Authored by: Joseph Ciollo
U.S. District Court – Deposition Subpoena To Insurer – Motion To Quash
In Kennedy et al v. Nationwide General Insurance Company et al, the plaintiffs were administrators of the decedent’s estate following a motor vehicle accident which resulted in the death. The estate brought suit against Nationwide and claimed that the decedent was entitled to Underinsured Motorist (“UIM”) benefits under the applicable insurance policy. Nationwide argued that the decedent was not a covered person because he was not operating a covered motor vehicle at the time of the accident. The plaintiff’s issued a deposition subpoena to obtain testimony and documents from a Nationwide representative. Nationwide moved to quash the subpoena on the basis that the subpoena was not relevant to any claim or defense because the case involved a coverage dispute and, therefore, only a question of law for the Court in interpreting the policy. Pursuant to the standards of review, the party issuing the subpoena must demonstrate that the information sought is relevant and material to the allegations and claims at issue in the proceedings. Noting that Nationwide had already produced the entire insurance policy to the plaintiffs, the Court was unable to discern how deposing a representative of Nationwide could further elicit information as to whether or not the decedent was covered under the policy. The plaintiffs argued that because Nationwide was seeking to exclude the decedent from UIM coverage, it can only do so pursuant to an express statutory or regulatory authorization. The plaintiffs asserted that there was no such authorization to exclude UIM coverage here and this entitled the plaintiffs to recover. The Court observed that while the plaintiffs made compelling arguments, they misinterpreted the dispute currently before the Court. The issue was not whether the Nationwide policy omitted UIM coverage as required by Connecticut law, but whether the decedent himself was covered under the policy. The Court decided that the plaintiffs did not demonstrate a sufficient need for the deposition on this basis. Finally, the plaintiffs argued that under principles of contract interpretation, any ambiguity in the terms of an insurance policy must be construed in favor of the insured, and that extrinsic evidence may be considered in determining the parties’ intentions regarding the scope of coverage. However, the Court noted that while those legal principles may be applicable at the summary judgment stage, neither was applicable for deciding the relevance of the discovery request. Further, the plaintiffs did not point to any potentially ambiguous or disputed terms in the insurance policy. Without such a showing, the Court was unable to determine how Nationwide’s intent had relevance to the insurance coverage dispute. The motion to quash was granted.
U.S. District Court – Duty To Defend – Liability Coverage Exclusions
In Salgado v. United States Liability Insurance Company, the plaintiff previously obtained a judgment against the defendant, USLI’s insured, in an underlying action. The plaintiff was injured while attending a Cinco de Mayo event organized by USLI’s insured, at which another person allegedly discharged a muzzle-loading black powder antique firearm in the plaintiff’s direction. USLI denied covered under the Commercial General Liability policy issued to its insured on the basis of coverage exclusions for “Firearms, Fireworks and Other Pyrotechnic Devices” and “Assault and Battery.” The plaintiff filed an action against USLI pursuant to Connecticut’s direct action statute and alleged that USLI breached its duty to defend its insured in the underlying action. The plaintiff and USLI filed cross-motions for summary judgment. Regarding the Firearm Exclusion, the Court analyzed various definitions of the terms “firearm” and “ammunition.” The Court determined there was legal uncertainty about whether a court would deem the Firearm Exclusion applicable to a device that could not in fact fire a projectile. Accordingly, given the legal and factual uncertainty about the capabilities of the antique device, the Firearms Exclusion did not clearly and unambiguously exclude coverage. Similarly, the Court found that, at the very least, it was ambiguous whether the device at issue in this case met the definition of “firework” or a “similar device” that “when ignited or activated, sound, smoke, motion or a combination of these.” Regarding the Battery Exclusion, the Court found that a lay person reading the policy would not reasonably expect for a battery exclusion to cover not only unintentional conduct but also injuries that result indirectly through the negligent interaction with devices or other objects. According to the Court, there was at a minimum ambiguity about the reach of the Battery Exclusion to injuries that do not result from body-to-body contact and result indirectly from conduct where the actor had no intention to set in motion an object or substance that ultimately causes injury. Because the Court found there to be legal uncertainty as to the application of the coverage exclusions relied upon by USLI, the Court determined that the allegations of the complaint in the underlying action fell even possibly within the coverage, which under Connecticut law triggers an insurer’s duty to defend. The plaintiff’s motion for summary judgment on the duty to defend was granted, and USLI’s motion for summary judgment was denied.
Superior Court – Underinsured Motorist Coverage – Reduction Of Limits
In Anderson v. Geico General Insurance Company et al, the plaintiff was an administrator of the decedent’s estate following a motor vehicle accident which resulted in the death. At issue was the plaintiff’s claim against defendant Liberty Mutual Liability Insurance Company (“Liberty”) for Underinsured Motorist (“UIM”) benefits under the applicable insurance policy. Following the accident, the plaintiff settled claims against the tortfeasor for $25,000 with State Farm Insurance Company (“State Farm”) as the insurer of the tortfeasor. In addition, the plaintiff settled a UIM claim for $25,000 with Geico General Insurance Company (“Geico”) as the insurer of the vehicle occupied by the decedent. Both Geico and Liberty had UIM policies with a coverage limit of $50,000. The parties agreed that pursuant to Connecticut law, Geico was the primary coverage and Liberty was secondary. However, the plaintiff argued that for purposes of the statute and regulations concerning the damages paid for UIM coverage, the payment by the tortfeasor did not reduce the amount by considering the tortfeasor payment as a set off to the policy of Liberty. The plaintiff sought to collect UIM benefits from Liberty as the insurer of the decedent. Liberty filed a motion for summary judgment and argued that since coverage under Liberty’s policy was equal to that of Geico’s, Liberty’s coverage was not triggered under the terms of Liberty’s policy. Liberty also argued that to permit further recovery from Liberty would amount to a stacking of the UIM coverages in violation of Liberty’s policy and the anti-stacking provisions of the policy and the state law. Upon review of the applicable Connecticut statutes and regulations pertaining to UIM coverage, the Court found it clear that the legislature did not intend to extend the payment for the injury beyond the maximum amount limited in the policies, which is what would occur if Liberty was obligated to pay $25,000 for UIM payments. Liberty’s motion for summary judgment was granted.
