Merchants Ins. Group v. Warchol
Decision Date | 14 July 1989 |
Docket Number | No. 88-185,88-185 |
Citation | 132 N.H. 23,560 A.2d 1162 |
Parties | MERCHANTS INSURANCE GROUP v. Mitchell WARCHOL d/b/a Justam General Contractor and William and Deborah Dimick. |
Court | New Hampshire Supreme Court |
Devine, Millimet, Stahl & Branch, P.A., Manchester (Andrew D. Dunn, on the brief and orally), for plaintiff.
Devine & Nyquist, Manchester (Kevin C. Devine, orally, and Maureen E. Raiche, on the brief), for defendants William and Deborah Dimick.
Moquin & Daley, Manchester (Richard C. Moquin, on the brief), by brief, for defendant Mitchell Warchol d/b/a Justam General Contractor.
The defendants, Mitchell Warchol d/b/a Justam General Contractor (Justam) and William and Deborah Dimick, appeal from a declaratory judgment entered by the Superior Court (Goode, J.), see RSA 491:22, ruling that an insurance policy issued to Justam by the plaintiff, Merchants Insurance Group, did not cover claims brought against it by the Dimicks. We affirm.
(Emphasis in original.) The policy defined "occurrence" as "an accident ... which results in bodily injury " (emphasis in original). The bodily injury liability coverage was limited by exclusion (j), which provided that the insurance did not apply "to bodily injury to any employee of the insured arising out of and in the course of his employment by the insured or to any obligation of the insured to indemnify another because of damages arising out of such injury" (emphasis in original). An amendatory endorsement deleted exclusion (j) and replaced it with an exclusion providing that the insurance did not apply:
(Emphasis in original.)
In fall, 1986, defendant William Dimick asked Warchol for work. Dimick had no experience in the construction business; at the time he approached Warchol, he was a management trainee for Papa Gino's of America restaurants. Warchol agreed to hire him as a "laborer." Warchol told Dimick that Justam would pay Dimick $6.50 per hour, and that Dimick would be a "subcontractor," responsible for his own taxes, social security payments, and health insurance. Dimick worked exclusively and continuously for Justam from approximately the second week of October, 1986, until the time of his accident in December, 1986.
During this period, Dimick never supplied any of the work materials nor specialized equipment used in Justam's projects, although he did provide his own basic hand tools. Dimick always worked under the close supervision of either Warchol himself or of another man hired by Justam.
(Emphasis added.) Deborah Dimick brought a separate count for loss of consortium in the same writ.
The plaintiff filed a petition for declaratory judgment in the superior court, requesting a ruling that "coverage is not afforded for the Dimick claims against Warchol" under the policy it had issued. Following a bench trial held on April 14, 1988, the court ruled that "Warchol had no reasonable expectation of coverage for claims arising out of injury to persons in the position of Dimick" and granted the plaintiff's petition.
The defendants contend on appeal that the trial court erred in failing to apply the "reasonable expectations rule" and that reasonable person in the position of the insured would not have understood the policy to exclude coverage for bodily injury claims brought against him by one he believed to be a subcontractor. The defendants also assert that the trial court erred in basing its holding on an irrelevant and inaccurate finding that Dimick was an employee. Finally, the defendants argue that the trial court erroneously relied upon subsequent dealings between the parties in interpreting the insurance policy.
In a declaratory judgment action to determine whether an insurance policy covers a pending claim, the burden of proving that no coverage exists rests upon the insurer. RSA 491:22-a; see Town of Epping v. St. Paul Fire & Marine Ins. Co., 122 N.H. 248, 252, 444 A.2d 496, 498 (1982); Robbins Auto Parts, Inc. v. Granite State Ins. Co., 121 N.H. 760, 762, 435 A.2d 507, 509 (1981). Furthermore, if insurance policy language is ambiguous, it is construed in favor of the insured. Town of Epping supra; Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 771-72, ...
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