Summary
The Supreme Court of New Hampshire reviewed an insurance coverage dispute arising from a slip-and-fall accident and a default judgment against a bathroom cleaner. The court held that the cleaner qualified as a "volunteer worker" under the policy because the disputed terms concerning donated work, compensation, and acting at the policyholder’s direction were ambiguous and construed in favor of coverage. The court affirmed the ruling as to Essex Insurance Company, reversed the rulings concerning Markel Corporation and Markel Services, and remanded for entry of summary judgment in favor of those entities.
Topics
Practice areas
Questions Presented
- Whether Markel Corporation and Markel Services were entitled to summary judgment because they did not issue the insurance policy and had no contractual relationship with Brames.
- Whether Banks qualified as a 'volunteer worker' and therefore an insured under the Essex policy.
- Whether the policy terms requiring that a volunteer worker donate work, receive no fee, salary, or other compensation, and act at the policyholder's direction were ambiguous and, if so, whether they should be construed in favor of coverage.
- Whether Essex was judicially estopped from denying coverage.
Holdings
- Markel Corporation and Markel Services were entitled to summary judgment because the action concerned the insurance contract with Essex and Newell did not contend that those entities had a contractual relationship with Brames.
- Banks qualified as a volunteer worker under the policy because each disputed policy term—whether he donated his work, received compensation, and acted at Brames's direction—was susceptible to at least two reasonable interpretations, and the reasonable interpretation providing coverage controlled.
- The court did not need to address Newell's judicial-estoppel argument because it independently concluded that Banks qualified as a volunteer worker under the policy.
Key quotations
“We agree with Newell that, at least in the context of unskilled labor, the phrase “at your direction” can reasonably be read to mean something other than “supervision or guidance” as urged by Essex.” (at 6-7)
“Having determined that all of the disputed provisions must be construed in favor of coverage, we conclude that the trial court did not err in ruling that Banks was a “volunteer worker” under the Policy.” (at 7)
Factual background
Michael Newell was allegedly injured in June 2010 when he slipped on a wet bathroom floor at property owned by Brames, Inc., during Motorcycle Week. Ivy Banks had cleaned the bathrooms for Brames for several years in exchange for tips from patrons, receiving no other payment. After Newell settled a negligence action against Brames, he sued Banks; Banks defaulted, and a $300,000 default judgment was entered against him. Newell then sought to recover that judgment from the insurers and claims-handling entities, asserting that Banks was an insured under Brames's Essex liability policy.
Procedural history
Newell obtained a $300,000 default judgment against Ivy Banks in a personal injury action after Banks failed to appear or answer. Newell then sued Markel Corporation, Markel Services, and Essex Insurance Company, alleging that Banks was an insured under Brames's Essex liability policy and that the defendants breached their duties to defend and indemnify him. On cross-motions for summary judgment, the Superior Court ruled that Banks qualified as a volunteer worker under the policy and granted summary judgment to Newell. The Supreme Court of New Hampshire reversed the rulings concerning Markel Corporation and Markel Services, affirmed the coverage ruling concerning Essex, and remanded.
Remand instructions
Reverse the summary-judgment rulings concerning Markel Corporation and Markel Services and remand for entry of summary judgment in favor of those entities. The court affirmed the trial court's ruling that Banks was a volunteer worker under the Essex policy.