Portsmouth Hospital v. Indemnity Ins. Co. of North America

• Decision Date: 29 May 1968
• Docket Number: No. 5688,5688
• Citation: 109 N.H. 53,242 A.2d 398
• Parties: PORTSMOUTH HOSPITAL v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA.
• Court: New Hampshire Supreme Court

Page 398

242 A.2d 398

109 N.H. 53

PORTSMOUTH HOSPITAL v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA.

No. 5688.

Supreme Court of New Hampshire.

Argued Dec. 5, 1967.

Decided May 29, 1968.

Orr & Reno, John W. Barto and Richard B. Couser, Concord, for plaintiff.

Devine, Millimet, McDonough, Stahl & Branch, Manchester (Shane Devine, Manchester, orally), for defendant.

LAMPRON, Justice.

Petition for declaratory judgment under RSA 491:22 brought by the plaintiff to determine its rights under a bodily injury liability policy issued to it by the defendant. The matter was submitted to the Trial Court (Dunfey, J.) on an agreed statement of facts. The Court reserved and transferred without ruling two questions of law raised thereby.

On November 3, 1958, Mark Ward, of Portsmouth, an infant of 14 months, underwent an operation at the Portsmouth Hospital during which he suffered a cardiac arrest and his brain apparently suffered irreversible damage. During the following three years Mark remained in the hospital and was cared for by plaintiff's personnel without payment by his parents, who refused to remove him therefrom, or by anyone else.

In January 1962, the plaintiff, believing it desirable to institute action to effect the removal of Mark to another institution, communicated its intention to do so to the defendant (INA) and the latter's counsel. In answer thereto INA's counsel stated in part, in a letter dated January 10, 1962: 'You realize that * * * (your proposed action) will mean an immediate law suit, and if liability can be established against the Hospital, the verdict might far exceed your insurance coverage and cause you a substantial financial loss * * * (W)e believe that under the terms and conditions of your policy we are entitled to your cooperation.' Within a month thereafter, counsel for INA received a demand from counsel for Mark which was in excess of the limits of coverage provided by the policy furnished by it and transmitted this demand to counsel for the Hospital.

Additional discussion and correspondence occurred between counsel for both parties. Counsel for the Hospital inquired if INA would agree that any legal action taken by the Hospital to remove Mark would not constitute lack of cooperation under the terms of the policy. Counsel for defendant replied that INA would neither approve any attempt at removal of Mark, nor give any assurance that an attempt at such removal would not prejudice the rights of the Hospital under the policy. Counsel stated further that, if such attempt at removal resulted unfavorably, INA would consider any rights it might have under the cooperation clause of its policy. An exchange of letters took place between the parties in February 1965 with no change in the position of the parties resulting therefrom.

The legal questions transferred are the following:

'1. Whether any attempt on the part of Portsmouth Hospital to remove an infant patient, Mark Ward, to other facilities would constitute a breach of the cooperation clause of its insurance policy?

'2. Whether the issue set forth in number 1, above, can properly by determined at this time by means of a Declaratory Judgment?'

Considering the questions in reverse order, RSA 491:22 reads 'Any person claiming a present legal or equitable right or title may maintain a petition against any person claiming adversely to such right or title, to determine the question as between the parties, and the court's judgment or decree thereon shall be conclusive.' Declaratory relief is a broad remedy and the statute itself, as well as petitions thereunder, must be literally construed so as to effectuate the evident purpose of the law. Faulkner v. Keene, 85 N.H. 147, 154-156, 155 A. 195; Burke v. City and County of San Francisco, 65 Cal.Rptr. 539, 540 (Cal.App.1968); 22 Am.Jur.2d, Declaratory Judgments, s. 8, pp. 843, 844.

The distinguishing characteristic of the action is that it can be brought before an actual invasion of rights has occurred. It is intended to permit a determination of a controversy before obligations are repudiated and rights invaded. Leavitt v. Town of North Hampton, 98 N.H. 193, 195, 96 A.2d 554; Villars v. Portsmouth, 100 N.H. 453, 454, 129 A.2d 914; Vlahos Realty Co. v. Little Boar's Head Dist., 101 N.H. 460, 465, 146 A.2d 257; 20 Appleman, Insurance Law and Practice, s. 11332, p. 104 (1963). 'If the controversy be one that would be justiciable under the law, provided either party had violated the right claimed by the other, it is justiciable under the act as soon as the essential facts arise. Claim of legal or equitable right on the one hand and its denial on behalf of an adverse interest constitute a cause for proceeding for a declaratory judgment.' Faulkner v. Keene, 85 N.H. 147, 155, 155 A. 195, 200; Hermer v. City of Dover, 105 N.H. 108, 192 A.2d 624. In short, the remedy of declaratory judgment affords relief from uncertainty and insecurity created by doubt as to rights, status, or legal relations existing between the parties. Faulkner v. Keene, supra, 85 N.H. 156, 155 A. 195; 12 Am.Jur.2d, Declaratory Judgments, s. 11, pp. 849-851. See Bourazak v. North River Insurance Company, 379 F.2d 530 (7th Cir. 1967).

On November 3, 1958, Mark Ward suffered a cardiac arrest in the course of an operation at the plaintiff Hospital which apparently caused him irreversible brain damage. The defendant INA insured the plaintiff for its liability, if any, therefor. The Hospital has cared for Mark in its facilities at its own expense since that time. It alleges in its petition that for the benefit of Mark and to relieve the Hospital from the financial burden which it has carried since the accident, it deems it desirable to institute legal action 'directed at the removal of Mark Ward from its hospital followed by his transfer to some other institution with facilities better able to care for him.' It further alleges that the Hospital has taken no such action because it is uncertain of its rights under the policy issued to it by INA.

According to the agreed facts the defendant, although requested to do so, will neither approve any attempt by the Hospital to remove Mark Ward, nor will it give assurance that an attempt at such removal would not prejudice the rights of the Hospital under the policy. Furthermore INA has stated that if such an attempt resulted unfavorably it would consider any rights it might have under the cooperation clause of the policy.

We are of the opinion that the above facts constitute a genuine controversy between the Hospital and INA as to their respective rights and obligations under the cooperation clause of the policy. Furthermore the facts are sufficiently complete to place the parties 'in gear' and to permit an intelligent and useful decision to be made. Merchants Mut. &c. Co. v. Kennett, 90 N.H. 253, 255, 7 A.2d 249; Hermer v. Dover, 105 N.H. 108, 192 A.2d 624; California Water & Telephone Co. v County of Los Angeles, 253 A.C.A. 11, 61 Cal.Rptr. 618, 623.

The fact that Mark Ward and his parents are not parties to these proceedings does...