Bunker v Midstate Mutual

                   UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF NEW HAMPSHIRE



Cindy Bunker

     v.                                       Civil No. 14-cv-274-PB
                                              Opinion No. 

Midstate Mutual Insurance
Company, et al.



                       MEMORANDUM AND ORDER


    Cindy Bunker was injured at a Nashua, New Hampshire rental

property owned by Brian Nadeau, a New Hampshire resident.          She

brought a negligence action against Nadeau in New Hampshire

Superior Court and later filed a separate insurance coverage

action in state court against Nadeau and his insurer, Midstate

Mutual Insurance Company, a New York corporation.       Midstate

removed the insurance coverage action to this court.       Nadeau

subsequently filed a cross-claim seeking a declaratory judgment

that Midstate’s insurance policy covers Bunker’s injuries.

    Midstate has filed a motion to dismiss arguing that all of

the claims against it are barred by the relevant statute of

limitations.   In the alternative, Midstate requests that I

dismiss this action under the doctrine of forum non conveniens.

                            I.   BACKGROUND

    Bunker was seriously injured in August 2013 when she fell
down a flight of stairs at a rental property owned by Nadeau in

Nashua, New Hampshire.    On October 4, 2013, she filed a

negligence action against Nadeau in New Hampshire Superior

Court.   During the course of settlement discussions, Bunker

asked Nadeau to produce all potentially applicable insurance

policies.   Nadeau produced the Midstate policy in response to

her request on April 14, 2014.     Upon examination, Bunker

determined that the Midstate policy covered her injuries, and

she submitted a claim to Midstate the next day.        Midstate

disagreed with Bunker’s interpretation of the policy and denied

her claim on May 12.     On May 14, Bunker filed the present action

in New Hampshire Superior Court.

    On June 26, Nadeau answered Bunker’s complaint and filed a

cross-claim against Midstate seeking a declaratory judgment that

the Midstate policy covers Bunker’s claims.



                         II.   STANDARD OF REVIEW

    To survive a motion to dismiss for failure to state a

claim, a plaintiff must make factual allegations sufficient to

“state a claim to relief that is plausible on its face.”

Ashcroft v. Iqbal, 

 (2009) (quoting Bell Atl.

Corp. v. Twombly, 

 (2007)).        A claim is

facially plausible when it pleads “factual content that allows
                                   2
the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.    The plausibility standard is

not akin to a ‘probability requirement,’ but it asks for more

than a sheer possibility that a defendant has acted unlawfully.”

 (citations omitted).

      In deciding a motion to dismiss, I employ a two-step

approach.    See Ocasio–Hernández v. Fortuño–Burset, 

 (1st Cir. 2011).    First, I screen the complaint for

statements that “merely offer legal conclusions couched as fact

or threadbare recitals of the elements of a cause of action.”

 (citations, internal quotation marks, and alterations

omitted).    A claim consisting of little more than “allegations

that merely parrot the elements of the cause of action” may be

dismissed.   

   Second, I credit as true all non-conclusory

factual allegations and the reasonable inferences drawn from

those allegations, and then determine if the claim is plausible.

   The plausibility requirement “simply calls for enough fact

to raise a reasonable expectation that discovery will reveal

evidence” of illegal conduct.    Twombly, 

.   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., 

 (1st Cir. 2010); see Twombly, 

                                 3
555 (“Factual allegations must be enough to raise a right to

relief above the speculative level.”).



                           III.   ANALYSIS

     I begin by addressing Midstate’s statute of limitations

argument before turning to the doctrine of forum non conveniens.

A.   

     A motion to dismiss based on a statute of limitations is

only successful when “the pleader’s allegations leave no doubt

that an asserted claim is time-barred.”      Gorelik v. Costin, 

 (1st Cir. 2010) (internal quotation marks

omitted).    To support dismissal, Midstate relies upon New

Hampshire’s statute of limitations for declaratory judgment

actions.    See 

   Section 491:22

provides that a petition “to determine coverage of an insurance

policy” must be filed “within 6 months after the filing of the

1
  Though neither party argues otherwise, it is worth noting that
the New Hampshire statute of limitations applies here regardless
of whether New York or New Hampshire law governs more generally.
New Hampshire “generally treat[s] statutes of limitations as
procedural statutes and accordingly appl[ies] [its] own law.”
Waterfield v. Meredith Corp., 

 (2011) (citing
Keeton v. Hustler Magazine, Inc., 

 (1988)). This
holds true “in any case in which either party is a New Hampshire
resident or the cause of action arose in this State.” Keeton,

. Here, the statute of limitations applies
because both Bunker and Nadeau are New Hampshire residents and
the accident for which Bunker and Nadeau seek coverage occurred
within the state.
                                4
writ, complaint, or other pleading initiating the action which

gives rise to the question.”   Bunker’s complaint in the

negligence suit, filed on October 4, 2013, initiated the action

which gave rise to the declaratory judgment claim.       Midstate

thus argues that any claim based on New Hampshire’s declaratory

judgment statute is barred because it was not brought within the

six month period after the complaint in which the underlying

action was filed.

    The six month limitations period is not without exceptions,

however.   It does not apply where (1) “the facts giving rise to

such coverage dispute are not known to, or reasonably

discoverable by, the insurer” until after the six month period;

or (2) when the failure to file was “the result of accident,

mistake or misfortune and not due to neglect.”     

§ 491:22(III).   Both Nadeau and Bunker rely on the first

exception, the so-called “late discovery exception.”       Binda v.

Royal Ins. Co., 

 (2000).    The late discovery

exception only applies when “the facts giving rise to a coverage

dispute are not known or reasonably discoverable until after the

expiration of the six-month period.”   

   In those

circumstances, a declaratory judgment action can permissibly be

filed “within a reasonable time frame.”   

    With these

standards in mind, I address section 491:22’s application to
                                 5
Nadeau and Bunker in turn.2

     1.   Nadeau

     Nadeau relies upon the late discovery exception to argue

that the facts giving rise to the coverage dispute were “not

known or reasonably discoverable” until after Midstate denied

Bunker’s request for coverage in May 2014.   Nadeau contends that

Midstate’s denial of coverage gave rise to the coverage dispute

and that he filed his claims within a reasonable time-frame

thereafter.   Midstate responds by arguing that because Nadeau

was both the defendant in the underlying action and the insured

under the Midstate policy, he was “uniquely positioned” in

October 2013 to possess awareness of all of the facts necessary

to alert him to the coverage dispute.   Doc. No. 19.

     Nadeau’s attempt to align his knowledge with Bunker’s

during the relevant time period is unconvincing.   It is clear

that Nadeau need not have actual knowledge of a denial of

coverage. “The statute does not . . . require an actual denial

of coverage by an insurer before an insured must seek a

determination of coverage or risk being time barred.   Rather,


2
  Although the late discovery exception by its terms applies only
when the facts giving rise to the dispute are not known to or
reasonably discoverable by the “insurer,” the New Hampshire
Supreme Court has applied the exception to both insured and
insurers. Mottolo v. U.S. Fidelity & Guar. Co., 

 (1985).
                                6
[it] . . . requires only that the insured know or be able to

reasonably discover facts which form the basis of a coverage

dispute.”    Binda, 

.    Here, Nadeau “kn[ew] or

[was] able to reasonably discover” all of the relevant facts

that formed the basis of the coverage dispute – those concerning

the underlying negligence suit and the potential applicability

of the Midstate policy to Bunker’s claims – when Bunker filed

her negligence action against him in October 2013.      He did not

file his declaratory judgment claim until June 26, 2014, some

nine months later.   The statute of limitations thus bars

Nadeau’s request for a declaratory judgment.

    2.      Bunker

    Bunker has alleged that she had no knowledge of Nadeau’s

Midstate policy until April 2014.      Prior to accepting a

settlement offer, Bunker requested information concerning any

insurance policies held by Nadeau that might cover her injuries.

On April 14, 2014, Nadeau provided the Midstate policy to

Bunker, and the next day she submitted her claim.     Bunker filed

her declaratory judgment action on May 14, only two days after

Midstate denied coverage – but some seven months after she had

filed her initial complaint in the negligence suit.

    Midstate’s initial briefing omitted any mention of the late

discovery exception.   Doc. No. 2-1.     After Bunker invoked the
                                  7
exception, Midstate maintained that her claim should

nevertheless be barred because she offered no explanation as to

why she did not learn of the policy sooner or why it was not

reasonably discoverable within the six month time period.

Relatedly, Midstate argues for dismissal because her complaint

does not plead sufficient facts to support her claim.

     I disagree with both arguments.   Bunker’s complaint alleges

that she engaged in settlement negotiations with Nadeau but was

not made aware of Midstate’s policy until April 14, 2014.     She

thus pleads that she lacked knowledge of the policy until after

the six-month limitations period had run.     She filed her

coverage claim with Midstate one day after learning of the

policy and her declaratory judgment action two days after

Midstate’s denial of coverage.   At a minimum, these allegations

“leave . . . doubt” as to whether Bunker could reasonably have

known of the facts underlying the coverage dispute.     See

Gorelik, 

.   Moreover, she acted “within a

reasonable time frame” after discovering the Midstate policy.

See Binda, 

.   Dismissal of Bunker’s claim is thus

improper at this stage of the proceedings.3


3
  In reaching this conclusion, I note that Midstate has not
argued that Bunker lacks standing to bring an insurance coverage
claim at the present time. See Burke v. Fireman’s Fund Ins.
Co., 

 (1980) (holding that an injured party
                                8
B.   Forum Non Conveniens

     Midstate also urges me to dismiss this case on forum non

conveniens grounds because New York state courts are a more

appropriate forum.     Forum non conveniens is a “discretionary

tool for the district court to dismiss a claim” even when it has

proper jurisdiction.    Adelson v. Hananel, 

 (1st

Cir. 2007) (citing Gulf Oil Corp. v. Gilbert, 

(1947)).   A federal court has discretion to dismiss on forum non

conveniens grounds when “an alternative forum has jurisdiction

to hear the case, and trial in the chosen forum would establish

oppressiveness and vexation to a defendant out of all proportion

to plaintiff’s convenience, or the chosen forum is inappropriate

because of considerations affecting the court’s own

administrative and legal problems.”     Sinochem Int’l Co. v.

Malaysia Int’l Shipping Corp., 

 (2007)

(alterations omitted) (citing Am. Dredging Co. v. Miller, 

 (1994)).

     This exacting standard is emphasized in the Supreme Court’s

holding that “[t]he common-law doctrine of forum non conveniens



does not have a direct cause of action against the company
insuring the person who injured him); see also Mendez v. Brites,

, 333 n.2 (R.I. 2004) (addressing the standing of
injured parties seeking declaratory judgments in direct action
states). In denying Midstate’s motion to dismiss, I express no
opinion on that issue.
                                9
‘has continuing application [in federal courts] only in cases

where the alternative forum is abroad’ and perhaps in rare

instances where a state or territorial court serves litigational

convenience best.”   

 (alteration in original)

(citations omitted) (quoting Am. Dredging Co., 

n.2); accord Jackson Nat’l Life Ins. Co. v. Economou, 

 (D.N.H. Apr. 30, 2008).     By any consideration

of the facts, Midstate has simply not provided sufficient

arguments to meet these restrictive standards.     I thus deny

Midstate’s motion to dismiss for forum non conveniens.



                         III.    CONCLUSION

      For the reasons discussed above, I grant Midstate’s motion

to dismiss the claims raised by Brian Nadeau, Doc. No. 15, and

deny its motion to dismiss the claims raised by Cindy Bunker,

Doc. No. 2.

      SO ORDERED.

                                 /s/Paul Barbadoro
                                 Paul Barbadoro
                                 United States District Judge

August 25, 2014

cc:   Thomas E. Craig, Esq.
      James E. Fiest, Esq.
      Adam R. Mordecai, Esq.
      Doreen F. Connor, Esq.
      Kevin G. Collimore, Esq.
                                  10