Portsmouth Hospital v. Indemnity Ins. Co. of North America, No. 5688

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

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.

[109 N.H. 54]

Page 399

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 [109 N.H. 55] 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?

Page 400

'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 [109 N.H. 56] 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...