McAllister v. Peerless Ins. Co.

Decision Date09 April 1984
Docket NumberNo. 82-383,82-383
PartiesDavid H. McALLISTER v. PEERLESS INSURANCE COMPANY.
CourtNew Hampshire Supreme Court

Ladd Law Offices, Hollis (William M. Ladd, Hollis, on the brief and orally), for plaintiff.

Devine, Millimet, Stahl & Branch P.A., Manchester (Lee C. Nyquist, Manchester, on the brief and orally), for defendant.

SOUTER, Justice.

This is an action for declaratory judgment under RSA 491:22 to resolve a disputed claim for coverage under an insurance policy. In 1978 the plaintiff began to conduct a landscaping and excavating business. He met with an agent of the defendant to obtain insurance coverage. The parties disagree over the details of the conversation between the plaintiff and the agent, but it is undisputed that each party understood that the defendant would issue to the plaintiff a comprehensive general liability policy with completed operations coverage. The defendant issued such a policy, but failed to deliver to the plaintiff a set of documents that included all the written terms governing the coverage.

Through the agent, the defendant did deliver a so-called deck sheet, which normally would have functioned as a cover or binder for written endorsements. The deck sheet identified the parties, bore some notations indicating coverage, and set out various standard definitions and conditions. It did not include language generally granting coverage, but it did include a definition of "completed operations hazard."

In 1979 Michael Finkelstein hired the plaintiff to landscape his property and to construct a leach field on it. In 1980 Mr. Finkelstein brought action against the plaintiff for breaches of contract, claiming faulty workmanship in constructing the leach field and in performing the landscaping. Mr. Finkelstein sought damages to pay for correcting the allegedly defective work. He did not claim that such defects had caused damage to any other property than the work product, nor did he claim any damage to the work product other than the defective workmanship.

The plaintiff brought the present action to determine coverage for the liability asserted in the underlying action brought by Mr. Finkelstein. Following trial, the Master (R. Peter Shapiro, Esq.) concluded that there was no coverage, and the Superior Court (Goode, J.) accordingly entered a decree for the defendant. We affirm.

The plaintiff claims that he is entitled to coverage for any liability for failure to perform in accordance with his contractual obligations. He rests his claim on two grounds, his dealings directly with the agent and the terms of the policy itself.

The master found that the plaintiff had discussed the insurance requirements of his business with an acquaintance, and that by the time he met with the agent, he understood that he ought to obtain general liability and completed operations coverage. The master also found that neither the plaintiff nor the agent definitely recalled any representations the agent made about the coverage the defendant would provide. He found the agent had made no representation that coverage would be provided for liability of the sort asserted by Mr. Finkelstein, and he concluded that the agent's conversation with the plaintiff did not give rise to any obligation to provide such coverage.

We will sustain the master's findings of fact if there was evidence on which a reasonable person could have found as he did. U.S. Fidelity & Guaranty Co., Inc. v. Johnson Shoes, Inc., 123 N.H. 148, 153, 461 A.2d 85, 88 (1983). Judged on this standard, the master's findings must stand. It is true that the plaintiff did testify that as a result of his conversation with the agent he understood that the insurance company would pay the cost of correcting substandard work. But the plaintiff also admitted that he had no recollection that the agent had said the plaintiff would have "warranty insurance," or "guaranteed [sic] insurance" and no memory that the agent "ever even mentioned anything at all about coverage for faulty workmanship."

No further references to the testimony are needed to demonstrate that there was a sufficient evidentiary basis for the master's findings. Since the findings must be sustained, there is no occasion to apply the rule that prior dealings between insured and insurer can lead to enforceable expectations of coverage. See Robbins Auto Parts, Inc. v. Granite State Ins. Co., 121 N.H. 760, 762-63, 435 A.2d 507, 508 (1981).

The plaintiff also claims coverage based on the terms of the policy. He argues that in construing those terms we should hold that the defendant's failure to deliver complete policy terms estops it to claim that any policy exclusions limit coverage, and he urges that any ambiguity in policy terms be construed against the defendant. We do not consider these claims about the application of estoppel and the resolution of ambiguity, because nothing in the policy language that was or should have been delivered could give rise to the coverage that the plaintiff seeks.

In considering the plaintiff's claim based on the terms of the policy, we look first to those terms set out on the deck sheet, the one document that was delivered to the plaintiff. Although the deck sheet did not include the general grant of liability coverage, it did include the definition of "completed operations hazard." Since it is undisputed that the insurance to be provided included coverage for liability arising out of completed operations, we look to that definition to determine whether completed operations coverage extends to claims of faulty workmanship. The portion of the definition that concerns us provides coverage by...

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