UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Natasha Urena and Daniel Rodriguez, Administrators of the Estate of Juliana Rodriguez Morel Case No. 22-cv-200-PB v. Opinion No.

Travelers Casualty and Surety Company of America

MEMORANDUM AND ORDER

This insurance declaratory judgment action stems from an underlying

action in which the plaintiff, Juliana Rodriguez Morel, received a default

judgment against her former employer for pregnancy discrimination and

wrongful termination. Rodriguez Morel filed the instant action seeking a

declaratory judgment that Travelers Casualty and Surety Company of

America, her employer’s insurer, is obligated to pay the judgment against her

employer. Travelers filed a motion to dismiss contending that Rodriguez

Morel lacks standing to bring this action and that, in any event, the claim is

untimely. I. BACKGROUND

Rodriguez Morel was employed by Mammoth Tech, Inc., an Ohio-based

corporation with branch offices in New Hampshire and California. 1 Doc. 1-1

at 43. Following her termination from the Manchester office, Rodriguez Morel

filed a complaint against Mammoth on January 15, 2021, asserting multiple

state and federal law claims for pregnancy discrimination and wrongful

discharge.

; see Rodriguez Morel v. Mammoth Tech, Inc., 21-cv-40-

AJ. Rodriguez Morel ultimately obtained a default judgment in that action

for $303,592.20. Doc. 20-3 at 2.

On May 2, 2022, Rodriguez Morel filed this action against Travelers,

seeking a declaration that an employment practices liability insurance policy

(EPL policy) issued to Mammoth by Travelers obligates Travelers to pay the

default judgment against Mammoth. 2 Doc. 1-1 at 5. The complaint was

originally filed in New Hampshire state court and then removed to this court

on the basis of diversity. Doc. 1 at 1. Travelers has filed a motion to dismiss

1 Mammoth was known by a different name when Rodriguez Morel worked there. Doc. 20-3 at 1. I refer to the company by its current name throughout this order.

2 Rodriguez Morel passed away a few months after filing this action, and the co-administrators of her estate were substituted as parties pursuant to Federal Rule of Civil Procedure 25. Doc. 13. For the sake of clarity, I refer throughout this order to the original plaintiff, Rodriguez Morel, rather than the co-administrators of her estate.

2 Rodriguez Morel’s complaint pursuant to Federal Rule of Civil Procedure

12(b)(6).

II. STANDARD OF REVIEW

To survive a motion to dismiss based on Rule 12(b)(6), 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)). This standard “demands more

than an unadorned, the-defendant-unlawfully-harmed-me accusation.”

A

claim is facially plausible if it “pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct

alleged.”

In testing a complaint's sufficiency, the court employs a two-step

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

(1st Cir.

2011). First, the complaint is screened for statements that “merely offer legal

conclusions couched as fact or threadbare recitals of the elements of a cause

of action.”

(cleaned up). A claim consisting of little more than “allegations

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

Second, after crediting as true all non-conclusory factual allegations and the

reasonable inferences drawn from those allegations, the court determines if

the claim is plausible.

The plausibility requirement “simply calls for

enough fact to raise a reasonable expectation that discovery will reveal

3 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. of P.R.,

(1st Cir. 2010).

III. ANALYSIS

The parties disagree as to whether this case is governed by Ohio law or

New Hampshire law. If Ohio law applies, Travelers argues that Rodriguez

Morel’s action is barred because Ohio does not permit a direct action against

a wrongdoer’s insurer unless she has suffered bodily injury or property

damage. If New Hampshire law applies, it argues that Rodriguez Morel

cannot sue Travelers both because she lacks standing to sue and because her

claim is barred by New Hampshire’s six-month statute of limitations for

insurance coverage actions. I resolve the choice of law problem before turning

to the merits.

A. Choice-of-Law Analysis

“A federal court sitting in diversity jurisdiction must employ the choice-

of-law principles of the forum state . . . .” Auto Europe, LLC v. Conn. Indem.

Co.,

(1st Cir. 2003). Under New Hampshire’s choice-of-law

rules, a “contract is to be governed, both as to validity and performance, by

the law of the state with which the contract has its most significant

relationship.” Consol. Mut. Ins. Co. v. Radio Foods Corp.,

, 496

4 (1968). In the context of insurance contracts, “the State which is the

‘principal location of the insured risk’ bears the most significant relationship

to the contract.” Glowski v. Allstate Ins. Co.,

(1991)

(quoting Ellis v. Royal Ins. Co.,

(1987)). Where, however, “a

policy covers risks in more than one state, it is considered a multiple risk

policy, and the principal location of the insured risk may be in more than one

state.” Cadell v. XL Specialty Ins. Co., No. 11-cv-394-JD,

,

at *2 (D.N.H. June 20, 2012). In such a case, each individual risk is “treated

as though it were insured by a separate policy,” and the policy is governed by

the laws of the state where the individual risk at issue is located. Cecere v.

Aetna Ins. Co.,

(2001) (quoting Ellis,

);

accord Restatement (Second) of Conflict of Laws § 193 cmt. f (noting that

“multiple risk policies which insure against risks located in several states”

may be treated “as if it involved [multiple] policies, each insuring an

individual risk”).

Rodriguez Morel asserts that the EPL policy is a multiple risk policy

that should be interpreted according to the law of New Hampshire, the place

where the risk giving rise to her claims was located. Travelers asserts that

the policy is not a multiple risk policy because “there is no indication that the

[policy] extended to risks outside of Ohio.” Doc. 24 at 2. I agree with

Rodriguez Morel.

5 The EPL policy expressly states that it “applies anywhere in the world”

and covers losses resulting from “any Employment Claim . . . for a Wrongful

Employment Practice” against Mammoth or its employees. Doc. 20-2 at 28,

69. Its coverage is not limited to employment claims brought under Ohio law,

but rather encompasses claims brought under the law of any state. See, e.g.,

id. at 69 (defining “discrimination” to include a “violation of any employment

discrimination law”); id. at 73 (defining a “third party wrongful act” to

include a “violation of any federal, state, or local law or statute or any

common law prohibiting any kind of discrimination”); id. at 14 (defining

“wage and hour law” to include “any federal, state, or local law or regulation

governing or related to the payment of wages”). The insured risk, therefore,

could arise in any state where Mammoth had employees. According to the

complaint, Mammoth employed individuals in at least three states: Ohio,

New Hampshire, and California. Doc. 1-1 at 43. Thus, the EPL policy covers

risks in multiple states and is therefore a multiple risk policy that must be

controlled by the law of New Hampshire, where the individual risk at issue

was located. See Raymond v. Monsanto Co.,

(D.N.H.

1971) (“This policy was clearly intended to cover liability for personal injuries

wherever such injuries were incurred throughout the United States and is,

therefore, a multiple risk policy.”); Northland Cas. Co. v. HBE Corp.,

(M.D. Fla. 2001) (finding that a general liability policy

6 covering a hotel corporation that operated hotels in multiple states was a

multiple risk policy); cf. Auto Europe, LLC,

(“a policy covering

numerous related companies located in different states would be deemed a

multiple risk policy that . . . would be viewed in a particular case as if a

separate policy had been issued to cover each entity.”).

This case is thus comparable to Ellis v. Royal Insurance Co., where the

New Hampshire Supreme Court applied its own state law to an insurance

policy that covered multiple automobiles located across various states.

. The court noted that, although the policy was held by a New

Jersey corporation, “the fact remain[ed] that the policy covered a multitude of

risks located in various States” and therefore constituted a multiple risk

policy.

. Thus, the policy was governed by the law of New

Hampshire, where the automobile at the center of the plaintiff’s claims was

located.

Travelers’ attempts to distinguish the present case from Ellis are

unavailing. Travelers notes, first, that the policy in Ellis specifically covered

automobiles located in New Hampshire, whereas the EPL policy at issue here

did not “specifically insure[] a risk located in New Hampshire.” Doc. 24 at 2.

But, as I explained, the plain language of the EPL policy provides that it

covers risks arising out of Mammoth’s employment practices wherever they

may occur. That the policy did not specifically identify Mammoth’s New

7 Hampshire branch office does not mean that it did not cover its operations in

this state. See Westchester Fire Ins. Co. v. G. Heileman Brewing Co.,

(Ill. App. Ct. 2001) (noting that a commercial liability

insurance policy that failed to “list the individual states where [the insured]

operated” was nonetheless a multiple risk policy because “the insured risk

could occur in any state where [the insured] conducted its business” and the

policy “provide[d] coverage without regard to location of risks”).

Travelers next asserts that Ellis is distinguishable because the policy

in that case included an “endorsement providing for limited uninsured

motorist coverage in New Hampshire,” whereas the policy here does not

reference New Hampshire. Doc. 24 at 2 (quoting Ellis,

). But

the court’s conclusion in Ellis did not turn on the policy’s New Hampshire-

specific endorsement or its reference to New Hampshire. Rather, the court’s

holding was explicitly premised on the fact that the insured’s “business and

insurance coverage extend[ed] to a number of States, including New

Hampshire.” Ellis,

.

While a specific reference to a state may be one way to indicate that a

policy’s coverage extends to that state, it is by no means the only way. For

example, in Raymond v. Monsanto Co., this court concluded that a personal

injury liability insurance policy was a multiple risk policy because it covered

a product that was sold across the United States.

-250

8 (cited favorably in Ellis,

). Although the policy did not appear

to include any specific reference to New Hampshire, the court reasoned that

the policy “was clearly intended to cover liability for personal injuries

wherever such injuries were incurred throughout the United States and

[was], therefore, a multiple risk policy” subject to the law of New Hampshire,

where the accident giving rise to the underlying action occurred. Id. at 249.

Because the EPL policy at issue in this case clearly covers risks arising

out of Mammoth’s employment operations in New Hampshire, it is of no

consequence that the policy does not specifically reference New Hampshire.

The fact remains that it is a multiple risk policy to be governed by the law of

state where the relevant risk was located. Accordingly, I evaluate the merits

of the parties claims under New Hampshire law.

B. Standing

Travelers asserts that Rodriguez Morel lacks standing to bring a

declaratory judgment action against it. 3 New Hampshire’s declaratory

judgment statute,

, permits “[a]ny person

3 To be clear, Travelers does not contest that Rodriguez Morel has Article III standing, and Rodriguez Morel clearly satisfies the constitutional requirements for standing. See TransUnion LLC v. Ramirez,

, 423 (2021) (noting that a plaintiff has constitutional standing where she demonstrates “a concrete and particularized injury caused by the defendant and redressable by the court”). Travelers’ only contention is that Rodriguez Morel does not have statutory standing under § 491:22.

9 claiming a present legal or equitable right or title” to bring a declaratory

judgment action against “any person claiming adversely to such right or

title.” To establish standing under § 491:22, a “party must show that some

right of the party has been impaired or prejudiced.” Carlson v. Latvian

Lutheran Exile Church of Bos. & Vicinity Patrons, Inc.,

(2017). This requires the party to demonstrate that “the facts are sufficiently

complete, mature, proximate and ripe to place the party in gear with the

party’s adversary, and thus to warrant the grant of judicial relief.”

(quoting Duncan v. State,

(2014)).

Travelers argues that Rodriguez Morel cannot claim a “present legal or

equitable right” within the meaning of § 491:22 because (1) New Hampshire

does not have a direct action statute permitting an injured party to proceed

directly against a wrongdoer’s insurer; and (2) Rodriguez Morel is not a third-

party beneficiary of the insurance contract. Neither argument has merit.

Travelers’ assertion that Rodriguez Morel cannot pursue a declaratory

judgment action in the absence of a direct action statute ignores the critical

distinction between direct actions and declaratory judgment actions. A direct

action is “a suit by an injured party against an insurer, in which the plaintiff

looks to hold the insurer liable for the actions of the insured.” Currier v.

Newport Lodge No. 1236,

,

, at *4 (D.N.H.

Jan. 31, 2022). An insurance declaratory judgment action, in contrast, “seeks

10 a determination of whether coverage exists under certain insurance policies.”

Id. at *5.

Declaratory judgment actions and direct actions are entirely distinct

causes of action that seek “fundamentally different relief” and impose

“different jurisdictional prerequisites.” Id. at *5 & n.11. Thus, the right to

bring a declaratory judgment action exists independently of the right to bring

a direct action. Id. at *5 (concluding that a plaintiff could pursue a

declaratory judgment action against a wrongdoer’s insurer, even though it

could not bring a direct action). Because this case is a declaratory judgment

action rather than a direct action, it is irrelevant that New Hampshire does

not have a direct action statute. See Doc. 1-1 at 5 (stating that Rodriguez

Morel is “seeking a declaration under RSA 491:22 that [Travelers] must

defend against and pay for losses stemming from her ‘employment claims’

against [Mammoth]”); id. at 14-15 (petitioning “for declaratory judgment”

that “Travelers is obligated to defend against and pay for all losses resulting

from Ms. Rodriguez Morel’ ‘Employment Claims’”).

Travelers’ argument that Rodriguez Morel lacks standing because she

is not a third-party beneficiary to the insurance contract fares no better.

Under New Hampshire law, a “third-party beneficiary relationship exists

if . . . the contract calls for a performance by the promisor, which will satisfy

some obligation owed by the promisee to the third party.” Brooks v. Tr. of

11 Dartmouth Coll.,

(2011). The Restatement (Second) of

Contracts explains that this test is satisfied where a promisor agrees to

satisfy another’s debts by directly paying the debtor’s creditors. Restatement

(Second) of Contracts § 302 cmt. b, illus. 3 (relied on in Brooks,

); see also Dartmouth Hitchcock Med. Ctr. v. Cross Country Travcorps,

Inc.,

,

, at *5 (D.N.H. June 10, 2010) (noting

the New Hampshire Supreme Court’s reliance on the Restatement (Second) of

Contracts when determining third-party beneficiary rights).

Here, the EPL policy provides that Travelers will “pay on behalf of

[Mammoth]” any “money which [Mammoth] is legally obligated to pay as a

result of a Claim” covered by the policy. Doc. 20-2 at 69, 71. Because the

policy requires Travelers to satisfy debts owed by Mammoth to its judgment

creditors, Mammoth’s judgment creditors are third-party beneficiaries. Thus,

Rodriguez Morel became third-party beneficiary with standing to maintain a

declaratory judgment action against Travelers by virtue of obtaining a final

judgment against Mammoth.

Applying similar reasoning, a number of courts have concluded that an

injured party becomes a third-party beneficiary to an insured’s liability

insurance contract upon obtaining a final judgment against the insured. See,

e.g., Morales v. Zenith Ins. Co.,

(11th Cir. 2013)

(applying Florida law); CX Reinsurance Co. Ltd. v. Johnson,

,

12 146 (Md. 2022); State Farm Cnty. Mut. Ins. Co. of Tex. v. Ollis,

(Tex. 1989); Zahn v. Gen. Ins. Co. of Am.,

(Okla.

1980); Reagor v. Travelers Ins. Co.,

(Ill. App. Ct. 1980);

see also Allan Windt, 2 Insurance Claims & Disputes § 9:16 (6th ed. 2023);

Jordan Plitt et. al., 17 Couch on Insurance § 242:24 (3d ed. 2023). Although

the New Hampshire Supreme Court has not directly addressed the issue, its

case law suggests that it would recognize that judgment creditors are third-

party beneficiaries of liability insurance contracts. Without discussing the

question of third-party beneficiary status, the court in Newell v. Markel Corp.

nonetheless affirmed a finding in favor of a plaintiff who sued his tortfeasor’s

insurer for breach of contract on the theory that he became a third-party

beneficiary to the insurance policy by obtaining a default judgment against

the tortfeasor.

(2016).

Even Milestone Engineering & Construction, Inc. v. Fire Equipment,

Inc.—the case primarily relied on by Travelers—endorses the theory that a

judgment creditor is a third-party beneficiary of a liability insurance policy.

,

, at *2 (D.N.H. Dec. 13, 2013). Travelers

cites to Milestone for its conclusion that the plaintiff, a tort victim, was not a

third-party beneficiary based on the language of the relevant insurance

policy.

But, because the plaintiff in that case had not yet obtained a final

judgment against the insured, Milestone does not stand for the proposition

13 that judgment creditors are not third-party beneficiaries. See id. at *1. To the

contrary, the court explicitly recognized that third-party beneficiary status

may be achieved by virtue of “an explicit admission of [the insured’s] liability

or a judicial determination of the same.” Id. at *2 (quoting Shaheen v.

Preferred Mut. Ins. Co.,

(D.N.H. 1987)) (alterations in

original). Relying on this principle, the court ultimately concluded that the

plaintiff was a third-party beneficiary “on the alternative ground that [the

insurer] conceded [the insured’s] liability.”

Milestone therefore

undermines, rather than supports, Travelers’ argument.

For these reasons, I conclude that Rodriguez Morel, as a judgment

creditor, has standing to bring the present declaratory judgment action

against Travelers.

C. Statute of Limitations

Travelers next argues that the complaint should be dismissed as

untimely because it falls outside the declaratory judgment statute’s six-

month statute of limitations. Section 491:22 provides that “[n]o petition shall

be maintained under this section to determine coverage of an insurance

policy unless it is filed within 6 months after the filing of the writ, complaint,

or other pleading initiating the action which gives rise to the question.” The

six-month statute of limitations does not apply, however, (1) under the “late

discovery exception” if either “the facts giving rise to such coverage dispute

14 are not known to, or reasonably discoverable by, the insurer” until after the

six-month period or (2) under the “misfortune exception” if a court finds that

the failure to file was “the result of accident, mistake or misfortune and not

due to neglect.”

, III; see Quincy Mut. Fire Ins.

Co. v. Croteau,

(1986).

Travelers asserts that Rodriguez Morel’s claim is time-barred because

it was filed more than a year after she initiated the underlying action against

Mammoth. Rodriguez Morel does not contest that the instant complaint was

filed outside the six-month limitation period. Instead, she asserts that her

claim is exempt from the statute of limitations under both the late discovery

exception and the misfortune exception.

The statute of limitations is an affirmative defense on which a

defendant bears the burden of proof. Riso v. Riso,

, 178-179

(2019); see Fed. R. Civ. P. 8(c)(1). Under the Federal Rules of Civil Procedure,

“a complaint need not anticipate or overcome affirmative defenses.” Schmidt

v. Skolas,

(3d Cir. 2014). Accordingly, dismissal under Rule

12(b)(6) based on an affirmative defense is inappropriate unless the relevant

facts “(1) [are] ‘definitively ascertainable from the complaint and other

allowable sources of information,’ and (2) ‘suffice to establish the affirmative

defense with certitude.’” Gray v. Evercore Restructuring LLC,

(1st Cir. 2008) (quoting Nisselson v. Lernout,

(1st Cir.

15 2006)). In other words, before a motion to dismiss can be granted on the basis

of an affirmative defense, the plaintiff must “affirmatively plead himself out

of court” by alleging “everything necessary to satisfy the affirmative defense.”

Hyson USA, Inc. v. Hyson 2U, Ltd.,

, 939 (7th Cir. 2016)

(cleaned up).

Applying this principle to motions to dismiss for failure to comply with

the statute of limitations, courts have regularly held that even a facially

untimely case should proceed if the allegations in the complaint leave open

the possibility that an exception to the statute of limitations could apply. See,

e.g., Schmidt,

(holding that a district court erred in

granting a motion to dismiss on statute of limitations grounds, despite the

lower court’s finding that the plaintiff did not adequately allege that an

exception to the statute of limitations applied, because “a plaintiff is not

required to plead, in the complaint, facts sufficient to overcome an

affirmative defense”); Supermail Cargo Inc. v. United States,

(9th Cir. 1995) (quoting Jablon v. Dean Witter & Co.,

(9th Cir. 1980)) (“A motion to dismiss based on the running of the statute of

limitations period may be granted only ‘if the assertions of the complaint,

read with the required liberality, would not permit the plaintiff to prove that

the statute was tolled.’”). Accordingly, courts generally do not grant motions

to dismiss on statute of limitations grounds unless either an exception to the

16 statute is unavailable to the plaintiff as a matter of law, see, e.g., Gorelik v.

Costin,

(1st Cir. 2010); Trans-Spec Truck Serv., Inc. v.

Caterpillar, Inc.,

(1st Cir. 2008); or the factual

allegations in the complaint are incompatible with the facts necessary to

establish such an exception, see, e.g., Brawner v. Educ. Mgmt. Corp.,

(3d Cir. 2013) (per curiam).

Such is not the case here. Nothing in the complaint indicates that

Rodriguez Morel could not ultimately establish that her claim fits within one

or more of the exceptions to the six-month statute of limitations. Despite

Travelers’ argument to the contrary, the New Hampshire Supreme Court has

held that the late discovery exception can be invoked by plaintiffs as well as

insurers. Singer v. Travelers Indem. Co.,

(1980) (holding

that a plaintiff could bring a declaratory judgment action under § 491:22 past

the expiration of the six-month statute of limitations because “[o]nce it is

determined that [the late discovery exception] is applicable, the six-month

prohibition does not apply to either party”). And, because the complaint

asserts that Travelers did not render its coverage decision until February

2022, the pleadings leave open the possibility that Rodriguez Morel filed her

complaint within six months of the date that Travelers learned of the facts

that gave rise to the coverage dispute. Doc. 1-1 at 101. The complaint

similarly leaves open the possibility that the misfortune exception could

17 apply. Although not directly addressed by the pleadings, the allegations in

the complaint do not in any way undermine the assertion that the late filing

was due to misfortune rather than neglect. Cf. Schmidt,

(concluding that a district court erred in dismissing claims for failure to

comply with the statute of limitations where the plaintiff could claim the

benefit of the discovery rule because “nothing in [the] complaint clearly

suggests that [the plaintiff] did in fact have knowledge of the full scope of his

injury” prior to the time of filing). Thus, dismissal based on the running of

the statute of limitations is not appropriate at this time.

IV. CONCLUSION

For the foregoing reasons, Travelers’ motion to dismiss (Doc. 20) is

denied.

SO ORDERED. /s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge

February 2, 2024

cc: Counsel of Record

18