Hardy v. Granite State Ins. Co.
| Decision Date | 28 May 2020 |
| Docket Number | Case No. 20-cv-216-SM |
| Parties | Ryan Hardy and Matthew O'Connor, Plaintiffs v. Granite State Insurance Company, Defendant |
| Court | U.S. District Court — District of New Hampshire |
This is a declaratory judgment action in which plaintiffs seek a judicial determination of the limits of coverage provided under an insurance policy issued by defendant, Granite State Insurance Company. Plaintiffs originally filed their petition in the Hillsborough County Superior Court, seeking a declaratory judgment under state law. See N.H. Rev. Stat. Ann. ("RSA") 491:22. Granite State removed the action, invoking this court's diversity subject matter jurisdiction. Plaintiffs then amended their petition to include a count under the federal Declaratory Judgment Act. See 28 U.S.C. § 2201.
Pending before the court is Granite State's motion to dismiss the Amended Complaint. Granite State asserts that plaintiffs are neither parties to, nor insureds under, the insurance contract and, therefore, lack standing to sue. Granite State also says plaintiffs' claims are not ripe for adjudication. Plaintiffs object. For the reasons discussed, Granite State's motion to dismiss (document no. 11) is denied. This matter is, however, remanded to the Hillsborough County Superior Court.
When ruling on a motion to dismiss under Rules 12(b)(1) and 12(b)(6), the court must "accept as true all well-pleaded facts set out in the complaint and indulge all reasonable inferences in favor of the pleader." SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010). See also Lyman v. Baker, 954 F.3d 351, 359-60 (1st Cir. 2020) (). Although the complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), it must allege each of the essential elements of a viable cause of action and "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face," Ashcroft v. Iqbal, 556U.S. 662, 678 (2009) (citation and internal punctuation omitted).
In April of 2016, Ian MacPherson purchased a firearm from Chester Arms, a federally licensed firearms dealer in Derry, New Hampshire. About six weeks later, Manchester Police Officer Ryan Hardy saw MacPherson walking in Manchester and noticed that he met the description of a man suspected of having recently robbed a gas station. Officer Hardy approached MacPherson and, at some point during their encounter, MacPherson shot Hardy several times in the face and torso. Hardy radioed in his status, location, and the direction in which MacPherson fled.
Approximately thirty minutes later, Manchester Police Officer Matthew O'Connor and members of the State Police saw a man fitting MacPherson's description. During the officers' efforts to apprehend him, MacPherson shot Officer O'Connor in the leg. MacPherson again escaped, but was arrested a few hours later. The weapon MacPherson used to shoot both officers was the one he had purchased from Chester Arms.
In July of 2018, Officer Hardy and Officer O'Connor brought separate lawsuits in state court asserting, among other things,that MacPherson was a "prohibited person" (that is, someone barred from lawfully purchasing, owning, or possessing a firearm) and that Chester Arms had been negligent in selling the firearm to him. That negligent sale, say plaintiffs, proximately caused their injuries when MacPherson subsequently shot them.
Chester Arms is insured by the defendant in this proceeding, Granite State Insurance Company. Under the terms of its policy, Granite State provides Chester Arms with liability coverage of up to One Million Dollars ($1,000,000) for each insured "occurrence," with an aggregate limit of Two Million Dollars ($2,000,000). Granite State has acknowledged coverage under the policy and is providing Chester Arms with a defense in state court.
At issue in this case is the proper interpretation of that insurance policy. Officers Hardy and O'Connor say they were shot and injured in separate "occurrences" and, therefore, Granite State's policy provides Chester Arms with One Million Dollars of coverage in each of their separate lawsuits. Granite State disagrees and says the officers' injuries were the product of a single insured "occurrence" (presumably Chester Arms' negligent sale of the firearm to MacPherson). So, says GraniteState, because there is only a single covered "occurrence," Chester Arms' insurance coverage is limited to a total of One Million Dollars (for both claims).
As the defendant in the state negligence actions, and the insured under Granite State's policy, Chester Arms presumably shares the officers' interest in maximizing insurance coverage under the policy. After all, its potential liability in the state negligence actions is substantial. Yet, Chester Arms is not a party to this declaratory judgment action.
In their Amended Complaint, plaintiffs advance two virtually identical claims for declaratory relief: first, under the federal Declaratory Judgment Act, and second, under New Hampshire's state analog. In each count, plaintiffs seek a judicial declaration:
Granite State's pending motion does not address the merits of plaintiffs' interpretation of the underlying insurance policy. Rather, Granite State asserts that neither officer has standing to bring this action because neither is an insured under the policy. The contract of insurance is between Granite State and Chester Arms. So, says Granite State, only Chester Arms has standing (at least at this juncture) to question Granite State's interpretation of the policy language. And, as noted earlier, Chester Arms is not a party to this action.1
Moreover, Granite State asserts that the police officers' claims are not ripe for judicial resolution because Chester Arms' liability (if any) to the officers has not been resolved, and no fixed monetary claim for indemnification has been made against the insurance policy. Accordingly, says Granite State, plaintiffs' amended complaint should be dismissed.
Many federal courts have concluded (sometimes in slightly different procedural postures) that tort victims can have standing in declaratory judgment actions seeking a determination of the scope of insurance coverage provided by a tortfeasor's insurer. See, e.g., Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270 (1941). See also Ricchio v. Bijal, Inc., 424 F. Supp. 3d 182, 186-87 (D. Mass. 2019) (collecting cases). See generally Bankers Tr. Co. v. Old Republic Ins. Co., 959 F.2d 677, 681-82 (7th Cir. 1992); Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co. of Reading, Pa., 873 F.2d 229, 232 (9th Cir. 1989); Federal Kemper Insurance Co. v. Rauscher, 807 F.2d 345 (3d Cir.1986); Penn Am. Ins. Co. v. Valade, 28 F. App'x 253, 256-57 (4th Cir. 2002).
Similarly, the New Hampshire Supreme Court (and, necessarily, the New Hampshire Superior Courts) have, on many occasions, permitted victims to pursue declaratory judgment actions against their tortfeasor's insurance provider (without directly addressing the question of standing). See, e.g., Cogswell Farm Condo. Ass'n v. Tower Grp., Inc., 167 N.H. 245 (2015); St. Pierre v. State Farm Mut. Auto. Ins. Co., No. 2014-0225, 2014 WL 11485835 (N.H. Nov. 21, 2014); White v. Vermont Mut. Ins. Co., 167 N.H. 153 (2014); Brown v. Concord Grp. Ins. Co., 163 N.H. 522 (2012); Warner v. Clarendon Ins. Co., 154 N.H. 331 (2006); Guilfoy v. United Servs. Auto. Ass'n, 153 N.H. 461 (2006); Banfield v. Allstate Ins. Co., 152 N.H. 491 (2005); High Country Assocs. v. New Hampshire Ins. Co., 139 N.H. 39 (1994); Brown v. City of Laconia, 118 N.H. 376 (1978).2
Granite State argues that the decisions cited above are distinguishable because, in each, the court "inadvertently" failed to recognize the standing issue. Defendant's Reply Memorandum (document no. 14) at 10. But, a plaintiff's standing (or lack thereof) implicates the very core of the court's authority to preside over a matter: subject matter jurisdiction. See, e.g., Duncan v. State, 166 N.H. 630, 640 (2014) (). In every case before them, courts must first assess their subject matter jurisdiction - sua sponte, if necessary. See, e.g., Arbaugh v. Y&H Corp., 546 U.S. 500, 514, (2006) (). See also Libertarian Party of New Hampshire v. Sec'y of State, 158 N.H. 194, 195-96 (2008) (same).
The New Hampshire Supreme Court undoubtedly considered its jurisdiction to hear each of the cases cited above and likely accepted that a victim's standing to bring a declaratory judgment action under RSA 491:22...
To continue reading
Request your trial