Lumbermen's Mut. Cas. Co. v. McCarthy

• Decision Date: 03 October 1939
• Docket Number: No. 3050.,3050.
• Citation: 8 A.2d 750
• Parties: LUMBERMEN'S MUT. CASUALTY CO. v. McCARTHY et al.
• Court: New Hampshire Supreme Court

8 A.2d 750

LUMBERMEN'S MUT. CASUALTY CO.

v. McCARTHY et al.

No. 3050.

Supreme Court of New Hampshire. Hillsborough.

Oct. 3, 1939.

BRANCH, J., dissenting.

Transferred from Superior Court, Hillsborough County; Johnston, Judge,

Petition for a declaratory judgment by the Lumbermen's Mutual Casualty Company against Edward McCarthy and Maurice O. Bullard to determine whether the insurer is under obligation to further defend an action brought against Edward McCarthy by Maurice O. Bullard and to determine whether it is under an obligation to pay the whole or any part of any judgment which may be recovered in the action. Questions of law transferred without ruling.

Both questions answered in negative. Case discharged.

Petition for a declaratory judgment under Laws 1929, c. 86. The questions of law raised thereby were transferred without ruling by Johnston, J.

The defendant Bullard's minor son Robert received personal injuries by reason of the negligent operation of an automobile by the defendant McCarthy. An action at law against McCarthy to recover for those injuries was instituted on behalf of Robert by his father, and the father also brought an action in his own name against McCarthy to recover for the loss occasioned to him personally by reason of the injuries to his son. The actions were tried together by a jury and resulted in verdicts for the plaintiffs. Upon appeal to this court (Bullard v. McCarthy, 89 N.H. 158, 195 A. 355) judgment on the verdict was ordered in the action of the son, and a new trial was ordered in the action of the father.

The plaintiff, having issued a policy of liability insurance covering the automobile operated by McCarthy, assumed the defense of these actions and after the above opinion of this court was handed down paid five thousand dollars on account of the judgment obtained on behalf of the son; the above sum being the full limit of its coverage "on account of bodily injuries" sustained by one person. After making this payment it notified the defendant McCarthy "that it had discharged its obligations under the policy and directed him to obtain other counsel to take charge of" the further defense of the action brought by the father. Upon the refusal of McCarthy to do so, the plaintiff brought this petition to determine (1) whether it is under any obligation under its policy of liability insurance to further defend that action, and (2) whether it is obligated by that policy "to pay the whole or any part of any judgment which may be recovered in said action."

Robert W. Upton and Laurence I. Duncan, both of Concord, and Robert B. Hamblett, of Nashua, for plaintiff.

Ivory C. Eaton and Alvin A. Lucier, both of Nashua, for defendants.

WOODBURY, Justice.

The questions of law raised by the plaintiff's query with respect to its duty, under the circumstances disclosed, to pay any judgment which the father may eventually recover in his personal action against the insured have been recently considered by this court. Putnam v. Assurance Corp., N. H., 4 A.2d 353; Lumbermen's Mutual Casualty Co. v. Yeroyan, N.H., 5 A.2d 726. We see no reason to recapitulate the reasoning of these cases or to reconsider the result which they reach. In consequence the plaintiff's second question is answered in the negative.

Upon the first question propounded no authority in point has come to our attention. It is therefor necessary to answer it by reference to the terms of the policy of insurance itself as those terms have, in a general way, been interpreted in dissimilar cases from this and other jurisdictions.

By its policy of insurance the plaintiff agreed to defend on behalf of the insured and in his name "any suit, coming within the terms of this Policy, seeking damages on account of [bodily injuries, death or destruction of property] even if such suit is groundless, false or fraudulent." This clause, in keeping with its provisions, has been generally construed to obligate the insurer to defend suits, even though groundless, false or fraudulent, upon only those claims for which it has assumed liability under the terms of its policy. United Waste Mfg. Co. v. Casualty Co., 85 Misc. 539, 148 N.Y.S. 852 (affirmed without opinion, 169 App.Div. 906, 153 N. Y.S. 1148); Henderson Lighting Co. v. Casualty Company, 153 N.C. 275, 69 S.E. 234, 30 L.R.A., N.S, 1105; Brodek v. Insurance Co., 292 Ill. App. 363, 11 N.E.2d 228. And the question of whether or not an action is upon a claim for which the insurer has assumed liability is to be determined by reference to the allegations of the declaration in the action against the insured. Fessenden School, Inc., v. Insurance Co., 289 Mass. 124, 193 N.E. 558; Lunt v. Insurance Company, 261 Mass. 469, 159 N. E. 461.

In the case at bar it is undisputed that both of the Bullard actions were upon claims for which the plaintiff gave coverage at the time when those actions were brought, and the plaintiff, in accordance with its contractual obligation, assumed their defense. It thereafter prosecuted its defense of both actions until in one of them a final judgment was rendered for the plaintiff in an amount greater than the limits of coverage provided in the policy of insurance and the plaintiff thereupon paid that...