Authored by: Joseph Ciollo
Superior Court – Underinsured Motorist Coverage – Policy Limit and Reductions
In Bottass v. United Ohio Insurance Company, the plaintiff was injured in a motor vehicle accident and filed an action to recover Uninsured Motorist (“UM”) benefits from her insurer. After a trial, the jury returned a verdict in the amount of $1.7 million. The defendant then filed a motion for remittitur of the jury’s award of damages on the grounds that: (1) the plaintiff’s recovery was statutorily limited to $500,000, the limit of the plaintiff’s UM policy, and (2) the plaintiff’s recovery was further limited to $495,000 because the plaintiff previously received $5,000 in medical expense payments from the defendant. The Court found that a reduction of the jury’s award to $500,000 was supported both by the applicable UM statutory language, as well as the public policy behind the availability of UM coverage. Regarding the defendant’s second argument for further reduction of the jury’s award based on the plaintiff’s receipt of $5,000 in medical expense payments, the Court disagreed. While the applicable Connecticut UM regulations permit an insurer to reduce its UM coverage liability based on payment of medical expense benefits, the specific language in the defendant’s policy was substantially congruent with the regulations. For this reason, the Court found that the defendant did not bargain for the reduction it sought the Court to enforce. Accordingly, the Court denied the motion for remittitur insofar as it sought the further reduction of $5,000 from the jury’s award.
Superior Court – Homeowners Insurance – Contractor’s Claims
In Rising Star Roofing, LLC v. General Insurance Company of America, the plaintiff roofing contractor filed suit against the defendant, seeking payment for the amounts the contractor spent repairing a home owned by the defendant’s insureds, Alexander and Mary-Jane Pazda. Although the defendant already paid the contractor over $28,000 for the damage, the contractor claimed additional compensation pursuant to a construction contract and an assignment of insurance claim and insurance benefits signed by Alexander Pazda. The contractor moved for summary judgment, claiming there were no genuine issues of material fact that: (1) the assignment was invalid because it was not signed by both insureds; (2) the defendant had already paid the “total project cost” as defined in the contract; and (3) the contractor was unable to prove the amount “actually and necessarily incurred to repair or replace” the property as required by the loss settlement provisions of the insurance policy because the Xactimate estimating software the contractor used to determine the price of repairing the property did not provide sufficient specificity to support the contractor’s claim for additional compensation. The defendant also asserted that the contract was void and unenforceable based on the contractor’s failure to comply with statutory requirements. The contractor opposed the defendant’s motion for summary judgment on the grounds that: (1) Alexander Pazda had apparent authority to sign the assignment on behalf of his wife, Mary-Jane Pazda; (2) the Xactimate estimating software provided sufficient evidence to support the contractor’s claim for additional compensation; and (3) the defendant lacked standing to contest the enforceability of the contract based on an alleged statutory violation because the defendant was not a party to the contract. The contractor also filed its own motion for summary judgment arguing that there was no genuine issue of material fact that it was entitled to an appraisal or court order determining the amount of the loss pursuant to the appraisal provision of the policy. The defendant argued that the contractor was not entitled to appraisal because appraisal rights are waived if not demanded before repairs are completed. The defendant further asserted that the contractor was precluded from seeking appraisal because neither the insureds nor the contractor ever demanded appraisal prior to initiating litigation as required by the “Suit Against Us” provision of the policy. The insurer also contended there was no basis for the contractor’s request for appraisal because the contractor was bound by the express terms of the contract, which specifically stated that the final project cost “will equal the carrier’s final agreed scope and estimate of damages.”
The Court denied first prong of the defendant’s motion for summary judgment because genuine issues of material fact existed regarding whether Alexander Pazda had apparent authority to execute the assignment on behalf of his wife, Mary-Jane Pazda. The Court also denied the second prong of the defendant’s motion for summary judgment because a genuine issue of material fact existed regarding whether the contractor was limited to recovering the “final” project cost set forth in the contract. The Court also concluded that a genuine issue of material fact existed regarding whether the contractor will be able to prove the amount “actually and necessarily incurred to repair or replace” the property by utilizing the Xactimate estimating software. Regarding the contractor’s alleged failure to comply with statutory requirements in its contract with the insureds, the Court concluded that the defendant may not assert such non-compliance as a basis for avoiding payment of additional amounts that may be due pursuant to the policy. Turning to the contractor’s motion for summary judgment, the Court disagreed with the defendant’s argument that the contractor cannot enforce its assignment rights simply because the assignment was executed post loss. The Court also found there to be a genuine issue of material fact as to whether the contractor’s delay in seeking an appraisal was sufficiently significant to preclude it from seeking appraisal. The Court further concluded that it would be inappropriate to determine, as a matter of law, that every failure to request appraisal prior to initiating suit automatically results in a waiver of appraisal rights
U.S. District Court – Insured’s Duties to Cooperate and Provide Records
In Billie v. Plymouth Rock Assurance Corp. et al, the plaintiff’s home was damaged in a fire. The defendant determined that the plaintiff failed to cooperate with the investigation into the claim and denied on that basis. The plaintiff filed an action for breach of contract, alleging that his client had been wrongfully denied. The defendant filed a motion for summary judgment. The evidence demonstrated that the police and fire departments were ultimately unable to conclusively determine the cause of the fire, but they suspected that it was caused by an unknown human source. The defendant learned that the subject claim was the plaintiff’s fourth fire loss claim against an insurer. As part of the claim investigation, the defendant’s counsel requested documents from the plaintiff, including financial records, tax statements, and banking information from 2019 to present, as well as records of improvements made to the property. Over the course of eighteen months, the defendant’s counsel followed up seven times, seeking responsive documents from the plaintiff, who acknowledged receipt of at least some of these communications. During the claim investigation, the defendant’s counsel conducted the plaintiff’s examination under oath despite not having received all of the documents that had been requested. Subsequently, the defendant’s counsel sent the plaintiff a letter to once again request the documents and advise the plaintiff that the defendant would conclude that he did not wish to cooperate with the investigation if the documents were not received within thirty days. Having received no response from the plaintiff, the defendant issued a letter denying the claim. On the issue of the defendant’s ongoing requests for documents, the Court reviewed evidence and deposition testimony that had been obtained from both the plaintiff and his public adjuster concerning their understanding of the requests and the incomplete scope of the plaintiff’s compliance. The Court found that based on all of the evidence in the record, there was no dispute that the plaintiff failed to comply with his duties after the fire, even drawing all reasonable inferences in his favor. The Court also found that the plaintiff’s systematic and unexcused noncompliance with the defendant’s document requests was substantial and material. Citing prior Connecticut decisional law, the Court explained that in cases like the instant action, where the basis of the insurer’s request for the insured’s financial information is predicated on suspicions of arson, financial records of the insured are patently relevant to the insurer’s rightful scope of the investigation and requests for income records are certainly material inquiries. The Court found that the plaintiff’s failure to produce the requested documents prejudiced the defendant in its investigation of the plaintiff’s claim. The defendant needed the plaintiff’s financial and tax records in order to investigate whether he and his family were experiencing financial distress that might raise questions regarding an unexplained fire and subsequent insurance claim. As a result, the Court held that the defendant was entitled to a judgment as a matter of law that the defendant was relieved of the obligation to pay the underlying insurance claim due to the plaintiff’s breach of the “Duties After Loss” provision in the policy. The motion for summary judgment was granted.
