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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Hillsborough-northern judicial district
No. 96-327
TRACEY AND GREGORY DEYETTE
v.
LIBERTY MUTUAL INSURANCE COMPANY
December 31, 1997
Meade & Loring, P.C., of Portsmouth (Charles A. Meade on the brief and orally), for the plaintiffs.
Ouellette, Hallisey, Dibble and Tanguay, P.A., of Dover (Stephen J. Dibble on the brief and orally), for the defendant.
BROCK, C.J. Liberty Mutual Insurance Company, the defendant in the declaratory judgment action below, appeals from an order of the Superior Court (Smukler, J.). The plaintiffs, Tracey and Gregory Deyette, had petitioned the trial court to determine the extent of underinsured motorist benefits available to the injured insured, Tracey Deyette. On appeal, the defendant argues that the trial court erred in prohibiting it from reducing benefit payments to the plaintiffs by the amount they received from the tortfeasor motorist and requiring it to pay attorney's fees and costs. We reverse.
The trial court found the following facts. Matthew MaCarty (tortfeasor) caused an automobile accident that injured Tracey Deyette. A panel of arbitrators determined that Tracey Deyette suffered bodily injury damages in the amount of $125,000 and Gregory Deyette suffered loss of consortium damages in the amount of $5,000. The tortfeasor's insurer paid $25,000, the maximum amount under his policy. The plaintiffs submitted a claim to the defendant for the remaining damages. Tracey Deyette's policy with the defendant provides underinsured motorist coverage in the amount of $100,000 per person with a $300,000 limit for each accident. The defendant paid Tracey Deyette $75,000, the difference between the $100,000 policy limit and the amount paid by the tortfeasor's insurer.
The plaintiffs filed a petition for declaratory judgment alleging that the defendant is prohibited from reducing its payment by the amount paid by the tortfeasor's insurer and that the plaintiffs are entitled to attorney's fees and costs. The trial court ruled that the defendant may not reduce the benefit payment by the amount the tortfeasor's insurer paid in this case and, pursuant to RSA 491:22-b (1997), awarded attorney's fees and costs incurred pursuing Tracey Deyette's claim.
The defendant argues that the trial court erred in concluding that the policy provision limiting the defendant's liability contravenes RSA 264:15 (1993), and in ruling that an insurer is liable for the difference between the amount of the insured's damages or the uninsured motorist coverage, whichever is greater, and the tortfeasor's liability coverage. We look first at the policy language, which we interpret as a matter of law. See, e.g., Concord Gen. Mut. Ins. Co. v. Mitchell, 138 N.H. 229, 231, 637 A.2d 903, 904 (1994). "[W]e take the plain and ordinary meaning of the policy's words in context, and we construe the terms of the policy as would a reasonable person in the position of the insured based on more than a casual reading of the policy as a whole." Brouillard v. Prudential Prop. & Cas. Ins. Co., 141 N.H. 710, 712, 693 A.2d 63, 66 (1997) (quotation omitted). We will enforce a policy provision that limits the insurance company's liability when the policy language is clear and unambiguous. See id. at 717, 693 A.2d at 68.
The policy included the following limiting clause:
With respect to damages caused by an accident with an "underinsured motor vehicle" . . . [t]he limit of liability shall be reduced by all sums paid because of the "bodily injury" by or on behalf of persons or organizations who may be legally responsible.
Underinsured motorist insurance coverage typically includes this language. See 3 A. Widiss, Uninsured and Underinsured Motorist Insurance