Jespersen v. U.S. Fidelity & Guar. Co., 88-008

• Decision Date: 12 December 1988
• Docket Number: No. 88-008,88-008
• Citation: 551 A.2d 530,131 N.H. 257
• Parties: Marshall JESPERSEN, et al. v. UNITED STATES FIDELITY & GUARANTY COMPANY, et al.
• Court: New Hampshire Supreme Court

Page 530

551 A.2d 530

131 N.H. 257

Marshall JESPERSEN, et al. v. UNITED STATES FIDELITY & GUARANTY COMPANY, et al.

No. 88-008.

Supreme Court of New Hampshire.

Dec. 12, 1988.

Sheehan, Phinney, Bass & Green P.A., Portsmouth (Peter F. Kearns, on the brief and orally), for plaintiffs.

Devine & Nyquist, Manchester (Corey Belobrow, on the brief and orally), for defendant U.S. Fidelity & Guar. Co.

Devine, Millimet, Stahl and Branch P.A., Manchester (Joseph M. McDonough, III, on the brief, and Mark D. Wiseman, on the brief and orally), for defendant United Services Auto. Ass'n Wiggin & Nourie, Manchester (Arnold Rosenblatt, on the brief and orally), for defendant Jefferson Ins. Co.

JOHNSON, Justice.

In this declaratory judgment action to determine whether they are entitled to coverage under three insurance policies, insureds Marsha and Marshall Jespersen and Dein Hosts, Inc. (Dein Hosts) appeal a decree of summary judgment in favor of insurers United States Fidelity & Guaranty Company (USF & G), United States Automobile Association (USAA), and Jefferson Insurance Company (Jefferson). The Superior Court (Groff, J.) approved a determination by the Master (R. Peter Shapiro, Esq.) that, as a matter of law, the insureds were not entitled to coverage in an underlying action against them for damages, because the injuries the insureds allegedly caused were anticipated results of their intentional acts. We affirm.

The relevant facts are not in dispute. The plaintiff in the underlying action is the Jespersens' former employee and business partner, Joseph Pignato. Mr. Pignato owned and operated a restaurant in Rye. Because he required financial assistance, he entered into an agreement with the Jespersens in June 1984 in exchange for financing. This agreement made the Jespersens officers and shareholders of two corporations formed in accordance with its terms, one of which, Dein Hosts, was the operating entity for the restaurant. Under the agreement, Mr. Pignato owned 49% of the business and was employed, under contract, by Dein Hosts to manage the restaurant. As manager, Mr. Pignato was also entitled to live in an apartment on the restaurant premises, to take his meals at the restaurant, and to receive a salary and other benefits.

In January 1985, the Jespersens terminated Mr. Pignato's employment in accordance with a contract provision allowing his discharge for cause. Mr. Pignato then sued the Jespersens and Dein Hosts, alleging wrongful discharge, intentional breach of contract, intentional infliction of emotional distress, wrongful eviction, and wrongful conversion. In addition to economic damages, Mr. Pignato sought recovery for "humiliation, anxiety, loss of self-esteem and morale, nervousness, and loss of reputation."

The insureds provided the three insurance carriers timely notice of litigation, seeking representation in the suit and coverage for the mental and physical injuries alleged. Each of the policies in question provides coverage for "an occurrence." Both the USF & G and the Jefferson policies define "occurrence" as:

"an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured."

(Emphasis in original (USF & G).) The USAA policy provides that "occurrence":

"means an accident, including exposure to conditions, which results, during the policy period, in:

a. bodily injury; or

b. property damage "

(Emphasis in original.)

There is no dispute that the Jespersens intended to discharge Mr. Pignato, to discontinue all benefits under the employment contract, and to prevent his further involvement in management of the business. On the basis of the above definitions, each of the carriers therefore denied coverage on grounds that the acts alleged were intentional and inherently injurious and thus outside the scope of an "occurrence." The master granted summary judgment for the carriers in the ensuing declaratory judgment action. This appeal followed.

Summary judgment affords savings in time, effort, and expense by allowing courts to grant final judgment without trial under appropriate circumstances. "Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits filed, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." RSA 491:8-a, III. The insureds do not dispute the appropriateness of summary judgment in this case, but rather, urge that the master improperly applied the law to the issues at hand. They first argue that the master was required to find that they did not intend to cause the injuries for which Mr. Pignato is suing because Marshall Jespersen submitted an affidavit to that effect in response to which the carriers submitted no counter-affidavit. According to the insureds, their insurance contracts provide coverage...