Progressive Northern Insurance v. Argonaut Insurance
161 N.H. 778
| N.H. | 2011Background
- On June 7, 2006, Kelly left his car for service at Tom's Auto Sales, which his parents own and operate; Tom's loaned Kelly a 1991 Honda Accord as a loaner while his car was serviced.
- The next day, Kelly was involved in a car accident with Morasse, leading Morasse and wife to sue Kelly for negligence and loss of consortium.
- Kelly had a Progressive auto policy with $100,000 per person liability limits; Tom's garage policy issued by Argonaut provided $25,000 and $750,000 limits depending on circumstances.
- Argonaut investigated and concluded Kelly’s use of the loaner was personal, not a scheduled driver, and that Argonaut would defend Kelly under the $25,000 limit; Progressive contended Argonaut must defend and indemnify Kelly under Argonaut’s $750,000 policy.
- The trial court held Argonaut’s coverage was primary up to $750,000 and Progressive’s was excess, with defense costs allocated on a pro rata basis; Argonaut appealed.
- This appeal followed to determine whether Argonaut’s $25,000 endorsement governs, and how primary/excess and defense-cost allocations should be interpreted under the policies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the endorsement limits Argonaut to $25,000 under Kelly’s use of the loaner | Argonaut: use not within garage operations; Progressive: broader coverage. | Argonaut: loaner use falls within garage operations and the endorsement applies; Progressive: argues excess/primary interplay. | Endorsement applies; Argonaut’s coverage remains $25,000 only if use is not within garage operations; here, use is within garage operations, so endorsement limits apply. |
| Whether Kelly’s use of the loaner auto was for garage operations | Progressive contends broader interpretation supports garage use. | Argonaut argues garage operations include use necessary or incidental to garage business. | We adopt Argonaut’s interpretation that garage operations includes necessary/incidental use; Kelly’s use as a loaner was incidental to Tom’s garage business. |
| Whether Argonaut’s primary coverage and Progressive’s excess coverage should apply pro rata | Argonaut: pro rata sharing when both coverages apply on same basis. | Progressive: Argonaut primary, Progressive excess; no same-basis coverage triggering pro rata. | Argonaut provides primary coverage; Progressive provides excess; Argonaut pro rata language not triggered. |
| Whether defense costs should be shared between Argonaut and Progressive | Argonaut contends defense costs should be pro rata; raised in the appeal. | Progressive: not preserved in notice of appeal; plain-error analysis inappropriate. | Defense-cost allocation not properly preserved by the notice of appeal; no plain-error finding. |
Key Cases Cited
- Marikar v. Peerless Ins. Co., 151 N.H. 395 (2004) (defense obligation determined by pleadings and policy language)
- Weeks v. Co-Operative Ins. Cos., 149 N.H. 174 (2003) (avoid reading exclusions to render them meaningless)
- Int'l Surplus Lines Ins. Co. v. Mfrs. & Merchants Mut. Ins. Co., 140 N.H. 15 (1995) (policy language not to be treated as surplusage; interpret to give effect)
- Concord Gen. Mut. Ins. Co. v. Green & Co. Bldg. & Dev Corp., 160 N.H. 690 (2010) (interpretation of policy language; plain meaning when unambiguous)
- Henry ex rel. Weis v. General Cas. Co., 225 Wis. 2d 849 (1999) (interpretation of garage-operations concepts in coverage)
- Spangle v. Farmers Ins. Exchange, 166 Cal. App. 4th 560 (2008) (divergent interpretations of garage-operations definitions)
- Lambert v. Northwestern Nat. Ins. Co., 769 P.2d 1152 (1989) (interpretation of garage-operations and incidental use)