Authored by: Joseph Ciollo
Superior Court – Standing – Third-Party Beneficiaries
In Weston-Keldo et al v. Ramos-Rodriguez et al, the plaintiffs filed a personal injury action arising out of a motor vehicle accident. The insurer for the tortfeasor defendants was Progressive Casualty Insurance Company (“Progressive”). As to the claims against Progressive, the plaintiffs claimed to be third-party beneficiaries to an insurance contract between Progressive and its insured, and that Progressive breached that agreement by refusing to pay for claims when the insured acknowledged fault. Progressive filed a motion to dismiss on the basis that the plaintiffs lacked standing. It was undisputed that the plaintiffs were not parties to the insurance contract and were not named or additional insureds. Further, the complaint was devoid of facts that could support a claim that Progressive and its insured intended to create a direct obligation between a promisor and the plaintiffs. The plaintiffs argued that the Connecticut statute requiring drivers to maintain automobile insurance had the effect of making them third-party beneficiaries. The Court rejected this argument and noted that the statute only establishes a person’s obligation to prove financial responsibility when operating a motor vehicle and not an insurer’s obligation to create third-party beneficiary rights when issuing policies. The Court further noted that under the direct action statute, the plaintiffs must obtain a judgment against Progressive’s insured before they can proceed against Progressive. The motion to dismiss was granted.
Superior Court – Standing – Quantum Meruit, Promissory Estoppel and Unjust Enrichment
In Modzelewski’s Recovery and Repair, Inc. v. Colon et al, the plaintiff was summoned by police to the scene of a motor vehicle accident where an overturned dump truck spilled allegedly hazardous fluid on and around the roadway. The plaintiff assisted with the cleaning up of the accident scene, including removal of the dump truck. The plaintiff filed an action against the owner and operator of the dump truck, as well against Progressive Casualty Insurance Company (“Progressive”) as the insurer of the dump truck, to recover payment for an outstanding bill for services rendered. The claims against the plaintiff included causes of action for quantum meruit, promissory estoppel and unjust enrichment. Progressive filed a motion to dismiss on the basis that the plaintiff lacked standing. Progressive argued that the complaint failed to allege any contractual relationship between itself and the plaintiff. Progressive also argued that there was no allegation about how, if at all, Progressive benefitted from the work that the plaintiff performed at the scene of the accident. Moreover, Progressive argued that there was no allegation that the types of services (i.e., automobile recovery, towing, etc.) were included in the insurance contract between Progressive and its insured. In response, the plaintiff argued that there was an implied contract created when Progressive’s insured operator offered his insurance card at the accident scene, thereby conferring apparent authority to bind Progressive. The plaintiff also argued that because Progressive made partial payment of the outstanding bill, it should be presumed to have taken on full financial responsibility for the remainder thereof. Citing binding authority that supported Progressive’s position, the Court rejected the plaintiff’s position that its claims should be permitted as a matter of fairness. Ultimately, the Court concluded that the plaintiff failed to allege any facts or provide language in the insurance policy that would suggest that Progressive and its insured intended a direct obligation to the plaintiff. The motion to dismiss was granted.
Superior Court – Duty to Defend – Property Damage
In Amica Mutual Insurance Company v. Gilleran et al, Amica sought a judicial determination regarding its duty to defend and indemnify its insured, in connection with a motor vehicle negligence action filed against him for economic damages relating to the loss of use and inherent diminished value of a vehicle, loss of time for the damaged party to pursue her interests, and loss of life’s enjoyment. Amica filed a motion for summary judgment asserting that it was entitled to judgment as a matter of law because neither inherent diminished value nor inconvenience damages constitute “property damage” within the meaning of its automobile policy. The defendants, who were the plaintiff and defendant in the underlying action, opposed the motion for summary judgment and filed their own cross-motions for summary judgment. The defendants argued that inherent diminished value has been recognized by the Connecticut Supreme Court as a legitimate form of property damage. The defendants further argued that Amica’s interpretation of its policy conflicted with Connecticut law governing the minimum amount of liability coverage insurers must provide to their insureds. The defendants also argued that Amica’s interpretation of its policy violated Connecticut regulations regarding a motor vehicle liability insurer’s obligation to cover property damage caused by an accident and arising out of the ownership, maintenance or use of a motor vehicle owned or long-term leased by the named insured. The defendants also argued that Amica was obligated to defend and indemnify its insured for the underlying plaintiff’s claims for lost time, inconvenience, and loss of life’s enjoyment because those damages arose out of the physical damage to said plaintiff’s vehicle. Amica argued that it had no duty to defend or indemnify its insured because diminution in value does not constitute “property damage” as that term is defined in the policy. However, the Connecticut Supreme Court has held that diminution in value may constitute a proper measure of property damage in the context of a damaged automobile in certain situations. The Court concluded that the plain language of the applicable Connecticut regulation requires Amica to provide coverage for “all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage,” including damages based on diminution in value. Accordingly, the Court held that Amica was obligated to defend and indemnify its insured in connection with any claim for diminution in value damages in the underlying action. Amica’s motion for summary judgment was denied insofar as it related to diminution in value damages. As for the underlying claims for inconvenience damages, the Court found it unnecessary to determine whether Amica had a duty to defend, in light of Connecticut law that requires an insured to defend all claims if even one of the claims gives rise to the duty to defend. However, due to prior cases holding that inconvenience damages are not recoverable in situations similar to the present action, the Court granted Amica’s motion for summary judgment insofar as it related to the underlying claims for inconvenience damages.
