United States Court of Appeals

For the First Circuit

No. 23-1522

MARGARET AND DAVID JESPERSEN,

Plaintiffs, Appellants,

v.

COLONY INSURANCE COMPANY,

Defendant, Third-Party Plaintiff, Appellee,

v.

JPKS MANAGEMENT LLC; PENUCHES SPORTS AND MUSIC COMPLEX LLC,

Third-Party Defendants. 

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Joseph N. Laplante, U.S. District Judge] 

Before

Barron, Chief Judge,

Howard and Gelpí, Circuit Judges.

Bruce W. Felmly, with whom Benjamin B. Folsom, Graham W. 

Steadman, and McLane Middleton, Professional Association were on 

brief, for appellants.

William L. Boesch, with whom Sulloway & Hollis PLLC was on 

brief, for appellee.

Peter Chiesa on brief for City of Manchester, amicus curiae.

March 25, 2024
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BARRON, Chief Judge. This appeal concerns a suit that 

a married couple brought in the District of New Hampshire to 

recover from a restaurant owner's insurer for the injuries that 

they alleged that they suffered when one of them fell down the 

restaurant's stairs. The District Court granted summary judgment 

to the insurer and denied the couple's motion for summary judgment. 

We affirm. 

I.

A.

The suit that underlies this appeal traces back to the 

suit that Margaret and David Jespersen, both New Hampshire 

residents, brought in New Hampshire state court against JPKS 

Management, LLC d/b/a Penuches Music Hall, and Penuches Sports and 

Music Complex, LLC d/b/a Penuches Grill. The complaint in that 

suit set forth claims against those defendants for negligence, 

negligence per se, negligent misrepresentation, and violation of 

New Hampshire Revised Statutes Annotated ("RSA") § 354-A.1 It also

alleged the following facts.

On May 28, 2018, the Jespersens were patrons of Penuches 

Music Hall in Manchester, New Hampshire, and were eating in that 

1 The complaint also alleged "loss of consortium" as a 

separate "count," and this "count" appears to derive from New 

Hampshire RSA § 507:8-a, which provides that, "[i]n a proper 

action, either a wife or husband is entitled to recover damages 

for loss or impairment of right of consortium whether caused 

intentionally or by negligent interference." 
- 3 -

restaurant's "outdoor dining area," which is "located on the 

sidewalk in front of the restaurant." Margaret Jespersen is 

"functionally blind," and David Jespersen "is blind in one eye and 

severely vision impaired in his other eye." 

The Jespersens were "using white probing canes to guide 

themselves through the establishment" and "asked a staff member to 

direct them to the restrooms." After the staff member "told them 

that the restrooms were downstairs," the Jespersens "asked if there 

was an elevator that they could use." The staff member responded 

"that there was no elevator available and directed them to a 

stairway."

Margaret Jespersen proceeded to walk down the stairs, 

but "her cane caught on the railing, and she lost her balance and 

fell down the stairs." Her fall resulted in "three fractures in 

her left ankle and one in her right ankle." When the paramedics 

arrived, "another Penuche[]s employee informed them . . . that 

there was in fact an elevator and [that] the paramedics could use 

it to transport Margaret up to the ground floor." 

The complaint alleged that Margaret Jespersen "suffered 

severe injuries as a result of the Defendants' negligence in 

failing to inform [her] about, or refusal to allow her to use, the 

available elevator." The complaint also alleged that the 

defendants had "effectively denied Margaret access to the restroom

. . . in violation of RSA [§] 354-A:16 and [§] 354-A:17," which in 
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relevant part concern discrimination "because of . . . physical 

. . . disability" in "places of public accommodation." N.H. Rev. 

Stat. Ann. § 354-A:16 to :17 (2022). 

The complaint requested that "judgment be entered 

against Defendants, Penuches Sports and Music Complex, LLC d/b/a 

Penchues [sic] Grill, as well as JPKS Management, LLC, d/b/a 

Penuches Music Hall," that "Margaret Jespersen be awarded direct, 

compensatory, and enhanced compensatory damages in the maximum 

amount allowed in accordance with the law," that "David Jespersen 

be awarded damages for loss of consortium in the maximum amount 

allowed in accordance with the law," and that "all costs of this 

action be assessed against Defendants, including all reasonable 

attorney's fees, costs and expenses." The complaint also requested 

that the Jespersens "be awarded all other such relief as . . . 

deem[ed] just and proper." 

Because the defendants failed to respond to the

complaint, the state court entered a notice of default in August 

2019. See Jespersen v. Colony Ins. Co., No. 21-cv-846, 2023 WL 

3584607, at *3 (D.N.H. May 22, 2023). The Jespersens then moved 

in December 2019 for a final judgment based on the default. The 

defendants did not respond to this motion or appear at the hearing 

on the motion for entry of final judgment, which was held in August 

2020. See id.
- 5 -

Two months later, in October 2020, the state court issued 

a final judgment for the Jespersens and awarded them $391,585.21. 

See id. This amount included $193,688.91 in compensatory damages 

for past medical expenses, future medical and counseling bills, 

lost wages, loss of consortium, and pain, suffering, and loss of 

enjoyment of life; plus an additional $100,000 for enhanced 

compensatory damages; plus $97,896.30 for attorney's fees and 

costs. See id.

B.

In February 2021, the Jespersens wrote a demand letter 

to Colony Insurance Company, which had issued a liability insurance 

policy that named "Penuches Music Hall, LLC" as the insured and 

that provided the insured with coverage for "sums that the insured

becomes legally obligated to pay as damages because of 'bodily 

injury' or 'property damage' to which this insurance applies."

Based on that policy, the demand letter sought the payment of the 

award that the state court had granted to them in their suit 

against JPKS Management, LLC d/b/a Penuches Music Hall and Pencuhes 

Sports and Music Complex, LLC. See id. at *4. Colony responded 

to the demand letter, but the parties were unable to come to a 

resolution. See id.

The Jespersens initiated the suit against Colony that 

underlies this appeal in the District of New Hampshire in October 

2021. The complaint sought "an Order compelling [Colony] to pay 
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the judgment rendered against its insured JPKS Management, LLC 

d/b/a Penuches Music Hall." Specifically, the Jespersens' 

complaint sought a "judgment in favor of [the Jespersens] and 

against Colony in the amount of $391,585.21" or, in the 

alternative, a "declaratory judgment [pursuant to RSA § 491:22 or 

28 U.S.C. § 2201] that Colony is obligated to pay the full amount 

of the Judgment," plus attorney's fees, costs and expenses, and 

"all other such relief as this Court deems just and proper." 

Before discovery, Colony moved for summary judgment, 

which the District Court denied. Then, after discovery, the 

Jespersens and Colony cross-moved for summary judgment. The 

District Court granted summary judgment to Colony and denied 

summary judgment to the Jespersens. See id. at *10.

In so ruling, the District Court first agreed with Colony 

that, as a matter of law, the insured had "breached the insurance 

contract" by failing to "notify [Colony] of Margaret's fall or the 

resulting suits 'as soon as practicable'" as Colony's insurance 

policy with the insured required it to do. Id. at *4. As the 

District Court concluded, "the undisputed facts cannot reasonably 

support a finding that [the insured] provided notice as soon as 

practicable." Id. 

The District Court noted that New Hampshire courts 

"consider three factors" under New Hampshire law "in assessing 

whether there has been a substantial breach of a notice 
- 7 -

provision -- 'the length of the delay [in notification], . . . the 

reasons for the delay[,] and whether the delay resulted in 

prejudice to the insurer.'" Id. (alterations in original) (quoting 

Wilson v. Progressive N. Ins. Co., 868 A.2d 268, 271 (N.H. 2005)). 

As to the first factor, the District Court pointed out that Colony 

"first received notice of Margaret's fall two years and nine months 

after the incident occurred," which the District Court concluded 

was a "lengthy delay." Id. As to the second factor, the District 

Court noted that there was "no reason or excuse for this delay in 

the record." Id. at *5. As to the third factor, the District 

Court rejected the Jespersens' contention that the lack of notice 

had not prejudiced Colony. See id. 

Having ruled that the insured had breached the insurance 

contract by failing to provide the requisite notice pertaining to 

Margaret Jespersen's fall, the District Court turned its attention 

to the Jespersens' separate contention that, under what is known 

as the "compulsory insurance doctrine," Colony was not entitled to 

assert that breach as a ground for denying the Jespersens' attempt 

to recover under the policy. See id. at *6. The Jespersens had

based this contention on a City of Manchester ("City") ordinance

that provided in relevant part: 

(B) The City Clerk . . . may . . . license 

businesses . . . to encumber no more than half 

of the sidewalk area immediately adjacent to 

the building in which the business is located 

so that a minimum of half of the sidewalk is 
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maintained free and clear for pedestrian 

traffic. Each such license shall contain the 

following provisions:

. . . . (2) Each license shall be subject to 

the insurance provisions contained in § 115.60 

of this code and shall be subject to the 

restrictions contained in § 115.44 of this 

code with the exception of times of operation.

Manchester, N.H., Code § 97.34(B) (2023). The "insurance 

provisions" referenced by the second subsection of the ordinance 

provided that an application for a license shall include:

A certificate of insurance that the applicant 

has been issued an insurance policy by an 

insurance company licensed to do business in 

the state, protecting the licensee and the 

city from all claims for damages to property 

and bodily injury, including death which may 

arise from operations under or in connection 

with the license. Such insurance shall provide 

combined primary and excess coverage which 

meet a $500,000 minimum limit; such policy 

shall provide for automobile liability 

insurance for owned, nonowned, and hire 

vehicles as applicable; and such policy shall 

provide that the policy shall not terminate or 

be cancelled prior to the expiration date 

except with 30 days' advance written notice to 

the city.

Id. § 115.60.

In pressing this ground for recovery from Colony, the 

Jespersens argued that the ordinance triggered the compulsory 

insurance doctrine. Under that doctrine, as the District Court 

explained, "[w]hen injured parties seek to recover under insurance 

policies issued pursuant to compulsory insurance laws . . . 
- 9 -

'generally,'" the injured parties "are not subject to defenses 

arising out of the breach of conditions subsequent to the accident 

even though they would be available to the insurer as against the 

insured." Jespersen, 2023 WL 3584607, at *6 (quoting Steven Plitt, 

et al., Couch on Insurance § 106:27 (3d ed. 2023)). The District 

Court ruled, however, that the doctrine had no application to this 

case. Id. at *10. Accordingly, the District Court granted 

Colony's summary judgment motion based on Colony's defense that

the insured had breached the insurance contract. See id. The 

Jespersens timely appealed.

II.

We review cross-motions for summary judgment de novo. 

See Pac. Indem. Co. v. Deming, 828 F.3d 19, 22-23 (1st Cir. 2016). 

In doing so, we "view each motion separately and draw all 

reasonable inferences in favor of the respective non-moving 

party," id. at 23 (quoting Roman Cath. Bishop of Springfield v. 

City of Springfield, 724 F.3d 78, 89 (1st Cir. 2013)), to 

"determine whether either of the parties deserves judgment as a 

matter of law on facts that are not disputed," Easthampton 

Congregational Church v. Church Mut. Ins. Co., 916 F.3d 86, 91 

(1st Cir. 2019) (quoting Littlefield v. Acadia Ins. Co., 392 F.3d 

1, 6 (1st Cir. 2004)). Because this complaint was "exclusively 

grounded in the law of [New Hampshire]" and arises under our 

diversity jurisdiction pursuant to 28 U.S.C. § 1332, "we look to 
- 10 -

[New Hampshire] law for the substantive rules of decision." Halsey

v. Fedcap Rehab. Servs., Inc., No. 23-1351, 2024 WL 911754, at *5 

(1st Cir. Mar. 4, 2024).

A.

We begin with the Jespersens' contention that the 

District Court erred in holding that, as a matter of law, Colony 

had a viable defense to the Jespersens' claims under Colony's 

insurance policy based on the insured's breach.2 We do not agree.

The District Court concluded, "as a matter of law, that

[the insured's] delay in notifying Colony was lengthy and 

unjustified, and it resulted in prejudice to Colony." Jespersen, 

2023 WL 3584607, at *6. The Jespersens do not challenge the 

District Court's conclusions that there was a "lengthy delay" and 

no "reason or excuse for this delay in the record." Id. at *5-6. 

They challenge only the District Court's conclusion that, as a 

matter of law, there was prejudice.3 

2 Although the parties dispute whether Margaret Jespersen's 

fall is a covered "accident" under the insurance policy at all, we 

assume that the fall is covered under the policy because, even if 

it is, we conclude that Colony's notice defense precludes the 

Jespersens from recovering from Colony. 

3 The parties also dispute who bears the burden of 

demonstrating whether Colony is obligated to compensate the 

Jespersens under the insurance policy. But, even assuming that 

Colony has that burden, we conclude that the record demonstrates 

that, as a matter of law, Colony has established that it was 

prejudiced by the delay in notice and that the compulsory insurance 

doctrine does not apply.
- 11 -

The District Court explained that the record established

as a matter of law that Colony was prejudiced, because the record 

established beyond dispute that the lack of timely notice 

pertaining to Margaret Jespersen's fall deprived Colony of "the 

opportunity to engage in settlement discussions prior to (or 

instead of) litigation." Id. at *5. The District Court also 

concluded that it was indisputable on this record that "[the 

insured's] (and thus Colony's) absence from the proceedings was 

consequential to the court and factored into its calculation of 

damages," as the state court "premised its grant of attorney's 

fees -- which amounted to roughly one-quarter of the damages 

awarded -- in part on [the insured's] unwillingness to participate 

in the case." Id. Indeed, the District Court explained, the lack 

of timely notice plainly left Colony "[un]able to defend [the 

insured] in the litigation." Id. 

The Jespersens contend otherwise in part because they 

argue that, at the very least, the record suffices to show that 

Colony was at fault for not having received the notice pertaining 

to Margaret Jespersen's fall. The Jespersens here reprise an

argument that they made below. They argue in this regard that 

Penuches Music Hall had obtained the insurance policy so that it 

could comply with the ordinance requiring it to obtain liability 

insurance but that the ordinance required the insurer to notify 

the City thirty days before the cancellation of any insurance 
- 12 -

policy obtained pursuant to that ordinance. The Jespersens then 

go on to contend that Penuches Music Hall had refused to allow 

on-site inspections at the restaurant, which was required "for the 

[insurance policy with Colony] to remain in effect," and that, as 

a result, there were repeated failed attempts by Colony's insurance 

agent to inspect the restaurant in the months after Margaret 

Jespersen's fall. They note, too, that, as the District Court had 

recounted, the "insurance policy was ultimately cancelled in 

September 2018, a few months after the [Jespersens'] visit to 

Penuches, for failure to pay the premium." Id. at *3. Moreover, 

the Jespersens contend, "given the contentious relationship 

between the City and [the insured] and the vigilance with which 

the City enforced the compulsory insurance requirement against 

[the insured], had Colony actually given notice of the Policy's 

cancellation . . . the City would have likely investigated, and in 

doing so likely learned about the accident." Thus, they argue, 

"Colony contributed to its own prejudice." 

This chain of reasoning depends, however, on quite a few 

speculative inferences -- namely, that if Colony had notified the 

City that the insurance policy had been cancelled (which itself 

did not occur until four months after the fall), then the City 

would have inspected the restaurant, the inspection would have 

uncovered the accident, and notice of the accident at that point 

would have been given to Colony. We agree with the District Court, 
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however, that such speculation cannot suffice to create a triable 

issue of fact as to whether Colony was at fault for not having 

received the notice pertaining to Margaret Jespersen's fall at the 

restaurant in a timely manner. See id. at *6; cf. Gomez v. Stop 

& Shop Supermarket Co., 670 F.3d 395, 398 (1st Cir. 2012) ("This 

sort of purely conjectural assumption, drawn from an empty record, 

is insufficient to propel a cause of action beyond the summary 

judgment stage.").

Setting aside questions of Colony's fault for not having 

received the notice sooner than it did, the Jespersens separately 

argue that the District Court's prejudice ruling cannot be 

sustained because Colony "failed to submit any admissible evidence 

establishing that they were prejudiced as to all of the Jespersens' 

damages" (emphasis in original), particularly compensatory 

damages. But the Jespersens provide no reason for us to conclude 

that the insurer must prove prejudice as to all damages to prove 

prejudice, as they identify no precedent supporting such a 

surprising proposition. Moreover, the District Court's 

determination that there was some prejudice accords with the statecourt judgment, which not only relied on the insured's "flagrant

indifference to the plaintiffs' disabilities and the ready 

availability of an accommodation" to justify the enhanced 

compensatory damages but also, in justifying the award of 

attorney's fees, relied in part on the fact that the defendants
- 14 -

had "been totally unresponsive to this litigation" and showed 

"utter disregard of this case." Thus, we reject this ground for 

challenging the District Court's prejudice ruling.4

Finally, the Jespersens contend that the fact that there 

was a final judgment entered against the insured cannot, in and of 

itself, provide the basis for sustaining the finding of prejudice. 

But they of course do not dispute that the final judgment was part 

of the record or that a lower amount might have been given in that 

judgment had Colony been given timely notice. They contend instead 

that Colony cannot show prejudice based on the final judgment 

because Colony was required to submit evidence "establishing that 

it sought to strike or reopen the Final Judgment" rendered in state 

court but failed to do so. But to the extent that the Jespersens 

mean to argue that the possibility that Colony could have moved to 

strike or reopen the final judgment in and of itself made the 

District Court's prejudice ruling erroneous, we cannot agree. 

After all, the Jespersens point to nothing to indicate that Colony 

would have been able to have the final judgment set aside, 

4 Because we conclude that the lack of timely notice 

prejudiced Colony given the basis for the state court's award of 

enhanced compensatory damages and attorney's fees, we need not 

address the Jespersens' separate contention that Colony was 

required to have "submitted . . . evidence suggesting that 

conditions of the accident scene materially changed so that it 

could not determine whether Plaintiffs' injuries were covered by 

the Policy" such that the delay in notice "prejudiced [Colony's] 

investigation of [the Jespersens'] claims." 
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stricken, or vacated. See Nautilus Ins. Co. v. Gwinn Design & 

Build, No. 18-cv-633-JD, 2018 WL 6519071, at *1, *3 (D.N.H. Dec. 

11, 2018) (finding prejudice where the state court denied a motion 

by the insurer to set aside a default judgment against the insured, 

which the insured had not provided notice of to the insurer, and 

where there was "no suggestion that an earlier motion to reconsider 

or to set aside the judgment would have been successful"); Hudson

v. Musor, 519 A.2d 319, 321 (N.H. 1986) (explaining that the 

"decision to strike a default is ordinarily within the trial 

court's discretion").

Thus, on this record, we see no basis for overturning 

the District Court's determination that "no reasonable person 

could find that notice was given as soon as was reasonably 

possible" by the insured to Colony. Jespersen, 2023 WL 3584607, 

at *4 (quoting Dover Mills P'ship v. Com. Union Ins. Cos., 740 

A.2d 1064, 1066 (N.H. 1999)). We therefore agree with the District 

Court that, as a matter of law, the lack of notice constituted a 

breach of the insurance contract, thereby releasing Colony from 

payment of the award that the Jespersens received from the final 

judgment.

B.

Given our conclusion as to the District Court's 

prejudice ruling, we next must address the Jespersens' contention 

that the District Court erred in ruling that, as a matter of law,
- 16 -

the compulsory insurance doctrine does not apply here. That 

ruling, too, turns on a question of New Hampshire law. See

Peerless Indem. Ins. Co. v. Frost, 723 F.3d 12, 18 (1st Cir. 2013) 

("When a state's highest court has yet to rule definitively on a 

question of state law, our task is to predict how that court likely 

would decide the issue."); Nw. Airlines, Inc. v. Pro. Aircraft 

Line Serv., 776 F.3d 575, 582 (8th Cir. 2015) (predicting how 

Minnesota's highest court would apply the compulsory insurance 

doctrine). And, once again, our review is de novo. See Pac. 

Indem. Co., 828 F.3d at 23.

The Jespersens contend that the District Court erred in 

concluding that the rationale that underlies the compulsory 

insurance doctrine -- to better effectuate the purpose of 

compulsory insurance laws that "are for the benefit of members of 

the public and not of the insured" -- has no application to this 

case due to the text of the ordinance at issue. Jespersen, 2023 

WL 3584607, at *6-7 (quoting Plitt, Couch on Insurance § 106:27 

(emphasis in original)). And the Jespersens are right that, 

although the ordinance at no point expressly states that it has 

the purpose of benefiting the public, it does require that the 

insurance that is obtained "protect[] the licensee and the city 

from all claims." Manchester, N.H., Code § 97.34(B) (2023) 

(emphasis added). In addition, the Jespersens make the point that, 

although the District Court reasoned that the phrase "protecting 
- 17 -

the licensee and the city from all claims" in § 115.60 compels the 

conclusion that the ordinance is intended to protect only the 

licensees and the City, see Jespersen, 2023 WL 3584607, at *8

(emphasis added), "the persons at risk of injury or death would 

logically be members of the public" and that the ordinance requires 

insurance policies to cover "all claims." As a result, the

Jespersens contend that the ordinance indicates an intention to 

benefit the public and that, as a result, the rationale for the 

compulsory insurance doctrine supports applying the doctrine here.

In assessing this contention, we emphasize that we do 

not understand the District Court to have rested its holding that 

the compulsory insurance doctrine has no application here solely 

on either the determination that the doctrine is unavailable 

because the ordinance expressly disclaims any intent to benefit 

the public or the determination that the doctrine is unavailable 

merely because the ordinance failed to state expressly that it is 

for the benefit of the public. Rather, we understand the District 

Court to have relied as an independent ground for its ruling on 

the more nuanced determination that a "public safety purpose" was 

not "particularly salient in the[] ordinances [at issue], such 

that it would justify deviating from longstanding New Hampshire 

precedent to extend the compulsory insurance doctrine to this novel 

set of circumstances" beyond the automobile liability insurance 

context. Id. at *7. And, reviewing de novo, see Baker v. Smith 
- 18 -

& Wesson, Inc., 40 F.4th 43, 47 (1st Cir. 2022) (reviewing question 

of statutory interpretation de novo), we see no error in that 

conclusion, given that a federal court must "take care not to 

extend state law beyond its well-marked boundaries in an area . . . 

that is quintessentially the province of state courts," Markham v. 

Fay, 74 F.3d 1347, 1356 (1st Cir. 1996); see also Santiago v.

Sherwin Williams Co., 3 F.3d 546, 549 (1st Cir. 1993) (explaining 

that "a plaintiff who 'selects a federal forum in preference to an 

available state forum may not expect the federal court to steer 

state law into unprecedented configurations.'" (quoting Martel v. 

Stafford, 992 F.2d 1244, 1247 (1st Cir. 1993))).

1.

As Colony correctly highlights, the only New Hampshire 

state court cases that apply the compulsory insurance doctrine

under New Hampshire law concern automobile insurance policies. 

Those rulings are premised, moreover, on a provision of the New 

Hampshire Financial Responsibility Act, which expressly provides 

that motor vehicle liability policies shall be subject to the 

following provision:

I. Absolute Liability. The liability of any 

company under a motor vehicle liability policy 

shall become absolute whenever loss or damage 

covered by said policy occurs, and the 

satisfaction by the insured of a final 

judgment for such loss or damage shall not be 

a condition precedent to the right or duty of 

the company to make payment on account of said 

loss or damage. No agreement between the 
- 19 -

company and the insured after the insured has 

incurred liability for loss or damage covered 

by the policy shall operate to defeat the 

company’s liability to pay for such loss or 

damage. Upon the recovery of a final judgment 

against any person for any loss or damage 

specified in this section, if the judgment 

debtor was, at the accrual of the cause of 

action, protected against liability therefor 

under a motor vehicle liability policy, the 

judgment creditor shall be entitled to have 

the insurance money applied to the 

satisfaction of the judgment.

N.H. Rev. Stat. Ann. § 264:18 (2022). 

Furthermore, New Hampshire courts have relied on the 

explicit language in this provision to find the compulsory 

insurance doctrine to be applicable. For example, in Farm Bureau 

Automobile Insurance Co. v. Martin, 84 A.2d 823, 825-26 (N.H. 

1951), the New Hampshire Supreme Court pointed to the 

mandate -- under a prior version of this provision -- that an 

insurer's "liability . . . become[s] absolute" upon the occurrence 

of a covered loss to hold that the provisions of an insurance 

policy obtained pursuant to the Act "cannot be used to defeat or 

avoid coverage" because "the liability of the insurer became 

absolute upon the happening of the accident." 

We add, too, that it is hardly anomalous that the 

doctrine has thus far had such limited application under New 

Hampshire law. Every case cited in the insurance treatise sections 

on which the Jespersens rely for the proposition that there is a 

compulsory insurance doctrine concerns an automobile liability
- 20 -

insurance policy. See Plitt, Couch on Insurance §§ 106:27-:28.5 

In addition, in a majority of states today, compulsory insurance 

and financial responsibility statutes in the automobile liability 

context explicitly deprive insurers of certain defenses or 

explicitly impose absolute liability.6 Indeed, courts in several 

5 See Gillard v. Mfr.'s Ins. Co. of Phila., Pa., 107 A. 446 

(N.J. 1919) (same); Kruger v. Cal. Highway Indem. Exch., 258 P. 

602 (Cal. 1927) (same); Ott v. Am. Fidelity & Cas. Co., 159 S.E. 

635 (S.C. 1931) (same); Goldberg v. Preferred Accident Ins. Co. of 

N.Y., 181 N.E. 235 (Mass. 1932) (same); West v. Monroe Bakery, 

Inc., 46 So. 2d 122 (La. 1950) (same), abrogated on other grounds 

by Home Ins. Co. v. Highway Ins. Underwriters, 62 So. 2d 828, 831 

(La. 1952); Royal Indem. Co. v. Olmstead, 193 F.2d 451 (9th Cir. 

1951) (same); Pan-Am. Cas. Co. v. Basso, 252 S.W.2d 505 (Tex. Civ. 

App. 1952) (same); Milwaukee Ins. Co. v. Morrill, 123 A.2d 163 

(N.H. 1956) (same); Am. Emps. Ins. Co. v. Sterling, 146 A.2d 265 

(N.H. 1958) (same); Karp v. Aetna Cas. & Sur. Co., 201 N.Y.S.2d 

421 (Mun. Ct. 1959) (same); Sandoval v. Chenoweth, 428 P.2d 98 

(Ariz. 1967) (same); Jones v. State Farm Mut. Auto. Ins. Co., 155 

S.E.2d 118 (N.C. 1967) (same); Lumbermens Mut. Ins. Co. v. Grayson, 

422 S.W.2d 755 (Tex. Civ. App. 1967) (same); Anderson v. Aetna 

Cas. & Sur. Co., 432 S.W.2d 151 (Tex. Civ. App. 1968) (same);

Strickland v. Hughes, 160 S.E.2d 313 (N.C. 1968) (same); Evans v. 

Am. Home Assurance Co., 166 S.E.2d 811 (S.C. 1969) (same); Kahla

v. Travelers Ins. Co., 482 S.W.2d 928 (Tex. Civ. App. 1972) (same); 

Young v. Allstate Ins. Co., 282 S.E.2d 115 (Ga. 1981) (same); 

Chennault v. Dupree, 398 So. 2d 169 (La. Ct. App. 1981) (same); 

Johnson v. R & D Enters., 435 N.E.2d 1233 (Ill. App. Ct. 1982) 

(same); Ratcliff v. Nat'l Cnty. Mut. Fire Ins. Co., 735 S.W.2d 955 

(Tex. App. 1987) (same); Kambeitz v. Acuity Ins. Co., 772 N.W.2d 

632 (N.D. 2009) (same).

6 See Ala. Code § 32-7-22(f)(1) (2023); Alaska Stat. 

§ 28.20.440(f)(1) (2023); Ariz. Rev. Stat. Ann. § 28-4009(C)(5)(a) 

(2023); Colo. Rev. Stat. § 42-7-414(2)(a) (2024); Del. Code Ann. 

tit. 21, § 2902(f)(1) (2023); Haw. Rev. Stat. § 287-29(1) (2023); 

625 Ill. Comp. Stat. 5/7-317(f)(1) (2023); Iowa Code 

§ 321A.21(6)(a) (2023); La. Stat. Ann. § 32:900(F)(1) (2024); Me. 

Stat. tit. 24-A, § 2903 (2024); Minn. Stat. § 65B.49(3)(3)(a) 

(2023); Miss. Code Ann. § 63-15-43(3)(a) (2024); Mo. Rev. Stat. 

§ 303.190(6)(1) (2023); Mont. Code Ann. § 61-6-103(5)(a) (2023); 

Neb. Rev. Stat. § 60-538 (2023); Nev. Rev. Stat. § 485.3091(5)(a) 
- 21 -

of these states have applied the compulsory insurance doctrine 

precisely because of those explicit provisions. See, e.g., Torres

v. Nev. Direct Ins. Co., 353 P.3d 1203, 1207 (Nev. 2015) (relying 

on a Nevada statute's clear statement that "no violation of the 

policy defeats or voids the policy" to hold that "no post-injury 

violation of a policy will release the insurer under the 

absolute-liability provision"). Conversely, in one state that 

does not have such explicit provisions, the state's highest court 

has declined to apply the compulsory insurance doctrine because of 

that lack of explicit provisions. See Warren v. Com. Standard 

Ins. Co., 244 S.W.2d 488, 490 (Ark. 1951).

(2023); N.H. Rev. Stat. Ann. § 264:18(I) (2023); N.J. Stat. Ann. 

§ 39:6-48(a) (2023); N.Y. Veh. & Traf. Law § 345(i)(1) (Consol. 

2024); N.C. Gen. Stat. § 20-279.21(f)(1) (2023); N.D. Cent. Code 

§ 39-16.1-11(6)(a) (2023); Okla. Stat. tit. 47 § 7-324(f)(1) 

(2023); Or. Rev. Stat. § 742.456 (2023); 31 R.I. Gen. Laws 

§ 31-32-34(f)(1) (2023); S.C. Code Ann. § 56-9-20(5)(b)(1) (2023); 

S.D. Codified Laws § 32-35-74(1) (2023); Tenn. Code Ann. 

§ 55-12-122(e)(1) (2023); Tex. Transp. Code Ann. § 601.073(c) 

(2023); Vt. Stat. Ann. tit. 23, § 805 (2024) ("Waiver of defenses 

against injured party"); Va. Code Ann. §§ 46.2-479(1), (6) (2023); 

Wash. Rev. Code § 46.29.490(6)(a) (2023); W. Va. Code 

§ 17D-4-12(f)(1) (2023); cf. Mass. Gen. Laws ch. 175, § 112 (2023)

(containing "absolute liability" language but providing that an 

insurer "shall not deny insurance coverage to an insured because 

of failure of an insured to seasonably notify an insurance company 

of an occurrence, incident, claim or of a suit . . . unless the 

insurance company has been prejudiced"); Mich. Comp. Laws 

§§ 257.520(f)(1), (6) (2023) (containing "absolute liability" 

language but providing that the insurer "shall not be liable on 

any judgment if it has not had prompt notice of and reasonable 

opportunity to appear in and defend the action in which such 

judgment was rendered").
- 22 -

True, there are cases that apply the compulsory

insurance doctrine in the automobile liability context even in the 

absence of any express statutory bar to a notice defense. See

Olmstead, 193 F.2d at 454; Allen v. Canal Ins. Co., 433 S.W.2d 

352, 354 (Ky. 1968). But the Jespersens have identified only one 

case outside the automobile liability context -- Northwest 

Airlines -- that applies the doctrine based on a statute or 

ordinance that requires a party to obtain insurance but that does

not expressly render null an insurer's notice defense. See Nw.

Airlines, 776 F.3d 575. And, while the Jespersens appear to 

contend that we may fairly prophesy that the New Hampshire Supreme 

Court would follow Northwest Airlines and apply New Hampshire law

as the Eighth Circuit there applied Minnesota law, we cannot agree. 

Cf. Butler v. Balolia, 736 F.3d 609, 610 (1st Cir. 2013)

("This . . . case requires a Boston-based federal court to make an 

informed prophesy . . . .").

The issue of the applicability of the compulsory 

insurance doctrine arose in Northwest Airlines in connection with

an aircraft maintenance company that had obtained a liability 

insurance policy pursuant to a local ordinance requiring it to 

carry such insurance in order to operate at an airport. 776 F.3d 

at 576-77. After an accident occurred between the maintenance 

company and an airline, the airline informed the insurer about the 

accident, sued the insured maintenance company, received a default 
- 23 -

judgment in its favor, then filed a garnishment suit against the 

insurer, who argued that the insured's "failure to provide notice 

and to cooperate extinguished [the insurer's] payment obligation." 

Id. at 578. 

The Eighth Circuit held that, under Minnesota law, the 

compulsory insurance doctrine applied because it "is not 

necessarily limited to" the "context of statutes requiring auto 

liability insurance," and because, even though the ordinance at 

issue there lacked explicit language stating that the insurer was 

subject to absolute liability, the ordinance was "intended at least 

in part to protect injured third parties such as [the 

airline-claimant]." Id. at 580 (cleaned up). The court went on 

to explain, however, that the compulsory insurance doctrine 

"exists at a balance point between the interests of the injured 

party in recovering and the insurer in obtaining prompt notice and 

cooperation." Id. at 582. And the court then emphasized in 

relationship to that balance that two factors were "certainly 

relevant in [its] assessment of this unusual scenario." Id. at 

582. Those two factors were that: "(1) beginning soon after [the 

airline-claimant] learned of the . . . policy and over a year 

before [the airline-claimant] filed suit, [the airline-claimant] 

gave [the insurer] actual notice of its claim, the lawsuit, and 

the possibility of a default judgment, and (2) it was [the insurer] 

who spurned the notice from [the airline-claimant], discontinued 
- 24 -

communications, and, despite its actual knowledge, chose not to 

participate in the . . . litigation." Id. 

Given the qualified nature of the Northwest Airlines

ruling, we find it significant that neither of the two special 

features given such emphasis there obtains here. In addition to 

the fact that Colony "had no notice of the incident, the claim, or 

the litigation, nor any opportunity to participate in the matter, 

prior to the default judgment," there is nothing in the record to 

suggest that it was Colony that "spurned" notice or "chose not to 

participate" in the litigation notwithstanding actual knowledge of 

the claims. In fact, unlike in Northwest Airlines, where the 

claimant had notified the insurer prior to moving for default 

judgment, see id. at 577, here the record shows that the 

Jespersens, at least by October 2019 when they obtained a copy of 

the certificate of insurance that listed Colony as the insurer,

knew that Colony was the insurer but did not provide Colony with 

notice prior to their motion for the entry of final judgment on 

the default in December 2019. 

Moreover, although the court in Northwest Airlines

stated that "courts have applied the [compulsory insurance] 

doctrine where the ordinance's clear purpose was to protect a class 

of the public to which the injured party belongs," id. at 580, and 

that even an ordinance "intended at least in part to 'protect[] 

injured third parties'" can trigger that doctrine, id. (alteration 
- 25 -

in original), each of the four cases cited in Northwest Airlines

to support that extension of the compulsory insurance doctrine 

itself concerned automobile liability insurance, see Olmstead, 193 

F.2d 451; Young, 282 S.E.2d 115; Allen, 433 S.W.2d 352; Ott, 159 

S.E. 635. 

As a result, we cannot deduce from the Eighth Circuit's 

application of Minnesota law in the specific circumstances of that 

case that the New Hampshire Supreme Court would extend the 

compulsory insurance doctrine beyond the automobile liability 

insurance context in the differing circumstances of this case, at 

least given the terms of the ordinance at hand. As we have 

explained, the ordinance is far more oblique in purporting to 

dispense with an otherwise bargained-for notice defense than the 

only New Hampshire law that New Hampshire state courts have thus 

far held to have that consequence: the Financial Responsibility 

Act, which, as we have explained, expressly dispenses with a notice 

defense. Nor, unlike some ordinances from other states requiring 

the procurement of insurance outside the automobile liability 

context, does the Manchester ordinance even expressly state that 

the purpose of its requirement to obtain insurance "protecting the 

licensee and the city from all claims for damages to property and 

bodily injury, including death which may arise from operations 

under or in connection with the license," is to benefit not only 

the city and the insured but also the public more generally. See
- 26 -

Freehold, N.J., Code § 5.80.080(A) ("Any person obtaining a 

license for a sidewalk cafe or restaurant shall submit, for the 

protection of the borough and its representatives as well as the 

general public a comprehensive policy of liability insurance 

protecting the licensee and borough against any liability 

whatsoever occasioned by accident on or about the licensed property 

or any appurtenances thereto." (emphasis added)); Marietta, Ga., 

Code § 8-12-27-030(C) (requiring mobile-retail-food-establishment 

licensees to obtain insurance "protecting the licensee, the public

and the city from all claims for damage to property and bodily 

injury, including death, which may arise from operation under or 

in connection with the permit" (emphasis added)).

Simply put, even accepting that the insurance policies 

obtained pursuant to the ordinance must cover claims brought by 

injured members of the public, it does not follow that the New 

Hampshire Supreme Court would construe the ordinance, based on 

that fact alone, to trump any notice defense that the insurer 

otherwise would have under a policy that would cover claims brought 

by such persons. And nothing in Northwest Airlines nor any other 

precedent from New Hampshire or elsewhere of which we are aware 

suffices to persuade us that the New Hampshire Supreme Court would 

conclude, on the strength of the ordinance, that the compulsory

insurance doctrine should be extended to a realm in which it has 

not previously been applied in New Hampshire. Rather, we see no 
- 27 -

error in the District Court's conclusion that a "public safety 

purpose" is not "particularly salient in the[] ordinances [at 

issue], such that it would justify deviating from longstanding New 

Hampshire precedent to extend the compulsory insurance doctrine to 

this novel set of circumstances." Jespersen, 2023 WL 3584607, at 

*7.

2.

The Jespersens do argue that "New Hampshire law 

requir[es] insurance policies -- and the ordinances integral to 

them -- to be construed liberally in favor of coverage and against 

the insurer" (emphasis in original). And it is true that the New 

Hampshire Supreme Court has said that "[i]f more than one 

reasonable interpretation is possible, and an interpretation 

provides coverage, the policy contains an ambiguity and will be 

construed against the insurer." Great Am. Dining, Inc. v. Phila. 

Indem. Ins. Co., 62 A.3d 843, 846 (N.H. 2013) (quoting Brickley v. 

Progressive N. Ins. Co., 7 A.3d 1215, 1217 (N.H. 2010)). But the 

insurance policy at issue here is unambiguous in stating that "[n]o 

person . . . has a right . . . [t]o . . . bring [Colony] into a 

'suit' asking for damages from an insured; or . . . [t]o sue 

[Colony] on this Coverage Part unless all of its terms have been

fully complied with," including the policy term requiring the 

insured to "notify [Colony] as soon as practicable" about any claim 

or suit brought against the insured. 
- 28 -

Thus, we are not faced here with a question of 

insurance-policy interpretation. We are faced with a question of 

interpretation of New Hampshire law concerning when, if ever, an 

ordinance triggers the compulsory insurance doctrine outside the 

automobile liability context. The rule of liberal insurance policy 

construction on which the Jespersens rely has no application to 

that question.

The Jespersens do also rely on New Hampshire cases 

supporting the idea that provisions of insurance policies obtained 

pursuant to compulsory insurance statutes cannot conflict with 

those statutes. See Santos v. Metro. Prop. & Cas. Ins. Co., 201 

A.3d 1243, 1253 (N.H. 2019); Universal Underwriters Ins. Co. v. 

Allstate Ins. Co., 592 A.2d 515, 517 (N.H. 1991); Partridge v. 

USAA Life Ins. Co., No. 14-cv-170, 2015 WL 1268193, at *4 (D.N.H. 

Mar. 19, 2015). Those cases simply stand for the proposition, 

however, that a statutory insurance requirement trumps contrary 

language in a policy. They do not address the issue of concern 

here, which pertains to when a state statute or local ordinance 

suffices to trigger the compulsory insurance doctrine itself. As 

a result, they lend no support to the Jespersens' position.

3.

The Jespersens' final argument for applying the 

compulsory insurance doctrine here rests on statements by 

officials of the City. The Jespersens first point to a declaration 
- 29 -

from the City Clerk -- filed in the District Court -- stating that 

the City's "compulsory insurance requirements are meant to protect 

the public and the City from acts or omissions committed by 

licensees." 

As the District Court explained, though, the City Clerk 

had no special reason to know the legislative intention or purpose 

of the ordinance, as he is not a member of the City's Board of 

Aldermen and plays no role in the approval of City ordinances. 

And although the City Clerk issues the licenses that require the 

insurance policies to be obtained, see Manchester, N.H., Code 

§ 97.34(B), that task does not require the Clerk to make 

determinations about whether a notice defense contained in an 

insurance policy obtained pursuant to the ordinance is enforceable 

or even whether the purpose of requiring the insurance policies is 

to benefit the public.

The Jespersens do also point to an amicus brief filed by 

the City. The brief argues that the public-benefitting purpose of 

the ordinance is apparent when construing the ordinance "as part 

of a comprehensive scheme protecting the public" rather than as an 

"isolat[ed]" measure. But we do not find in that assertion a 

persuasive reason to reject the District Court's ruling that the 

compulsory insurance doctrine does not apply here. Given the 

ordinance's text relative to the text of the New Hampshire 

Financial Responsibility Act and the texts of similar ordinances 
- 30 -

from around the country requiring certain establishments to obtain 

insurance, the absence of any legislative history that would allow 

us to construe the ordinance's text to nullify an insurer's 

contractual notice defense, the fact that the ordinance is 

unrelated to the automobile liability context, and the absence of 

the circumstances deemed significant in Northwest Airlines, we 

cannot agree that the New Hampshire Supreme Court would extend the 

compulsory insurance doctrine here based on the City's contention 

about the ordinance's purpose.

III.

For the foregoing reasons, the District Court's ruling 

granting summary judgment to Colony and denying summary judgment 

to the Jespersens is affirmed. Each party shall bear its own 

costs.