MICHELLE RUSSELL & a.
NGM INSURANCE COMPANY
Argued: May 16, 2017
Office of John S. Wessler, of Lawrence, Massachusetts (John
S. Wessler on the brief and orally), for the plaintiffs.
Getman, Schulthess, Steere & Poulin, P.A., of Manchester
(Elizabeth L. Hurley on the brief and orally), for the
plaintiffs, Michelle and Robert Russell (homeowners), appeal
an order of the Superior Court (Anderson, J.)
denying their summary judgment motion and granting that of
the defendant, NGM Insurance Company (insurer). On appeal,
the homeowners contend that the trial court erred when it
determined that their homeowners' insurance policy
provided no coverage for the additional living expenses they
incurred when they were unable to live in their home because
of mold contamination. We affirm.
following facts are derived either from the trial court's
order or the record submitted on appeal. The insured
residence is a custom home in Windham, built in 2007. In
early 2015, the homeowners discovered mold and moisture in
the home's attic, which were the result of faulty
workmanship. As a result of the mold, they vacated the home
in March 2015 so that the mold could be eradicated. They
moved back into the home in May 2016.
October 2015, the homeowners submitted a claim to the insurer
for loss of use damages under Coverage D of their
homeowners' policy. There is no evidence in the record
that they also submitted a claim to the insurer for mold
eradication. The insurer denied the loss of use claim in
November 2015. The denial letter explained that, pursuant to
the "Limited Fungi, Wet or Dry Rot, or Bacteria"
endorsement to the homeowners' policy (Mold Endorsement),
"[m]old is covered only if caused by a Peril Insured
Against, " and, here, because the mold was caused by
faulty workmanship, which is an excluded peril, there is no
the homeowners brought a petition for declaratory judgment,
seeking a declaration that they are entitled to loss of use
damages under Coverage D. In their petition, they alleged
that their loss of use damages were not subject to the faulty
workmanship exclusion because mold constitutes an ensuing
loss of the faulty workmanship that was not otherwise
excluded under the policy.
the homeowners and the insurer moved for summary judgment.
The trial court granted the summary judgment motion of the
insurer and denied that of the homeowners. The homeowners
unsuccessfully moved for reconsideration, and this appeal
Standards of Review
reviewing a trial court's rulings on cross-motions for
summary judgment, we consider the evidence in the light most
favorable to each party in its capacity as the nonmoving
party and, if no genuine issue of material fact exists, we
determine whether the moving party is entitled to judgment as
a matter of law. JMJ Properties, LLC v. Town of
Auburn, 168 N.H. 127, 129 (2015). "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, then we will affirm the grant of summary judgment."
Id. at 129-30 (quotation omitted). We review the
trial court's application of the law to the facts de
novo. Brown v. Concord Group Ins. Co., 163 N.H.
522, 524-25 (2012).
"In a declaratory judgment action to determine the
coverage of an insurance policy, the burden of proof is
always on the insurer, regardless of which party brings the
petition." Cogswell Farm Condo. Ass'n v. Tower
Group, Inc., 167 N.H. 245, 248 (2015)
(quotation omitted). We interpret insurance policy language
de novo. See id. "The fundamental goal
of interpreting an insurance policy, as in all contracts, is
to carry out the intent of the contracting parties."
Bartlett v. Commerce Ins. Co., 167 N.H. 521, 530
(2015) (quotation omitted). To discern the parties'
intent, we begin by examining the insurance policy language.
Id. In interpreting policy language, we look to the
plain and ordinary meaning of the policy's words in
context. Id. We construe the terms of the policy as
would a reasonable person in the position of the insured
based upon more than a casual reading of the policy as a
whole. Id. at 530-31. This is an objective standard.
Great Am. Dining v. Philadelphia Indem. Ins. Co.,
164 N.H. 612, 616 (2013).
are free to contractually limit the extent of their liability
through use of a policy exclusion provided it violates no
statutory provision. Progressive N. Ins. Co. v. Concord
Gen. Mut. Ins. Co., 151 N.H. 649, 653 (2005). "Such
language must be so clear, however, as to create no ambiguity
that might affect the insured's reasonable
expectations." Id. (quotation omitted). The
insurer asserting an exclusion of coverage bears the burden
of proving that the exclusion applies. Id.
need not examine the parties' reasonable expectations of
coverage when a policy is clear and unambiguous; absent
ambiguity, our search for the parties' intent is limited
to the words of the policy." Bartlett, 167 N.H.
at 531. "The fact that the parties may disagree on the
interpretation of a term or clause in an insurance policy
does not necessarily create an ambiguity." Id.
"For an ambiguity to exist, the disagreement must be
determining whether an ambiguity exists, we will look to the
claimed ambiguity, consider it in its appropriate context,
and construe the words used according to their plain,
ordinary, and popular definitions." Id.
(quotation omitted). "If one of the reasonable meanings
of the language favors the policyholder, the ambiguity will
be construed against the insurer, in order to honor the
insured's reasonable expectations." Id.
(quotation and citation omitted). "However, when the
policy language is clear, this court will not perform amazing
feats of linguistic gymnastics to find a purported ambiguity
simply to construe the policy against the insurer and create
coverage where it is clear that none was intended."
Id. (quotation omitted).
homeowners' insurance policy consists of a base policy
modified by endorsements that include the Mold Endorsement
and the "Platinum Homeowner Endorsement - New
Hampshire" (New Hampshire Endorsement). (Bolding and
capitalization omitted.) The policy is an "all
risk" policy that insures "against risk of direct
loss" to the homeowners' dwelling, other structures
on the residence property, and personal property, if the loss
"is a physical loss to property." See
Michael C. Phillips & Lisa L. Coplen, Concurrent
Causation Versus Efficient Proximate Cause in First-Party
Property Insurance Coverage Analysis, 36 The Brief 32,
33 (Winter 2007) (explaining that "[t]he typical
'all risks' policy begins with a broad insuring
provision that states that the policy covers 'direct
physical loss or damages to covered property'" and
"then specifies which risks [the insurer] will not
assume by listing those causes of loss as policy
exclusions"). "An 'all risk' policy
typically covers any risk of direct physical loss or damage
that is not specifically excluded or limited by the terms of
the policy." Caryn L. Daum, A Primer on New
Hampshire First-Party Property Insurance, 52 N.H.B.J.
20, 21 (Autumn 2011). For the purposes of this appeal, there
is no dispute that the loss for which the homeowners seek
coverage constitutes a direct, physical loss to the property.
policy is divided into two sections: "Section I, "
which pertains to property coverages, and "Section II,
" which pertains to liability coverages. (Bolding and
capitalization omitted.) The instant case concerns only
I of the broad form policy has four components:
"Property Coverages, " "Perils Insured
Against, " "Exclusions, " and
"Conditions." (Bolding and capitalization omitted.)
As relevant to this appeal, the New Hampshire Endorsement
modifies within Section I "Perils Insured Against"
and "Exclusions." ...