USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

FOR THE FIRST CIRCUIT
____________________

No. 96-1620

STRATFORD SCHOOL DISTRICT,

Plaintiff, Appellee,

v.

EMPLOYERS REINSURANCE CORPORATION,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Paul J. Barbadoro, U.S. District Judge]

___________________

____________________

Before

Selya, Circuit Judge,

_____________

Aldrich, Senior Circuit Judge,

____________________

and Boudin, Circuit Judge.

_____________

____________________

Charles W. Grau with

________________

whom David P. Slawsky

________________

and Upton, Sander

_____________

Smith were on brief for appellant.

_____
Bruce W. Felmly with
________________

whom Jeanmarie Papelian and McLane, Gr

___________________
___________

Raulerson & Middleton were on brief for appellee.

_____________________

____________________

January 30, 1997

____________________

ALDRICH,

declaratory

Stratford

action

[New

insured under

issued

by

Senior Circuit
Judge.
_______________________

brought

Hampshire]

to

determine

School

a "claims-made"

the

District

errors

Employers Reinsurance

This

Stratford.

On

this

Crystal

exclusion

that,

Buffington,

appeal

post,
____

definition prior

to

rights

of

and omissions

policy

Corporation ("Employers").

Stratford's claim for coverage for

of

("Stratford"),

Both parties moved for summary judgment, and the

for

is

Employers

court ruled

asserts

a suit brought on

matured

within

the policy's

the

that

behalf

policy

issuance,

and

in any event, the policy was voidable because of false

answers in the application.

We affirm.

Starting

beginning, we

at the

accept the

facts,

recited in Employers' brief

it.

Morrissey v. Boston Five Cents Savings Bank, 54 F.3d 27,

___________________________________________

31 (1st Cir. 1995).

at

Stratford

in

investigation and

Hikel had

After

the

One

Harry Hikel became a music

1979.

In

1983 Stratford

held a hearing to

teacher

conducted

an

review allegations that

inappropriately hugged and kissed female students.

hearing

the

reprimand him severely.

him

as undisputed, most favorable to

in January 1984.

Stratford

School

Board

voted

to

reprimand letter was delivered to

Stratford did not

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notify State Child

Protective Services

169-C:29.1

in accordance with N.H.

Rev. Stat. Ann.

Hikel left Stratford in 1986.

His next employer was the Lakeway Elementary School

in

Littleton,

students

New

there,

Hampshire.

Crystal

According

Buffington,

molesting her during the fall of 1990

until the fall of 1992.

he

to

one

began

of his

sexually

and continued to do so

In 1993 the Manchester Union

Leader

reported this, although not identifying Crystal, and asserted

that

the Department of

that Hikel had

Education was

sexually abused

investigating charges

students when

he taught

in

Littleton.

For present purposes we assume that this came to

Stratford's

attention.

Grafton

County Grand

Thereafter, on

Jury issued

with an investigation of

Hikel in the

a subpoena

1993, a

in connection

criminal sexual misconduct of Harry

Littleton School District, seeking

records on Hikel.

4.

October 3,

Stratford's

Stratford received the subpoena on October

On October 8 it applied for the present policy.

While

obviously the subpoena was a strong reminder

that other such conduct might occur,

the question is whether

it suggested to Stratford (of which there is no evidence), or

should

have

suggested,

something

more

immediately

____________________

1.

This statute contains no language giving causes of action

to children who could

been avoided
A.2d

prove personal injury that might

had it been observed.

272, 278 (N.H. 1995),

created no personal rights.

contention

that

this

In Marquay v.
_______

the court held

retroactively.

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should

Eno, 662
___

that the statute

We are not moved

ruling

have

not

by Employers'
be

applied

troublesome.

of

So contending,

Employers complains -- in terms

warranty -- of Stratford's negative answers in the policy

application to questions 25 and 26:

25.

Has the applicant, Board and/or its

employees

been involved

knowledge of any
or

local

in or

pending federal,

legal actions

members,

last ten

stating nature

the entity,

or employees

years?

state

or proceedings,

including EEOC, against

board

have any

If yes,

its

within the

attach details

of claim, date

of claim,

loss date, loss payments and disposition,

carrier handling claims, etc.

26.

Are

indicating

there

this

circumstances

the probability of a claim or

action known by any

by

any

person to be covered

insurance?

If

yes,

attach

details.

In view of the lack of analysis in Employers' brief we regard

25

as

being

included

in

26

and

ask

what

claims,

or

"circumstances," to quote

the subpoena

criminal

might

decade

charged

be thought

proceedings.

Stratford's former

cause of

question 26, affecting

with

new

suggest.

could

it

Certainly

be

thought

students were attempting to

action arising

ago outside

Nor

to

of

from behavior

Littleton.

conduct

and

yet

happened.

representing

some

But

student

might

in

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some

occurred a

jury,

indicting, wished to look at the whole picture.

had

that

likely Hikel

grand

was

before

Nothing more

imaginative

connection

no

reactivate a

that had

Very

the

Stratford,

with

lawyer

this

new

conduct, think

of claiming against Stratford

published2 Hikel's prior behavior?

for not having

Anything is possible, but

how likely, let alone probable?

Employers

belief

contradicting

our

that a personal claim would be wholly frivolous.

The

New Hampshire

in

the statute

cites

no

authority

court's refusal to recognize

cited

supra, n.1,

confirms

such rights even

this.

If

an

_____

insurance

report,

brief)

applicant

told

every possibility

bring a

frivolous

would starve.

people

is

It

take out

he has

that someone

law suit,

is because there

insurance.

to

conceive

of, and

"might" (Employers'

Employers'

solicitors

are possibilities

The application

that

announced the

standard for reporting -- not possibility, but probability.

The

application,

standard-setter.

that it does

however,

The policy itself, by

against

in the

not

the

only

its terms, provides

not cover if "the Insured ha[d] become aware of

a proceeding, event or development

could
_____

was

future result
______

the Insured. . . ."

in the

which has resulted in

institution of

(Emphasis supplied.)

or

a claim

"Possibly
________

could result?"

"Reasonably
__________

result?"

apart from the principle

Even

insurance contracts

could result?"3

are to be resolved

"Probably could
________

that ambiguities in

against the insurer,

____________________

2.

At

the

risk, incidentally,

of

incurring

a claim

for

defamation, depending on how the duty is conceived.

3.

The New Hampshire case from which the court drew the more

limited word "reasonable" involved different policy language.

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Trombly v. Blue Cross/Blue Shield of New Hampshire-Vermont,

_______
__________________________________________________

423 A.2d 980, 985

to

construe

application

the

(N.H. 1980), it makes business

exclusion

questionnaire.

clause

interpreted

insured).

clauses

to reflect

408 A.2d 405,

an insurance

the reasonable

Hence we take probable.

other way, and

that notice

tell us about it,

seem affirmatively

with

the

407 (N.H. 1979)

contract

be

the

For the insurer to go the

of which you had

was too remote

for you

makes no sense; indeed,

misleading.

must

expectations of

say we do not cover matters

notice, even though

have to

in

together

Cf. Commercial Union Assurance

___ ___________________________

Co. v. Gilford Marina, Inc.,

____________________________

(contradictory

sense here

We

can not think

to

it would

the facts

charged

Stratford

of

probability

that

some

Littleton

student would sue it.

Finally, Employers' makes a

requires no comment.

Affirmed.
_________

claim of malice.

This

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