Green Mountain Ins. Co. v. George, 92-683

• Decision Date: 03 December 1993
• Docket Number: No. 92-683,92-683
• Citation: 634 A.2d 1011,138 N.H. 10
• Parties: GREEN MOUNTAIN INSURANCE COMPANY v. Jan and Gary GEORGE.
• Court: New Hampshire Supreme Court

Page 1011

634 A.2d 1011

138 N.H. 10

GREEN MOUNTAIN INSURANCE COMPANY v. Jan and Gary GEORGE.

No. 92-683.

Supreme Court of New Hampshire.

Dec. 3, 1993.

Wiggin & Nourie, P.A., Manchester (Doreen F. Connor on the brief and orally), for plaintiff.

Engel, Gearreald & Gardner, PA, Exeter (Mark S. Gearreald on the brief and orally), for defendants.

Brennan, Caron, Lenehan & Iacopino, Manchester (Ronald J. Caron on the brief), by brief for the New Hampshire Trial Lawyers Ass'n, as amicus curiae.

THAYER, Justice.

This is an appeal from a ruling by the Superior Court (Manias, J.) on a petition for declaratory judgment. The plaintiff, Green Mountain Insurance Company (Green Mountain), brought the declaratory judgment action to determine whether the uninsured motorist benefits provisions of its New Hampshire motor vehicle liability policy applied to an automobile collision that occurred in Massachusetts involving the insured, defendant Jan George, and a Massachusetts automobile owner. The trial court ruled that: (1) New Hampshire law governs the construction of the insurance contract; (2) the Georges were "legally entitled to recover" for injuries, including pain and suffering, proximately caused by the alleged tortfeasor; and (3) the alleged tortfeasor's vehicle was "uninsured" for purposes of Green Mountain's insurance policy. Green Mountain appeals the trial court's rulings. For the reasons that follow, we affirm.

In lieu of an evidentiary hearing, the parties to the declaratory judgment petition submitted an agreed statement of facts. On April 17, 1990, Jan George, a New Hampshire resident, was driving her automobile when she was injured in a two-car accident in Amesbury, Massachusetts. Jan George alleges that Lorraine Castonguay, driver of the second vehicle and a resident of Massachusetts was legally at fault. At the time of the accident, Jan George and her husband, Gary George, were insured by a Green Mountain motor vehicle liability policy that provided uninsured/underinsured motorist coverage of $50,000 per person, with a limit of $100,000 per occurrence. Lorraine Castonguay was insured by Commerce Insurance Company with liability limits of $50,000 per person, up to $100,000 per occurrence, but subject to the provisions of the Massachusetts "no fault" insurance coverage cap. Mass.Gen.Laws Ann. ch. 231, § 6D (West Supp.1993).

In June 1990, the Georges filed a complaint in the United States District Court for the District of Massachusetts against Lorraine Castonguay, alleging negligence and seeking damages for Jan George's medical expenses, lost wages, and pain and suffering, and for Gary George's loss of consortium. The district court granted summary judgment against the Georges because Jan George's medical bills totaled less than the $2,000 threshold required under Massachusetts law for a plaintiff to recover damages for pain and suffering.

After Green Mountain reimbursed the Georges for Jan George's medical treatment, the Georges initiated an arbitration claim against Green Mountain for uninsured motorist benefits, in accordance with the terms of the insurance policy. Green Mountain then brought its declaratory judgment action in the superior court, and now appeals that court's ruling.

This dispute centers mainly on the interpretation of the phrase "legally entitled to recover," as found in the parties' insurance contract. In requiring insurance companies to provide uninsured motorist coverage in all motor vehicle policies, the legislature determined that such benefits should be available "for the protection of persons ... who are legally entitled to recover damages from owners or drivers of uninsured motor vehicles." RSA 264:15, I (1993). The Georges' insurance policy with Green Mountain incorporates the same "legally entitled to recover" phrase:

"[The insurer is obligated] [t]o pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury ... sustained by the insured, caused by the accident and arising out of the ownership, maintenance or use of such uninsured automobile...."

Both the statute and the insurance policy are silent as to which state's laws apply to a determination of "legally entitled to recover." This omission is of particular importance where, as here, the underlying accident involves residents of more than one state.

The parties do not contest the fact that Massachusetts law prevents the Georges from recovering damages for pain and suffering against the alleged tortfeasor. Green Mountain relies primarily on a Rhode Island Supreme Court decision, Blais v. Aetna Casualty & Sur. Co., 526 A.2d 854 (R.I.1987), to insist that the Georges' inability to pursue a tort action in Massachusetts against the alleged tortfeasor means that the Georges are not "legally entitled to recover" New Hampshire uninsured motorist benefits. We disagree.

We have held that "while the underlying action against the tortfeasor is a tort action, the underinsured coverage claim is based in contract." Metropolitan Prop. & Liabil. Ins. Co. v. Walker, 136 N.H. 594, 596, 620 A.2d 1020, 1022 (1993). In contract cases, we apply "the law of the State with the most significant relationship to the contract [to] govern questions regarding the contract's performance." Glowski v. Allstate Ins. Co., 134 N.H. 196, 198, 589 A.2d 593, 595 (1991). When the interpretation of insurance policy language is at issue, our interpretation is governed by the law of the state that is the "principal location of the insured risk." Id. (quotation omitted). We note that our choice-of-law test for insurance contracts differs substantially from the test applied by the Rhode Island Supreme Court in Blais supra. We refuse to effectively create a no-fault law in this State, where our legislature has refused to enact no-fault legislation, despite the constitutional ability to do so. Opinion of the Justices, 113 N.H. 205, 212-13, 304 A.2d 881, 886-87 (1973). In this case, because the Georges' car was garaged in New Hampshire, New Hampshire law governs.

New Hampshire law mandates that insurance carriers provide coverage to insureds for accidents involving uninsured motorists in an amount not less than the amount of liability insurance provided to the insured. RSA 264:15, I. This coverage must be provided to insured New Hampshire motorists whether the accident occurs within the boundaries of this State or beyond them. See Gay v. Preferred Risk Mut. Ins. Co., 114 N.H. 11, 15, 314 A.2d 644, 646 (1974). As a general rule, we construe insurance policy language with the purpose of honoring the reasonable expectations of the policyholder. Town of Epping v. St. Paul Fire & Marine Ins. Co., 122 N.H. 248, 252, 444 A.2d 496, 498 (1982). If the policy's terms are clear and unambiguous, the language "must be accorded its natural and ordinary meaning." Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 770, 423 A.2d 980, 984 (1980) (quotation omitted). If, however, the policy language is reasonably susceptible of at least two different interpretations, one of which favors coverage, the language is ambiguous. See Coakley v. Maine Bonding & Cas. Co., 136 N.H. 402, 410, 618 A.2d 777, 781-82 (1992); see also 3 A. Widiss, Uninsured and Underinsured Motorist Insurance § 34.1, at 31 (2d ed. 1992). Such ambiguities must be "construed in favor of the insured and against the insurer." Trombly, 120 N.H. at 771-72, 423 A.2d at 985.

With these...