Hodge v. Allstate Ins. Co.

• Decision Date: 05 August 1988
• Docket Number: No. 87-309,87-309
• Citation: 130 N.H. 743,546 A.2d 1078
• Parties: Dawn HODGE v. ALLSTATE INSURANCE COMPANY.
• Court: New Hampshire Supreme Court

Page 1078

546 A.2d 1078

130 N.H. 743

Dawn HODGE v. ALLSTATE INSURANCE COMPANY.

No. 87-309.

Supreme Court of New Hampshire.

Aug. 5, 1988.

Wyskiel, Boc & Reid P.A., Dover (William E. Boc, on the brief and orally), for plaintiff.

McDonough & O'Shaughnessy P.A., Manchester (Michael B. O'Shaughnessy and Robert J. Rabuck, orally, on the brief), for defendant.

JOHNSON, Justice.

The defendant, Allstate Insurance Company (Allstate), appeals from the decision of the trial court finding that an automobile liability insurance policy was in existence between Allstate and the plaintiff, Dawn Hodge, and provided coverage on February 22, 1985, when she was involved in an automobile accident.

Hodge filed a petition for declaratory judgment against Allstate pursuant to RSA 491:22 to determine coverage. Allstate claimed her policy had been cancelled prior to the accident. The Superior Court (Temple, J.) approved the report of the Master (R. Peter Shapiro, Esq.) recommending a finding that there was an insurance policy in existence, but that attorney's fees not be awarded to Hodge pursuant to RSA 491:22-b. Allstate appeals the determination that a policy existed, and Hodge appeals the decree relative to attorney's fees. We affirm the decision relative to the existence of an insurance policy and reverse as to attorney's fees.

Hodge obtained her first insurance policy from Allstate in 1982. The agent she dealt with at that time was David Beauman, whose office was in Rye and who is employed by Allstate to write policies solely for that company. She continued to have contact with Beauman thereafter, although she generally made payments on her policies by stopping off at the Somersworth office of Allstate to turn over the funds for each premium due.

The policy in dispute in this action was one that covered the period from October 24, 1984, through April 24, 1985. The premiums on this policy were due in four equal installments on the 24th of October, November, December and January. When Hodge received the bill for the above period of coverage, the total premium was set at $221.50, with four monthly payments of $57.38. Since her previous six-months policy had had a total premium of $171.50 (four payments of $44.88), she contacted Beauman for an explanation. He advised her that a "point" had been added to her policy because of an accident. She protested that the accident for which the point was added had occurred at a time when her auto was parked and she was not inside it. Beauman examined her file, agreed that Allstate was in error in assessing her for this accident, and informed her that she should make the usual payment of $44.88. He also assured her that he would take care of the error. Hodge relied on Beauman's representation and made her first payment of $44.88.

In November, Hodge received a bill that said she now owed $69.87 on her policy, since she had not made the full payment of $57.38 in October. She again called Beauman, who advised her to make only the $44.88 payment, which she did. December was a replay of November. Hodge received a bill that showed she then owed $82.37. Hodge again called Beauman, who stated "everything was taken care of," and to make her usual payment of $44.88. Hodge did not make her December payment, however, until January 18, 1985, when she paid $89.76 ($44.88 for December and $44.88 for January) at the Allstate office in Somersworth.

On January 7, 1985, Allstate mailed a document to Hodge entitled "Notice of Cancellation for Non-Payment of Premium," which stated that the amount past due was $82.37 and that the policy would be cancelled on January 18, 1985, at 12:01 a.m. unless the full amount of $82.37 had been paid to Allstate by that time.

On February 5, 1985, Allstate mailed a letter to Hodge by regular mail which stated that her policy had been cancelled, and which she admitted to having received. On February 7, 1985, Allstate sent a second, certified letter to Hodge informing her of the cancellation of her policy. A copy of this letter was sent to Beauman. Hodge received a notice that a certified letter was available at the post office on February 11, but did not pick up the letter until after the accident on February 22. She discussed the cancellation notice that she had received with Beauman by telephone on February 9th or 10th, and the master specifically found that Beauman told her to disregard the cancellation notice. There is evidence from which the master could have found that Beauman had received a copy either of the February 5th cancellation notice or of the February 7th cancellation letter, or both, when he told her to disregard the cancellation notice during their telephone conversation.

Allstate argues that one who deals with an agent does so at his peril and has the obligation to ascertain the extent of the agent's authority, and that Beauman lacked authority to countermand Allstate's notice of cancellation. However, it is established law in this State that "[the insurance agent's] acts are imputed to [the insurer] to the extent permitted by common law, and the insurer is bound by those acts." Johnson v. Phenix Mut. Fire Ins. Co., 122 N.H. 389, 393, 445 A.2d 1097, 1099 (1982) (citations omitted).

The master found that Beauman's failure to warn Hodge during their conversation in February that her policy had lapsed caused Allstate to be "estopped from denying coverage to her for the February 22, 1985 accident." The elements of estoppel are:

"(1) a representation or a concealment of material facts; (2) the representation must have been made with knowledge of the facts; (3) the party to whom it was made must have been ignorant of the truth of the matter; (4) it must have been made with...