Great American Insurance v. Christy
164 N.H. 196
| N.H. | 2012Background
- Christy & Tessier, P.A. had a professional liability policy with GAIC from 2001 onward; renewal applications were required annually.
- Tessier engaged in serial misappropriations from Beatrice Jakobiec’s estate and related accounts between 2002 and 2006; Tessier later admitted wrongdoing and settled with Jakobiec in 2007.
- Christy allegedly enabled Tessier’s scheme by certifying documents and acting as appraiser, though no evidence showed Christy knew of Tessier’s thefts prior to 2007 renewal.
- In 2007 Tessier and Jakobiec entered a settlement; Tessier acknowledged debt and set a repayment plan, with limited ability to pay remaining balance.
- GAIC sought rescission of the 2007-2008 policy after discovering Tessier’s misconduct; Christy signed a renewal application answering no claims were known, with Tessier’s knowledge arguably concealed.
- Trial court held Tessier’s knowledge could be imputed to Christy, and that misstatements were material; policy rescission was entered against all insureds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tessier’s knowledge is imputable to Christy for renewal | GAIC argues imputed knowledge justifies rescission. | Christy argues only actual knowledge of the insured who committed the act should be imputed. | Imputation denied; innocent insureds may be covered. |
| Whether misrepresentation on renewal was material | GAIC contends the misstatement materially affected underwriting. | Christy and Johnson contend misstatement was not attributable to them personally or was not material. | Ambiguity in imputation and materiality; need further proceedings on non-coverage grounds. |
| Whether innocent insureds are protected under the policy's innocent insured provision | GAIC relies on rescission to all insureds due to misstatement. | Innocent insureds should receive coverage if they did not personally participate and acted in good faith. | Policy language favors innocent insureds; remand for non-imputation analysis. |
| Whether rescission is proper as to all insureds | Rescission is appropriate given material misstatements. | Rescission should not penalize innocent insureds. | Trial court erred in imputing Tessier’s knowledge; remand for further proceedings. |
Key Cases Cited
- Bianco Prof. Assoc. v. Home Ins. Co., 144 N.H. 288 (N.H. 1999) (policy terms interpreted as plain meaning; ambiguities resolved in insured's favor)
- Brown v. Concord Group Ins. Co., 163 N.H. 522 (N.H. 2012) (policy language construed objectively; ambiguities favor insured)
- Calabraro v. Metropolitan Prop. & Cas. Ins. Co., 142 N.H. 308 (N.H. 1997) (ambiguities in exclusions interpreted for insureds)
- Progressive N. Ins. Co. v. Concord Gen. Mut. Ins. Co., 151 N.H. 649 (N.H. 2005) (exclusions must be clear and unambiguous)
- Cacavas v. Maine Bonding & Casualty Co., 128 N.H. 204 (N.H. 1986) (insurance contracts read as a whole; avoid anomalies in interpretation)
- Holloway v. Sacks and Sacks, Esqs., 713 N.Y.S.2d 162 (N.Y. App. Div. 2000) (innocent insured standard for imputed knowledge analysis)