Bunker v. Midstate Mutual Insurance Company et al

Filing 26

///ORDER denying 2 Motion to Dismiss for Failure to State a Claim; granting 15 Motion to Dismiss for Failure to State a Claim. So Ordered by Judge Paul J. Barbadoro.(jna) Modified on 8/25/2014 to add:/// (mm).

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Cindy Bunker
v.

Civil No. 14-cv-274-PB
Opinion No. 2014 DNH 177

Midstate Mutual Insurance
Company, et al.

MEMORANDUM AND ORDER
Cindy Bunker was injured at a Nashua, New Hampshire rental
property owned by Brian Nadeau, a New Hampshire resident.

She

brought a negligence action against Nadeau in New Hampshire
Superior Court and later filed a separate insurance coverage
action in state court against Nadeau and his insurer, Midstate
Mutual Insurance Company, a New York corporation.

Midstate

removed the insurance coverage action to this court.

Nadeau

subsequently filed a cross-claim seeking a declaratory judgment
that Midstate’s insurance policy covers Bunker’s injuries.
Midstate has filed a motion to dismiss arguing that all of
the claims against it are barred by the relevant statute of
limitations.

In the alternative, Midstate requests that I

dismiss this action under the doctrine of forum non conveniens.
I.

BACKGROUND

Bunker was seriously injured in August 2013 when she fell

down a flight of stairs at a rental property owned by Nadeau in
Nashua, New Hampshire.

On October 4, 2013, she filed a

negligence action against Nadeau in New Hampshire Superior
Court.

During the course of settlement discussions, Bunker

asked Nadeau to produce all potentially applicable insurance
policies.

Nadeau produced the Midstate policy in response to

her request on April 14, 2014.

Upon examination, Bunker

determined that the Midstate policy covered her injuries, and
she submitted a claim to Midstate the next day.

Midstate

disagreed with Bunker’s interpretation of the policy and denied
her claim on May 12.

On May 14, Bunker filed the present action

in New Hampshire Superior Court.
On June 26, Nadeau answered Bunker’s complaint and filed a
cross-claim against Midstate seeking a declaratory judgment that
the Midstate policy covers Bunker’s claims.

II.

STANDARD OF REVIEW

To survive a motion to dismiss for failure to state a
claim, a plaintiff must make factual allegations sufficient to
“state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim is

facially plausible when it pleads “factual content that allows
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the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.

The plausibility standard is

not akin to a ‘probability requirement,’ but it asks for more
than a sheer possibility that a defendant has acted unlawfully.”
Id. (citations omitted).
In deciding a motion to dismiss, I employ a two-step
approach.

See Ocasio–Hernández v. Fortuño–Burset, 640 F.3d 1,

12 (1st Cir. 2011).

First, I screen the complaint for

statements that “merely offer legal conclusions couched as fact
or threadbare recitals of the elements of a cause of action.”
Id. (citations, internal quotation marks, and alterations
omitted).

A claim consisting of little more than “allegations

that merely parrot the elements of the cause of action” may be
dismissed.

Id.

Second, I credit as true all non-conclusory

factual allegations and the reasonable inferences drawn from
those allegations, and then determine if the claim is plausible.
Id.

The plausibility requirement “simply calls for enough fact

to raise a reasonable expectation that discovery will reveal
evidence” of illegal conduct.

Twombly, 550 U.S. at 556.

The

“make-or-break standard” is that those allegations and
inferences, taken as true, “must state a plausible, not a merely
conceivable, case for relief.”

Sepúlveda–Villarini v. Dep’t of

Educ., 628 F.3d 25, 29 (1st Cir. 2010); see Twombly, 550 U.S. at
3

555 (“Factual allegations must be enough to raise a right to
relief above the speculative level.”).

III.

ANALYSIS

I begin by addressing Midstate’s statute of limitations
argument before turning to the doctrine of forum non conveniens.
A.

N.H. Rev. Stat. Ann. § 491:22
A motion to dismiss based on a statute of limitations is

only successful when “the pleader’s allegations leave no doubt
that an asserted claim is time-barred.”

Gorelik v. Costin, 605

F.3d 118, 121 (1st Cir. 2010) (internal quotation marks
omitted).

To support dismissal, Midstate relies upon New

Hampshire’s statute of limitations for declaratory judgment
actions.

See N.H. Rev. Stat. Ann. § 491:22.1

Section 491:22

provides that a petition “to determine coverage of an insurance
policy” must be filed “within 6 months after the filing of the
1

Though neither party argues otherwise, it is worth noting that
the New Hampshire statute of limitations applies here regardless
of whether New York or New Hampshire law governs more generally.
New Hampshire “generally treat[s] statutes of limitations as
procedural statutes and accordingly appl[ies] [its] own law.”
Waterfield v. Meredith Corp., 161 N.H. 707, 710 (2011) (citing
Keeton v. Hustler Magazine, Inc., 131 N.H. 6, 14 (1988)). This
holds true “in any case in which either party is a New Hampshire
resident or the cause of action arose in this State.” Keeton,
131 N.H. at 15. Here, the statute of limitations applies
because both Bunker and Nadeau are New Hampshire residents and
the accident for which Bunker and Nadeau seek coverage occurred
within the state.
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writ, complaint, or other pleading initiating the action which
gives rise to the question.”

Bunker’s complaint in the

negligence suit, filed on October 4, 2013, initiated the action
which gave rise to the declaratory judgment claim.

Midstate

thus argues that any claim based on New Hampshire’s declaratory
judgment statute is barred because it was not brought within the
six month period after the complaint in which the underlying
action was filed.
The six month limitations period is not without exceptions,
however.

It does not apply where (1) “the facts giving rise to

such coverage dispute are not known to, or reasonably
discoverable by, the insurer” until after the six month period;
or (2) when the failure to file was “the result of accident,
mistake or misfortune and not due to neglect.”
§ 491:22(III).

Id.

Both Nadeau and Bunker rely on the first

exception, the so-called “late discovery exception.”
Royal Ins. Co., 144 N.H. 613, 616 (2000).

Binda v.

The late discovery

exception only applies when “the facts giving rise to a coverage
dispute are not known or reasonably discoverable until after the
expiration of the six-month period.”

Id.

In those

circumstances, a declaratory judgment action can permissibly be
filed “within a reasonable time frame.”

Id.

With these

standards in mind, I address section 491:22’s application to
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Nadeau and Bunker in turn.2
1.

Nadeau

Nadeau relies upon the late discovery exception to argue
that the facts giving rise to the coverage dispute were “not
known or reasonably discoverable” until after Midstate denied
Bunker’s request for coverage in May 2014.

Nadeau contends that

Midstate’s denial of coverage gave rise to the coverage dispute
and that he filed his claims within a reasonable time-frame
thereafter.

Midstate responds by arguing that because Nadeau

was both the defendant in the underlying action and the insured
under the Midstate policy, he was “uniquely positioned” in
October 2013 to possess awareness of all of the facts necessary
to alert him to the coverage dispute.

Doc. No. 19.

Nadeau’s attempt to align his knowledge with Bunker’s
during the relevant time period is unconvincing.

It is clear

that Nadeau need not have actual knowledge of a denial of
coverage. “The statute does not . . . require an actual denial
of coverage by an insurer before an insured must seek a
determination of coverage or risk being time barred.

2

Rather,

Although the late discovery exception by its terms applies only
when the facts giving rise to the dispute are not known to or
reasonably discoverable by the “insurer,” the New Hampshire
Supreme Court has applied the exception to both insured and
insurers. Mottolo v. U.S. Fidelity & Guar. Co., 127 N.H. 279,
282 (1985).
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[it] . . . requires only that the insured know or be able to
reasonably discover facts which form the basis of a coverage
dispute.”

Binda, 144 N.H. at 616.

Here, Nadeau “kn[ew] or

[was] able to reasonably discover” all of the relevant facts
that formed the basis of the coverage dispute – those concerning
the underlying negligence suit and the potential applicability
of the Midstate policy to Bunker’s claims – when Bunker filed
her negligence action against him in October 2013.

He did not

file his declaratory judgment claim until June 26, 2014, some
nine months later.

The statute of limitations thus bars

Nadeau’s request for a declaratory judgment.
2.

Bunker

Bunker has alleged that she had no knowledge of Nadeau’s
Midstate policy until April 2014.

Prior to accepting a

settlement offer, Bunker requested information concerning any
insurance policies held by Nadeau that might cover her injuries.
On April 14, 2014, Nadeau provided the Midstate policy to
Bunker, and the next day she submitted her claim.

Bunker filed

her declaratory judgment action on May 14, only two days after
Midstate denied coverage – but some seven months after she had
filed her initial complaint in the negligence suit.
Midstate’s initial briefing omitted any mention of the late
discovery exception.

Doc. No. 2-1.
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After Bunker invoked the

exception, Midstate maintained that her claim should
nevertheless be barred because she offered no explanation as to
why she did not learn of the policy sooner or why it was not
reasonably discoverable within the six month time period.
Relatedly, Midstate argues for dismissal because her complaint
does not plead sufficient facts to support her claim.
I disagree with both arguments.

Bunker’s complaint alleges

that she engaged in settlement negotiations with Nadeau but was
not made aware of Midstate’s policy until April 14, 2014.

She

thus pleads that she lacked knowledge of the policy until after
the six-month limitations period had run.

She filed her

coverage claim with Midstate one day after learning of the
policy and her declaratory judgment action two days after
Midstate’s denial of coverage.

At a minimum, these allegations

“leave . . . doubt” as to whether Bunker could reasonably have
known of the facts underlying the coverage dispute.
Gorelik, 605 F.3d at 121.

See

Moreover, she acted “within a

reasonable time frame” after discovering the Midstate policy.
See Binda, 144 N.H. at 616.

Dismissal of Bunker’s claim is thus

improper at this stage of the proceedings.3

3

In reaching this conclusion, I note that Midstate has not
argued that Bunker lacks standing to bring an insurance coverage
claim at the present time. See Burke v. Fireman’s Fund Ins.
Co., 120 N.H. 365, 366 (1980) (holding that an injured party
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B.

Forum Non Conveniens
Midstate also urges me to dismiss this case on forum non

conveniens grounds because New York state courts are a more
appropriate forum.

Forum non conveniens is a “discretionary

tool for the district court to dismiss a claim” even when it has
proper jurisdiction.

Adelson v. Hananel, 510 F.3d 43, 52 (1st

Cir. 2007) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507
(1947)).

A federal court has discretion to dismiss on forum non

conveniens grounds when “an alternative forum has jurisdiction
to hear the case, and trial in the chosen forum would establish
oppressiveness and vexation to a defendant out of all proportion
to plaintiff’s convenience, or the chosen forum is inappropriate
because of considerations affecting the court’s own
administrative and legal problems.”

Sinochem Int’l Co. v.

Malaysia Int’l Shipping Corp., 549 U.S. 422, 429 (2007)
(alterations omitted) (citing Am. Dredging Co. v. Miller, 510
U.S. 443, 447-48 (1994)).
This exacting standard is emphasized in the Supreme Court’s
holding that “[t]he common-law doctrine of forum non conveniens

does not have a direct cause of action against the company
insuring the person who injured him); see also Mendez v. Brites,
849 A.2d 329, 333 n.2 (R.I. 2004) (addressing the standing of
injured parties seeking declaratory judgments in direct action
states). In denying Midstate’s motion to dismiss, I express no
opinion on that issue.
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‘has continuing application [in federal courts] only in cases
where the alternative forum is abroad’ and perhaps in rare
instances where a state or territorial court serves litigational
convenience best.”

Id. at 430 (alteration in original)

(citations omitted) (quoting Am. Dredging Co., 510 U.S. at 449
n.2); accord Jackson Nat’l Life Ins. Co. v. Economou, 557 F.
Supp. 2d 216, 219 (D.N.H. Apr. 30, 2008).

By any consideration

of the facts, Midstate has simply not provided sufficient
arguments to meet these restrictive standards.

I thus deny

Midstate’s motion to dismiss for forum non conveniens.

III.

CONCLUSION

For the reasons discussed above, I grant Midstate’s motion
to dismiss the claims raised by Brian Nadeau, Doc. No. 15, and
deny its motion to dismiss the claims raised by Cindy Bunker,
Doc. No. 2.
SO ORDERED.
/s/Paul Barbadoro
Paul Barbadoro
United States District Judge
August 25, 2014
cc:

Thomas E. Craig, Esq.
James E. Fiest, Esq.
Adam R. Mordecai, Esq.
Doreen F. Connor, Esq.
Kevin G. Collimore, Esq.
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