Merchants Mut. Cas. Co. v. Kennett

• Decision Date: 31 May 1939
• Docket Number: No. 3089.,3089.
• Citation: 7 A.2d 249
• Parties: MERCHANTS MUT. CASUALTY CO. v. KENNETT et al.
• Court: New Hampshire Supreme Court

7 A.2d 249

MERCHANTS MUT. CASUALTY CO.

v. KENNETT et al.

No. 3089.

Supreme Court of New Hampshire. Carroll.

May 31, 1939.

Transferred from Superior Court, Carroll County; Lorimer, Judge.

Petition for a declaratory judgment by the Merchants Mutual Casualty Company against H. C. Kennett and another. Transferred without ruling to the Supreme Court.

Petition dismissed.

Petition, for a declaratory judgment. The material paragraphs of the petition are as follows:

"Now comes your Petitioner, the Merchants Mutual Casualty Company, * * * and complains against H. C. Kennett of Wakefield * * * and Ellsworth Locke of Sanbornville * * * and says:

"1. That prior to December 21, 1937, your petitioner issued to the defendant H. C. Kennett a policy of liability insurance covering automobiles of the named assured used in connection with his declared business of automobile repair shop.

"2. That on December 21, 1937, the defendant Locke, an employee of the defendant Kennett, while operating one of the automobiles of the defendant Kennett on the business of said Kennett was involved in an accident wherein the said defendant Locke is alleged to have suffered personal Injuries.

"3. That the defendant Locke intends to make claim against the said defendant Kennett and to look to your petitioner for satisfaction thereof.

"4. That your petitioner contends that by the terms of the aforesaid insurance policy there is no coverage for the injuries sustained by the defendant Locke.

"5. Your petitioner submits that the question of coverage presents a matter for preliminary determination before any claim is brought or suit instituted.

"6. Wherefore, your petitioner requests that all parties be summoned and a hearing had to determine the rights and duties of the respective parties hereto and a judgment declaratory thereof be rendered."

The defendants failed to enter an appearance, and the question whether judgment of "no coverage" should be rendered against them was transferred by Lorimer, J., without a ruling.

Devine & Tobin, of Manchester, for plaintiff.

MARBLE, Justice.

An insurer's duty to defend an action for negligence brought against the person insured should, as a general rule, be determined before trial through proceedings for a declaratory judgment. American Motorists Ins. Co. v. Central Garage, 86 N.H. 362, 169 A. 121; Gibbs v. Casualty Company, 87 N.H. 19, 21, 173 A. 372; American Motorists Ins. Co. v. Rush, 88 N.H. 383, 385, 190 A. 432; Laporte v. Houle, N.H., 4 A.2d 649, 650. And because this is the approved procedure by which a liability insurance company may ascertain the extent of coverage without assuming the defense of the suit and thereby admitting its liability, no price is exacted from the company for taking the requisite preliminary steps, and the burden of proof rests where it would have rested if the company had defended the action. Travelers Ins. Co. v. Greenough, 88 N.H. 391, 190 A. 129, 109 A.L.R. 1096; Liberty Mutual Ins. Co. v. Martel, 88 N.H. 479, 192 A. 152. The reason for the rule receives scant recognition in the recent case of Travelers Ins. Co. v. Drumheller, D. C, 25 F.Supp. 606, where the case of Travelers Ins. Co. v. Greenough, supra, is criticized.

The decision in the Greenough case does not mean, however, that the burden of proof is invariably on the defendants in proceedings for declaratory judgments or that an insurance company need not allege in its petition all facts necessary to establish its right to a negative declaration. "Its position that the claim is without merit is necessary, in order to show that the claim is a controverted one." Travelers Ins. Co. v. Greenough, supra, 88 N.H. 393, 190 A. 130, 109 A.L.R. 1096. Hence, although it does not assume the ultimate burden of proving coverage, its petition is defective if it seeks no more than "an order...