Sutton Mutual Insurance v. Notre Dame Arena, Inc.
1968 N.H. LEXIS 181, 108 N.H. 437, 237 A.2d 676 (1968)
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Rule of Law:
An insured's duty to provide notice of an accident 'as soon as practicable' is not breached by a delay if the insured was justifiably ignorant of the accident. The notice period begins to run only when the insured has knowledge of the accident and the potential for a claim.
Facts:
- On February 6, 1966, Notre Dame Arena rented its facility to a local hockey team for a game.
- During the game, Florence Plourde, a spectator, was struck by a hockey puck, resulting in a fractured jaw.
- A doctor who was also a spectator, and who was not affiliated with Notre Dame Arena, treated Plourde but did not inform the arena's management of the injury.
- Neither Florence Plourde nor her husband ever notified Notre Dame Arena about the accident or injury.
- The president of the Notre Dame Arena corporation, Dr. Danais, was present at the game as a spectator, not in his official capacity. He heard someone was hurt but was unaware of the nature or severity of the injury.
- The arena's general manager, Father Samson, was out of town and later heard only vague rumors of an accident without any specific details.
- On or shortly before May 25, 1966, an attorney for the Plourdes telephoned the secretary of Notre Dame Arena, J. L. Blais, to inform him that a lawsuit would be filed. This was the first reliable information the corporation received about the incident.
Procedural Posture:
- Florence and Joseph Plourde filed personal injury actions in a trial court against Notre Dame Arena.
- Notre Dame Arena gave notice of the lawsuit to its insurance company (the plaintiff in this action) on May 26, 1966.
- The insurer filed a declaratory judgment action against its insured, Notre Dame Arena, asking the trial court to declare that it had no duty to defend or indemnify due to late notice.
- The trial court found that Notre Dame Arena had reasonably complied with the policy's notice provision and did not breach the contract.
- The plaintiff insurer, as the appellant, appealed the trial court's ruling to the state's highest court.
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Issue:
Does an insured's delay of over three months in notifying its insurer of an accident breach a policy's 'as soon as practicable' notice requirement when the insured corporation had no actual or imputed knowledge of the accident until it was informed of an impending lawsuit?
Opinions:
Majority - Lampron, J.
No. The insured's delay does not breach the policy's notice requirement because the duty to notify is triggered only upon acquiring knowledge of the accident, and the insured was justifiably ignorant of the incident until notified of the impending lawsuit. The court reasoned that the 'as soon as practicable' clause requires notice within a reasonable time given all the circumstances. Key factors in this determination include the length of the delay, the reasons for it, and any prejudice to the insurer. The court found that knowledge acquired by a corporate officer acting as a private individual, outside the scope of their official duties, is not imputed to the corporation. Dr. Danais was merely a spectator, and Father Samson had only heard unsubstantiated rumors, which did not constitute sufficient knowledge to trigger a duty to investigate or report. Since Notre Dame Arena notified its insurer the day after being formally advised of the claim by Plourde's attorney, it acted as soon as was reasonably possible, and the delay was excused.
Analysis:
This decision reinforces the principle that an insured's lack of knowledge can be a valid excuse for a delay in providing notice to an insurer. It clarifies the doctrine of imputed knowledge for corporations, establishing that information an officer obtains in a personal capacity, outside the scope of their duties, does not constitute corporate knowledge. This precedent protects corporate insureds from forfeiting coverage due to fortuitous circumstances where key personnel are unaware of an incident. It places the focus of the 'as soon as practicable' analysis on when the corporate entity, through responsible agents acting in their official capacity, gains sufficient information to recognize an accident has occurred and a claim may arise.
