DocketNumber: No. 538646
Judges: HANDY, J.
Filed Date: 9/4/1998
Status: Non-Precedential
Modified Date: 7/5/2016
On September 3, 1992, the plaintiff was involved in an auto accident while operating his own vehicle. The plaintiff alleges that while traveling in a northerly direction on Wyassup Road in North Stonington, Connecticut, and while making a left turn, his vehicle was struck by Michael Howell, who was then traveling in a southerly direction on the same road. Howell was the chief of the North Stonington Volunteer Fire Association and was responding to an emergency call on I-95. The plaintiff alleges that he sustained permanent injuries, including severe physical1 and mental pain. The plaintiff alleges that his medical bills are in excess of $250,000. In addition, the plaintiff alleges that he will not be able to participate in some of his former activities. The plaintiff further alleges that he has sustained financial loss as he will not be able to pursue his usual course of employment.
The plaintiff initiated a personal injury action in the superior court, judicial district of New London, which was entitled Bond v. North Stonington, Docket Number CT Page 10274 527681. Howell's insurance carrier, Metropolitan, settled with the plaintiff for its full liability policy limit of $100,000. Additionally, the town of North Stonington, which was a party to the action, and the town of North Stonington Volunteer Fire Company ("fire company"), which was not a party to the action, entered into a settlement with the plaintiff. Pursuant to a contractual obligation between the fire company and Howell, who was a volunteer fireman, CIGNA, the fire company's insurer, agreed to pay $1,000,000, the full amount of the fire company's primary policy. After arbitration between the town of North Stonington and the fire company, CIGNA, on behalf of the fire company, agreed to pay an additional $700,000 pursuant to its excess umbrella policy.2
The plaintiff filed the amended complaint in the present case against his own carriers, the defendants, claiming that "the injuries and losses [which he has] sustained are the legal responsibility of the defendants, pursuant to the terms of the contract of insurance and in accordance with Connecticut General Statutes Sections 38-175c and
By Amended Answer and Special Defenses, the defendants asserted, as a first amended special defense, that the plaintiff's injuries, losses or damages were the direct and proximate result of the plaintiff's own contributory negligence. The second amended special defense asserted that the amount of recovery by the plaintiff under the defendants' insurance policy was limited to uninsured/underinsured coverage for four vehicles in the amount of $300,000 each, minus appropriate set-offs and credits. The third amended special defense asserted that the tortfeasor's vehicle was not underinsured at the time of the accident and, therefore, underinsured motorist coverage was not available to the plaintiff. The fourth amended special defense asserted that the policies applicable to the tortfeasor's vehicle were not exhausted by the plaintiff; thus, any claim for underinsured motorist benefits was impermissible. The fifth amended special defense asserted that the plaintiff breached the insurance contract by failing to obtain the insurers' consent to settle, extinguishing any potential claim for underinsured CT Page 10275 motorist benefits under the contract.
On April 13, 1998, the plaintiff filed a motion for partial summary judgment on the defendants' second, third and fourth special defense and an accompanying memorandum of law. The defendants filed a timely memorandum in opposition. While this memorandum only addressed the plaintiff's motion for partial summary judgment as to the second special defense, it incorporated by reference the defendants' own motion for summary judgment (filed May 15, 1998) and its accompanying memorandum which addressed the plaintiff's motion for summary judgment as to the third and fourth special defenses.
On May 15, 1998, the defendants filed their amended motion for summary judgment and accompanying memorandum of law, as to the plaintiff's amended complaint, dated July 25, 1996. The defendants moved on the ground that no genuine issue of material fact exists and that they are therefore entitled to judgment on the amended complaint based on their amended third, fourth and fifth special defenses. On May 14, 1998, the plaintiff filed a timely opposition. The court heard oral argument on the motions on May 18, 1998, at which time all parties approved and had an opportunity to be fully heard.
"The decisions of the Connecticut Superior Court . . . are almost in unanimous agreement that a motion for summary judgment as to a special defense is improper. . . Such a motion is improper because Practice Book § 379 [now Practice Book (1998 Rev.) § 17-44] does not provide for summary judgment on special defenses." (Citations omitted.) Dubourg v.Osborn, Superior Court, judicial district of Litchfield, Docket No. 06570, (July 5, 1995, Pickett, J.).
Accordingly, this court finds that the plaintiff's motion for partial summary judgment as to the special defenses is procedurally improper and is, therefore, denied.
The defendants argue that they are entitled to judgment on the amended complaint based on their amended third special defense because the tortfeasor was not underinsured. The defendants state that the tortfeasor was not underinsured at the time of the accident as the total underinsurance coverage available to the plaintiff ($1,200,000) did not exceed the total coverage available to the tortfeasor as an insured. The defendants argue that the tortfeasor was an insured not only CT Page 10277 under his own policy (total $100,000), but also under the fire company's policy (total $3,000,000) and under the town of North Stonington's policy (total $3,000,000). The defendants specify that the tortfeasor was an insured under the town of North Stonington policy as the town was under a mandatory obligation to provide liability insurance to its volunteer firemen, pursuant to General Statutes §
The plaintiff argues in opposition that he is entitled to summary judgment as to the third special defense because as a matter of law, the tortfeasor's vehicle was underinsured at the time of the accident. The plaintiff argues that pursuant to General Statutes §
The parties present the court with an issue of first impression: specifically, whether general liability policies which cover the tortfeasor as an insured are "applicable policies" within the meaning of General Statutes §
General Statutes §
While no Connecticut court has examined the precise question of whether coverage extended under general liability policies insuring a tortfeasor may be used in calculating whether that tortfeasor is underinsured for purposes of General Statutes §
In American Universal Insurance Co., after his decedent was killed in an auto accident, the defendant administrator pursued claims against the tortfeasor driver and, pursuant to the Dram Shop Act,5 against the restaurant which served alcohol to the intoxicated tortfeasor. Thereafter, CT Page 10279 the defendant administrator brought a claim for the underinsured motorist benefits provided by the automobile policy issued to its decedent by the plaintiff insurer. The insurer declined to pay its insured under a policy which provided $40,000 in underinsurance benefits, reasoning that it was not only entitled to set off the $20,000 paid by Allstate, the tortfeasor's insurer, but also was entitled to set off the $20,000 under the dram shop policy. In order to discern whether the dram shop payment could be set off against underinsurance benefits, the court sought to "ascertain the intent of the legislature by examining the language of the statute, its legislative history and the purpose it [was meant] to serve."American Universal Insurance Co. v. DelGreco, supra,
The court also examined the remarks of Representative Silvio Mastrianni in House discussions of Public Acts 1979, No. 79-235, which amended the uninsured motorist statute to add coverage for underinsurance, and concluded that the legislature intended that underinsured motorist coverage be triggered when automobile liability coverage is exhausted. Representative Mastrianni explained that the bill required the "insurance company of an innocent driver to pay up to the full amount of the uninsured motorist coverage when the at fault driver's insurance
has been exhausted and a deficiency remains." (Emphasis added.) 22 H.R. Proc., Pt. 16, 1979 Sess., p. 5341. Accordingly, the court concluded that the plaintiff insurer could not set off monies which its insured received pursuant to a dram shop policy CT Page 10280 because "underinsured motorist coverage is triggered when the tortfeasor's automobile liability coverage is exhausted. A dram shop policy is not classified as automobile coverage. Rather, it is designed to cover risks arising out of the sale of intoxicating liquors." American Universal Insurance Co. v. DelGreco, supra,
In Ciarelli v. Commercial Union Ins. Cos.,
Similarly, in Mass. v. United States Fidelity GuarantyCo.,
The plaintiff correctly argues that the tortfeasor is underinsured. Pursuant to statute and case law, only automobile liability bonds and policies constitute "bodily injury liability bonds or insurance policies applicable at the time of the accident." The tortfeasor's policy is an automobile liability policy. By contrast, the town of North Stonington's policy is a general liability policy as it provides coverage "on behalf of any paid or volunteer fireman of [a] municipality all sums [for] which [a] fireman becomes obligated to pay by reason of liability imposed upon such fireman by law for damages to personal property. . . ," citing General Statutes § 708. The fire company's policy is likewise a general liability policy. Neither of these policies is specifically an automobile liability policy; and thus, neither is subject to the legislative mandate of General Statutes §
Accordingly, the defendants' motion for summary judgment on the amended complaint based on their amended third special defense is denied because the tortfeasor is underinsured since his automobile liability policy limit ($100,000) is less than the total underinsurance available to the insured plaintiff ($1,200,000).
The defendants also argue that they are entitled to judgment on the amended complaint based on their amended fourth special CT Page 10282 defense because the tortfeasor's benefits were not exhausted as both the town of North Stonington's policy and the fire company's policy were available to the tortfeasor. The plaintiff argues in opposition that he is entitled to summary judgment as to the fourth amended special defense because as a matter of law, the tortfeasor's benefits were exhausted.
This court finds that since the tortfeasor's policy is the only applicable policy for purposes of determining whether the tortfeasor was underinsured, payment by the tortfeasor of the total benefits available under the policy constitutes exhaustion pursuant to General Statutes §
Accordingly, the defendants' motion for summary judgment as to its fourth special defense is therefore denied.
Finally, the defendants argue that they are entitled to judgment on the amended complaint based on their amended fifth special defense because the plaintiff, in reaching a settlement agreement with the tortfeasor, the fire company, and the town of North Stonington without the defendants' consent, breached the insurance contract by violating the consent to settle provision. The defendants reason that the plaintiff had three choices, any one of which would have been in compliance with the insurance contract: (1) he could have initiated suit against all of the potential parties, including the defendant-underinsurance carriers; (2) he could have proceeded to a verdict and obtained a judgment if he thought that the value of his case exceeded the $1.8 million settlement offer; or (3) he could have requested the defendants' consent to settle.
The plaintiff argues in opposition that his failure to obtain the defendants' consent to settle is not a bar to the plaintiff's right to collect underinsurance benefits under the contract because the defendants waived such claim by failing to raise it as a special defense pursuant to Practice Book § 164, now Practice Book (1998 Rev.) §
The validity under Connecticut law of consent to settle clauses in underinsured motorist policies has not been addressed by the Appellate Court. There is a split of authority among the superior courts that have considered the issue. One superior court, in the most comprehensive decision on the issue to date,Bertz v. Horace Mann Ins. Co., Superior Court, judicial district of Waterbury, Docket No. 115842, 14 CONN. L. RPTR. 523 (June 19, 1995, Flynn, J.), denied a plaintiff insured's motion to strike a special defense based upon a violation of a consent to settle clause where the insured had settled for the full amount of the tortfeasor's liability policy. The court declared that whether the defendant insurer would be able to ultimately prove and prevail upon its special defense was a matter that could not be decided as a matter of law on a motion to strike.
In denying the motion to strike, however, the court sought to investigate "the interplay between [the] rights and obligations of the insured, the insurer, the underinsured tortfeasor and the tortfeasor's insurer with respect to the underinsured motorist claim." Id., 524. It cited with approval the following discussion employed by the court in Longworth v. Van Houten,
Obviously, the victim may recover from the [underinsured or uninsured] tortfeasor only by judgment or settlement. Obtaining judgment requires the institution of litigation with all its inevitably attendant delay and expense. It would thus ordinarily be in the best interests of a victim whose damages exceed the tortfeasor's coverage to settle as expeditiously as possible with the tortfeasor's insurer for or close to the policy limits and then promptly resort to his own UIM coverage. But as a practical matter, the victim can only settle with the underinsured tortfeasor by giving him a general release. This is so since the tortfeasor's insurer, which controls settlement negotiations and any litigation against the tortfeasor as well as the pocketbook (up to the policy limits), owes a duty to its own insured, the tortfeasor, to provide him with the protection of a general release by the victim extinguishing the UIM carrier's right of subrogation against the tortfeasor, that right being no greater than the victim's own remaining right against the tortfeasor. . . Thus, the sole function of the consent CT Page 10284 to settle clause is the preservation of the subrogation right. Consequently, the victim cannot simultaneously give a release to the tortfeasor and protect his UIM insurer's right of subrogation. If he gives a release, he will have extinguished his UIM carrier's right of subrogation, an act which, under the policy, affords the carrier grounds for disclaiming its UIM liability. If he will not give a release, he cannot settle with the tortfeasor and, consequently, he will be able to seek recovery under his UIM endorsement only if he proceeds to judgment against the tortfeasor, incurring the expense and delay of litigation, even where the tortfeasor's carrier is willing to accept the policy limits.
(Emphasis added.) Bertz v. Horace Mann Ins. Co., supra, Docket No. 115842.
The Bertz court went on the conclude that the value of the consent to settle clause was not merely to "exhaust the limits of a tortfeasor's policy, but rather [was] . . . to ensure that the insured [would] not settle a claim against the tortfeasor for the amount of the tortfeasor's policy — thus giving a full release and extinguishing any right of subrogation — when the tortfeasor has substantial assets or may later acquire assets from which the insurer would be able to satisfy any judgment above the tortfeasor's policy limit obtained by the insured." Id. The court went on to conclude that "this was not to say that an insurer [could] withhold its consent to settlement when it is not prejudiced by the insured's settlement with the tortfeasor, or similarly when the refusal to consent to settlement would violate the obligation of good-faith and fair dealing imposed on the parties to an automobile insurance contract." Id. See also Hudak v. Safeco Ins. Co, Superior Court, judicial district of Waterbury, Docket No. 101731 5 CONN. L. RPTR. 293 (November 22, 1991, Blue, J.) (denying a motion to strike a special defense based on a violation of a consent to settlement clause where "[the] plaintiff in his motion [gave] no reason why this contractual obligation should not be binding, assuming that it exists); General Accident Ins.Co. of America v. Taplis,
The court in Connor v. State Farm Mutual, Superior Court, judicial district of New Haven, Docket No. 327003, 8 CONN. L. RPTR. 35 (December 9, 1992, O'Keefe, J.), however, granted the plaintiff insured's motion to strike a defense based on a violation of a consent to settlement clause. The court reasoned that a consent to settle provision was not violated when "all the other applicable insurance coverage [was] exhausted. [In such a situation,] the defendant could not conceivably have any grounds to withhold [its] consent to a settlement for the limits of the policy. The contract provision of the policy does not apply to these circumstances and the evils it [was] designed to prevent are not a possibility in this case. The lack of consent to a settlement for the policy limits does not prejudice the defendant and in this case is not a valid defense to the plaintiff's claims." See also Pinto v. Norfolk Dedham MutualFire Ins. Co., Superior Court, judicial district of Waterbury, Docket No. 111294, (February 23, 1993) (Sylvester, J.) (8 CONN. L. RPTR. 397,
This court finds that the defendants' consent to settle provision is invalid because (1) the superior courts are in agreement that the consent to settle clause in an insurance contract protects the insurer's right to subrogation; (2) Public Act 97-58(4), which declares that an insurer has no subrogation right against the owner or operator of an underinsured vehicle, effectively invalidates the consent to settle provision; (3) said public act affects the present claim, (original complaint) filed June 12, 1996, because it was pending on or brought after March 19, 1996; and (4) the defendants' consent to settle provision is invalid.
Accordingly, the defendants' motion for summary judgment as to its amended fifth special defense is therefore denied.
Handy, J.