Lexington Ins. Co. v. Lexington Healthcare Group, Inc. ( 2014 )

******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
LEXINGTON INS. CO. v. LEXINGTON HEALTHCARE GROUP, INC.—
DISSENT
EVELEIGH, J., with whom McDONALD and
ESPINOSA, Js., join, concurring and dissenting. I agree
with parts I and III of the majority opinion, but respect-
fully disagree with the majority’s conclusion in part
II that the policy unambiguously provides for only $1
million in professional liability coverage for all of the
defendants’1 claims because that is the aggregate limit
for professional liability coverage at each location.
Instead, I would conclude that endorsement no. 3,
which provides for an ‘‘[a]ggregate [p]olicy [l]imit’’ of
$10 million, when read in conjunction with the declara-
tions page, renders the terms of the policy ambiguous.
Accordingly, I would adhere to our well established
precedent and construe the terms of the policy in favor
of the insured and, thus, in favor of providing coverage.
See Allstate Ins. Co. v. Barron, 269 Conn. 394, 406, 848
A.2d 1165 (2004) (‘‘[w]hen the words of an insurance
contract are, without violence, susceptible of two
[equally reasonable] interpretations, that which will
sustain the claim and cover the loss must, in preference,
be adopted’’ [internal quotation marks omitted]). I
therefore respectfully dissent from part II of the major-
ity opinion.
I agree with the facts and procedural history set forth
in the majority opinion. I also agree with the majority
that the resolution of this issue requires us to interpret
the terms of the insurance policy. ‘‘[C]onstruction of a
contract of insurance presents a question of law for the
court which this court reviews de novo. . . . If the
terms of the policy are clear and unambiguous, then
the language, from which the intention of the parties
is to be deduced, must be accorded its natural and
ordinary meaning. . . . Under those circumstances,
the policy is to be given effect according to its terms.
. . . When interpreting [an insurance policy], we must
look at the contract as a whole, consider all relevant
portions together and, if possible, give operative effect
to every provision in order to reach a reasonable overall
result. . . .
‘‘In determining whether the terms of an insurance
policy are clear and unambiguous, [a] court will not
torture words to import ambiguity where the ordinary
meaning leaves no room for ambiguity . . . . Similarly,
any ambiguity in a contract must emanate from the
language used in the contract rather than from one
party’s subjective perception of the terms. . . . As with
contracts generally, a provision in an insurance policy
is ambiguous when it is reasonably susceptible to more
than one reading. . . . Under those circumstances, any
ambiguity in the terms of an insurance policy must be
construed in favor of the insured because the insurance
company drafted the policy.’’ (Internal quotation marks
omitted.) Johnson v. Connecticut Ins. Guaranty Assn.,
302 Conn. 639, 643, 31 A.3d 1004 (2011).
In view of the fact that the primary inquiry in this
matter is whether the policy is unambiguous, I empha-
size that ‘‘[t]he fact that the parties advocate different
meanings of the [insurance policy] does not necessitate
a conclusion that the language is ambiguous.’’ (Internal
quotation marks omitted.) Connecticut Ins. Guaranty
Assn. v. Fontaine, 278 Conn. 779, 786, 900 A.2d 18
(2006). ‘‘Rather, insurance policy language is ambiguous
if we determine that it is ‘reasonably susceptible to
more than one reading.’ ’’ Id., quoting Metropolitan Life
Ins. Co. v. Aetna Casualty & Surety Co., 255 Conn.
295, 305, 765 A.2d 891 (2001). In contrast, ‘‘[a] contract
is unambiguous when its language is clear and conveys
a definite and precise intent.’’ United Illuminating Co.
v. Wisvest-Connecticut, LLC, 259 Conn. 665, 670, 791
A.2d 546 (2002). In determining whether policy language
is ambiguous, we read the policy ‘‘from the perspective
of a reasonable layperson in the position of the pur-
chaser of the policy.’’ (Internal quotation marks omit-
ted.) Israel v. State Farm Mutual Automobile Ins. Co.,
259 Conn. 503, 509, 789 A.2d 974 (2002).
The primary issue is whether the phrase ‘‘[a]ggregate
[p]olicy [l]imit’’ contained within endorsement no. 3 can
be reasonably read to amend the phrase ‘‘[a]ggregate
[l]imit’’ of both professional liability and general liability
coverage from $1 million, as stated on the declarations
page, to $10 million. The plaintiff, Lexington Insurance
Company, claims, and the majority agrees, that the
aggregate policy limit contained within endorsement
no. 3 clearly and unambiguously provides that $10 mil-
lion is the maximum amount of insurance available
under the entire policy when claims for both types of
coverage, at all insured locations, are combined. The
majority concludes that the trial court improperly
equated the terms ‘‘[a]ggregate [p]olicy [l]imit’’ and
‘‘[a]ggregate [l]imit’’ because the terms are different
and, therefore, the majority claims it is clear that the
plaintiff intended each term to have a different meaning.
The majority additionally relies on the fact that the term
‘‘[a]ggregate [p]olicy [l]imit’’ only appears in endorse-
ment no. 3, while the term ‘‘[a]ggregate [l]imit’’ appears
in the declarations page and in § IV B of the professional
liability part of the policy, both prior to and following
its amendment by endorsement no. 3. The majority
therefore concludes that, by virtue of the placement of
the two terms and the absence of the word policy in
the term ‘‘[a]ggregate [l]imit,’’ it is clear that the term
‘‘[a]ggregate [p]olicy [l]imit’’ does not amend the term
‘‘[a]ggregate [l]imit.’’ Instead, the majority concludes
that the term ‘‘[a]ggregate [p]olicy [l]imit’’ unambigu-
ously amends the policy to place a limit on the maxi-
mum amount of insurance available under the entire
policy when claims for both types of coverage, general
liability and professional liability, at all insured loca-
tions, are combined, while the term ‘‘[a]ggregate [l]imit’’
refers to the total amount available for professional
liability coverage only, at a particular location. While I
agree that the majority’s interpretation of the policy
is reasonable, I disagree that the policy language is
unambiguous and compels only one conclusion.
I begin my analysis with the language of the relevant
portions of the insurance policy. On the declarations
page of the policy, under the heading ‘‘LIMITS OF
INSURANCE,’’ the following provisions are included:
‘‘(a) Healthcare Professional Liability
‘‘Aggregate Limit $1,000,000
‘‘Each Medical Incident $ 500,000 . . .
‘‘(b) Healthcare General Liability
‘‘Aggregate Limit $1,000,000 . . .
‘‘Each Occurrence Limit $ 500,000 . . . .’’
As the majority points out, it is undisputed that only
professional liability coverage is available for the indi-
vidual defendants’ claims.
Section IV of the professional liability part of the
policy, entitled ‘‘LIMITS OF INSURANCE,’’ provides in
relevant part: ‘‘The [a]ggregate [l]imit is the most we
will pay for the sum of all damages under this [c]overage
[p]art.’’ Additionally, § IV of the general liability part of
the policy, which is also entitled ‘‘LIMITS OF INSUR-
ANCE,’’ contains similar language. Specifically, § IV B
provides in relevant part: ‘‘The [a]ggregate [l]imit is the
most we will pay for the sum of [all damages under the
general liability coverage part of the policy] . . . .’’
The policy also contains a number of endorsements.
Endorsement no. 3 is entitled ‘‘AGGREGATE LIMITS
OF ENDORSEMENT [GENERAL LIABILITY/PROFES-
SIONAL LIABILITY].’’ That endorsement provides in
relevant part:
‘‘The Policy is amended as follows:
‘‘I. AGGREGATE POLICY LIMIT
‘‘The Aggregate Policy Limit stated below is the most
we will pay for any annual period for the sum of all
damages payable under the [professional liability cover-
age part] and the [general liability coverage part].
‘‘AGGREGATE POLICY LIMIT: $10,000,000.
‘‘II. AGGREGATE LIMITS PER LOCATION
‘‘Subject to the Aggregate Policy Limit stated in Item
I. above:
‘‘A. HEALTHCARE PROFESSIONAL LIABILITY COV-
ERAGE PART FOR LONG TERM CARE FACILITIES,
Section IV. Limits of Insurance, Item B. is deleted in
its entirety and replaced with the following:
‘‘The Aggregate Limit is the most we will pay for
the sum of all damages under this Coverage Part. The
Aggregate Limit shall apply separately to each location
owned or rented by you.
‘‘B. HEALTHCARE GENERAL LIABILITY COVER-
AGE PART FOR LONG TERM CARE FACILITIES, Sec-
tion IV. Limits of Insurance, Item B. is deleted in its
entirety and replaced with the following:
‘‘The Aggregate Limit is the most we will pay for the
sum of [all damages under the general liability coverage
part of the policy] . . . .’’ (Emphasis in original.)
The majority states that, because both types of cover-
age are included in the definition for ‘‘[a]ggregate [p]ol-
icy [l]imit,’’ the term clearly conveys that the aggregate
policy limit is the most the plaintiff will pay annually
for the sum of all damages ‘‘under both the general
liability and professional liability parts of the policy.’’
(Emphasis in original.) I respectfully disagree.
An examination of the relevant terms of the policy
reveals the ambiguity in the policy language. First, the
terms ‘‘[a]ggregate [l]imit’’ and ‘‘[a]ggregate [p]olicy
[l]imit’’ are extremely similar and, therefore, it is not
unreasonable to assume that a layperson reading the
policy would conclude that the terms are equivalent
and that both refer to the maximum amount the insurer
will pay out under the professional liability and general
liability coverage parts, respectively. The majority dis-
misses this similarity, and concludes that because the
phrase ‘‘[a]ggregate [p]olicy [l]imit’’ contains the word
policy, it is a different term than ‘‘[a]ggregate [l]imit’’
and therefore must be construed differently. I agree
with the majority that when different terms are
employed within the same writing, different meanings
are often intended. See Scholastic Book Clubs, Inc. v.
Commissioner of Revenue Services, 304 Conn. 204, 217,
38 A.3d 1183 (applying rule in statutory construction),
cert. denied, U.S. , 133 S. Ct. 425, 184 L. Ed. 2d
255 (2012). The similarities between the definitions of
the two phrases, however, mitigate any distinction that
the word policy places on the terms. Specifically, the
aggregate limit for professional liability coverage is
defined in § IV B as ‘‘the most [the insurer] will pay
for the sum of all damages under this [c]overage [p]art,’’
while the aggregate policy limit is defined in endorse-
ment no. 3 as ‘‘the most [the insurer] will pay for any
annual period for the sum of all damages payable under
the [professional liability coverage part] and the [gen-
eral liability coverage part].’’ (Emphasis added.) Thus,
the definitions contain identical ‘‘for the sum of all
damages’’ language. In light of the fact that the defini-
tions of the terms contain similar language and, in my
view, can reasonably be read to have the same meaning,
I would decline to conclude that the qualifying word
policy in the phrase ‘‘[a]ggregate [p]olicy [l]imit’’ clearly
distinguishes it from the term ‘‘[a]ggregate [l]imit.’’
Furthermore, in my view, the fact that both the pro-
fessional liability and general liability coverage are ref-
erenced in the definition of aggregate policy limit does
not unambiguously indicate that it is distinct from the
policy’s aggregate limit. Once again, the aggregate pol-
icy limit is defined in endorsement no. 3 as ‘‘the most
[the insurer] will pay for any annual period for the sum
of all damages payable under the [professional liability
coverage part] and the [general liability coverage part].’’
(Emphasis added.) The use of the word ‘‘and’’ to link
the two coverage parts does not clearly indicate that
the insurer intended to combine the sum of all damages
paid under both the general liability and professional
liability parts of the policy when determining whether
an aggregate limit for the entire policy had been
reached. Rather, I would conclude that a reasonable
layperson reading the policy could conclude that, the
‘‘[a]ggregate [p]olicy [l]imit’’ in endorsement no. 3
amends the ‘‘[a]ggregate [l]imit’’ for both professional
liability and general liability, so that the ‘‘[a]ggregate
[l]imit’’ for both coverage parts is $10 million each. In
other words, a layperson in the position of the pur-
chaser could read the definition of aggregate policy
limit in endorsement no. 3 and conclude that $10 million
is the most that the insurer will pay annually to each
location under the professional liability coverage part
of the policy and $10 million is the most that the insurer
will pay annually to each location under the general
liability coverage part of the policy.
I find further support for my reading of the policy
in the fact that the aggregate policy limit set forth in
endorsement no. 3 acts to amend the policy as a whole,
and is not preceded by language purporting to insert
that term into the ‘‘LIMITS OF INSURANCE’’ section
of either the professional liability or general liability
coverage part. Part II of endorsement no. 3, entitled
‘‘[a]ggregate [l]imits [p]er [l]ocation,’’ on the other hand,
explicitly applies to the ‘‘LIMITS OF INSURANCE’’ sec-
tions of both coverage parts, and provides, inter alia,
that the ‘‘[a]ggregate [l]imit’’ applies separately to each
location owned or rented by the insured. If the ‘‘[a]ggre-
gate [p]olicy [l]imit’’ was in fact a new limit to the policy
that placed a limit on the maximum amount of insurance
available under the entire policy, it is reasonable to
assume that it would be included in the ‘‘[l]imits of
[i]nsurance’’ section of the policy. As written, however,
the ‘‘[a]ggregate [p]olicy [l]imit’’ does not apply to any
specific section, but rather applies to the policy as a
whole. Accordingly, I would conclude that a layperson
reading the policy could reasonably expect that the
‘‘[a]ggregate [p]olicy [l]imit’’ amends the ‘‘[a]ggregate
[l]imit’’ for both professional liability and general liabil-
ity coverage stated on the declarations page of the pol-
icy and, therefore, expands coverage at each location
to $10 million for each type of coverage.
Additionally, part II of endorsement no. 3 begins by
stating that the following changes to the policy are
‘‘[s]ubject to the [a]ggregate [p]olicy [l]imit stated in
[i]tem I. above . . . .’’ Part II of endorsement no. 3 then
states that the aggregate limit for each coverage part
applies separately to each location owned or rented by
the insured. Thus, because part II is ‘‘[s]ubject to the
[a]ggregate [p]olicy [l]imit’’ of $10 million in part I, it
would be reasonable to assume that the aggregate limits
referred to in subsections A and B of part II, for profes-
sional liability and general liability, respectively, are
$10 million each.
The majority claims, however, that interpreting the
policy so that the $10 million aggregate policy limit
contained within endorsement no. 3 amends the $1 mil-
lion aggregate limits set forth on the declarations page
would render the latter superfluous. I respectfully dis-
agree. Interpreting endorsement no. 3 as amending the
$1 million ‘‘[a]ggregate [l]imits’’ for professional liability
and general liability coverage stated in the declarations
page is, in my view, no different than certain aspects
of the majority’s interpretation of the policy. For exam-
ple, the majority states that ‘‘[t]he policy, without con-
sideration of the endorsements, provides for a total of
$1 million in general liability coverage and a total of $1
million in professional liability coverage for a single
location.’’ Presumably, the single location referred to
by the majority is the address that appears in item 2
on the declarations page, which is a location in Farm-
ington. This is the only address that can be attributed
to the insured without reference to the endorsements.
The majority then states that ‘‘[t]he policy then is
amended by endorsements so as to cover additional
locations owned or rented by the insured. Endorsement
no. 2 lists seven different locations and provides that the
policy shall apply to them.’’ The address that appears on
the declarations page, however, is not included in the
addresses listed in endorsement no. 2. Thus, it follows
that, by taking into account the address listed on the
declarations page and the seven addresses listed in
endorsement no. 2, the policy covers eight separate
locations. The majority states, however, and the parties
do not dispute, that the policy only applies to the seven
locations listed in endorsement no. 2. The majority’s
interpretation of the policy, therefore, amends the pol-
icy so that the address included in the declarations page
is not covered by the policy. Similarly, my interpretation
of the policy would amend the policy so that the aggre-
gate limits listed on the declarations page for profes-
sional liability and general liability are changed from
$1 million to $10 million. Therefore, I interpret endorse-
ment no. 3 as amending the aggregate limits on the
declarations page, rather than rendering them super-
fluous.
On the basis of the foregoing, I would conclude that
the policy language is reasonably susceptible to more
than one interpretation and, accordingly, is ambiguous.
Having reached this conclusion, I turn to resolving the
ambiguity. The plaintiff claims that, if the policy is
ambiguous, this court must consider extrinsic evidence
to determine the intent of the parties. In support of this
position, the plaintiff relies on previous cases where
this court has stated that ‘‘[i]f the [insurance policy] is
ambiguous, extrinsic evidence may be introduced to
support a particular interpretation. . . . If the extrinsic
evidence presents issues of credibility or a choice
among reasonable inferences, the decision on the intent
of the parties is a job for the trier of fact.’’ (Internal
quotation marks omitted.) Hartford Accident & Indem-
nity Co. v. Ace American Reinsurance Co., 284 Conn.
744, 755, 936 A.2d 224 (2007). The plaintiff further claims
that, after examining the extrinsic evidence submitted
in support of its motion for summary judgment, we
must conclude that it is entitled to summary judgment
in its favor.
Although I agree that this court has, in some cases,
examined extrinsic evidence to support a particular
interpretation when the ambiguity in the policy is based
upon a factual determination, this court has also
declined to examine extrinsic evidence to interpret
ambiguous policy language where the ambiguity in the
policy is inherent in the terms of the policy, and has
instead construed the ambiguous language against the
drafter of the policy. For example, in Israel v. State
Farm Mutual Automobile Ins. Co., supra, 259 Conn.
512, this court concluded that the language of the insur-
ance policy was ambiguous, and stated that our analysis
of such ambiguous language ‘‘is governed by the well
established principle of insurance law that policy lan-
guage will be construed as laymen would understand it
and not according to the interpretation of sophisticated
underwriters, and that ambiguities in contract docu-
ments are resolved against the party responsible for
its drafting; the policyholder’s expectations should be
protected as long as they are objectively reasonable
from the layman’s point of view. . . . The premise
behind the rule is simple. The party who actually does
the writing of an instrument will presumably be guided
by his own interests and goals in the transaction. He
may choose shadings of expression, words more spe-
cific or more imprecise, according to the dictates of
these interests. . . . A further, related rationale for the
rule is that [s]ince one who speaks or writes, can by
exactness of expression more easily prevent mistakes
in meaning, than one with whom he is dealing, doubts
arising from ambiguity are resolved in favor of the latter.
. . . This canon, commonly styled contra proferentem,
is more rigorously applied in the context of insurance
contracts than in other contracts.’’ (Citation omitted;
internal quotation marks omitted.) Id., 508–509, quoting
Hansen v. Ohio Casualty Ins. Co., 239 Conn. 537, 544,
687 A.2d 1262 (1996). Accordingly, because the policy
language was ambiguous, this court construed the pol-
icy language against the insurer, without ever examin-
ing extrinsic evidence. Israel v. State Farm Mutual
Automobile Ins. Co., supra, 512; see also R.T. Vander-
bilt Co. v. Continental Casualty Co., 273 Conn. 448,
463–65 n.25, 870 A.2d 1048 (2005) (construing ambigu-
ous policy language against insurer without examining
extrinsic evidence); S & S Tobacco & Candy Co. v.
Greater New York Mutual Ins. Co., 224 Conn. 313, 320,
617 A.2d 1388 (1992) (same).
Furthermore, in Connecticut Ins. Guaranty Assn. v.
Fontaine, supra, 278 Conn. 787, this court determined
that a phrase in the insurance policy was ambiguous
because it was reasonably susceptible to more than one
interpretation. Having concluded that the policy was
ambiguous, this court stated: ‘‘Thus, having concluded
that the relevant policy language is ambiguous, we ordi-
narily would be free to consider extrinsic evidence,
although ‘[i]f the extrinsic evidence presents issues of
credibility or a choice among reasonable inferences,
the decision on the intent of the parties is a job for the
trier of fact.’ . . . The present case is, however, before
both the trial court and this court on a statement of
stipulated facts, and, accordingly, the language falls into
the category of ambiguities ‘that cannot be resolved by
examining the parties’ intentions.’ ’’ (Citation omitted.)
Id., 788, quoting Metropolitan Life Ins. Co. v. Aetna
Casualty & Surety Co., supra, 255 Conn. 306. Accord-
ingly, because interpreting the ambiguous language was
a legal, rather than a factual, issue, this court applied
the doctrine of contra proferentem and construed the
ambiguous language against the insurer.2 Connecticut
Ins. Guaranty Assn. v. Fontaine, supra, 788–89.
In the present case, the facts surrounding the creation
of the policy are not in dispute, and the ambiguity arises
only from the terms of the policy. Accordingly, I would
resolve the ambiguities in the policy language against
the drafter, and conclude that the $10 million coverage
limit applies separately to professional liability and gen-
eral liability at each location covered by the policy.
See Allstate Ins. Co. v. Barron, supra, 269 Conn. 406
(‘‘[w]hen the words of an insurance contract are, with-
out violence, susceptible of two [equally reasonable]
interpretations, that which will sustain the claim and
cover the loss must, in preference, be adopted’’ [internal
quotation marks omitted]). I would, therefore, affirm
the judgment of the trial court as to part II of the major-
ity opinion, albeit on different grounds.
Accordingly, I respectfully dissent as to part II of the
majority opinion.
1
I note that the defendants in the present action include Lexington
Healthcare Group, Inc., Lexington Highgreen Holding, Inc., Nationwide
Health Properties, Inc., and various personal representatives of the injured
parties, or the estates thereof, in the underlying action. See footnote 3 of
the majority opinion.
2
Justice Norcott, writing for the majority in Fontaine, stated ‘‘our interpre-
tation of ambiguous policy language in favor of coverage under the doctrine
of contra proferentem has become near axiomatic in insurance coverage
disputes.’’ Connecticut Ins. Guaranty Assn. v. Fontaine, supra, 278
Conn. 788–89.