Opinion
Civil No. 02-409-JD, Opinion No. 2003 DNH 096
May 30, 2003
ORDER
This action is brought by Jonathan and Heidi Fisher, as the assignees of Philip Martin, Jr., seeking insurance coverage for a judgment they were awarded against Martin. The defendant, Clarendon National Insurance Co., contends that Martin's automobile policy does not cover the accident in which Jonathan Fisher was injured and asserts other defenses to coverage. Clarendon moves to dismiss Counts I and III of the complaint.
Standard of Review
When, as here, the defendant has filed an answer, a motion to dismiss is properly considered as a motion for judgment on the pleadings. "After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). When considering a motion for judgment on the pleadings, the "court must accept all of the nonmoving party's well-pleaded factual averments as true and draw all reasonable inferences in her favor." Feliciano v. Rhode Island, 160 F.3d 780, 788 (1st Cir. 1998). Judgment on the pleadings is not appropriate "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief.'" Santiago de Castro v. Morales Medina, 943 F.2d 129, 130 (1st Cir. 1991) (quoting Rivera-Gomez v. De Castro, 843 F.2d 631, 635 (1st Cir. 1988)).
Background
The Fishers allege that on May 8, 2000, Philip Martin pulled out of a restaurant parking lot on Loudon Road in Concord, driving his 1987 Chevrolet van, and hit Jonathan Fisher, who was operating a motorcycle on Loudon Road. Jonathan Fisher's injuries caused by the accident include a broken leg, dislocated heel, bruises, and scrapes.
Clarendon issued an automobile insurance policy to Martin in November of 1999 to cover a 1984 Nissan King and a 1985 Nissan 300ZX. The policy covered the period of November 1999 to November 2000. In April of 2000, Martin called his insurance agent to have his 1987 Chevrolet van added to the policy. The declarations page of the policy does not include the van.
After the accident, Martin attempted to notify Clarendon by calling his insurance agent. The agent no longer occupied its former office, and Martin had difficulty locating the agent. Eventually, he spoke to someone at the agent's headquarters in Oriskany, New Hampshire, and reported the accident.
Martin has disabilities, including a severe hearing loss and a permanent head injury caused by a fall, which make it difficult for him to communicate, particularly by telephone. He is unemployed and has been unemployed for some time.
The Fishers brought suit against Martin on July 8, 2000. They were awarded a default judgment in the suit, in the amount of $88,806.73, on January 30, 2001. Clarendon did not participate in the suit. After learning that Martin had insurance in April of 2001, counsel for the Fishers notified Clarendon of the suit and judgment on April 23, 2001. Clarendon has denied coverage. Martin assigned his rights and causes of action against Clarendon to the Fishers.
Discussion
The Fishers, as assignees of Martin, seek a declaratory judgment pursuant to both New Hampshire Revised Statute Annotated ("RSA") § 491:22 and 28 U.S.C. § 2201 that Clarendon is obligated to pay the judgment they were awarded. They also bring a breach of contract claim and a bad faith claim. Clarendon moves to dismiss the declaratory judgment claim based on RSA 491:22 on the ground that the claim was not filed within six months of the filing of the Fishers' suit against Martin, as is required by RSA 491:22, III. Clarendon also contends that the Fishers have not stated a bad faith claim.
Because the Fishers brought their declaratory judgment claim under both federal and state law and the six-month limitation applies only to the state law claim, Clarendon's motion addresses only the part of Count I based on RSA 491:22.
A. Declaratory Judgment
RSA 491:22, III requires that a petition for declaratory judgment in a coverage dispute be filed within six months after the writ implicating insurance coverage is filed unless "the facts giving rise to such coverage dispute are not known to, or reasonably discoverable by, the insurer until after expiration of such 6-month period." Extra time is allowed only if the material facts are not known or reasonably discoverable within the six months allowed, and then a reasonable time is allowed to file. See Binda v. Royal Ins. Co., 144 N.H. 613, 615 (2000). Alternatively the court "may permit the filing of such a petition after such period upon a finding that the failure to file such petition was the result of accident, mistake or misfortune and not due to neglect." Id.
Although the statute refers to the knowledge of the insurer, the New Hampshire Supreme Court interprets the extension to also apply to an insured. See Binda, 144 N.H. at 615.
The Fishers filed suit against Martin on July 8, 2000. Martin, as the insured, had until January 8, 2001, to file an action under RSA 491:22. The Fishers, as Martin's assignees, filed this action on September 6, 2002. Therefore, the declaratory judgment claim under RSA 491:22 is time-barred unless Martin did not know and could not reasonably have discovered the facts giving rise to the coverage dispute before January 8, 2001, and the Fishers filed the present action within a reasonable time after Martin discovered the coverage dispute. Alternatively, relief may be granted if Martin's failure to file by January 8, 2001, was due to accident, mistake, or misfortune.
In response to Clarendon's motion, the Fishers submitted materials that are extrinsic to the complaint, including copies of correspondence and memos. Such materials are not to be considered for purposes of judgment on the pleadings. See Fed.R.Civ.P. 12(c); Rubert-Torres v. Hosp. San Pablo, Inc., 205 F.3d 472, 475 (1st Cir. 2000); Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993). Although a motion for judgment on the pleadings may be converted to one for summary judgment with notice to the parties and after the parties have been given an opportunity to respond accordingly, that would not appear to be appropriate at this early stage of the case. See Rubert-Torres, 205 F.3d at 475.
The question of the timeliness of the RSA 491:22 claim would be better raised and addressed in a properly supported motion for summary judgment. Therefore, Clarendon's motion for judgment on the pleadings as to the RSA 491:22 claim is denied without prejudice to file a motion for summary judgment.
B. Bad Faith Claim
The Fishers allege in Count III that Clarendon breached the covenant of good faith and fair dealing and acted in bad faith in failing to honor its contractual obligations under the automobile policy. They seek damages including recovery for emotional distress. Clarendon contends that New Hampshire law does not recognize a tort cause of action arising from a breach of contract and does not permit recovery for emotional distress on a contract claim. Clarendon further contends that the Fishers have not alleged a separate tort claim.
The Fishers object to Clarendon's motion to dismiss Count III but also acknowledge the limitations of New Hampshire law. See, e.g., Wong v. Ekberg, 807 A.2d 1266, 1272 (N.H. 2002) (affirming no tort claim for actions that are essentially breach of contract and citing cases);Centronics Corp. v. Genicom Corp., 132 N.H. 133, 137, 139-40 (1989) (discussing bad faith breach of contract); Crowley v. Global Realty, Inc., 124 N.H. 814, 817 (1984) (holding that recovery for emotional distress not permitted in actions arising from breach of contract);Lawton v. Great Southwest Fire Ins. Co., 118 N.H. 607, 613, 615 (1978) (holding that breach of contract does not also give rise to tort cause of action and that emotional distress damages not available for breach of contract). The Fishers assert, however, that the bad faith claim also alleges a tort based on a duty that is independent of the breach of contract. See Lawton, 118 N.H. at 613.
In the complaint, the Fishers allege that Clarendon acted in bad faith by failing to defend and indemnify Martin, by denying coverage without referencing the policy, by failing to record Martin's report of the accident, and by taking advantage of Martin's disabilities in denying coverage. Those allegations arise from Clarendon's obligations under the insurance policy.
In their objection to Clarendon's motion, the Fishers provide new allegations and arguments to support a bad faith tort claim. They allege that Clarendon, through the insurance agent, was aware of Martin's disabilities and had a duty to accommodate his disabilities so that he could report his claim. As a result, they argue, Clarendon acted in bad faith when it permitted the agent to shut down its office without notifying Martin. Since those allegations and argument do not appear in the complaint, however, they cannot be considered in opposition to Clarendon's motion. The Fishers' allegation that Clarendon took advantage of Martin's disabilities in denying coverage does not encompass the tort theory expressed in their objection.
As pled in the complaint, Count III states a claim for breach of the implied covenant of good faith and fair dealing or bad faith breach of contract, but not a separate tort claim of bad faith. Therefore, the tort cause of action for bad faith and claim for emotional distress damages alleged in Count III are dismissed. The bad faith breach of contract claim remains in Count III.
C. Motion to Amend
In the event the tort claim in Count III was dismissed, the Fishers ask that the court merge Counts II and III to allege a bad faith breach of contract. Alternatively, they argue that they should be allowed to file an amended complaint. They have also filed a separate motion for leave to file an amended complaint that is contingent on the outcome of Clarendon's motion.
The court declines to speculate about which claims the Fishers intend to press, in light of the resolution of Clarendon's motion. Therefore, the motion for leave to amend is denied without prejudice to file another for motion for leave to amend, if that would be appropriate.
Conclusion
For the foregoing reasons, the defendant's motion for judgment on the pleadings (document no. 9) is denied without prejudice as to Count I and is granted as to Count III in that the tort cause of action and claim for emotional distress damages are dismissed. The plaintiff's motion to amend (document no. 11) is denied without prejudice.
SO ORDERED.