Wells v. Acceptance Indemnity Insurance Company
ORDER denying 5 Motion to Dismiss. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Noah Wells d/b/a
Civil No. 17-cv-669-JD
Opinion No. 2018 DNH 011
O R D E R
Noah Wells, who does business as Centerpoint Chimney,
brought suit in state court against his insurer, Acceptance
Indemnity Insurance Company (“AIIC”), seeking a declaration that
AIIC owed him a defense and indemnification in an underlying
lawsuit and alleging that AIIC has breached its insurance
AIIC removed the case to this court and moves to
dismiss on the ground that it has no duty to defend or indemnify
Wells under the terms of the policy.
a reply after the deadline for doing so.
See LR 7.1(e)(1).
Standard of Review
For purposes of a motion to dismiss, the court accepts all
well-pleaded facts as true, disregarding mere legal conclusions,
and resolves reasonable inferences in the plaintiff’s favor.
Galvin v. U.S. Bank, N.A., 852 F.3d 146, 155 (1st Cir. 2017).
Taken in that light, the complaint must state sufficient facts
to support a plausible claim for relief.
19, 25 (1st Cir. 2017).
In re Curran, 855 F.3d
The plausibility standard is satisfied
if the factual allegations in the complaint “are sufficient to
support the reasonable inference that the defendant is liable.”
In re Fidelity ERISA Float Litig., 829 F.3d 55, 59 (1st Cir.
2016) (internal quotation marks omitted).
In addition to the allegations in the complaint, the court
may also consider “documents the authenticity of which are not
disputed by the parties . . . , documents central to plaintiffs’
claim, . . . [and] documents sufficiently referred to in the
Ironshore Specialty Ins. Co. v. United States, 871
F.3d 131, 135 (1st Cir. 2017) (internal quotation marks
For that reason, in this case, the court will
consider the insurance policy and the complaint in the
underlying suit against Wells, along with the allegations in
Noah Wells and his company, Centerpoint Chimney, were sued
in state court by Marlin Fogg who alleges that he was an
authorized agent of one of Wells’s subcontractors on a
residential roofing project.
Fogg also alleges that while
working on the project he fell off of the roof and was injured
as a result of the negligence of Wells and others.
insured by AIIC and provided notice of the suit to AIIC.
AIIC acknowledged receiving Wells’s notice but declined to
provide a defense or to indemnify Wells in Fogg’s suit on the
ground that two exclusionary endorsements in the policy
Specifically, AIIC cited an endorsement
titled “Injury to Employees, Workers or Contracted Persons or
Insureds or Contracted Organizations Exclusion” and an
endorsement titled “Injury to Independent Contractors
Wells brought suit to contest AIIC’s decision not
to provide a defense or indemnification in the Fogg suit.
AIIC moves to dismiss Wells’s claims based on the
exclusions cited in the coverage denial letter.
arguing that other provisions in the policy create an ambiguity
as to whether the policy covers the claims in the Fogg suit.
Wells also argues that discovery is required to determine Fogg’s
status at the job site.
The parties do not distinguish between an insurer’s duty to
defend and the duty to indemnify.
The duty to defend is
different from and broader than the duty to indemnify.
Am. Dining, Inc. v. Phil. Indem. Ins. Co., 164 N.H. 612, 627
(2013); accord Mass. Bay Ins. Co. v. Am. Healthcare Servs.
Ass’n, 172 A.3d 1043, 1049, n.12 (N.H. 2017).
The duty to
defend arises at the beginning of the underlying litigation and
is based on allegations “that potentially support a covered
The duty to indemnify arises only once liability
has been determined in the underlying litigation and is based on
“the facts actually established in the underlying suit.”
The interpretation of the language in an insurance policy
is a legal question for the court to decide.
Exeter Hosp., Inc.
v. Steadfast Ins. Co., 170 N.H. 170, 174 (2017).
policy language, the court considers “the plain and ordinary
meaning of the policy’s words in context . . . [and] construe[s]
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.”
“Where an insurance policy’s
language is reasonably susceptible of more than one
interpretation, however, and one reasonable interpretation
favors coverage, we construe the ambiguity against the insurer
and in favor of coverage in order to honor the reasonable
expectation of the policyholder.”
Insurers may use exclusions to limit the coverage provided
in their policies, as long as the exclusions comply with
Mass. Bay, 172 A. 3d at 1049.
effective, the language in an exclusion “must be so clear,
however, as to create no ambiguity that might affect the
insured’s reasonable expectations.”
Id. (internal quotation
“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
Id. (internal quotation marks omitted).
In Section I, the policy provides coverage for the
insured’s liability for bodily injury “to which this insurance
applies” that is caused by an occurrence during the policy
Doc. 6-4, at 33.
In those circumstances, AIIC will
provide a defense to the insured in a suit seeking damages for
The amount that AIIC will pay is limited by the
AIIC is not obligated to provide a defense or pay
damages for bodily injury “to which this insurance does not
AIIC does not dispute that the Fogg suit would meet the
conditions for coverage in Section I but argues that the
insurance does not apply because of the two exclusionary
The first endorsement states, in pertinent part,
Wells’s declaratory judgment claim is brought pursuant to
RSA 491:22. For purposes of the motion to dismiss, AIIC focuses
on the declaratory judgment claim.
that the insurance coverage provided in Section I of the policy
does not apply to “[a]ny person who is an ‘employee’, ‘leased
worker,’ ‘temporary worker’ or ‘volunteer worker’” for Wells.
Doc. 6-5, at 2.
The second endorsement provides that the
insurance in Section I does not apply to “[a]ny independent
contractor or ‘employee’ of any independent contractor while
such independent contractor or their ‘employee’ is working: (a)
On behalf of any insured; or (b) On the job site, but not
working on behalf of any insured.”
Doc. 6-6, at 2.
Wells does not dispute the meaning of the exclusionary
Instead, Wells argues that other provisions in
the policy, specifically premiums paid for additional coverage
as shown on the Declarations page and a provision titled
“Independent Contractors Special Condition” support a reasonable
expectation that the insurance would apply to Fogg.
In support of his argument that an ambiguity exists, Wells
relies on certain coverage he obtained by paying additional
premiums, as listed on the Declarations page of the policy.
its reply, AIIC argues that the cited coverage does not apply to
The Declarations page shows that Wells paid additional
premiums for four classifications: chimney cleaning, masonry,
contractors and subcontracted work, and an additional insured.2
In support of ambiguity, Wells relies on the last two
classifications that are described on the Declarations page, as
91583 Contractors – Subcontracted Work-in Connection
with Building Construction, Reconstruction, Repair or
Erection-One or Two Family Dwellings
ADD’L INSURED PER FORM CG2010
Doc. 6-4, at 17.
A General Change Endorsement shows that the additional
insured added by Form CG2010 was Pinkerton Academy.
Because the project where Fogg was injured did not
involve Pinkerton Academy, the additional insured listed on the
Declarations page does not appear to be pertinent to the
coverage issue here.
As a result, to the extent a premium was
paid to add Pinkerton Academy as an additional insured, Wells
has not shown that would create an ambiguity as to whether the
exclusionary endorsements apply to Fogg’s suit.
The premium paid for “Contractors – Subcontracted Work-in
Connection with Building Construction, Reconstruction, Repair or
Erection – One or Two Family Dwellings,” however, raises a
question about coverage in this case.
The roofing project was a
The amounts of the premiums paid were redacted by AIIC.
repair of a home, apparently a one family dwelling.
additional coverage, which could be interpreted to cover Wells’s
liability for bodily injury to contractors and those doing
subcontracted work, could reasonably be understood to cover
Fogg, who alleges that he worked for a subcontractor.
In its reply, AIIC contends that the coverage for
contractors and subcontracted work is inapplicable here because
it only reflects the nature of Wells’s business and does not
change the effect of the exclusionary endorsements.
explanation does not resolve whether the policy provides
coverage for Fogg’s claim against Wells because Fogg alleges he
was working for a subcontractor.
AIIC also argues that Wells’s
interpretation of the contractors and subcontracted work
coverage is unreasonable because it would directly contradict
and render meaningless the exclusionary endorsements that
preclude coverage for independent contractors and their
At this early stage of the case, however, the parties have
not sufficiently explained the coverage for contractors and
subcontracted work to allow the court to determine as a matter
of law what the policy covers and whether an ambiguity exists.
Independent Contractors Special Condition
Wells also cites the endorsement that required him to
provide AIIC with evidence of insurance held by independent
contractors as follows:
You will provide certificates of insurance from all
independent contractors providing evidence of:
1. Limits of liability equal to or greater than the
limits provided by this policy; and
2. Coverage equal to or greater than the coverages
provided by this policy.
However, should you fail to comply with this
condition, independent contractors will be considered
your “employees” and a premium charge will be made
accordingly. The cost of the sublet labor for each
independent contractor not in compliance will be used
as the rating basis for the work they performed.
Doc. 6-4 at 32.
Wells contends that that provision also
supports a reasonable understanding that the policy covered
If the exclusionary endorsements
preclude coverage for independent contractors, the exclusionary
endorsements appear to render the special condition endorsement
AIIC does not explain why the policy includes the
special condition for independent contractors, along with the
Additional explanation is necessary
to understand the meaning of the various policy provisions.
For the foregoing reasons, the defendant’s motion to
dismiss (document no. 5) is denied.
Joseph A. DiClerico, Jr.
United States District Judge
January 10, 2018
Melissa Brill, Esq.
Laura Dowgin, Esq.
J. Bruce Maffeo, Esq.
Peter J. Nicosai, Esq.
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