Fisher v. Fitchburg Mut. Ins. Co.
| Decision Date | 13 July 1989 |
| Docket Number | No. 88-428,88-428 |
| Citation | 560 A.2d 630,131 N.H. 769 |
| Parties | David A. FISHER and Julie A. Fisher v. FITCHBURG MUTUAL INSURANCE COMPANY. |
| Court | New Hampshire Supreme Court |
Gray, Wendell & Clark, Manchester (Grenville Clark, III, and Nathan T. Foose, orally and on the brief, for plaintiffs.
Wiggin & Nourie, Manchester (Gordon A. Rehnborg, Jr., and Doreen F. Connor orally and on the brief, for defendant.
The plaintiffs, David and Julie Fisher, filed a declaratory judgment action against their insurance carrier, Fitchburg Mutual Insurance Company (Fitchburg), asking the court to find that under the terms of the plaintiffs' homeowner's policy Fitchburg was obligated to provide a defense against and damage coverage for two suits filed against the plaintiffs by Martin and Barbara Arliss who alleged that the plaintiffs breached an agreement to sell them the plaintiffs' home. Both parties moved for summary judgment. The Court (Dalianis, J.) denied the plaintiffs' motion and granted summary judgment in favor of Fitchburg, and we affirm.
In August of 1987, the plaintiffs were the joint owners of a home located in Manchester for which they maintained a homeowner's insurance policy with Fitchburg. In August, 1987, the plaintiffs engaged in negotiations concerning the sale of their home. Although the parties dispute the exact sequence of events, they agree that at some point during the latter part of August, David Fisher signed two separate purchase and sale agreements for the same residential property, one with a Mr. and Mrs. Clayton and one with Martin and Barbara Arliss. Thereafter, the plaintiffs notified the Arlisses that they did not intend to convey the property to them and refused to perform under the Arlisses' contract.
In September 1987, the Arlisses brought a civil action against the plaintiffs claiming breach of contract and negligent and intentional misrepresentation. The Arlisses also filed a bill in equity against the plaintiffs in which they sought specific performance of the purchase and sale agreement and a temporary restraining order and permanent injunction to prevent the plaintiffs from conveying the property to any other party.
On September 22, 1987, the plaintiffs notified Fitchburg of the Arlisses' claims against them, and tendered the defense of the case. Fitchburg returned the pleadings and refused to assume the defense or pay any judgment which might result from the litigation asserting by letter that "[t]he activities which led to this litigation would not be an 'occurrence' as defined in our policy."
On February 5, 1988, the plaintiffs filed a petition requesting a declaratory judgment that Fitchburg was obligated to provide a defense and afford coverage for the plaintiffs' expenses in the pending lawsuits filed by the Arlisses. The plaintiffs settled the suits on May 18, 1988, at their own expense. On July 7, 1988, the plaintiffs moved for summary judgment in the declaratory judgment action against Fitchburg, which objected and filed a cross-motion for summary judgment in its favor. After reviewing the claim against the Fishers, the court found that the Fishers' conduct was not accidental and that no coverable "property damage" resulted, denied the plaintiffs' motion and granted Fitchburg's motion for summary judgment. This appeal ensued.
The Fishers' homeowners policy with Fitchburg states that:
"This Company agrees to pay on behalf of the Insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence. This Company shall have the right and duty, at its own expense, to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, but may make such investigation and settlement of any claim or suit as it deems expedient. This Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of this Company's liability has been exhausted by payment of judgments or settlement. (Emphasis added.)
....
'property damage ': means injury to or destruction of tangible property, including loss of use thereof
....
'occurrence ': means an accident, including injurious exposure to conditions, which results, during the policy term, in bodily injury or property damage."
On appeal the plaintiffs first argue that the court erred in finding that the Arlisses' suit, which contained a claim for unintentional negligent misrepresentation, did not allege an "occurrence" covered by the Fitchburg policy. Second, the plaintiffs argue that even if the actions alleged by the Arlisses in the underlying suits are deemed intentional, they are not inherently injurious or patently hazardous, and they should therefore still be viewed as an occurrence under the test set forth in Vermont Mutual Insurance Co. v. Malcolm, 128 N.H. 521, 524, 517 A.2d 800, 802 (1986). Third, the plaintiffs argue that as equitable owners of the Manchester property, the Arlisses suffered a loss of use which constituted "property damage" under the terms of the policy. Fourth, the plaintiffs contend that Fitchburg failed to meet its burden of proof regarding the non-existence of the Arlisses' property rights. Finally, the plaintiffs argue that the following reasons were not included in Fitchburg's initial letter denying coverage, and that Fitchburg should therefore be estopped from claiming: (1) that the Arlisses' lawsuits do not allege property damage; (2) that any damage alleged was expected or intended from the standpoint of the insured; or (3) that any damage alleged involved property owned by the insured.
The terms of the Fitchburg policy require accidental bodily injury or property damage to constitute a covered "occurrence" under...
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