UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE
Melissa Currier, as Administrator of the Estate of Nicholas B. Carpenter, et al.,
v. Civil No. 21-cv-00667-JL Opinion No. 2022 DNH 011 Newport Lodge No. 1236, Loyal Order of Moose, Newport, New Hampshire, et al.
MEMORANDUM ORDER
Resolution of defendants’ motions to dismiss this insurance coverage dispute
hinges on: (1) whether the plaintiffs must first obtain a judgment or settlement against
the defendants in their underlying tort suit in order to have standing to bring this
declaratory judgment action and (2) whether the declaratory relief sought is so premature
and hypothetical that it is not ripe for review in federal court. The plaintiffs here –
alleged tort victims and plaintiffs in an underlying negligence and liquor liability suit –
have sued the defendants in the underlying tort action and their insurers,1 seeking a
declaratory ruling that the tortfeasor defendants are entitled to liability coverage under
certain insurance policies and that one policy is not eroded by defense costs. This court
has jurisdiction under 28 U.S.C. § 1332(a) (diversity).
1 The defendants here are: (1) the alleged tortfeasor defendants in the underlying litigation (Moose International, Inc. and Newport Lodge No. 1236, Loyal Order of Moose, Newport, New Hampshire); and (2) four insurance companies (Fraternal Insurance Company, Inc., American Empire Surplus Lines Insurance Company, Great American Assurance Company, and Gemini Insurance Company). 1 Defendants move to dismiss, arguing that the plaintiffs lack standing and that their
claims are untimely and unripe. After considering the parties’ submissions and hearing
oral argument, the court grants defendants’ motions in part and denies them in part. The
absence of a judgment or settlement in the underlying litigation does not deprive the
plaintiffs of standing to bring this action, and defendants’ other standing arguments lack
merit. Because, however, the declaratory relief sought here is wholly dependent on a
series of contingent events that have not occurred, and may never occur, the claim is not
yet fit for judicial review. Nor would the declaratory relief prevent hardship to the parties
by resolving a dilemma in the underlying litigation or ending that litigation. The
plaintiffs, as the parties invoking federal court jurisdiction, have therefore not met their
burden of proving that their claim is ripe. The court dismisses it without prejudice.
Defendants’ statute of limitations challenge is denied as moot.
Applicable legal standard
To defeat a Rule 12(b)(6) motion to dismiss, the plaintiffs must plead “factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015).
This standard “demands that a party do more than suggest in conclusory terms the
existence of questions of fact about the elements of a claim.” A.G. ex rel. Maddox v.
Elsevier, Inc., 732 F.3d 77, 81 (1st Cir. 2013). A motion to dismiss based on a statute of
limitations, such as some of the motions presented here, can only be successful when “the
pleader’s allegations leave no doubt that an asserted claim is time-barred.” Gorelik v.
2 Costin, 605 F.3d 118, 121 (1st Cir. 2010) (internal quotation marks omitted). Moreover,
where, as here, a defendant challenges the court’s subject matter jurisdiction under Rule
12(b)(1), the “pleading standard for satisfying the factual predicates for proving
jurisdiction is the same as applies under Rule 12(b)(6).” Labor Relations Div. v. Healey,
844 F.3d 318, 327 (1st Cir. 2016).
In ruling on defendants’ motions to dismiss, the court accepts as “true all well-
pleaded facts in the plaintiffs’ complaint[ ], scrutinize[s] them in the light most hospitable
to the plaintiffs’ theory of liability, and draw[s] all reasonable inferences therefrom in the
plaintiffs’ favor.” Fothergill v. United States, 566 F.3d 248, 251 (1st Cir. 2009). The
court may also consider judicially noticed documents, matters of public record,
documents (with undisputed authenticity) central to the plaintiffs’ claim or sufficiently
referred to in the complaint, and concessions in the plaintiffs’ objections to the motion to
dismiss, without converting the 12(b)(6) motions into motions for summary judgment.
See Breiding v. Eversource Energy, 939 F.3d 47, 49 (1st Cir. 2019); Alternative Energy,
Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (1st Cir. 2001).
Background
The court recites the relevant factual background from the plaintiffs’ First
Amended Complaint2 and materials referenced and incorporated therein.3 Plaintiff
2 Doc. no. 3-1. 3 These materials include the First Amended Consolidated Complaint in the underlying tort litigation (docket number 1:19-cv-1196-JL), and the insurance policies in question. 3 Melissa Currier is the administrator of her son Nicholas Carpenter’s estate. Plaintiff
Jennifer Rhodes is the administrator of her daughter Michelle Fenimore’s estate.4 At
approximately 11:15 p.m. on September 22, 2017, Carpenter and Fenimore were killed
when a vehicle driven by Kristin Lake collided with their vehicle on New Hampshire
Route 10 in Croydon, New Hampshire.
Earlier that evening, Lake had been drinking at the social quarters at the Newport,
New Hampshire Moose Lodge. Lake was at the Newport Lodge as a guest of a member.
Following the crash, Lake’s blood alcohol concentration (BAC) tested at .144, over the
legal limit to operate a motor vehicle in New Hampshire.
In November 2019 and May 2020, the plaintiffs filed suit in this court against the
Newport Lodge, alleging claims for negligent and reckless service under New
Hampshire’s liquor liability statute, RSA 507-F. They later filed a separate suit against
Moose International, Inc., the umbrella charitable organization for local Moose lodges,
alleging negligence and vicarious liability. After the court consolidated the related cases,
the plaintiffs filed an amended consolidated complaint in the underlying litigation on
September 17, 2020. The underlying litigation is ongoing. Trial is scheduled for April 5,
2022, and summary judgment motions from the Newport Lodge, Moose International,
and the plaintiffs are presently pending.
4 The estates are located in Vermont and thus considered citizens of Vermont for jurisdictional purposes. 4 The plaintiffs filed this declaratory judgment action about a year after filing the
operative complaint in the underlying litigation.5 They seek declaratory relief under New
Hampshire RSA 491:226 that (1) the Newport Lodge and Moose International are entitled
to liability insurance coverage under policies issued by several defendant insurers, and
(2) any coverage under a policy issued by defendant Fraternal Insurance Company, Inc. is
not eroded by defense costs.7
Analysis
New Hampshire’s declaratory judgment statute provides, in relevant part, that
“[a]ny person claiming a present legal or equitable right or title may maintain a petition
against any person claiming adversely to such right or title to determine the question as
between the parties, and the court’s judgment or decree thereon shall be conclusive.”
N.H. Rev. Stat. Ann. § 491:22. Declaratory judgment actions under RSA 491:22 include
petitions “to determine the coverage of a liability insurance policy,” and in such actions,
the insurer bears the “burden of proof concerning the coverage.” RSA 491:22-a. “Where
a plaintiff seeks a declaratory judgment, he is not seeking to enforce a claim against the
defendant, but rather a judicial declaration as to the existence and effect of a relation
between him and the defendant.” Benson v. New Hampshire Ins. Guar. Ass’n, 151 N.H.
590, 593 (2004) (citing N. Country Envtl. Servs. v. Town of Bethlehem, 150 N.H. 606,
5 See doc. no. 3-1. 6 The plaintiffs clarified in one of their objections that they are not pursuing a declaratory judgment under the Federal Declaratory Judgment Act. See doc. no. 46-1 at 1. 7 Id. at 12. 5 621 (2004)). The claim “must be definite and concrete touching the legal relation of
parties having adverse interests, and must not be based upon a hypothetical set of facts.”
Carlson v. Latvian Lutheran Exile Church of Bos. & Vicinity Patrons, Inc., 170 N.H. 299,
303 (2017), as modified on denial of reconsideration (Oct. 20, 2017) (quoting Duncan v.
State, 166 N.H. 630, 645 (2014)).
Defendants8 move to dismiss the plaintiffs’ declaratory judgment claim on several
grounds. They argue that this court lacks jurisdiction over the claim because the
plaintiffs lack standing to bring the claim, and the claim is not ripe. They further argue
that the plaintiffs’ suit is untimely. The court begins with standing.
A. Standing
Defendants assert that the plaintiffs lack standing to bring a declaratory judgment
action to establish coverage for two reasons: first, that the plaintiffs are not named
beneficiaries or recognized third-party beneficiaries of the insurance policies at issue; and
second, that the plaintiffs have not obtained a judgment or settlement in the underlying
tort action. The court addresses and rejects each argument in turn.
Beneficiary status. Defendants first argue that the plaintiffs do not have a present
legal or equitable right or title in the insurance policies at issue because they are neither
parties to nor beneficiaries of those policies. This argument could have merit if the
plaintiffs were advancing a breach of contract claim, but they are not. Defendants do not
8 The court refers to the defendants collectively because while they filed four separate motions to dismiss, the central bases for each motion (standing and timeliness) are the same or similar, and the question of ripeness applies regardless of which defendant raised it in a motion to dismiss. 6 cite, and the court’s research has not uncovered, any controlling9 New Hampshire cases
that require a tort victim to be a party to an insurance policy, or recognized third-party
beneficiary of that policy, to have standing to pursue a coverage suit against the insurer
and insured. If that were a requirement, arguably no tort victim would have standing as
most, if not all, liability insurance policies do not name tort victims as parties or
beneficiaries under the policy. The fact that the plaintiffs are not parties to the insurance
policies or recognized third-party beneficiaries of those policies does not deprive them of
standing to bring this action.
Lack of judgment or settlement. Defendants next argue that the plaintiffs lack
standing to bring this action because they have not obtained a judgment or settlement in
the underlying tort litigation. American Empire further argues that its policy language
expressly forbids the plaintiffs from filing this suit absent an “agreed settlement” or “final
judgment” against its insured. The court disagrees with both arguments.
American Empire’s policy states that a “person or organization may sue us to
recover on an agreed settlement or on a final judgment against an insured obtained after
an actual trial.”10 It further states that no “person or organization has a right . . . [t]o join
us as a party or otherwise bring us into a ‘suit’ asking for damages from an insured.”
9 In O’Connor v. Certain Underwriters at Lloyd’s of London, the court referenced the absence of a contract between the tort victim plaintiff and the insurer defendants as a reason why the plaintiff did not have a present legal or equitable right to bring a declaratory judgment action under RSA 491:22. No. 03-E-0064, 2005 WL 6310216 (N.H. Super. Jan. 25, 2005). In the same order (a non-binding decision from the New Hampshire Superior Court), however, the court assumed that the plaintiff had standing to bring the action and addressed the merits of his coverage claim. Id. O’Connor thus has little precedential value here. 10 See American Empire Primary Policy, Ex. F to Motion to Dismiss (doc no. 20-8). 7 This declaratory judgment action to establish insurance coverage under the policy is
neither a “suit asking for damages from an insured” nor a suit “to recover on an agreed
settlement or on a final judgment against an insured.” The quoted policy language
therefore does not bar the plaintiffs from bringing this suit prior to obtaining a judgment
or settlement against American Empire’s insured.
In support of their argument that the plaintiffs lack standing absent a settlement or
judgment in the underlying case, defendants also seize on Judge Barbadoro’s observation
in Bunker v. Midstate Mut. Ins. Co. that “New Hampshire . . . is not a ‘direct action’
state, meaning that it does not provide injured parties with a cause of action against an
insurance company until the insured’s liability is established in an earlier judicial
proceeding” No. 14-CV-274-PB, 2014 WL 3891296, at *4 (D.N.H. Aug. 7, 2014)
(Barbadoro, J.) (citing Burke v. Fireman’s Fund Ins. Co., 120 N.H. 365, 366-67, (1980)).
Standing was not at issue in Bunker, however, as the court referenced “direct actions” as
part of its personal jurisdiction analysis.
In any event, the statement does not stand for the proposition defendants allege.
Rather, the “direct action” referenced in this quote is a suit by an injured party against an
insurer, in which the plaintiff looks to hold the insurer liable for the actions of the
insured. See Fletch’s Sandblasting & Painting, Inc. v. Colony Ins. Co., No. 15-CV-490-
PB, 2017 WL 11541726, at *4 (D.N.H. Nov. 6, 2017) (Johnstone, J.), report and
recommendation adopted, No. 15-CV-490-PB, 2017 WL 11541728 (D.N.H. Nov. 28,
2017) (“Moreover, it is well established under New Hampshire law that an insurer may
not be sued directly for its insured’s actions until the insured is found liable and is unable
8 or unwilling to satisfy the judgment.”); Black’s Law Dictionary, Direct Action (11th ed.
2019) (defining “direct action” as a “lawsuit by a person claiming against an insured but
suing the insurer directly instead of pursuing compensation indirectly through the
insured”); cf. Burke, 120 N.H. at 367 (“Before the insurer’s duty to provide indemnity
[under RSA 268:16 I] arises, the plaintiff must first have the liability of the insured
judicially imposed.”). Indeed, in Burke – the decision Judge Barbadoro cited in support
of his “direct action” quote in Bunker – the dispute was about motor vehicle insurance
and indemnification under a separate statute, and the claim was a direct action by the tort
victim against the insurer to pay for the insured’s liability, not a declaratory judgment suit
relating to the scope of coverage. Thus, when a tort victim sues an insurer to hold the
insurer liable for its insured’s actions, New Hampshire law requires a finding of liability
against the insured prior to the tort victim bringing suit. See Shaheen v. Preferred Mutual
Ins. Co., 668 F. Supp. 716, 719 (D.N.H. 1987) (“plaintiffs are asking the Court to declare
Utica’s liability to them—a declaration that requires the determination of Cotsibas’
liability”).
A different rule applies in declaratory judgment actions to establish the scope of
insurance coverage, as here. See id. at 719 (suggesting that “the issue of the legal scope
of insurance coverage . . . might be suitable for declaratory relief” absent a finding of the
insured’s liability) (citing Morin v. Berkshire Mut. Ins. Co., 126 N.H. 485, 486 (1985));
Warner v. Frontier Ins. Co., 288 F. Supp. 2d 127, 129 (D.N.H. 2003) (DiClerico, J.)
(“Some courts have allowed an injured party to bring a declaratory judgment action
against an insurer to determine the applicability of its coverage, even in the absence of a
9 determination of the insured’s liability to the injured party.”); see also McNamara, 9 New
Hampshire Practice, Personal Injury: Tort and Ins. Practice § 14.24A (2021) (“A case in
which an injured plaintiff claims an insured tortfeasor is liable to him and in which the
tortfeasor’s insurance carrier disclaims any obligation to provide the tortfeasor with
liability coverage is a proper subject for a declaratory judgment action, brought on behalf
of the injured party.”). The “New Hampshire Supreme Court (and, necessarily, the New
Hampshire Superior Courts) have on many occasions permitted victims to pursue
declaratory judgment actions against their tortfeasor’s insurance provider,” absent a
finding of the tortfeasor-insured’s liability. Hardy v. Granite State Ins. Co., No. 20-CV-
216-SM, 2020 WL 2768969, at *3 (D.N.H. May 28, 2020) (McAuliffe, J.) (collecting
cases).
While the New Hampshire Supreme Court has not highlighted the distinction
between direct actions and coverage disputes with perfect clarity, its decisions reflect that
different jurisdictional prerequisites exist for each type of suit. Cf. Radkay v. Confalone,
133 N.H. 294, 296-97 (1990) (noting that the “justiciability of a declaratory judgment
action is not dependent upon proof of a wrong committed by one party against the other”)
(quoting Faulkner v. Keene, 85 N.H. 147, 149 (1931)). Because the plaintiffs’ suit seeks
a determination of whether coverage exists under certain insurance policies,11 and is not a
11 The plaintiffs’ complaint seeks a declaration that the Newport Lodge and Moose International are “entitled to [certain amounts of] coverage” under the policies and that the liquor liability exclusions do not apply. See Doc. no. 3-1, at ¶¶ 41, 42, 51, 52, 60, 61, 71, 72. That is fundamentally different relief than a finding that the insurers are liable for losses caused by the insureds. 10 direct action against the insured as defined above and as generally understood in the law,
a judgment or settlement in the underlying tort case is not a prerequisite to standing.
Defendants’ motions to dismiss on standing grounds are denied.
B. Discretionary considerations
The jurisdictional inquiry does not end simply because the plaintiffs may have
standing to pursue this declaratory judgment action. As Judge DiClerico observed in
Warner, “there is no absolute rule either requiring or forbidding a court to exercise
jurisdiction over this sort of an action. Instead, the court enjoys a measure of equitable
discretion in deciding whether to hear the injured party’s declaratory judgment action.”
288 F. Supp. 2d at 130. Defendants urge the court to exercise that discretion and refuse
to hear this suit. The court declines the invitation.
Whether to entertain an action for declaratory relief involves “considerations of
practicality and wise judicial administration.” Wilton v. Seven Falls Co., 515 U.S. 277,
288 (1995); see also El Dia, Inc. v. Hernandez Colon, 963 F.2d 488, 494 (1st Cir.1992)
(“Although declaratory relief frequently serves a valuable purpose and courts must
remain reasonably receptive to suitable requests for it, . . . there are limits to that
receptivity”). One consideration the court weighs in exercising jurisdiction over a
declaratory judgment action is the extent to which the sought-after relief would serve to
put the underlying controversy to rest. Warner, 288 F. Supp. 2d at 130 (citing Rhode
Island v. Narragansett Indian Tribe, 19 F.3d 685, 693 (1st Cir. 1994)).
Here, while the sought-after relief may give the plaintiffs added reassurance that
any judgment or settlement in the underlying litigation may be paid for with insurance
11 proceeds, and thus inform the plaintiffs’ settlement efforts or litigation tactics, based on
the defendants’ litigation posture, it likely will not put the underlying controversy to rest.
Newport Lodge and Moose International vigorously dispute all aspects of the plaintiffs’
claims, have moved for summary judgment on those claims, and appear poised to defend
themselves before a jury if summary judgment is unsuccessful. These factors thus weigh
against exercising jurisdiction over the plaintiffs’ declaratory judgment action.
On the other hand, the plaintiffs have named all applicable insurers, as well as all
potential insureds, as defendants in this suit, so considerations of wise judicial
administration and practicality support exercising jurisdiction over this case. Contra
Warner, 288 F. Supp. 2d at 130 (finding that a judgment as to the amount of insurance
coverage would have little practical effect in a case where the insurers and the tortfeasors
were not parties). The court therefore finds that general equitable considerations do not
weigh strongly in favor of declining jurisdiction.
C. Ripeness
Certain defendants also argue that the plaintiffs’ claim is not ripe.12 The ripeness
doctrine derives from “the constitutional requirement that federal jurisdiction extends
only to actual cases or controversies.” Ernst & Young v. Depositors Econ. Prot. Corp.,
45 F.3d 530, 535 (1st Cir. 1995) (citing U.S. Const. art. III, § 2). It is therefore of no
consequence that only some of the defendants have challenged the plaintiffs’ claims on
ripeness grounds, as “a court has no alternative but to dismiss an unripe action.” Id.; see
12 See doc. no. 28-1. 12 also City of Fall River v. FERC, 507 F.3d 1, 6 (1st Cir. 2007) (noting that “the question
of ripeness may be considered on a court’s own motion”) (internal quotation marks and
citation omitted). As the plaintiffs chose to invoke this court’s jurisdiction, they have the
“burden to prove ripeness.” Labor Relations Div., 844 F.3d at 326; see also Murphy v.
United States, 45 F.3d 520, 522 (1st Cir. 1995) (“the party invoking the jurisdiction of a
federal court carries the burden of proving its existence”).13
The question is “whether the facts alleged, under all the circumstances, show that
there is a substantial controversy, between parties having adverse legal interests, of
sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
Labor Relations Div., 844 F.3d at 326 (quoting MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 127 (2007)). Accordingly, “a claim is ripe only if the party bringing suit can
show both that the issues raised are fit for judicial decision at the time the suit is filed and
that the party bringing suit will suffer hardship if ‘court consideration’ is withheld.” Id.
(quoting McInnis–Misenor v. Me. Med. Ctr., 319 F.3d 63, 70 (1st Cir. 2003)).
Defendants assert that the plaintiffs cannot satisfy either the fitness or hardship
elements of the ripeness inquiry. The plaintiffs muster little in response. They first
misconstrue the defendants’ arguments, incorrectly claiming that defendants contend that
13 Although the plaintiffs assert their claim under the New Hampshire declaratory judgment act, the court applies the federal ripeness standard because the plaintiffs have invoked the jurisdiction of the federal courts. The court must apply federal procedural law, and courts consider declaratory judgment actions procedural. See Tocci Bldg. Corp. of New Jersey, Inc. v. Virginia Sur. Co., 750 F. Supp. 2d 316, 320 N.2 (D. Mass. 2010) (evaluating a claim for declaratory judgment in a diversity action under the federal, rather than the state, act because “[a] declaratory judgment action is procedural only”).
13 a judgment in the underlying action is required for their declaratory judgment claim to be
ripe.14 That is plainly not the defendants’ argument. The plaintiffs then attempt to
distinguish the defendants’ ripeness cases by arguing that those cases arose under the
federal declaratory judgment act. But the most analogous case that the defendants rely
upon – Weinhold v. Phoenix Insurance Company – was a coverage determination action
under RSA 491:22, not the federal statute. As the party with the burden to prove
ripeness, the plaintiffs must do more in both their pleading and objection to the
defendants’ motion to dismiss to convince the court that their claims are ripe. Thus, for
the following reasons, the court finds that the plaintiffs’ claim, as currently plead, is not
ripe.
Fitness. A claim is not fit for adjudication “if it rests upon contingent future
events that may not occur as anticipated, or indeed may not occur at all.” Labor
Relations Div., 844 F.3d at 326 (quoting City of Fall River v. F.E.R.C., 507 F.3d 1, 6 (1st
Cir. 2007)). The fitness analysis entails considerations of “finality, definiteness, and the
extent to which resolution of the challenge depends upon facts that may not yet be
sufficiently developed.” Ernst & Young, 45 F.3d at 535. Unlike in Weinhold, where a
jury had already determined the underlying tortfeasors’ liability and the amount of
damages, here there are several “uncertain or contingent events that may impact a
determination of the [defendants’] available insurance coverage.” Weinhold v. Phoenix
Ins. Co., No. 18-CV-383-PB, 2018 WL 5085707, at *4 (D.N.H. Oct. 18, 2018). Indeed,
14 See doc. no. 46-1, at 1. 14 the plaintiffs’ declaratory judgment claim is wholly dependent on contingent future
events and factfinding that may not occur as they anticipate or may not occur at all.
For example, the plaintiffs’ tort claims may not proceed to trial against one or both
of the defendants.15 Further, if the claims are tried, a jury could find neither defendant
liable, one defendant liable, or both defendants liable. It is similarly uncertain if one or
both of the defendants are willing to participate in mediation or engage in settlement
discussions while their motions for summary judgment are pending. Plaintiffs’ counsel
asserted at oral argument that counsel for defendants Moose International and the
Newport Lodge in the underlying litigation agreed during a conference with the court that
the court needed to resolve this coverage action before mediation in the underlying
litigation could be meaningful. The court has a different recollection of defense
counsel’s position and nevertheless, defendants’ forceful defense strategy in the
underlying litigation suggests that they were not content to wait for this coverage dispute
to play out before mediating the case. None of these contingencies or hypothetical
scenarios existed in Weinhold, where the court found the fitness element “easily
satisf[ied].” Id.; see also Avery v. N.H. Dep’t of Educ., 162 N.H. 604, 608 (2011) (A
declaratory judgment action “cannot be based on a hypothetical set of facts.” (quotation
omitted)).
Moreover, the range of potential damages in the underlying tort case is uncertain
at best, and the plaintiffs have not plead facts showing there is a “practical likelihood”
15 Both defendants have moved for summary judgment in the underlying tort case. 15 that a verdict or settlement in the tort case will ever reach the excess insurance policies at
issue in this case.16 SIG Arms, Inc. v. Emps. Ins. of Wausau, No. CIV. 99-466-JD, 2000
WL 1499456, at *2 (D.N.H. Apr. 26, 2000) (“In determining whether a justiciable
controversy exists as to an excess liability insurer’s obligations to its insured, before the
underlying suits have been resolved, courts have examined the probability of a recovery
in the underlying suits that would trigger excess coverage.”) (citing Associated Indem. v.
Fairchild Indus., 961 F.2d 32, 34–35 (2d Cir. 1992)). Too many contingencies must
occur in the plaintiffs’ favor in order for the court to find it practically likely that
potentially applicable coverage under any of the policies may be triggered, or that there
will be a dispute over that coverage. While district courts outside of the First Circuit
have recognized that “declaratory judgments are issued in cases where insurance
companies seek to determine their duties prior to the full adjudication of an underlying
controversy,” the petitioner in those cases was the insurer, and there was an actual dispute
between insured and insurer over the scope of coverage. Allstate Ins. Co. v. Tenn, No.
3:19-CV-432 (JBA), 2020 WL 3489387, at *4 (D. Conn. June 26, 2020) (collecting
cases). Here, by contrast, the insured and insurers appear united, and the plaintiffs have
16 The court ordered the plaintiffs to show cause that there was a reasonable likelihood that any settlement or judgment in the underlying litigation is likely to exhaust the available policy limits. The plaintiffs’ responded in good faith to the show cause order on January 6, 2022. See doc. no. 51.
16 not alleged any facts suggesting that there is an actual dispute as to the availability or
scope of coverage.17
Indeed, the plaintiffs have not plead any facts suggesting that the tortfeasor
defendants have requested coverage from their insurers, or that the insurers have denied
coverage or dispute the plaintiffs’ interpretation of the policies at issue.18 Therefore, this
case, as plead, is missing the substantial and sufficiently immediate controversy between
parties having adverse legal interests, which is required to “warrant the issuance of a
declaratory judgment.” Labor Relations Div., 844 F.3d at 326. At oral argument,
plaintiffs’ counsel stressed that it is customary for parties to file declaratory judgment
coverage actions prior to a finding of liability or settlement in the underlying case, and a
ruling that the plaintiffs’ claim is not ripe would threaten to upend that custom.19 While
that argument has some appeal, the court’s jurisdictional requirements cannot yield to
counsel’s experience or practical customs in the trial bar. In choosing to file suit in
federal court, the plaintiffs must plead facts from which the court can determine that it
17 Indeed, in Weinhold, the underlying tortfeasor (the State) and the injured party (Weinhold) were aligned as plaintiffs and filed suit together after the State’s insurers refused to indemnify it. The plaintiffs here are not similarly aligned with the tortfeasor defendants. Moreover, the court’s understanding based on the pleadings is that the insurers have not similarly refused to indemnify their insureds or otherwise denied coverage. 18 The plaintiffs allege that the tortfeasor defendants dispute their interpretation of the policy limit erosion provision of the Fraternal policy, so that element of the plaintiffs’ claim is arguably fit for judicial review. See doc. no. 3-1, at ¶ 32. For the reasons discussed in the next section, however, the plaintiffs cannot satisfy the hardship element for this aspect of their claim, so the claim still fails the ripeness test. 19 Counsel for Gemini Insurance Company pointed out, however, that it is just as customary for New Hampshire courts to stay premature declaratory judgment coverage disputes until the underlying cases are resolved. Based on this court’s experience, both pronouncements ring true. 17 has jurisdiction. The plaintiffs’ complaint falls short of that mark. In so ruling, the court
is not requiring that a party must obtain a judgment or settlement in the underlying
litigation before an insurance coverage dispute can be ripe. Rather, under these facts and
circumstances, allegations of a more concrete, present dispute are required to invoke this
court’s jurisdiction. Part A of the declaratory relief requested by the plaintiffs is
accordingly not fit for judicial review.
Hardship. Nor can the plaintiffs satisfy the hardship element of the ripeness test.
The court may find hardship when “the challenged action creates a direct and immediate
dilemma for the parties.” Sindicato Puertorriqueño de Trabajadores v. Fortuno, 699 F.3d
1, 9 (1st Cir. 2012) (internal quotation marks omitted). “In general, the greater the
hardship, the more apt a court will be to find ripeness.” Ernst & Young, 45 F.3d at 536.
The court found the hardship element satisfied in Weinhold because “the underlying
action [could not] be resolved until the State’s right to indemnification is determined.”
2018 WL 5085707, at *6.
The same cannot be said here. Determining the scope of coverage is not a
roadblock to resolving the underlying tort action. While it may give the plaintiffs more
information for mediation (and mediation is not a given), and possibly help the plaintiffs’
settlement position, it will not ensure that the case will settle. In fact, the sought-after
declaration will not even set “the underlying controversy to rest,” as summary judgment
briefing still must be completed and there may be a trial, regardless of whether the court
determines the scope of liability insurance coverage. Narragansett Indian Tribe, 19 F.3d
at 693. Moreover, the “conditional nature of the claims [here] strongly counsels against a
18 finding of hardship.” Labor Relations Div., 844 F.3d at 326. Thus, the absence of a
coverage determination does not present a “direct and immediate dilemma” for the
plaintiffs, or the tortfeasor defendants or insurers, in the sense required for a hardship
showing. As the plaintiffs cannot satisfy either element of the ripeness test, the court
does not have jurisdiction over their claim and dismisses it without prejudice. While at
oral argument several of the defendants and the plaintiffs raised the option of staying this
case pending resolution of the underlying tort case as an alternative to dismissing it,
because ripeness is a jurisdictional issue, the “court has no alternative but to dismiss an
unripe action.” Ernst & Young, 45 F.3d at 535.
D. Timeliness20
Finally, some of the defendants21 argue that the plaintiffs’ suit is untimely because
it was not filed within six months after they filed the operative complaint in the
underlying tort action. See RSA 491:22, III (“No petition shall be maintained under this
section to determine coverage of an insurance policy unless it is filed within 6 months
after the filing of the writ, complaint, or other pleading initiating the action which gives
rise to the question”). The plaintiffs concede that they did not file this lawsuit within six
months of when they filed the underlying tort suit.22 They argue, however, that at least
20 Defendant American Empire also raises a merits argument that the court need not consider at this time. 21 The Newport Lodge, Moose International, and Fraternal do not move to dismiss the plaintiffs’ complaint on timeliness grounds. See doc. no. 28. 22 Using October 9, 2020 (the date the court consolidated the plaintiffs underlying tort suits against the Newport Lodge and Moose International and accepted the plaintiffs’ First Amended Consolidated Complaint) as the date from which the six-month limitations period began to run, 19 one of the exceptions to the six-month limitations period applies because they did not
learn of certain key information giving rise to this coverage dispute until well into the
discovery period in the underlying litigation.23
The problem with this argument is that the plaintiffs plead insufficient facts to
support the application of any exception. The plaintiffs instead raised these facts in their
objections to the defendants’ motions to dismiss and documents attached to those
objections. A party cannot, however, amend its complaint through an objection to a
motion to dismiss. Thus, had the timeliness issue not been rendered moot by the court’s
dismissal of the claim on ripeness grounds, the court would have been inclined to dismiss
this action as untimely, without prejudice to the plaintiffs’ ability to amend its petition to
add allegations sufficient to support an exception to the six-month limitations period.
Had the court allowed amendment, it would have required plaintiffs’ counsel to explain
why they did not include facts supporting tolling of the limitations period – facts that the
plaintiffs had at their disposal at the time they filed their first amended complaint – in that
version of the complaint.
this suit was untimely as the plaintiffs did not file it until August 2021. See Binda v. Royal Ins. Co., 144 N.H. 613, 619 (2000) (holding “that an amended writ triggers a new six-month limitations period under RSA 491:22, III when new factual or legal allegations change the cause of action in a manner that raises a coverage issue for the first time”). 23 The six-month period may be extended “where the facts giving rise to such coverage dispute are not known to, or reasonably discoverable by, the insurer until after” the period expires or where “the failure to file [a timely] petition was the result of accident, mistake or misfortune and not due to neglect.” RSA 491:22, III. These exceptions apply to both insurers and insureds. See Mottolo v. U.S Fidelity & Guar. Co., 127 N.H. 279, 283 (1985). 20 If the plaintiffs re-file this action, or some modified version of it, at a later date,
and plead sufficient facts to support an exception to the six-month limitations period, the
court is inclined to use the filing date of the first amended complaint here (August 16,
2021, see doc. no. 3-1) as the operative date for statute of limitations purposes. The court
cautions defense counsel that it will likely summarily deny or view with skepticism any
motions to dismiss a re-filed version of this action on timeliness grounds.
Conclusion
For the reasons set forth above, Newport Lodge, Moose International, and
Fraternal Insurance Company, Inc.’s motion to dismiss24 is GRANTED. The remaining
defendants’ motions to dismiss25 are DENIED as moot. The plaintiffs’ complaint for
declaratory judgment is dismissed without prejudice. The clerk shall enter judgment
accordingly and close the case.
SO ORDERED.
_____________________________ Joseph N. Laplante United States District Judge Dated: January 31, 2022
cc: Philip R. Waystack, Jr., Esq. Rebecca Anne Witmon, Esq. Gregory P. Howe, Esq. Matthew J. Lahey, Esq. John M. Dealy, Esq.
24 Doc. no. 28. 25 Doc. nos. 20, 21, and 31. 21 Scott T. Ober, Esq. John Piegore, Esq. Brett Richard Corson, Esq. Katherine Tammaro, Esq. Mark Robert Vespole, Esq. Naomi L. Getman, Esq. Dorren F. Connor, Esq.