January 17, 2019
- Whether the trial court erred in finding defendant liable for excess underinsured motorist coverage where plaintiff did not carry the required amount of underlying insurance coverage.
Plaintiff Joseph Santos held a personal excess liability policy with defendant Metropolitan Property and Casualty Insurance Company. His policy included excess underinsured motorist coverage. He also held a policy with Allstate Insurance Company that insured his motorcycle. Plaintiff made a claim for the excess underinsured motorist (UIM) benefits after being struck by an SUV while driving his motorcycle, for which his Allstate plan did not fully compensate his injuries. Defendant denied the claim because plaintiff did not maintain the appropriate amount of underlying insurance coverage to trigger the UIM benefit. Plaintiff filed a declaratory judgment action to determine coverage under the defendant’s policy. The trial court ruled that defendant was liable to plaintiff for the excess UIM benefits for the injuries he sustained, in the amount that it would have been had he held the underlying coverage necessary to receive the benefits.
The trial court found that the policy language was ambiguous in determining a remedy should the insured person fail to carry the underlying insurance necessary to receive the benefits. In the excess UIM endorsement, the policy stated that, should the insured person fail to carry the underlying insurance necessary to receive the benefits, defendant was entitled to deny the benefits. The policy itself stated that, should the insured person fail to carry the underlying insurance necessary to receive the benefits, defendant could not completely deny benefits but must cover the amount it would have been liable if plaintiff had carried the proper underlying coverage. In the case of an ambiguity in an insurance policy as found in the UIM policy, the trial court ruled the ambiguity must be construed in the favor of the insured.
On appeal, defendant argued that plaintiff’s failure to carry a certain amount of underlying insurance coverage necessary to receive excess UIM benefits, as set forth in the endorsement, does allow it to entirely deny the benefits. It argued the endorsement did not create an ambiguity as the purpose of an endorsement is to modify the policy to which it is attached. Defendant also challenged plaintiff’s argument on appeal that the policy did not comply with RSA 264:15.
The court disagreed with the trial court’s judgment of ambiguity, stating that an endorsement is intended to change the terms of the policy to which it is attached. The conflict between the policy and the endorsement compelled the conclusion that the endorsement controlled.
The court did find, however, that the excess UIM endorsement violated RSA 264:15, I. RSA 264:15, I provides that excess UIM coverage must be available in the same circumstances that excess motor vehicle liability coverage is available. The precondition in the UIM policy violated RSA 264:15, I. The court affirmed the trial court’s ruling that defendant was liable to plaintiff for excess UIM benefits in the amount that it would have been liable had plaintiff maintained the underlying coverage.
Rory J. Parnell, Parnell, Michels & McKay, Londonderry, for the plaintiff. Debra L. Mayotte, Desmarais Law Group, Manchester, for the defendant.