Northern Sec. Ins. Co. v. Connors

• Decision Date: 31 March 2011
• Docket Number: No. 2010–152.,2010–152.
• Citation: 161 N.H. 645,20 A.3d 912
• Parties: NORTHERN SECURITY INSURANCE COMPANYv.Michael CONNORS and another.
• Court: New Hampshire Supreme Court

161 N.H. 645

20 A.3d 912

NORTHERN SECURITY INSURANCE COMPANY

v.Michael CONNORS and another.

No. 2010–152.

Supreme Court of New Hampshire.

Argued: Jan. 13, 2011.Opinion Issued: March 31, 2011.

Wiggin & Nourie, P.A., of Manchester (Doreen F. Connor and Gary M. Burt on the brief, and Mr. Burt orally), for the petitioner.Kenna & Sharkey, P.A., of Manchester (Kevin E. Sharkey on the brief and orally), for respondent Michael Connors.Brennan, Caron, Lenehan & Iacopino, of Manchester (Gary S. Lenehan and Jaye L. Rancourt on the brief, and Ms. Rancourt orally), for respondents Estate of Jack F. Reid, Sr., Jay Klos, James Reid, Laurie Zic, and Catherine Reid.CONBOY, J.

The petitioner, Northern Security Insurance Company (Northern Security), appeals an order of the Superior Court ( McHugh, J.), denying its motion for summary judgment and granting the cross-motion for summary judgment of respondent Michael Connors. The trial court ruled that Northern Security has a duty to defend respondent Connors in a civil lawsuit pending in Rockingham County Superior Court, Reid v. Brooks, No. 08–C–543. We affirm.

The trial court found the following facts. The civil suit that underlies this case involves the 2005 murder of Jack F. Reid. The plaintiffs in that case, who are also respondents in the instant action, are Reid's estate and several individual family members; the defendants are John Brooks (Brooks), Robin Knight, Michael Benton, Joseph Vrooman, Jesse Brooks, and Michael Connors. The writ alleges that over a two-year period, Brooks, Knight, Benton, Vrooman, and Jesse Brooks conspired to trap, torture, and kill Reid, reportedly because Brooks believed Reid, a handy man for hire, stole personal property from him. On June 27, 2005, Reid was lured to Michael Connors' residence in Deerfield for a non-existent job. Once Reid arrived, Brooks, Knight, Vrooman, and Benton killed him by striking him in the head and chest with a blunt object.

The writ identifies four causes of action against Connors: civil conspiracy, wrongful death, intentional infliction of emotional distress, and negligent infliction of emotional distress. The writ alleges the following facts regarding Connors: (1) “Defendant Brooks spoke with Defendant Michael Connors and informed him that he would be sending him a package and that if anyone asked, Defendant Connors was instructed by Defendant Brooks to tell them [ sic ] that the package contained steak knives”; (2) “In furtherance of the conspiracy, Defendant Brooks forwarded a package containing a stun gun, hand cuffs, and/or pepper spray via [F]ederal [E]xpress to 145 North Road, Deerfield, New Hampshire, Defendant Connors's residence at that time”; (3) “Defendant Brooks requested from Defendant Connors that he, and other herein named defendants, be allowed to use Defendant Connors' property....”

The trial court found that as to Connors the writ does not contain “evidence of either subjective or objective intent to do harm to Reid.” It noted that the plaintiffs agree that Connors was not on the property the day of the murder. The trial court also noted that the plaintiffs do not allege that Connors knew the contents of the package he received from Brooks, that he agreed to let Brooks use his property, or that Connors was aware of the plot to harm Reid. Connors argued to the trial court that he was never indicted by the State for conspiracy to commit murder, that in three criminal trials he testified that he had no knowledge of the murder plan, and that he denied Brooks's request to use his property.

At all relevant times, Connors was covered by a homeowner's insurance policy issued by Northern Security. Section II of the policy provides defense and indemnity to an insured “[i]f a claim is made or a suit is brought against an ‘insured’ for damages because of ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence’ to which this coverage applies.” An “occurrence” is defined elsewhere in the policy as: “[a]n accident ... which results, during the policy period in: a) ‘bodily injury’; or b) ‘property damage.’ ”

A provision entitled “Section II–Exclusion” provides that the policy does not cover bodily injury or property damage that is expected or intended by the insured (intentional acts exclusion), or that arises out of sexual molestation, corporal punishment, or physical or mental abuse (physical abuse exclusion).

Connors's policy also includes a “Homeowners Coverage Enhancement Amendment” (enhancement amendment), which expands the definition of “bodily injury” to include “personal injury.” “Personal injury” is defined as:

injury arising out of one or more of the following offenses:

1. False arrest, detention or imprisonment, or malicious prosecution;

2. Libel, slander or defamation of character, or

3. Invasion of privacy, wrongful eviction or wrongful entry.

The enhancement amendment also contains the following sentence: “Section II Exclusions do not apply to personal injury.” As stated in Northern Security's brief, “Northern denied coverage because the conduct attributed to Connors does not constitute an ‘occurrence,’ and the acts are excluded by the policy's physical abuse exclusion.”

Following the filing of cross-motions for summary judgment, the trial court ruled in favor of Connors, concluding that Northern Security has an obligation to defend Connors on two claims. While the trial court recognized that “[t]he parties generally agree that intentional acts are not covered by the policy,” it found that (1) negligent infliction of emotional distress and conspiracy to commit false imprisonment were acts covered by Connors's policy, and (2) the covered alleged acts were not inextricably intertwined with any non-covered alleged acts.

On appeal, Northern Security argues that: (1) the personal injury endorsement for false imprisonment claims is not triggered by a claim for civil conspiracy to commit false imprisonment; (2) the alleged conduct does not meet the policy's definition of an “accident” or “occurrence,” as the elements of civil conspiracy require non-covered intentional conduct; (3) any claim of false imprisonment is inextricably intertwined with an overall intentional plan to murder Reid, thus precluding coverage; and (4) the damages sought by the estate and family members constitute damages for Reid's wrongful death.

Connors and the other respondents disagree and argue that the enhancement amendment creates an ambiguity because it purports to cover claims of false imprisonment, an intentional tort, while the underlying policy precludes coverage for intentional acts. They argue that because ambiguities must be construed in favor of coverage, we should uphold the trial court's finding of coverage.

In reviewing the trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. Big League Entm't v. Brox Indus., 149 N.H. 480, 482, 821 A.2d 1054 (2003). If our review of that evidence discloses no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm the grant of summary judgment. Id. We review the trial court's application of the law to the facts de novo. Id.

Resolution of this dispute requires us to interpret the insurance policy. Interpretation of an insurance policy is a question of law. Philbrick v. Liberty Mut. Fire Ins. Co., 156 N.H. 389, 390, 934 A.2d 582 (2007). We construe the language of an insurance policy as would a reasonable person in the position of the insured based upon a more than casual reading of the policy as a whole. Id. Where the terms of the policy are clear and unambiguous, we accord the language its natural and ordinary meaning. Id. at 391, 934 A.2d 582. However, if the policy is reasonably susceptible to more than one interpretation and one interpretation favors coverage, the policy will be construed in favor of the insured and against the insurer. Id. Absent a statutory provision or public policy to the contrary, an insurance company is free to limit its liability through an exclusion written in clear and unambiguous policy language. Id. For exclusionary language to be considered clear and unambiguous, two parties cannot reasonably disagree about its meaning. Id. Pursuant to RSA 491:22–a (2010), the burden of proving lack of insurance coverage is on the insurer.

An insurer's obligation to defend its insured is determined by whether “the cause of action against the insured alleges sufficient facts in the pleadings to bring it within the express terms of the policy.” State Farm Ins. Co. v. Bruns, 156 N.H. 708, 710, 942 A.2d 1275 (2008). In considering whether a duty to defend exists based on the sufficiency of the pleadings, we consider the reasonable expectations of the insured as to its rights under the policy. Id. An insurer's obligation is not merely to defend in cases of perfect declarations, but also in cases where, by any reasonable intendment of the pleadings, liability of the insured can be inferred, and neither ambiguity nor inconsistency in the underlying writ can justify escape of the insurer from its obligation to defend. Id. In cases of doubt as to whether the writ against the insured alleges a liability of the insurer under the policy, the doubt must be resolved in the insured's favor. Id.

Northern Security concedes that the policy with the enhancement amendment covers false imprisonment claims. Its counsel agreed at oral argument that coverage is provided for the offenses enumerated in the amendment, regardless of whether the injuries arising out of those offenses were expected or intended; the amendment specifically states that “Section II Exclusions do not apply to personal injury.” Therefore, the provision that excludes expected or intended bodily injury from coverage does not apply to false imprisonment claims.

Northern Security argues, however, that...