CT Property and Casualty Insurance Law Newsletter – December 2022
December 16, 2022
Superior Court – Underinsured Motorist Benefits
In Mastrobattisto v. Zurich American Insurance Company et al, the co-defendant Nationwide Agribusiness Insurance Company (“Nationwide”) sought a declaratory order that the plaintiff was bound by the informed consent form executed by a fellow named insured under an automobile policy issued by Nationwide, and that the informed consent reduced the coverage available to the plaintiff. Following the subject accident, the plaintiff exhausted the available liability coverage from the responsible motorist’s policy and from the policy covering the company vehicle she had been operating. In connection with the plaintiff’s policy with Nationwide, the plaintiff’s fellow named insured had executed an informed consent form whereby he selected Uninsured/Underinsured Motorist (“UM/UIM”) coverage limits of $300,000, which was less than the $1,000,000 in bodily injury liability coverage under that policy. The plaintiff argued that because she did not sign the informed consent form to the policy herself, she could not be bound by the selection of reduced coverage. Nationwide argued that the signature of the fellow named insured provided the necessary informed consent form to reduce the policy coverage as applicable to the plaintiff. The Court noted that under Connecticut General Statutes § 38a–336(a)(2), “any named insured” can effectuate the selection of UM/UIM coverage limits that are less than the bodily injury liability coverage. Accordingly, the Court found that the validly executed informed consent signed by the fellow named insured was binding on the plaintiff to reduce the UIM coverage limits.
Superior Court – Dog Bite Claim – Homeowner’s Insurance Coverage
In Liberty Mutual Corporation v. QBE Insurance Corporation, the two insurers disputed coverage for a dog bite claim. Liberty Mutual had issued a homeowner’s insurance policy to the homeowner who was also a co-owner of the dog. QBE had issued a homeowner’s insurance policy to the dog’s’ other co-owner. QBE denied coverage. Liberty Mutual settled the claim on behalf of QBE’s named insured and sought reimbursement from QBE for the amount it paid in settlement. QBE’s policy contained an express exclusion from coverage for bodily injury or property damage “caused in whole or in part by one or more ‘prohibited breeds of dogs[,]’ ” including pit bull or any cross breed of pit bull. The parties agreed that the dog involved was a pit bull or cross breed of a pit bull. QBE moved for summary judgment on the ground that the plain terms of its policy excluded coverage for the dog bite claim. Liberty Mutual argued that QBE’s exclusion from coverage for claims caused by particular dog breeds was contrary to public policy and was inapplicable to the facts of QBE’s named insured being a keeper of the dog and a bite falling under the Connecticut strict liability dog bite statute. Liberty Mutual further argued that that Connecticut public policy is reflected in its statute prohibiting municipalities from adopting “breed-specific dog ordinances[,]” and cited to law review articles that have argued that breed-specific exclusions in insurance policies are “an overreaction.” The Court observed that the legislature’s decision to prohibit municipalities from adopting ordinances that are dog breed specific demonstrates that the it is aware of the issue addressed in law review articles and is capable of legislating about it, but has chosen not to prohibit breed-specific exclusions in homeowners insurance policies. The Court also noted that law review articles arguing that such exclusions are ill-advised does not make them unenforceable in the absence of legislative action. Based on its analysis, the Court granted QBE’s motion for summary judgment.
U.S. District Court – Duty to Defend – Intentional Conduct Exclusion
In Acceptance Indemnity Insurance Company v. Migneault et al, the insurer sought to avoid coverage for an underlying wrongful death action, in which it was alleged that one defendant utilized his position as an employee of a food store to procure illegal drugs and provide them to the decedent, who had suffered an overdose and passed away as a result. The underlying complaint also alleged that the store owner defendant negligently hired the employee and failed to identify and prevent illegal activity. The insurer moved for summary judgment and argued that coverage was not triggered because no “accident” had occurred, or that in the alternative, the intentional conduct exclusion applied to the conduct alleged in the underlying complaint. After reviewing various prior cases on similar issues, the Court noted that death caused by a drug overdose will only be an expected or intended harm if either the provision of drugs is so “inherently harmful” that death by overdose would be a natural consequence, or the provider had actual knowledge that the drugs were harmful enough that the decedent might perish as a result of taking them. The Court found there to be genuine issues of material fact in dispute concerning what kind of drugs the employee provided, in what quantity, and under what circumstances. As for the underlying claims involving the store owner, the Court noted that the underlying allegation that the store owner “knew or should have known that [the employee] utilized [the store] to conduct illegal activities, including the purchase and distribution of illegal drugs, yet failed to take steps to prevent the same” left open the possibility that even if the employee’s conduct was intentional, the store owner did not have actual knowledge that the employee was planning to and did provide the decedent with illegal drugs, but instead merely failed to fulfill one of the alleged duties. The Court found that the underlying complaint alleged facts that could potentially fall within the scope of coverage, which triggered the duty to defend. The insurer failed to establish that the store owner’s conduct was not accidental as a matter of law. The motion for summary judgment was denied as to the claims involving both defendants.
Superior Court – Underinsured Motorist Benefits
In Wedderburn et al v. Budget Truck Rental, LLC, the plaintiffs sought Underinsured Motorist (“UIM”) coverage available through Budget with limits of $20,000 per claim and $40,000 per accident. The same limits had been available to the plaintiffs under the tortfeasor’s insurance policy, which ultimately paid the plaintiffs an aggregate amount of $40,000. Budget filed a renewed motion for summary judgment on the grounds that where the tortfeasor has liability insurance equal to the available UIM, there is no UIM coverage available under Connecticut law. Budget had previously moved for summary judgment on the same issue, but the motion was denied because there was a question of fact concerning whether the rental contract on which the motion was based was, in fact, the applicable rental contract for the vehicle occupied by the plaintiffs. The renewed motion for summary judgment contained a new affidavit which addressed this issue. The Court rejected the plaintiffs’ argument that Budget needed to seek permission to file a second motion for summary judgment under these circumstances. The Court also disagreed with the plaintiffs’ contention that the renewed motion for summary judgment was effectively an untimely motion to reargue, noting that the motion was based on new information and further that there is no prohibition against filing a second motion for summary judgment. The Court declined to apply the discretionary “law of the case” doctrine because Budget was not seeking to reverse a prior decision on a point of law, but was rather seeking a ruling based on a new factual record. The renewed motion for summary judgment was granted.