Matosantos Int'l Corp. v. Hartford Cas. Ins. Co.

• Docket Number: CIVIL 21-cv-317-LM
• Decision Date: 30 June 2023
• Parties: Matosantos Int'l Corp. v. Hartford Casualty Insurance Co. & Twin City Fire Insurance Co.
• Court: U.S. District Court — District of New Hampshire

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Matosantos Int'l Corp. v. Hartford Casualty Insurance Co. & Twin City Fire Insurance Co.

CIVIL No. 21-cv-317-LM

United States District Court, D. New Hampshire

June 30, 2023

Opinion No. 2023 DNH 080 P

ORDER

Landya McCafferty United States District Judge

Plaintiff Matosantos International Corporation (“Matosantos”) brought this insurance coverage suit against defendants Hartford Casualty Insurance Company and Twin City Fire Insurance Company (together “Hartford”). The suit relates to workers' compensation insurance coverage under a Hartford-issued policy (the “Policy”) for a May 2018 motor vehicle accident involving one of Matosantos's employees Javier Vasquez, in New Hampshire. Hartford denied coverage and Matosantos subsequently brought this suit. Hartford and Matosantos filed cross-motions for summary judgment (doc nos. 36, 38). Matosantos's motion is granted in part and denied in part. Hartford's motion is denied.

STANDARD OF REVIEW

Summary judgment is proper only if the moving party can demonstrate that there is no evidence in the record to support a judgment for the nonmoving party. Borges v. Serrano-Isern, 605 F.3d 1, 5, 8 (1st Cir. 2010); see also Fed.R.Civ.P. 56(a). If the moving party succeeds in making that showing, “the burden shifts to the nonmoving party, who must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor.” Borges, 605 F.3d at 5. The nonmoving party's failure to meet that burden by reference to “significantly probative” materials “of evidentiary quality” entitles the moving party to summary judgment. Irobe v. U.S. Dep't of Agric., 890 F.3d 371, 377 (1st Cir. 2018). In evaluating a motion for summary judgment, the courts must view the evidence in the light most favorable to the nonmoving party, must draw all reasonable inferences in that party's favor, and may neither make credibility determinations nor weigh the evidence. Harris v. Scarcelli, 835 F.3d 24, 29 (1st Cir. 2016); Hicks v. Johnson, 755 F.3d 738, 743 (1st Cir. 2014).

When parties file cross-motions for summary judgment, “the standard does not change.” Motorists Commercial Mut. Ins. Co. v. Hartwell, 53 F.4th 730, 734 (1st Cir. 2022); Dusel v. Factory Mut. Ins. Co., 52 F.4th 495, 503 (1st Cir. 2022). The court views each motion for summary judgment separately and draws all reasonable inferences in favor of each respective nonmoving party. Hartwell, 53 F.4th at 734.

BACKGROUND

I. Matosantos employs Javier Vasquez as Vice President of the Southeast Region of the United States

Matosantos provides auditing and merchandising services for non-party Matosantos Commercial Corporation (“Commercial”). Commercial supplies products, such as frozen fruit, to retail supermarkets and other stores.

Matosantos employs “auditors” who travel around the United States visiting stores that carry Commercial's products. Those employees audit store inventory, train store staff on how to handle and merchandise Commercial's products, and develop Commercial's relationships with store management. Commercial and Matosantos work closely together to determine the stores and locations to be visited by Matosantos auditors. Ultimately, Commercial tells Matosantos which stores and regions its auditors must visit.

In 2014, Matosantos hired Javier Vasquez as an auditor.^[1] Vasquez's job title was Vice President of the Southeast region of the United States. Doc. no. 36-7 at 7. Initially, Vasquez primarily visited stores in Florida, which is where Commercial's products were concentrated. As time went on, Commercial's business grew, and Vasquez spent time elsewhere. Vasquez's visits were generally concentrated in the southern United States.

From time to time, Matosantos sent Vasquez on “special assignments” to visit stores in the northeast United States. Of note, Vasquez traveled to New Hampshire to audit stores for approximately one week in June 2016 and another week in July 2016. Vasquez again audited stores in New Hampshire for a short time in April 2017. After the April 2017 audit, however, the stores carrying Commercial's products in New Hampshire ceased doing so. Without any stores carrying Commercial's products in New Hampshire, no further audits were planned.

Vasquez drove from store to store and state to state in a rental car, which Matosantos rented in Mississippi for 11-month terms.^[2] When not on the road, Vasquez usually stayed with friends and family in Florida. Doc. no. 36-7 at 55.

The record does not establish with specificity how much time Vasquez spent in Florida or in any particular state. Hartford submitted Vasquez's expense reports from the six months preceding the accident, which provide some insight into where Vasquez spent his time.^[3] The expense reports indicate that Vasquez spent approximately 11% of the six months preceding the accident in Florida. The only state in which Vasquez spent more time was New York (approximately 15%).^[4]However, there are some gaps in the six-month period for which no location is indicated.

In September and October 2017, Walmart began stocking Commercial's products at stores in New England, including New Hampshire. In November 2017, Commercial mapped a route of Walmart stores which included New Hampshire.

Commercial planned to send Matosantos's auditors on that route between the end of November and mid-December 2017. A Matosantos principal was copied on the email about the route.

However, Commercial ultimately did not send Matosantos's auditors to visit the New Hampshire Walmart stores in November or December 2017. Rather, Vasquez was not directed to visit the New Hampshire Walmart stores until April 26, 2018. Vasquez arrived in New Hampshire to audit the stores on May 23, 2018.

On May 31, 2018, Vasquez was seriously injured in a car accident after leaving a Walmart store he had audited.

II. Matosantos's workers' compensation policy with Hartford

At the time of the accident, Matosantos held a workers' compensation insurance policy issued by Hartford. Matosantos had held a workers' compensation insurance policy with Hartford since 2014, which renewed yearly on January 20. The Policy's effective date at the time of Vasquez's accident was January 20, 2018. Matosantos filed a claim under the Policy a few days after the accident, on June 4, 2018.

The Policy provides insurance to Matosantos for workers' compensation benefits that must be paid under different states' workers' compensation laws. Coverage is provided through two alternate routes: (1) Information Page Item 3.A. and Part One of the Policy, and (2) Information Page Item 3.C. and Part Three of the Policy, which is known as “Other States Insurance.”

Item 3.A. states that “Part one of the policy applies to the Workers Compensation Law of the states listed here.” Doc. no. 36-26 at 3. Florida and New York are listed as Item 3.A. states. Part One of the Policy states that Hartford will “pay promptly when due the benefits required of [Matosantos] by the workers compensation law.” Doc. no. 36-26 at 7. The term “workers compensation law” is defined, in relevant part, to mean “the workers or workmen's compensation law and occupational disease law of each state or territory named in Item 3.A. of the Information Page.” Id.

Item 3.C. states that “Part Three of the policy applies to the states, if any, listed here: ALL STATES EXCEPT ND, OH, WA, WY, U.S. TERRITORIES, AND STATES DESIGNATED IN ITEM 3.A. OF THE INFORMATION PAGE.” Doc. no. 36-26 at 3. Part Three of the Policy states, in its entirety, as follows:

A. How This Insurance Applies

1. This other states insurance applies only if one or more states are shown in Item 3.C. of the Information Page.

2. If you begin work in any one of those states after the effective date of this policy and are not insured or are not self-insured for such work, all provisions of the policy will apply as though that state were listed in Item 3.A. of the Information page.

3. We will reimburse you for the benefits required by the workers compensation law of that state if we are not permitted to pay the benefits directly to persons entitled to them.

4. If you have work on the effective date of this policy in any state not listed in Item 3.A. of the Information Page, coverage will not be afforded for that state unless we are notified within thirty days. B. Notice

Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page.

Doc. no. 36-26 at 10-11. Section 3.A. ¶ 4 and Section B are the most critical provisions of Part Three for purposes of this case. The court will refer to Section 3.A. ¶ 4 as the “30-day notice clause” and Section B as the “at-once notice clause.”

The Policy also classifies Matosantos's employees into different categories (such as salespersons or clerical employees) and calculates estimated premiums based in part on those classifications. Vasquez was identified as “salespersons or collectors - outside”^[5] and as a Florida employee. Doc. no. 36-23; doc. no. 36-26 at 4.

III. Hartford denies Matosantos's claim.

After investigating, Hartford denied Matosantos's claim related to Vasquez's accident on the grounds that it was not covered under the Policy. Hartford asserted that Item 3.A. did not apply because the workers' compensation laws of neither New York nor Florida applied.^[6] Hartford asserted that Item 3.C. did not apply because Matosantos's work in New Hampshire was not temporary and because New Hampshire has a law which requires coverage under Item 3.A. as opposed to Item 3.C.

IV. Claims

Matosantos brings five counts in its complaint. Counts 1 through 4 all relate to enforcing the Policy and providing Matosantos coverage for Vasquez's accident....