UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Natasha Urena and Daniel Rodriguez, Administrators of the Estate of Juliana Rodriguez Morel Case No. 22-cv-200-PB v. Opinion No. 2024 DNH 006
Travelers Casualty and Surety Company of America
MEMORANDUM AND ORDER
This insurance declaratory judgment action stems from an underlying
action in which the plaintiff, Juliana Rodriguez Morel, received a default
judgment against her former employer for pregnancy discrimination and
wrongful termination. Rodriguez Morel filed the instant action seeking a
declaratory judgment that Travelers Casualty and Surety Company of
America, her employer’s insurer, is obligated to pay the judgment against her
employer. Travelers filed a motion to dismiss contending that Rodriguez
Morel lacks standing to bring this action and that, in any event, the claim is
untimely. I. BACKGROUND
Rodriguez Morel was employed by Mammoth Tech, Inc., an Ohio-based
corporation with branch offices in New Hampshire and California. 1 Doc. 1-1
at 43. Following her termination from the Manchester office, Rodriguez Morel
filed a complaint against Mammoth on January 15, 2021, asserting multiple
state and federal law claims for pregnancy discrimination and wrongful
discharge. Id. at 72; see Rodriguez Morel v. Mammoth Tech, Inc., 21-cv-40-
AJ. Rodriguez Morel ultimately obtained a default judgment in that action
for $303,592.20. Doc. 20-3 at 2.
On May 2, 2022, Rodriguez Morel filed this action against Travelers,
seeking a declaration that an employment practices liability insurance policy
(EPL policy) issued to Mammoth by Travelers obligates Travelers to pay the
default judgment against Mammoth. 2 Doc. 1-1 at 5. The complaint was
originally filed in New Hampshire state court and then removed to this court
on the basis of diversity. Doc. 1 at 1. Travelers has filed a motion to dismiss
1 Mammoth was known by a different name when Rodriguez Morel worked there. Doc. 20-3 at 1. I refer to the company by its current name throughout this order.
2 Rodriguez Morel passed away a few months after filing this action, and the co-administrators of her estate were substituted as parties pursuant to Federal Rule of Civil Procedure 25. Doc. 13. For the sake of clarity, I refer throughout this order to the original plaintiff, Rodriguez Morel, rather than the co-administrators of her estate.
2 Rodriguez Morel’s complaint pursuant to Federal Rule of Civil Procedure
12(b)(6).
II. STANDARD OF REVIEW
To survive a motion to dismiss based on Rule 12(b)(6), 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)). This standard “demands more
than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. A
claim is facially plausible if it “pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id.
In testing a complaint's sufficiency, the court employs a two-step
approach. See Ocasio–Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir.
2011). First, the complaint is screened for statements that “merely offer legal
conclusions couched as fact or threadbare recitals of the elements of a cause
of action.” Id. (cleaned up). A claim consisting of little more than “allegations
that merely parrot the elements of the cause of action” may be dismissed. Id.
Second, after crediting as true all non-conclusory factual allegations and the
reasonable inferences drawn from those allegations, the court determines if
the claim is plausible. Id. The plausibility requirement “simply calls for
enough fact to raise a reasonable expectation that discovery will reveal
3 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. of P.R., 628 F.3d 25, 29 (1st Cir. 2010).
III. ANALYSIS
The parties disagree as to whether this case is governed by Ohio law or
New Hampshire law. If Ohio law applies, Travelers argues that Rodriguez
Morel’s action is barred because Ohio does not permit a direct action against
a wrongdoer’s insurer unless she has suffered bodily injury or property
damage. If New Hampshire law applies, it argues that Rodriguez Morel
cannot sue Travelers both because she lacks standing to sue and because her
claim is barred by New Hampshire’s six-month statute of limitations for
insurance coverage actions. I resolve the choice of law problem before turning
to the merits.
A. Choice-of-Law Analysis
“A federal court sitting in diversity jurisdiction must employ the choice-
of-law principles of the forum state . . . .” Auto Europe, LLC v. Conn. Indem.
Co., 321 F.3d 60, 64 (1st Cir. 2003). Under New Hampshire’s choice-of-law
rules, a “contract is to be governed, both as to validity and performance, by
the law of the state with which the contract has its most significant
relationship.” Consol. Mut. Ins. Co. v. Radio Foods Corp., 108 N.H. 494, 496
4 (1968). In the context of insurance contracts, “the State which is the
‘principal location of the insured risk’ bears the most significant relationship
to the contract.” Glowski v. Allstate Ins. Co., 134 N.H. 196, 198 (1991)
(quoting Ellis v. Royal Ins. Co., 129 N.H. 326, 331 (1987)). Where, however, “a
policy covers risks in more than one state, it is considered a multiple risk
policy, and the principal location of the insured risk may be in more than one
state.” Cadell v. XL Specialty Ins. Co., No. 11-cv-394-JD, 2012 WL 2359975,
at *2 (D.N.H. June 20, 2012). In such a case, each individual risk is “treated
as though it were insured by a separate policy,” and the policy is governed by
the laws of the state where the individual risk at issue is located. Cecere v.
Aetna Ins. Co., 145 N.H. 660, 664 (2001) (quoting Ellis, 129 N.H. at 331);
accord Restatement (Second) of Conflict of Laws § 193 cmt. f (noting that
“multiple risk policies which insure against risks located in several states”
may be treated “as if it involved [multiple] policies, each insuring an
individual risk”).
Rodriguez Morel asserts that the EPL policy is a multiple risk policy
that should be interpreted according to the law of New Hampshire, the place
where the risk giving rise to her claims was located. Travelers asserts that
the policy is not a multiple risk policy because “there is no indication that the
[policy] extended to risks outside of Ohio.” Doc. 24 at 2. I agree with
Rodriguez Morel.
5 The EPL policy expressly states that it “applies anywhere in the world”
and covers losses resulting from “any Employment Claim . . . for a Wrongful
Employment Practice” against Mammoth or its employees. Doc. 20-2 at 28,
69. Its coverage is not limited to employment claims brought under Ohio law,
but rather encompasses claims brought under the law of any state. See, e.g.,
id. at 69 (defining “discrimination” to include a “violation of any employment
discrimination law”); id. at 73 (defining a “third party wrongful act” to
include a “violation of any federal, state, or local law or statute or any
common law prohibiting any kind of discrimination”); id. at 14 (defining
“wage and hour law” to include “any federal, state, or local law or regulation
governing or related to the payment of wages”). The insured risk, therefore,
could arise in any state where Mammoth had employees. According to the
complaint, Mammoth employed individuals in at least three states: Ohio,
New Hampshire, and California. Doc. 1-1 at 43. Thus, the EPL policy covers
risks in multiple states and is therefore a multiple risk policy that must be
controlled by the law of New Hampshire, where the individual risk at issue
was located. See Raymond v. Monsanto Co., 329 F. Supp. 247, 249 (D.N.H.
1971) (“This policy was clearly intended to cover liability for personal injuries
wherever such injuries were incurred throughout the United States and is,
therefore, a multiple risk policy.”); Northland Cas. Co. v. HBE Corp., 145 F.
Supp. 2d 1310, 1314 (M.D. Fla. 2001) (finding that a general liability policy
6 covering a hotel corporation that operated hotels in multiple states was a
multiple risk policy); cf. Auto Europe, LLC, 321 F.3d at 65 (“a policy covering
numerous related companies located in different states would be deemed a
multiple risk policy that . . . would be viewed in a particular case as if a
separate policy had been issued to cover each entity.”).
This case is thus comparable to Ellis v. Royal Insurance Co., where the
New Hampshire Supreme Court applied its own state law to an insurance
policy that covered multiple automobiles located across various states. 129
N.H. at 331-332. The court noted that, although the policy was held by a New
Jersey corporation, “the fact remain[ed] that the policy covered a multitude of
risks located in various States” and therefore constituted a multiple risk
policy. Id. at 332. Thus, the policy was governed by the law of New
Hampshire, where the automobile at the center of the plaintiff’s claims was
located. Id.
Travelers’ attempts to distinguish the present case from Ellis are
unavailing. Travelers notes, first, that the policy in Ellis specifically covered
automobiles located in New Hampshire, whereas the EPL policy at issue here
did not “specifically insure[] a risk located in New Hampshire.” Doc. 24 at 2.
But, as I explained, the plain language of the EPL policy provides that it
covers risks arising out of Mammoth’s employment practices wherever they
may occur. That the policy did not specifically identify Mammoth’s New
7 Hampshire branch office does not mean that it did not cover its operations in
this state. See Westchester Fire Ins. Co. v. G. Heileman Brewing Co., 747
N.E.2d 955, 964 (Ill. App. Ct. 2001) (noting that a commercial liability
insurance policy that failed to “list the individual states where [the insured]
operated” was nonetheless a multiple risk policy because “the insured risk
could occur in any state where [the insured] conducted its business” and the
policy “provide[d] coverage without regard to location of risks”).
Travelers next asserts that Ellis is distinguishable because the policy
in that case included an “endorsement providing for limited uninsured
motorist coverage in New Hampshire,” whereas the policy here does not
reference New Hampshire. Doc. 24 at 2 (quoting Ellis, 129 N.H. at 332). But
the court’s conclusion in Ellis did not turn on the policy’s New Hampshire-
specific endorsement or its reference to New Hampshire. Rather, the court’s
holding was explicitly premised on the fact that the insured’s “business and
insurance coverage extend[ed] to a number of States, including New
Hampshire.” Ellis, 129 N.H. at 332.
While a specific reference to a state may be one way to indicate that a
policy’s coverage extends to that state, it is by no means the only way. For
example, in Raymond v. Monsanto Co., this court concluded that a personal
injury liability insurance policy was a multiple risk policy because it covered
a product that was sold across the United States. 329 F. Supp. at 249-250
8 (cited favorably in Ellis, 129 N.H. at 332). Although the policy did not appear
to include any specific reference to New Hampshire, the court reasoned that
the policy “was clearly intended to cover liability for personal injuries
wherever such injuries were incurred throughout the United States and
[was], therefore, a multiple risk policy” subject to the law of New Hampshire,
where the accident giving rise to the underlying action occurred. Id. at 249.
Because the EPL policy at issue in this case clearly covers risks arising
out of Mammoth’s employment operations in New Hampshire, it is of no
consequence that the policy does not specifically reference New Hampshire.
The fact remains that it is a multiple risk policy to be governed by the law of
state where the relevant risk was located. Accordingly, I evaluate the merits
of the parties claims under New Hampshire law.
B. Standing
Travelers asserts that Rodriguez Morel lacks standing to bring a
declaratory judgment action against it. 3 New Hampshire’s declaratory
judgment statute, N.H. Rev. Stat. Ann. § 491:22, permits “[a]ny person
3 To be clear, Travelers does not contest that Rodriguez Morel has Article III standing, and Rodriguez Morel clearly satisfies the constitutional requirements for standing. See TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) (noting that a plaintiff has constitutional standing where she demonstrates “a concrete and particularized injury caused by the defendant and redressable by the court”). Travelers’ only contention is that Rodriguez Morel does not have statutory standing under § 491:22.
9 claiming a present legal or equitable right or title” to bring a declaratory
judgment action against “any person claiming adversely to such right or
title.” To establish standing under § 491:22, a “party must show that some
right of the party has been impaired or prejudiced.” Carlson v. Latvian
Lutheran Exile Church of Bos. & Vicinity Patrons, Inc., 170 N.H. 299, 303
(2017). This requires the party to demonstrate that “the facts are sufficiently
complete, mature, proximate and ripe to place the party in gear with the
party’s adversary, and thus to warrant the grant of judicial relief.” Id.
(quoting Duncan v. State, 166 N.H. 630, 645 (2014)).
Travelers argues that Rodriguez Morel cannot claim a “present legal or
equitable right” within the meaning of § 491:22 because (1) New Hampshire
does not have a direct action statute permitting an injured party to proceed
directly against a wrongdoer’s insurer; and (2) Rodriguez Morel is not a third-
party beneficiary of the insurance contract. Neither argument has merit.
Travelers’ assertion that Rodriguez Morel cannot pursue a declaratory
judgment action in the absence of a direct action statute ignores the critical
distinction between direct actions and declaratory judgment actions. A direct
action 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.” Currier v.
Newport Lodge No. 1236, 2022 DNH 011, 2022 WL 279639, at *4 (D.N.H.
Jan. 31, 2022). An insurance declaratory judgment action, in contrast, “seeks
10 a determination of whether coverage exists under certain insurance policies.”
Id. at *5.
Declaratory judgment actions and direct actions are entirely distinct
causes of action that seek “fundamentally different relief” and impose
“different jurisdictional prerequisites.” Id. at *5 & n.11. Thus, the right to
bring a declaratory judgment action exists independently of the right to bring
a direct action. Id. at *5 (concluding that a plaintiff could pursue a
declaratory judgment action against a wrongdoer’s insurer, even though it
could not bring a direct action). Because this case is a declaratory judgment
action rather than a direct action, it is irrelevant that New Hampshire does
not have a direct action statute. See Doc. 1-1 at 5 (stating that Rodriguez
Morel is “seeking a declaration under RSA 491:22 that [Travelers] must
defend against and pay for losses stemming from her ‘employment claims’
against [Mammoth]”); id. at 14-15 (petitioning “for declaratory judgment”
that “Travelers is obligated to defend against and pay for all losses resulting
from Ms. Rodriguez Morel’ ‘Employment Claims’”).
Travelers’ argument that Rodriguez Morel lacks standing because she
is not a third-party beneficiary to the insurance contract fares no better.
Under New Hampshire law, a “third-party beneficiary relationship exists
if . . . the contract calls for a performance by the promisor, which will satisfy
some obligation owed by the promisee to the third party.” Brooks v. Tr. of
11 Dartmouth Coll., 161 N.H. 685, 697 (2011). The Restatement (Second) of
Contracts explains that this test is satisfied where a promisor agrees to
satisfy another’s debts by directly paying the debtor’s creditors. Restatement
(Second) of Contracts § 302 cmt. b, illus. 3 (relied on in Brooks, 161 N.H. at
697); see also Dartmouth Hitchcock Med. Ctr. v. Cross Country Travcorps,
Inc., 2010 DNH 102, 2010 WL 2407375, at *5 (D.N.H. June 10, 2010) (noting
the New Hampshire Supreme Court’s reliance on the Restatement (Second) of
Contracts when determining third-party beneficiary rights).
Here, the EPL policy provides that Travelers will “pay on behalf of
[Mammoth]” any “money which [Mammoth] is legally obligated to pay as a
result of a Claim” covered by the policy. Doc. 20-2 at 69, 71. Because the
policy requires Travelers to satisfy debts owed by Mammoth to its judgment
creditors, Mammoth’s judgment creditors are third-party beneficiaries. Thus,
Rodriguez Morel became third-party beneficiary with standing to maintain a
declaratory judgment action against Travelers by virtue of obtaining a final
judgment against Mammoth.
Applying similar reasoning, a number of courts have concluded that an
injured party becomes a third-party beneficiary to an insured’s liability
insurance contract upon obtaining a final judgment against the insured. See,
e.g., Morales v. Zenith Ins. Co., 714 F.3d 1220, 1232 (11th Cir. 2013)
(applying Florida law); CX Reinsurance Co. Ltd. v. Johnson, 282 A.3d 126,
12 146 (Md. 2022); State Farm Cnty. Mut. Ins. Co. of Tex. v. Ollis, 768 S.W.2d
722, 723 (Tex. 1989); Zahn v. Gen. Ins. Co. of Am., 611 P.2d 645, 647 (Okla.
1980); Reagor v. Travelers Ins. Co., 415 N.E.2d 512, 514 (Ill. App. Ct. 1980);
see also Allan Windt, 2 Insurance Claims & Disputes § 9:16 (6th ed. 2023);
Jordan Plitt et. al., 17 Couch on Insurance § 242:24 (3d ed. 2023). Although
the New Hampshire Supreme Court has not directly addressed the issue, its
case law suggests that it would recognize that judgment creditors are third-
party beneficiaries of liability insurance contracts. Without discussing the
question of third-party beneficiary status, the court in Newell v. Markel Corp.
nonetheless affirmed a finding in favor of a plaintiff who sued his tortfeasor’s
insurer for breach of contract on the theory that he became a third-party
beneficiary to the insurance policy by obtaining a default judgment against
the tortfeasor. 169 N.H. 193, 194 (2016).
Even Milestone Engineering & Construction, Inc. v. Fire Equipment,
Inc.—the case primarily relied on by Travelers—endorses the theory that a
judgment creditor is a third-party beneficiary of a liability insurance policy.
2013 DNH 171, 2013 WL 65533143, at *2 (D.N.H. Dec. 13, 2013). Travelers
cites to Milestone for its conclusion that the plaintiff, a tort victim, was not a
third-party beneficiary based on the language of the relevant insurance
policy. Id. But, because the plaintiff in that case had not yet obtained a final
judgment against the insured, Milestone does not stand for the proposition
13 that judgment creditors are not third-party beneficiaries. See id. at *1. To the
contrary, the court explicitly recognized that third-party beneficiary status
may be achieved by virtue of “an explicit admission of [the insured’s] liability
or a judicial determination of the same.” Id. at *2 (quoting Shaheen v.
Preferred Mut. Ins. Co., 668 F. Supp. 716, 718 (D.N.H. 1987)) (alterations in
original). Relying on this principle, the court ultimately concluded that the
plaintiff was a third-party beneficiary “on the alternative ground that [the
insurer] conceded [the insured’s] liability.” Id. Milestone therefore
undermines, rather than supports, Travelers’ argument.
For these reasons, I conclude that Rodriguez Morel, as a judgment
creditor, has standing to bring the present declaratory judgment action
against Travelers.
C. Statute of Limitations
Travelers next argues that the complaint should be dismissed as
untimely because it falls outside the declaratory judgment statute’s six-
month statute of limitations. Section 491:22 provides that “[n]o 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
six-month statute of limitations does not apply, however, (1) under the “late
discovery exception” if either “the facts giving rise to such coverage dispute
14 are not known to, or reasonably discoverable by, the insurer” until after the
six-month period or (2) under the “misfortune exception” if a court finds that
the failure to file was “the result of accident, mistake or misfortune and not
due to neglect.” N.H. Rev. Stat. Ann. § 491:22, III; see Quincy Mut. Fire Ins.
Co. v. Croteau, 127 N.H. 676, 678 (1986).
Travelers asserts that Rodriguez Morel’s claim is time-barred because
it was filed more than a year after she initiated the underlying action against
Mammoth. Rodriguez Morel does not contest that the instant complaint was
filed outside the six-month limitation period. Instead, she asserts that her
claim is exempt from the statute of limitations under both the late discovery
exception and the misfortune exception.
The statute of limitations is an affirmative defense on which a
defendant bears the burden of proof. Riso v. Riso, 172 N.H. 173, 178-179
(2019); see Fed. R. Civ. P. 8(c)(1). Under the Federal Rules of Civil Procedure,
“a complaint need not anticipate or overcome affirmative defenses.” Schmidt
v. Skolas, 770 F.3d 241, 248 (3d Cir. 2014). Accordingly, dismissal under Rule
12(b)(6) based on an affirmative defense is inappropriate unless the relevant
facts “(1) [are] ‘definitively ascertainable from the complaint and other
allowable sources of information,’ and (2) ‘suffice to establish the affirmative
defense with certitude.’” Gray v. Evercore Restructuring LLC, 544 F.3d 320,
324 (1st Cir. 2008) (quoting Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir.
15 2006)). In other words, before a motion to dismiss can be granted on the basis
of an affirmative defense, the plaintiff must “affirmatively plead himself out
of court” by alleging “everything necessary to satisfy the affirmative defense.”
Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 936, 939 (7th Cir. 2016)
(cleaned up).
Applying this principle to motions to dismiss for failure to comply with
the statute of limitations, courts have regularly held that even a facially
untimely case should proceed if the allegations in the complaint leave open
the possibility that an exception to the statute of limitations could apply. See,
e.g., Schmidt, 770 F.3d at 251-252 (holding that a district court erred in
granting a motion to dismiss on statute of limitations grounds, despite the
lower court’s finding that the plaintiff did not adequately allege that an
exception to the statute of limitations applied, because “a plaintiff is not
required to plead, in the complaint, facts sufficient to overcome an
affirmative defense”); Supermail Cargo Inc. v. United States, 68 F.3d 1204,
1206 (9th Cir. 1995) (quoting Jablon v. Dean Witter & Co., 614 F.2d 677, 682
(9th Cir. 1980)) (“A motion to dismiss based on the running of the statute of
limitations period may be granted only ‘if the assertions of the complaint,
read with the required liberality, would not permit the plaintiff to prove that
the statute was tolled.’”). Accordingly, courts generally do not grant motions
to dismiss on statute of limitations grounds unless either an exception to the
16 statute is unavailable to the plaintiff as a matter of law, see, e.g., Gorelik v.
Costin, 605 F.3d 118, 121 (1st Cir. 2010); Trans-Spec Truck Serv., Inc. v.
Caterpillar, Inc., 524 F.3d 315, 323-324 (1st Cir. 2008); or the factual
allegations in the complaint are incompatible with the facts necessary to
establish such an exception, see, e.g., Brawner v. Educ. Mgmt. Corp., 513 F.
App’x 148, 151 (3d Cir. 2013) (per curiam).
Such is not the case here. Nothing in the complaint indicates that
Rodriguez Morel could not ultimately establish that her claim fits within one
or more of the exceptions to the six-month statute of limitations. Despite
Travelers’ argument to the contrary, the New Hampshire Supreme Court has
held that the late discovery exception can be invoked by plaintiffs as well as
insurers. Singer v. Travelers Indem. Co., 120 N.H. 879, 881 (1980) (holding
that a plaintiff could bring a declaratory judgment action under § 491:22 past
the expiration of the six-month statute of limitations because “[o]nce it is
determined that [the late discovery exception] is applicable, the six-month
prohibition does not apply to either party”). And, because the complaint
asserts that Travelers did not render its coverage decision until February
2022, the pleadings leave open the possibility that Rodriguez Morel filed her
complaint within six months of the date that Travelers learned of the facts
that gave rise to the coverage dispute. Doc. 1-1 at 101. The complaint
similarly leaves open the possibility that the misfortune exception could
17 apply. Although not directly addressed by the pleadings, the allegations in
the complaint do not in any way undermine the assertion that the late filing
was due to misfortune rather than neglect. Cf. Schmidt, 770 F.3d at 252
(concluding that a district court erred in dismissing claims for failure to
comply with the statute of limitations where the plaintiff could claim the
benefit of the discovery rule because “nothing in [the] complaint clearly
suggests that [the plaintiff] did in fact have knowledge of the full scope of his
injury” prior to the time of filing). Thus, dismissal based on the running of
the statute of limitations is not appropriate at this time.
IV. CONCLUSION
For the foregoing reasons, Travelers’ motion to dismiss (Doc. 20) is
denied.
SO ORDERED. /s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge
February 2, 2024
cc: Counsel of Record