Case Title: Hanover Ins. Co. v. Grondin

Citation: 119 N.H. 394

Docket Number: 78-255

State: new-hampshire

Court: New Hampshire Supreme Court

Date: 1979-05-23T00:00:00Z

Document:
119 N.H. 394 (1979) THE HANOVER INSURANCE COMPANY v. ERNEST M. GRONDIN, JR. & a. No. 78-255. Supreme Court of New Hampshire. May 23, 1979. *395 Sulloway, Hollis, Godfrey & Soden, of Concord (Stephen M. Duprey orally), for the plaintiff. Cooper, Hall & Walker, of Rochester (Peter A. Handy orally), for the defendants Ernest M. Grondin, Jr., and Norma M. Grondin. Burns, Bryant, Hinchey, Cox & Shea, of Dover (Paul R. Cox orally), for the defendant Priscilla D. Boyle, Administratrix, Estate of Martin P. Boyle. BOIS, J. This is a petition for declaratory judgment, RSA 491:22, to determine coverage under a homeowner's liability insurance policy. An agreed statement of facts was submitted to Mullavey, J., who determined that "all of the claims arise . . . from the ownership, operation and use of a watercraft owned by the insured, away from the premises and with inboard motor power exceeding fifty horsepower." The court ruled that the accident came within an exclusion of the policy and "that the plaintiff company need not defend nor respond in damages. . . ." All questions of law raised by defendants' exceptions were reserved and transferred. We overrule defendants' exceptions. On July 24, 1975, Martin P. Boyle was fatally injured while swimming when he was struck by a motor boat owned by the defendants Grondin. With his parents' permission, fourteen-year-old David Grondin was operating the sixteen-foot craft, which was powered by a 210-horsepower inboard motor. The administratrix of Boyle's estate brought suit against the Grondins. Count I of the writ alleges the negligent operation of the boat by the defendants through the negligence of their agents and servants. Count II alleges negligence in the *396 defendants' failure to supervise properly their minor son and entrusting him with a dangerous instrumentality. Count III alleges unseaworthiness of the boat due to lack of care in the operation of the boat. Defendants concede tha no coverage is afforded by counts I and III of the writ. They restrict their present claim to the negligent entrustment theory. At the time of the accident, the defendants were covered by a homeowner's insurance policy issued by the plaintiff company. Section II of the policy provided in pertinent part as follows: The DEFINITIONS under Section II provide in pertinent part as follows: The EXCLUSIONS under Section II provide in pertinent part as follows: [1] Defendants' first argument is that the language of the policy is "vague and confusing" in that the policy and the exclusion clause did not give fair notice of noncoverage. Aetna Ins. Co. v. State Motors, Inc., 109 N.H. 120, 125, 244 A.2d 64, 67 (1968) (citations omitted); accord, Storms v. United States Fidelity and Guar. Co., 118 N.H. 427, 430, 388 A.2d 578, 579-80 (1978); Atwood v. Hartford Accident & Indem. Co., 116 N.H. 636, 637, 365 A.2d 744, 746 (1976); Berkshire Mut. Ins. Co. v. LaChance, 115 N.H. 487, 488, 343 A.2d 642, 643 (1975). In applying the "reasonable expectation rule," we have held that "it is well settled that the interpretation of an insurance policy is for the court," Sun Ins. Co. v. Hamanne, 113 N.H. 319, 321, 306 A.2d 786, 788 (1973), and that "the court will honor the reasonable expectations of the policy holder." Magulas v. Travelers Ins. Co., 114 N.H. 704, 706, 327 A.2d 608, 609 (1974). [2] An examination of the policy reveals that the provisions of section II relating to insuring agreements and exclusions are both brief and located in close proximity to each other. The captions are simple and informative. The language is clear and unambiguous. This is in sharp contrast to the seventeen page policy and multitudinous exclusions dealt with in Commercial Union Assurance Cos. v. Gollan, 118 N.H. 744, 394 A.2d 839 (1978), or the sentence of one hundred twenty-nine words found in Atwood v. Hartford Accident & Indem. Co., 116 N.H. 636, 638, 365 A.2d 744, 746 (1976). A fair reading of the policy does not reveal an ambiguous and confusing interplay between the words "the insured", "an insured" and "the named insured" found in Commercial Union Assurance Cos. v. Town of Derry, 118 N.H. 469, 387 A.2d 1171 (1978) and Pawtucket Mutual Insurance Co. v. Lebrecht, 104 N.H. 465, 190 A.2d 420 (1963). The record reveals that the trial court applied the proper test in arriving at the finding that "a reasonable person in the position of the insured reading the policy as a whole would come to the conclusion that no coverage would be afforded for personal injuries resulting from the operation of the boat under the conditions alleged." We agree with the trial court that the language of the policy is clear. *398 The defendants next argue that the company is bound by the allegedly confused reason that it initially gave them for the denial of coverage. That reason had been based on operation and ownership requirements of the policy. We interpret this claim to be one of estoppel. The record contains no evidence of the elements required to sustain the application of this theory. "Although the defendant gave a false answer in its original reason for denying coverage, that untruth alone does not give rise to estoppel." Storms v. United States Fidelity and Guar. Co., 118 N.H. 427, 432, 388 A.2d 578, 581 (1978). [3] Defendants' final argument is that their claim is based upon the negligent entrustment of a dangerous instrumentality, and on the parents failure to train, instruct, and supervise a minor son. They submit that these allegations are "based on primary negligence separate and distinct from the watercraft and are not encompassed within exclusion (b) (2)." They rely on cases from four other jurisdictions to support their position. Kansas: see Upland Mut. Ins., Inc. v. Noel, 214 Kan. 145, 519 P.2d 737 (1974); Minnesota: see Republic Vanguard Ins. Co. v. Buehl, 295 Minn. 327, 204 N.W.2d 426 (1973); New Jersey: see McDonald v. Home Ins. Co., 97 N.J. Super. 501, 235 A.2d 480, (1967); New York: see Travelers Ins. Co. v. Beschel, 71 Misc. 2d 420, 336 N.Y.S.2d 370 (1972), modified, 43 App. Div. 2d 734, 350 N.Y.S.2d 682 (1973); Lalomia v. Bankers & Shippers Ins. Co., 35 App. Div. 2d 114, 312 N.Y.S.2d 1018 (1970), aff'd, 31 N.Y.2d 830, 339 N.Y.S.2d 680 (1972). A reading of these cases, except for Lalomia, however, reveals that liability is predicated on the entrustment to an individual known, or who should have been known, to have been unfit because of age, bad habits, dangerous propensities, carelessness, recklessness, or habitual driving while under the influence of liquor. This distinction was recognized by the Minnesota Court in a suit involving identical exclusionary language. That suit also involved watercraft and facts strikingly similar to those before us here. The Minnesota Court held that "[g]eneral allegations of negligence are insufficient to maintain a cause of action within Republic Vanguard Ins. Co. v. Buehl, supra." Torbert v. Anderson, 301 Minn. 339, 344-45, 222 N.W.2d 341, 345 (1974). The negligent entrustment theory of action expressed in Count II by the defendants Grondin and Boyle is as follows: These pleadings are merely "general allegations" of negligence and would not support a cause of action in Minnesota or, we believe, in the other three jurisdictions relied on by the defendants. In any event, we adopt the rationale of the courts that have held that "[t]he accident occurred off the premises and undoubtedly from the use of the [instrumentality]. [The] argument that the `negligent entrustment', rather than the `use' of the [instrumentality] is the negligent act ignores the clear language of the exclusionary clause." Aetna Cas. & Sur. Co. v. Am. Mfrs. Mut. Ins. Co., 261 Ark. 326, 327-28, 547 S.W.2d 757, 758 (1977). The Alabama Supreme Court denied coverage in a case involving interpretation of an exclusionary clause similar to the one before us. Cooter v. State Farm Fire & Cas. Co., 344 So. 2d 496 (Ala. 1977). Id. at 499 (citation omitted). Massachusetts echoed this reasoning in Barnstable County Mut. Fire Ins. Co. v. Lally, 373 N.E.2d 966 (Mass. 1978). Id. at 969. We endorse the rationale of the above cited cases and hold that the trial court correctly ruled that the homeowner's policy did not afford coverage to the Grondins for any liability arising out of their son's use of the watercraft. Exceptions overruled. GRIMES, J., did not sit; the others concurred.