Pelissier v. GEICO Gen. Ins. Co

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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Hillsborough-northern judicial district
Case No. 2022-0714
Citation: Pelissier v. GEICO Gen. Ins. Co., 2024 N.H. 60

SHANE PELISSIER & a.

v.

GEICO GENERAL INSURANCE COMPANY

Argued: October 3, 2023
Opinion Issued: October 25, 2024

Backus, Meyer & Branch, LLP, of Manchester (John A. Wolkowski on the
brief and orally), for the plaintiffs.

Getman, Schulthess, Steere & Poulin, P.A., of Manchester (Clara E.
Lyons on the brief and orally), for the defendant.

BASSETT, J.

¶1 The plaintiffs, Shane and Maura Pelissier, insured their automobile
through the defendant, GEICO General Insurance Company. The plaintiffs
filed suit against the defendant seeking underinsured motorist benefits four
and a half years after a motor vehicle accident with an underinsured driver.
The defendant moved for summary judgment on the ground that the plaintiffs’
automobile insurance policy contained a provision that required any lawsuit
filed by an insured against the defendant for damages caused by an
underinsured motorist be filed within three years of the date of the accident.
The Trial Court (Anderson, J.) denied the motion and transferred three
interlocutory appeal questions to this court. See Sup. Ct. R. 8. We answer the
first and third questions in the negative, need not address the second question,
and remand for further proceedings consistent with this opinion.

¶2 We accept the statement of the case and facts as presented in the
interlocutory appeal statement and rely upon the record for additional facts as
necessary. See State v. Hess Corp., 159 N.H. 256, 258 (2009). The plaintiffs
seek compensation for damages arising out of a July 29, 2017 automobile
accident. They assert that the other driver was at fault. The plaintiffs filed suit
against the alleged tortfeasor prior to the expiration of the three-year statute of
limitations for personal injury claims. See RSA 508:4, I (2010). The plaintiffs
maintain that it was not until November 2021 that they learned, during
discovery in their case against the alleged tortfeasor, that the tortfeasor’s
liability insurance policy limit was less than the plaintiffs’ accident-related
medical expenses. The plaintiffs formally notified the defendant of their intent
to file an underinsured motorist claim on November 5, 2021. On November 30,
2021, the defendant denied the plaintiffs’ underinsured motorist claim relying
on the “Statute of Limitations” provision (hereinafter, contractual limitations
provision) in the plaintiffs’ insurance policy that required the plaintiffs to file
suit for underinsured motorist benefits within three years of the date of the
accident — that is, within three years of July 29, 2017.

¶3 On February 19, 2022 — four and a half years after the accident but
less than three months after the defendant denied their claim — the plaintiffs
filed suit against the defendant seeking underinsured motorist benefits. The
defendant moved for summary judgment arguing that it was entitled to
judgment as a matter of law because the plaintiffs failed to bring suit within
three years of the date of the accident as required by the contractual
limitations provision.

¶4 The trial court denied the defendant’s motion. The trial court
reasoned that, because there is no breach of contract until the defendant’s
purportedly wrongful denial of an underinsured motorist claim, the contractual
limitations provision is unenforceable given that it could require insureds to file
suit before a justiciable cause of action exists. Additionally, the trial court
found that: (1) using the date of the accident as the triggering event for the
contractual limitations provision is contrary to the public policy “underlying
the . . . statutory requirement in RSA 264:15”; and (2) there is a material
factual dispute as to whether the plaintiffs could have discovered the policy
limits of the alleged tortfeasor prior to the expiration of the contractual
limitations period. The defendant filed a motion for reconsideration. The trial
court denied the motion; it nonetheless granted the defendant’s interlocutory

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appeal motion. The defendant prepared an interlocutory appeal statement, the
trial court signed it, and the defendant submitted the statement to this court.

¶5 The substance of the questions presented in this interlocutory
appeal is whether the trial court erred when: (1) it declined to enforce the
contractual limitations provision; (2) it found that there was an issue of
material fact as to whether the plaintiffs could have reasonably complied with
the contractual limitations provision; and (3) it ruled that the contractual
limitations provision is void because it violates the policy underlying New
Hampshire’s uninsured motorist statute, RSA 264:15. We answer the first and
third questions in the negative and need not address the second.

¶6 To prevail on a motion for summary judgment, the moving party,
here the defendant, must “show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of
law.” RSA 491:8-a, III (2010). “The facts stated in the [moving party’s]
accompanying affidavits shall be taken to be admitted for the purpose of the
motion, unless within 30 days” the opposing party files contradictory
affidavits. RSA 491:8-a, II (2010). Mere denials in the opposing affidavits are
insufficient to raise an issue of fact for trial. O’Malley-Joyce v. Travelers Home
& Marine Ins. Co., 175 N.H. 245, 250 (2022).

¶7 We consider the affidavits and other evidence, and all inferences
properly drawn from them, in the light most favorable to the non-moving party.
Id. An issue of fact is material for summary judgment purposes if it affects the
outcome of the litigation. Porter v. City of Manchester, 155 N.H. 149, 153
(2007). Where no material fact is in dispute on appeal, we need only determine
whether the moving party, here the defendant, was entitled to judgment as a
matter of law. Lower Village Hydroelectric Assocs. v. City of Claremont, 147
N.H. 73, 75 (2001). We review the trial court’s application of the law to the
facts de novo. Id.

¶8 We turn to the first and third questions. Considered together, they
present the following issue: whether a contractual limitations provision that is
triggered by the date of the accident, rather than the denial of an underinsured
motorist claim, is unenforceable because it contravenes the public policy
underlying the New Hampshire uninsured motorist statute, RSA 264:15. On
appeal, the defendant argues that parties to a contract are free to agree to
establish when the limitations period for a suit for underinsured motorist
benefits begins to run. Here, the defendant argues that the three-year
contractual limitations provision triggered by the date of the accident imposes
a reasonable restriction that does not violate the public policy underlying RSA
264:15 and is, therefore, enforceable. The plaintiffs counter that because the
contractual limitations period could run before the insured’s legal claim against
the insurer has accrued, the contractual limitations provision impermissibly

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restricts underinsured motorist coverage and is unenforceable. We agree with
the plaintiffs.

¶9 The language of the contractual limitations provision at issue states:
“Any claim for damages caused by an uninsured auto . . . must be brought by
lawsuit within three years of the date of the accident.” (Bolding omitted.) The
insurance policy defines “uninsured auto” to include underinsured autos. This
language unambiguously provides that an insured must file a suit seeking
underinsured motorist benefits within three years of the date of the accident.
In general, parties to a contract are bound by the terms of an agreement freely
and openly entered into, and courts cannot make better agreements than the
parties themselves have entered into or rewrite contracts merely because they
might operate harshly or inequitably. Rizzo v. Allstate Ins. Co., 170 N.H. 708,
713 (2018). We will not, however, enforce a contract or contract term that
contravenes public policy. Id. An agreement is against public policy if it is
injurious to the interests of the public, contravenes some established interest
of society, violates some public statute, is against good morals, tends to
interfere with the public welfare or safety, or, as it is sometimes put, if it is at
war with the interests of society and is in conflict with the morals of the time.
Id.

¶10 “[T]he overall goal of the [uninsured motorist] statute is to promote
a public policy of placing insured persons in the same position that they would
have been if the offending uninsured motorist had possessed comparable
liability insurance by broadening protection for those injured in accidents
involving uninsured motorists.” Rivera v. Liberty Mut. Fire Ins. Co., 163 N.H.
603, 608-09 (2012) (quotation and emphasis omitted); see RSA 264:15 (2024).
Although the defendant is correct that there is nothing in the language of RSA
264:15 that prohibits the contractual limitations provision, a contract provision
need not conflict with the express terms of the underinsured motorist statute
in order to contravene the public policy underlying the statute. Cf. Rivera, 163
N.H. at 607, 609-10 (holding that interpretation of “owned vehicle exclusion”
that excluded from uninsured motorist coverage any vehicle owned by the
insured violated the public policy underlying RSA 264:15 because restricting
compensation for injuries caused by an underinsured motorist would “frustrate
the purpose” of the statute).

¶11 The defendant argues that the contractual limitations provision did
not violate the public policy underlying the uninsured motorist statute because
it provided the plaintiffs with the same rights they would have had if the
tortfeasor had comparable liability coverage. We disagree.

¶12 A plaintiff who is injured in a motor vehicle accident has three
years from the date of the “act or omission complained of” or three years from
when “the plaintiff discovers, or in the exercise of reasonable diligence should
have discovered, the injury and its causal relationship to the act or omission

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complained of” to sue the motorist. RSA 508:4, I. In other words, the three-
year statute of limitations for personal injury claims starts to run when the
plaintiff knew or reasonably should have known of the injury. See id. By
contrast, under the contractual limitations provision at issue here, the three-
year period to file suit against the insurer begins to run before the occurrence
of the “injury” that would be redressed by the underinsured motorist suit.
That is because, under the common law, claims for underinsured motorist
benefits sound in contract, see Metropolitan Prop. & Liabil. Ins. Co. v. Walker, 136 N.H. 594, 596 (1993), and a cause of action for breach of contract does not
arise until the breach occurs. See Coyle v. Battles, 147 N.H. 98, 100 (2001).
In the underinsured motorist context, the breach occurs — and therefore the
cause of action accrues — when the insurer wrongfully denies underinsured
motorist coverage. Walker, 136 N.H. at 598. This means that under the
contractual limitations provision, a plaintiff injured by an underinsured
motorist will, in effect, have less than three years in which to file suit against
the insurer because the three-year period begins to run before the relevant
“injury” occurs. Contrary to the defendant’s contention, the contractual
limitations provision does not, and cannot, change when the cause of action for
a suit for underinsured motorist benefits accrues.

¶13 The insurer’s denial of an insured’s underinsured motorist claim
will always occur at some point after the date of the accident. Indeed, insureds
must first ascertain the extent of their damages, discover that the other
motorist involved in the accident had insufficient coverage, file a claim for
underinsured motorist benefits with their insurer, and have that claim denied
before a cause of action for underinsured motorist benefits accrues. See id. at
595, 598; see also Coyle, 147 N.H. at 100. Given the time required for an
insured to ascertain whether they have a claim for underinsured motorist
coverage, a contractual limitations provision such as the one at issue here
could effectively: (1) force insureds to file suit before a cause of action for
breach of their insurance contract has accrued; or (2) bar any relief because
insureds may not be aware that they have a claim for underinsured motorist
benefits prior to the expiration of the three-year period. In either circumstance,
the insureds’ ability to recover for their injuries is restricted as compared to a
person injured in an accident caused by a motorist with liability coverage equal
to the liability coverage purchased by the insureds.

¶14 The defendant argues that the contractual limitations provision
does not unreasonably restrict underinsured motorist coverage because there
are steps that insureds can take to avoid or minimize the risk of having an
underinsured motorist benefits suit barred by the contractual limitations
provision. For example, the defendant argues, insureds who believe that they
may have a valid claim for underinsured motorist benefits within three years of
the date of the accident can either ask their insurer to toll the contractual
limitations period, or file a lawsuit for underinsured motorist benefits and then
move to stay the proceedings until their suit against the alleged tortfeasor is

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resolved. As to the former, we decline to allow an insured’s ability to receive
underinsured motorist benefits to be dictated by his or her insurer’s
willingness to toll a contractual provision intended to limit the period during
which an insured may file suit. As to the latter, we are disinclined to
incentivize litigants to bring suit before a cause of action exists. To hold
otherwise would, at a minimum, be in tension with our standing doctrine and
the rules of professional conduct. See Avery v. Comm’r, N.H. Dep’t of Corr.,
173 N.H. 726, 737 (2020) (requiring legal injury to have standing); N.H. R. Prof.
Conduct 3.1 (“A lawyer shall not bring or defend a proceeding, . . . unless there
is a basis in law and fact for doing so . . . .”).

¶15 Nor are we persuaded by the defendant’s contention that without a
contractual limitations provision triggered by the date of the accident, insurers
could be subject to unreasonable delay when an insurer does not outright deny
a claim, and therefore there is no breach, but instead disputes the amount of
the claim to be paid. However, this case does not present such a scenario, and
therefore we need “not address[ ] what lawful alternatives an insurer may
explore to minimize undesirable uncertainty and open-ended liability.” Whelan
v. State Farm Mut. Auto. Ins. Co., 329 P.3d 646, 651 (N.M. 2014). Moreover,
“we are hard-pressed to envision a scenario in which an insured who is in need
of benefits and who has a viable [underinsured motorist] claim . . . would delay
asserting the claim and remain less than fully compensated any longer than
necessary.” American States Ins. Co. v. LaFlam, 69 A.3d 831, 842 (R.I. 2013).

¶16 We note that courts in other jurisdictions have employed similar
reasoning and reached the same conclusion when addressing this issue. For
example, the Rhode Island Supreme Court in American States Insurance Co. v.
LaFlam held that a three-year contractual limitations period triggered by the
date of the accident was void because it could require the insured to bring suit
before a cause of action for breach of contract against the insurer had accrued.
See id. at 833, 841, 844-45; see also Whelan, 329 P.3d at 650-51.

¶17 Accordingly, because the contractual limitations provision at issue
here unreasonably restricts the plaintiffs’ ability to obtain the same benefits
they would have been entitled to had the alleged tortfeasor had comparable
liability insurance coverage, we conclude that it violates the public policy
underlying RSA 264:15. Given that we hold that the contractual limitations
provision at issue is unenforceable and, therefore, that summary judgment is
not appropriate, we need not reach the second interlocutory question: whether
the trial court erred when it found that there was an issue of material fact as to
whether the plaintiffs could have reasonably complied with the contractual
limitations provision. In sum, we answer the first and third questions in the

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negative, need not address the second, and remand for further proceedings
consistent with this opinion.

Affirmed in part and
remanded.

MACDONALD, C.J., and DONOVAN and COUNTWAY, JJ., concurred;
NADEAU, J., retired superior court chief justice, specially assigned under RSA
490:3, II, concurred; HANTZ MARCONI, J., sat for oral argument but did not
participate in the final vote.

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