uninsured motorist provision in its policy is applicable and that each policy provided $15,000 coverage, each denied the claim made against it. The plaintiff then requested arbitration. The arbitrator, a New Hampshire attorney, found that total damages were $24,000, but then made only one award of $15,000 under both policies. He felt that New Hampshire law did not allow the plaintiff to stack both policies. The plaintiff brought suit in superior court to set aside the arbitrator's award. The plaintiff claimed that the subject matter submitted for arbitration was limited to only two fact issues: whether he was entitled to recover damages from the hit-and-run driver and the amount of such recovery. In deciding questions of coverage, Courtemanche argued that the arbitrator exceeded his powers. The plaintiff also argued that the arbitrator made an error of law in refusing to stack coverage up to damages, that he erroneously refused to decide all issues submitted for arbitration, and that the award was not timely. The Court (Perkins, J.) upheld the arbitrator but apportioned the award equally between both insurers. The plaintiff excepted to all these rulings.

As both defendant insurers have argued in their briefs, the facts of this case parallel those of Maryland Casualty Co. v. Howe supra. Howe involved a claim by an insured that he should be allowed to recover under policies issued by different insurers up to his total damages. Both policies contained an "Other Insurance" provision, which reduced recovery under the policy by amounts received under other policies. The court held that this "Other Insurance" limitation did not violate the New Hampshire Uninsured Motorist Coverage Statute, RSA 268:15 (now codified at RSA 268:15-a (Supp.1975)), because "(t)he statute was not designed to provide the insured with greater insurance protection than would have been available had the insured been injured by an operator with a policy containing minimum statutory limits." Maryland Casualty Co. v. Howe, supra at 424, 213 A.2d at 422. Hence, the insured could recover only up to the higher of the policy limits, or if equal, the limit of either policy, but not the sum of the policy limits.

Howe is one of the earliest decisions to consider the effect of the uninsured motorist coverage statute on the standard "Other Insurance" clauses. See also Burcham v. Farmers Ins. Exch., 255 Iowa 69, 121 N.W.2d 500 (1963). However, Howe and other cases reaching a similar result were decided before the emergence of a "substantial body of case law that allows stacking of insurance coverage." Widiss, The Slow Evolution of a New Automobile Coverage, Trial Magazine, Sept. 1977, at 47; see, e. g., American Mut. Ins. Co. v. Romero, 428 F.2d 870 (10th Cir. 1970) (New Mexico); Geyer v. Reserve Ins. Co., 8 Ariz.App. 464, 447 P.2d 556 (1968); Harleysville Mut. Cas. Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968). Courts in other jurisdictions construing the language of statutes virtually identical to RSA 268:15-a I (Supp.1975) in fact situations similar to that in Howe have permitted stacking of applicable policies up to damages. E. g., Sellers v. United States Fidelity & Guar. Co., 185 So.2d 689 (Fla.1966); Harleysville Mut. Cas. Co. v. Blumling, supra; Bryant v. State Farm Mut. Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817 (1965).

The reasoning of Bryant, probably the leading case in stacking uninsured motorist coverages, is instructive. State Farm, the insurer, argued that its "Other Insurance" clause prevented Bryant from stacking the same coverages in two of its policies, both of which covered him. The Virginia court first noted that the uninsured motorist statute was enacted to benefit injured persons and was " 'to be liberally construed so that the purpose intended may be accomplished.' " 205 Va. at 900, 140 S.E.2d at 819. That statute required that all policies issued or delivered in Virginia obligate the insurer to pay "all sums" that an insured could recover as damages from an uninsured motorist within the policy limits. In limiting an insured's recovery to an amount that damages exceeded recovery under all other policies, the "Other Insurance" clause in State Farm's policy contravened the statute.

The Pennsylvania Supreme Court in Harleysville Mut. Cas. Co. v. Blumling, supra specifically rejected cases like Howe, even though the Pennsylvania statute, like that of New Hampshire, does not require an insured to pay "all sums" recoverable as damages. Rather, it requires a policy to provide a minimum uninsured motorist coverage. Pa.Stat.Ann. tit. 40, § 2000 (Purden 1971), quoted in Harleysville Mut. Cas. Co. v. Blumling, supra at 391 n. 1, 241 A.2d at 113 n. 1. Nevertheless "(t)he purpose of the uninsured motorist law is to provide protection to innocent victims of (financially) irresponsible drivers. The amount of coverage . . . is set by the statute, but nowhere . . . does the act place a limit on the total (recovery)." 429 Pa. at 395, 241 A.2d at 115. The court would not allow the company to "avoid its statutorily imposed liability by its unilateral insertion . . . of a liability limiting ('Other Insurance') clause repugnant to the statute." Id. at 396, 241 A.2d at 115-16. See also Kirkley v. State Farm Mut. Ins. Co., 17 Cal.App.3d 1078, 95 Cal.Rptr. 427 (1971); Sellers v. United States Fidelity & Guar. Co., supra; Smith v. Pacific Automobile Ins. Co., 240 Or. 167, 400 P.2d 512 (1965) (two "Other Insurance" clauses repugnant to each other fall).

We held in Howe that the purpose of RSA 268:15-a I (Supp.1975) is " 'to close a gap in the protection afforded the public under existing Financial Responsibility Acts.' " Maryland Casualty Co. v. Howe, supra at 424, 213 A.2d at 421, quoting Kirouac v. Healey, 104 N.H. 157, 159, 181 A.2d 634, 636 (1962); accord, American Mut. Ins. Co. v. Commercial Union Ins. Co., 116 N.H. 210, 213, 357 A.2d 873, 876 (1976) overruled in part, Vigneault v. Travelers Ins. Co., 118 N.H. ---, ...