Dairyland Ins. Co. v. Mitchell

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DAIRYLAND INSURANCE COMPANY v. MAUREEN K.
MITCHELL, EXECUTRIX (ESTATE OF JOHN
MOONEY, JR.), ET AL.
(SC 19482)
Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald, Espinosa and
Robinson, Js.
Argued October 7, 2015—officially released January 19, 2016
William M. O’Donnell III, with whom, on the brief,
were Lauren J. Taylor and S. Sherry Xia, for the appel-
lant (named defendant).
Cristin E. Sheehan, with whom was Cara D. Joyce,
for the appellee (plaintiff).
Opinion
ROGERS, C. J. This appeal presents the question of
whether General Statutes (Rev. to 2009) § 38a-335 (d)1
bars automobile liability insurers from excluding cover-
age for personal injuries caused to a named insured
unless the exclusion is set forth in a separate endorse-
ment to the policy. The named defendant, Maureen K.
Mitchell, in her capacity as executrix of the estate of
John Mooney, Jr. (decedent), appeals from the trial
court’s summary judgment rendered in favor of the
plaintiff, Dairyland Insurance Company, in this declara-
tory judgment action brought to determine the scope
of coverage provided by an automobile insurance policy
and the associated duty to defend. She argues that the
trial court’s ruling was improper because the exclusion
at issue was void and unenforceable due to its failure
to comply with the clear and unambiguous require-
ments of § 38a-335 (d). We agree and reverse the judg-
ment of the trial court.
The following undisputed facts and procedural his-
tory are relevant to the appeal. The decedent died in
an automobile accident on April 24, 2010, while riding
in his own motor vehicle as a passenger. The vehicle
was being driven, with the decedent’s permission, by
the decedent’s friend, Robert Atherton,2 when it struck
a parked tractor trailer. At the time, the vehicle was
insured by the plaintiff under a personal automobile
policy (policy). Atherton was a covered permissive
driver under the policy.
On or about April 12, 2012, the defendant filed a
wrongful death action against Atherton, seeking various
damages on behalf of the decedent’s estate. On June
25, 2012, the plaintiff filed a one count declaratory judg-
ment action3 against the defendant and Atherton, seek-
ing a ruling that the policy did not provide coverage
for the defendant’s claims against Atherton and that
the plaintiff had no duty to defend Atherton. Specifi-
cally, the plaintiff claimed that, although Atherton gen-
erally was covered as a driver, exclusion 11 of the policy
precluded coverage for claims of bodily injury to the
named insured, i.e., the decedent.4
Thereafter, the plaintiff filed a motion for summary
judgment on the basis of that exclusion, arguing that
it unambiguously barred coverage for the defendant’s
claims and, therefore, that the plaintiff had no duty to
defend or indemnify Atherton. The defendant objected
to the plaintiff’s motion, arguing that exclusion 11 vio-
lated § 38a-335 (d) and, therefore, was void. Specifi-
cally, the defendant contended, § 38a-335 (d) required
that an exclusion, such as exclusion 11, be set forth
separately in an endorsement to the policy that specifi-
cally names the individual excluded from coverage.
Exclusion 11, to the contrary, is located within the
body of the policy. The defendant argued further that,
because exclusion 11 failed to comply with the statute,
it was void and unenforceable as against public policy.
Consequently, according to the defendant, the plaintiff
had a duty to defend Atherton and, potentially, to indem-
nify him if he ultimately were to be held liable for the
decedent’s death. In response, the plaintiff contended,
inter alia, that exclusion 11 was valid, consistent with
Connecticut’s public policy and specific enough to sat-
isfy the parameters of § 38a-335 (d).
After surveying the various appellate and Superior
Court case law applying § 38a-335 (d), the trial court
concluded that exclusion 11 did not violate that statute
and, further, unambiguously barred the defendant’s
claims against Atherton.5 Accordingly, the court ren-
dered summary judgment in favor of the plaintiff. The
defendant’s appeal followed.6
The defendant claims that the trial court improperly
granted the plaintiff’s motion for summary judgment
because exclusion 11, although permitted by § 38a-335
(d), nevertheless is invalid because it fails to comply
with the plain and unambiguous strictures of that stat-
ute, namely, the requirements that the exclusion be
both sufficiently specific and set forth in a separate
endorsement to the policy. According to the defendant,
these requirements must be met in order to create a
valid exception from coverage, because such an excep-
tion would not be expected by the ordinary consumer
and, therefore, must be set forth in a manner that is
more likely to be noticed.7 The plaintiff contends, in
response, that the exclusion’s location in the body of the
policy, rather than in an endorsement, ‘‘unquestionably’’
complies with § 38a-335 (d), and that the exclusion
clearly and unambiguously disallowed liability coverage
for the decedent. According to the plaintiff, it would
be ‘‘illogical’’ to conclude that the exclusion, which
specifically is authorized by § 38a-335 (d), is invalid
simply because it was part of the original terms of the
policy rather than set forth in an amendatory endorse-
ment. We agree with the defendant that exclusion 11
is invalid because it was not set forth in a separate
endorsement to the policy.8
We begin with the standard of review. ‘‘Summary
judgment shall be rendered forthwith if the pleadings,
affidavits and other proof submitted show that there is
no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.
. . . The scope of our appellate review depends upon
the proper characterization of the rulings made by the
trial court. . . . When . . . the trial court draws con-
clusions of law, our review is plenary and we must
decide whether its conclusions are legally and logically
correct and find support in the facts that appear in the
record.’’ (Internal quotation marks omitted.) Lexington
Ins. Co. v. Lexington Healthcare Group, Inc., 311 Conn.
29, 37, 84 A.3d 1167 (2014).
The parties do not dispute that exclusion 11, by its
terms, precludes recovery under the policy. See foot-
note 4 of this opinion. They contest only whether that
exclusion, as it appears in the body of the policy, is
authorized by § 38a-335 (d) and, therefore, is valid.
Because the trial court’s conclusion in this regard
required it to determine the meaning and applicability
of a statute, our review is plenary. Lexington Ins. Co.
v. Lexington Healthcare Group, Inc., supra, 311 Conn.
37; see also Joseph General Contracting, Inc. v. Couto,
317 Conn. 565, 586, 119 A.3d 570 (2015) (statutory inter-
pretation presents question of law). In reviewing the
trial court’s construction of § 38a-335 (d), we adhere
to the strictures of General Statutes § 1-2z.9
Section 38a-335 governs the general requirements for
automobile liability insurance policies in Connecticut.
At the time of the accident when the insurance policy
at issue was in effect, subsection (d) provided: ‘‘With
respect to the insured motor vehicle, the coverage
afforded under the bodily injury liability and property
damage liability provisions in any [automobile liability
insurance] policy shall apply to the named insured and
relatives residing in his household unless any such per-
son is specifically excluded by endorsement.’’10 General
Statutes (Rev. to 2009) § 38a-335 (d). This court had
occasion to construe this subsection in American
States Ins. Co. v. Allstate Ins. Co., 282 Conn. 454, 922
A.2d 1043 (2007), a conflict of laws case in which an
insurer sought to exclude liability coverage for injuries
caused to a named insured under a policy provision
similar to exclusion 11.11 As part of a multifactor test
used to determine whether Connecticut or Florida law
should govern the dispute, we weighed the public policy
interests of the conflicting forums. We concluded that
§ 38a-335 (d) did not create ‘‘an absolute prohibition
on such exclusions, but merely require[d] notice and
acceptance by the insured of an endorsement that spe-
cifically exclude[s] the [named insured and] relatives
residing in the household of the named insured.’’
(Emphasis added; internal quotation marks omitted.)
Id., 475. Stated otherwise, the statute ‘‘prescribes a pro-
cess by which such exclusions must be executed [in
order] to be valid.’’ Id.
In the insurance context, ‘‘endorsement’’ is a term of
art. It is defined as ‘‘a writing added or attached to a
policy or certificate of insurance which expands or
restricts its benefits or excludes certain conditions from
coverage. . . . When properly incorporated into the
policy, the policy and the . . . endorsement together
constitute the contract of insurance, and are to be read
together to determine the contract actually intended by
the parties.’’ (Emphasis added; internal quotation marks
omitted.) Liberty Mutual Ins. Co. v. Lone Star Indus-
tries, Inc., 290 Conn. 767, 806, 967 A.2d 1 (2009); see
also id. (endorsement is ‘‘[a] written or printed form
attached to the policy which alters provisions of the
contract’’ [emphasis added; internal quotation marks
omitted]).
When an insurer seeks to limit its liability based on
a statute, ‘‘it should only be permitted to do so to the
extent that the statute expressly authorizes.’’ Chmie-
lewski v. Aetna Casualty & Surety Co., 218 Conn. 646,
674, 591 A.2d 101 (1991). ‘‘In order for a policy exclusion
to be expressly authorized by [a] statute [or regulation],
there must be substantial congruence between the stat-
utory [or regulatory] provision and the policy provi-
sion.’’ (Internal quotation marks omitted.) Piersa v.
Phoenix Ins. Co., 273 Conn. 519, 529, 871 A.2d 992(2005); see also Lowrey v. Valley Forge Ins. Co., 224
Conn. 152, 156, 617 A.2d 454 (1992). This requirement
pertains to matters of both substance and form. See 2
G. Couch, Insurance (3d Ed. 2010) § 22:33, p. 22-147
(‘‘[e]xceptions are without effect and may be ignored
where there is a violation of statute in respect of the
size of type in which they are printed and the want of
prominence given them in the format of the policy’’);
43 Am. Jur. 2d 238, Insurance § 180 (2013) (‘‘[i]f an
insurance policy provision violates a statute requiring
exceptions to be printed with prominence, an exception
that is not printed in compliance with the statute will
be rendered meaningless, and the contract will be read
as if the exception were not there’’).
On the basis of the foregoing law, we conclude that
the trial court improperly held that exclusion 11 was
valid, as that exclusion was not set forth in an endorse-
ment as clearly and unambiguously required by § 38a-
335 (d), but rather, was listed among other exclusions
in the body of the policy itself. We disagree with the
plaintiff that the exclusion’s clarity excuses it from the
statutory requirement that it be set forth in an endorse-
ment, or that it is ‘‘illogical’’ to enforce such a require-
ment. Presumably, the legislature considered
exclusions such as exclusion 11 to be counterintuitive
to the lay consumer of insurance and, therefore,
required them to be set forth in a conspicuous fashion.
The plaintiff directs our attention to the distinction
between liability coverage for the named insured when
he or she is a tortfeasor who negligently injures third
parties, and liability coverage for the named insured
when he or she is a victim of the negligence of another
insured party under the policy, such as Atherton. It
argues, as an alternative ground for affirmance of the
trial court’s judgment, that § 38a-335 (d) is directed at
the first situation, but not at the second. Consequently,
according to the plaintiff, the statute is simply inapplica-
ble and, therefore, no endorsement was necessary.
It is difficult to see how this argument benefits the
plaintiff because it has not identified any other statutory
or regulatory authority for disallowing coverage for cer-
tain classes of injured parties if § 38a-335 (d) is inappli-
cable.12 In any event, we agree with the defendant that
there is no basis for the distinction identified by the
plaintiff in the wording of the statute, which, in the years
since its enactment, has been applied by Connecticut’s
courts under both fact patterns. See, e.g., American
States Ins. Co. v. Allstate Ins. Co., supra, 282 Conn. 458(named insured as injured party); Progressive North-
western Ins. Co. v. Rivera, Superior Court, judicial dis-
trict of Hartford, Docket No. CV-00-0802973-S
(September 25, 2001) (30 Conn. L. Rptr. 469) (relative
of named insured as liable party); Colonial Penn Ins.
Co. v. Patriot General Ins. Co., Superior Court, judicial
district of New Haven, Docket No. CV-95-0377876-S
(June 19, 1998) (22 Conn. L. Rptr. 355) (named insured
as liable party). Subsequent to these decisions, the legis-
lature has amended the statute; see footnote 10 of this
opinion; but has not rewritten it in a fashion that would
make clear an intent to limit its application to the named
parties as tortfeasors only. ‘‘[T]he legislature is pre-
sumed to be aware of the [courts’] interpretation of
a statute and . . . its subsequent nonaction may be
understood as a validation of that interpretation,’’ par-
ticularly when it ‘‘affirmatively amended the statute
subsequent to [such] interpretation, but chose not to
amend the specific provision of the statute at issue.’’
(Internal quotation marks omitted.) Berkley v. Gavin,
253 Conn. 761, 776 n.11, 756 A.2d 248 (2000); see also
Thomas v. Dept. of Developmental Services, 297 Conn.
391, 404, 999 A.2d 682 (2010).
The judgment is reversed and the case is remanded
for further proceedings consistent with this opinion.
In this opinion the other justices concurred.
1
Hereinafter, all references to § 38a-335 are to the 2009 revision, unless
otherwise noted.
2
Atherton also was named as a defendant in this action. He did not appear
in the trial court proceedings, however, and he has not participated in this
appeal. We refer, hereinafter, to Mitchell as the defendant and to Atherton
by name.
3
General Statutes § 52-29 (a) provides in relevant part that ‘‘[t]he Superior
Court in any action or proceeding may declare rights and other legal relations
on request for such a declaration . . . .’’
4
The portion of the policy pertaining to liability coverage provides in
relevant part: ‘‘We will pay damages for which any insured person is legally
liable because of bodily injury . . . caused by a car accident arising out
of the ownership, maintenance or use of a car . . . . We have no duty to
defend any suit or settle any claim for bodily injury . . . not covered under
this policy.’’ (Emphasis in original.) The policy otherwise defines ‘‘[b]odily
injury’’ to include death, and ‘‘[i]nsured person’’ to include both the named
insured, here, the decedent, and permissive users such as Atherton.
The body of the policy also contains a number of exclusions within the
liability coverage portion, among them exclusion 11. That exclusion provides
in relevant part: ‘‘This coverage and our duty to defend does not apply to
. . . [b]odily injury to you.’’ (Emphasis in original.) ‘‘You’’ is defined in the
policy as the named insured, who in turn is identified as the decedent.
5
The trial court’s opinion specifically acknowledges the defendant’s argu-
ment that exclusion 11, to be valid, needed to be both: (1) specific; and (2)
set forth in an endorsement to the policy. The court’s analysis, however,
addresses only the specificity and clarity of that exclusion, and not the
question of whether it properly was located within the policy itself.
6
The defendant appealed from the trial court’s judgment to the Appellate
Court, and this court transferred the appeal to itself pursuant to General
Statutes § 51-199 (c) and Practice Book § 65-1.
7
The defendant also contends, in the alternative, that exclusion 11 is
invalid and unenforceable because it is contrary to separate statutory provi-
sions governing minimum coverage for bodily injury liability, or because it
is unconscionable and violates Connecticut public policy. Because we agree
with the defendant’s first claim, we need not address these alternative bases
for her appeal.
8
Because the failure to set forth exclusion 11 in a separate endorsement
is fatal to its validity, we do not address the defendant’s additional contention
that the exclusion is not sufficiently specific.
9
‘‘When construing a statute, [o]ur fundamental objective is to ascertain
and give effect to the apparent intent of the legislature. . . . In other words,
we seek to determine, in a reasoned manner, the meaning of the statutory
language as applied to the facts of [the] case, including the question of
whether the language actually does apply. . . . In seeking to determine that
meaning . . . 1-2z directs us first to consider the text of the statute itself
and its relationship to other statutes. If, after examining such text and
considering such relationship, the meaning of such text is plain and unambig-
uous and does not yield absurd or unworkable results, extratextual evidence
of the meaning of the statute shall not be considered.’’ (Internal quotation
marks omitted.) Joseph General Contracting, Inc. v. Couto, supra, 317
Conn. 586.
10
In the following year, § 38a-335 (d) was amended by No. 11-19, § 4, of
the 2011 Public Acts. That subsection presently provides: ‘‘With respect to
the insured motor vehicle, the coverage afforded under the bodily injury
liability and property damage liability provisions in any [automobile liability
insurance] policy shall apply to the named insured and relatives residing
in such insured’s household unless any such relative is specifically excluded
by endorsement.’’ (Emphasis added.) General Statutes § 38a-335 (d). The
change suggests that, at present, an automobile liability insurer may not
exclude a named insured from bodily injury liability or property damage
liability coverage under any circumstances. In this opinion, however, we
analyze the validity of the exclusion at issue with reference to the statute
as it existed in 2010, when the policy at issue was in effect.
11
The exclusion at issue, which was set forth in an endorsement, barred
‘‘automobile liability insurance coverage for bodily injury to [the policy-
holder] or any resident of [the policyholder’s] household related to [the
policyholder] by blood, marriage or adoption.’’ (Internal quotation marks
omitted.) American States Ins. Co. v. Allstate Ins. Co., supra, 282 Conn.
458. One of two policyholders sought to recover under the policy for injuries
she had sustained as a passenger while the other policyholder was driving
the insured vehicle. Id., 457.
12
See Regs., Conn. State Agencies § 38a-334-5 (c) and (d) (listing permissi-
ble exclusions for automobile liability insurance policies, and requiring liabil-
ity coverage for permissive users, with certain inapplicable exceptions,
respectively).