United States District Court, D. New Hampshire
Karen M. Weinhold, et al.
The Phoenix Insurance Company, et al.
P. Graceffa, Esq., Brian A. Suslak, Esq., Scott H. Harris,
Esq., Ashley B. Campbell, Esq., Mary Elizabeth Tenn, Esq.,
Vincent A. Wenners, Jr., Esq., Dianne H. Martin, Esq.
MEMORANDUM AND ORDER
BARBADORO UNITED STATES DISTRICT JUDGE.
declaratory judgment action stems from a refusal by The
Phoenix Insurance Company, Travelers Property Casualty
Company of America, and The Travelers Indemnity Company
(collectively, “Travelers”) to indemnify the
State of New Hampshire (“State”) under two
commercial liability insurance policies. Travelers removed
the case to federal court but now argues in a motion to
dismiss that this court lacks subject matter jurisdiction
because the plaintiffs' claim for coverage is not ripe.
For the reasons set forth below, I deny the motion.
October 2014, Karen and Charles Weinhold filed a lawsuit in
New Hampshire Superior Court against the State, Audley
Construction, Inc. (“Audley”), and Remi
Gross-Santos for the injuries they suffered when Gross-Santos
struck Mrs. Weinhold with his car. At the time of the
accident, Mrs. Weinhold was walking on an unprotected
shoulder on the west side of Ocean Boulevard in Hampton, New
Hampshire. Audley, a contractor hired by the State to repair
the seawall that runs along Ocean Boulevard, had closed the
protected sidewalk on the east side of the boulevard,
diverting Mrs. Weinhold and other pedestrians to the
unprotected shoulder on the west side.
case was tried before a jury in January 2018. The Weinholds
offered evidence at trial showing both that Audley was
negligent in choosing to divert the public onto the
unprotected west-side shoulder where Mrs. Weinhold was
injured and that the State had approved Audley's plan.
The jury awarded the Weinholds $9 million in damages and
apportioned liability among the three defendants, finding the
State 40% at fault and Audley and Gross-Santos each 30% at
fault. The State's share of the verdict thus totaled $3.6
million, exclusive of interest.
the trial court denied the State's post-trial motions
challenging the validity of the verdict and the State decided
not to appeal, it sought a ruling that the verdict against it
is subject to a statutory cap that limits the State's
tort liability to the greater of $475, 000 or the amount of
available insurance coverage. See N.H. Rev. Stat.
Ann. § 541-B:14, I. The Weinholds did not dispute the
applicability of the statutory cap. Instead, they argued that
the cap did not limit their right to recover against the
State because the State was covered as an additional insured
on several insurance policies purchased from Travelers by
Audley. Because Travelers denied that the State was covered
under two of the three policies, the Weinholds informed the
state court that they intended to file a declaratory judgment
action to resolve the coverage dispute and asked the court to
stay any action on the State's motion. The court agreed
that “a declaratory judgment action is the best means
of resolving this issue” and granted the request for a
stay. Doc. No. 20-6 at 2 n.2.
Weinholds and the State jointly filed this declaratory
judgment action in New Hampshire Superior Court, seeking a
determination that Travelers is obliged to indemnify the
State for its portion of the jury verdict. Travelers
responded by removing the action to federal court based on
diversity of citizenship.
removal, the court in the underlying action was asked to
decide the Weinholds' motion for prejudgment interest. By
order dated June 15, 2018, the state court determined that
the dispute concerning the extent of insurance coverage
available to the State precluded a calculation of prejudgment
interest. The court reasoned that Section 541-B of the New
Hampshire Revised Statutes limits the State's liability
for prejudgment interest to “any award authorized under
this chapter.” Doc. No. 16-3 at 4 (quoting N.H. Rev.
Stat. Ann. § 541-B:14, III). Because the amount
“authorized under” the statute is dependent on
the amount of available insurance coverage, the court
concluded that it could not calculate the prejudgment
interest award. Id. (citing N.H. Rev. Stat. Ann.
§ 541-B:14, I). Accordingly, the court stayed the
Weinholds' request for prejudgment interest on the 40% of
damages attributable to the State “pending resolution
of the relevant declaratory judgment action.”
Id. at 5.
contract with the State for the seawall repair project
required Audley to secure various types of insurance
coverage, including owner's protective liability coverage
for the benefit of the State, a commercial general liability
policy that names the State as an additional insured, and a
commercial umbrella policy. Audley procured three different
policies from Travelers: an owner's protective liability
policy with $2 million in coverage per occurrence and $3
million in aggregate (“Owner's Policy”), a
commercial general liability policy with $1 million in
coverage per occurrence and $2 million in aggregate
(“CGL Policy”), and a commercial excess liability
policy with $10 million in coverage (“Umbrella
Policy”). A certificate of liability insurance that
Audley submitted to the State recorded the three policies and
noted that the State “is included as an additional
insured under general liability coverage for ongoing
operations when required by written contract.”
the jury verdict in the underlying action, Travelers took the
position that the CGL Policy and the Umbrella Policy do not
cover the State's liability. Travelers pointed to an
endorsement to the CGL Policy that it claims limits the
State's coverage to vicarious liability arising out of
Audley's actions.According to Travelers, the State's
liability is not vicarious but is instead based on the
State's independent breach of a duty to the Weinholds
that is unrelated to Audley's actions. Because coverage
under the Umbrella Policy is subject to the limitations
contained in the underlying CGL Policy, Travelers determined
that no coverage is available to the State under either
lawsuit, the Weinholds and the State seek a determination
that the CGL Policy and the Umbrella Policy cover the
State's liability. They maintain that the policy
endorsement at issue is not applicable to the State, and even
if it were, that the endorsement's conditions have been