Opinion
No. CV 09 5014317 S
November 19, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#130)
In this action, the plaintiffs, Xiu Mei Chen and Jacky Li, through his mother and next friend Xiu Mei Chen, bring claims against the defendant Nationwide Property and Casualty Insurance Company (Nationwide) and AIG Casualty Company (AIG) for the payment of uninsured motorist benefits pursuant to two automobile insurance policies. Nationwide has brought a motion for summary judgment as to the plaintiffs' claims pursuant to its policy. Nationwide argues, among other things, that a choice of law provision requires the policy to be interpreted according to North Carolina law and, under North Carolina law, the plaintiffs' claims are barred because the plaintiffs did not bring them within the time set by the applicable statute of limitations for their underlying claims against the tortfeasor. The plaintiffs and AIG object to the motion. For the following reasons, the court agrees with Nationwide and, therefore, grants the motion for summary judgment.
I
BACKGROUND
A
Material Facts
The plaintiffs' allegations, as contained in the complaint, are as follows: On the evening of July 18, 2007, Xiu Mei Chen was driving north on Hartford Road in New Britain, Connecticut in a vehicle that she owned. Jacky Li was a passenger in the vehicle. Meanwhile, Larry Jackson was driving southbound on the same road in a vehicle owned by Lydia Jackson. Larry Jackson, due to his negligence, caused the vehicle that he was operating to cross the double yellow line and collide with the plaintiffs' vehicle head on.
The accident caused personal injuries to both plaintiffs.
On the date of the accident, the vehicle in which the plaintiffs were traveling was covered by two insurance policies, one issued by Nationwide and the other issued by AIG, each of which included uninsured motorist coverage. The vehicle that Larry Jackson was driving was not covered by any insurance policy. Both Nationwide and AIG have failed to pay to the plaintiffs uninsured motorist benefits pursuant to their respective policies.
B
Procedural History
The plaintiffs commenced this action by service of process on August 17, 2009, against both defendants. Nationwide filed the present motion for summary judgment on March 23, 2010, along with a memorandum of law (#131). AIG (#134) and the plaintiffs (#135) filed their objections to the motion on June 28, 2010, and June 29, 2010, respectively. The court heard the motion at short calendar on September 13, 2010.
II
DISCUSSION
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any 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." (Internal quotation marks omitted.) Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007). "The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law; entitle him to a judgment as a matter of law . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
A
Choice of Law
In its amended answer and special defenses, Nationwide alleges that North Carolina law governs the plaintiffs' claims against it and that, under North Carolina law, the plaintiffs' claims are barred by the expiration of the statute of limitations applicable to their underlying tort claims against the tortfeasor. Nationwide argues that North Carolina law applies because the policy has a choice of law provision stating that disputes regarding the policy are governed by North Carolina law. AIG and the plaintiffs argue that Connecticut law states that tort choice of law principles apply to an uninsured motorist coverage claim. They contend that these choice of law principles direct the court to apply Connecticut law and not North Carolina law. Additionally, they argue that Xiu Mei Chen's brother, Bin Chen, purchased the Nationwide policy on the vehicle rather than the plaintiffs, and therefore the plaintiffs are not bound by the choice of law provision.
The objecting parties' argument that tort choice of law principles apply to determine which law governs is unavailing. "In determining the governing law, a forum applies its own conflict-of-law rules . . ." Gibson v. Fullin, 172 Conn. 407, 411, 374 A.2d 1061 (1977). "An action to recover under an automobile insurance policy is not an action in tort but, rather, an action in contract. The obligation of [an] insurance carrier providing uninsured motorist coverage as a part of its liability insurance coverage on the automobile of the insured person is a contractual obligation arising under the policy of insurance . . . Payments made pursuant to an uninsured motorist policy are paid on behalf of the insured, and not on behalf of the financially irresponsible motorist who has caused the insured's injuries." (Citation omitted; internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 384, 698 A.2d 859 (1997). Thus, Connecticut applies contract choice of law rules to insurance contract disputes; see, e.g., American States Ins. Co. v. Allstate Ins. Co., 282 Conn. 454, 461-63, 922 A.2d 1043 (2007); including uninsured motorist claims. See, e.g., Anely v. Allstate Ins. Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 98 0166413 (January 9, 2002).
Neither of the cases cited by AIG for the principle that tort choice of law principles should apply is persuasive: O'Connor v. O'Connor, 201 Conn. 632, 633, 519 A.2d 13 (1986), is not on point as it involved solely a negligence claim disputed by two Connecticut residents arising out of a one-car accident in Quebec; and in Williams v. State Farm Mutual Automobile Ins. Co., 229 Conn. 359, 364, 641 A.2d 783 (1994), the court declined to say which choice of law principles applied because the result was the same whether contract or tort was used.
"Connecticut's choice of law approach for contracts is the `most significant relationship' test of . . . [1] Restatement (Second) [Conflict of Laws] § 188 [p. 575 (1971] . . . Where there is no choice of law provision in the contract, the general rule to be applied is that of § 188." (Emphasis added.) Reichhold Chemicals, Inc. v. Hartford Accident Indemnity Co., 252 Conn. 774, 781, 750 A.2d 1051 (2000). In the present case, there is a choice of law provision, which, unless it is invalid, preempts § 188.
"[T]he law of the state chosen by the parties governs their contractual rights unless one of two exceptions applies: (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which . . . would be the state of the applicable law in the absence of an effective choice of law by the parties." (Internal quotation marks omitted.) Merrick v. Cummin, 100 Conn.App. 664, 668 n. 3, 919 A.2d 495 (2007), citing 1 Restatement (Second), Conflict of Laws § 187, p. 561 (1971). None of the objecting parties argues that either of these exceptions applies, and the court finds that neither of these exceptions apply.
The choice of law provision states: "CHOICE OF LAW. This policy is issued in accordance with the laws of North Carolina and covers property or risks principally located in North Carolina. Any and all claims or disputes in any way related to this policy shall be governed by the laws of North Carolina." (Nationwide's Memorandum of Law, Exhibit 2, p. G4.) As the plaintiffs' claims against Nationwide are for uninsured motorist benefits payable pursuant to the Nationwide policy, they are governed by the laws of North Carolina.
The objecting parties' alternative argument that the plaintiffs did not purchase the Nationwide policy and thus are not subject to the choice of law provision also fails. Under the language of the Nationwide policy, anyone occupying a covered vehicle is covered for purposes of uninsured motorist benefits. According to the first declaration page in Exhibit 2 of Nationwide's memorandum of law, the vehicle involved in the accident, a 2004 Toyota; (AIG's Memorandum of Laws Exhibit A, p. 1); was covered under the Nationwide policy at the time of the accident. Furthermore, there is no dispute that the plaintiffs occupied such vehicle within the meaning of the Nationwide policy. (Nationwide's Memorandum of Law, Exhibit 2, p. U1.) Therefore, Bin Chen and Nationwide intended and contemplated that persons in the plaintiffs' situation would be covered for uninsured motorist benefits, making the plaintiffs third-party beneficiaries of the Nationwide policy. See Komondy v. Middlesex Mutual Assurance Co., Superior Court, judicial district of Middlesex, Docket No. CV 09 6000516 (October 20, 2009) ( 48 Conn. L. Rptr. 637). As third-party beneficiaries, the plaintiffs are subject to all terms of the contract, including the choice of law provision, because they have no greater right to recovery under the Nationwide policy than Bin Chen, who purchased the policy, would have had. See HL Chevrolet, Inc. v. Berkley Ins. Co., 110 Conn.App. 428, 435 n. 3, 955 A.2d 565 (2008). Furthermore, as stated in Wyer v. Sonitrol Security Systems of Hartford, Inc., 46 Conn.Sup. 101, 104, 738 A.2d 1179 [ 25 Conn. L. Rptr. 300] (1999): "It is inconsistent for [a] plaintiff to claim the breach of a contract to which she claims she is not bound by a portion thereof because she did not sign the contract . . . [S]he cannot claim the benefits of a contract and at the same time deny those provisions that are unfavorable to her."
The court finds that the parties are subject to the choice of law provision as set forth in the policy, and that North Carolina law governs the plaintiffs' claims.
B
Analysis
Under North Carolina law, "[a]n insurance policy is a contract between two parties . . . [I]t is the duty of the court to construe an insurance policy as it is written, not to rewrite it and thus make a new contract for the parties . . ."
"[A] contract of insurance should be given that construction which a reasonable person in the position of the insured would have understood it to mean[.] . . . If there is uncertainty or ambiguity in the language of an insurance policy regarding whether certain provisions impose liability, the language should be resolved in the insured's favor." (Citations omitted; internal quotation marks omitted.) Trophy Tracks, Inc. v. Massachusetts Bay Ins. Co., 195 N.C.App. 734, 738, 673 S.E.2d 787 (2009).
The Nationwide policy provides in relevant part: "We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:
"1. Bodily injury sustained by an insured and caused by an accident;" and
"2. Property damage caused by an accident." (Emphasis added.) (Nationwide's Memorandum of Law, Exhibit 2, p. U1.)
Nationwide contends that, under North Carolina law, an insured who has failed to obtain a judgment against the tortfeasor and whose underlying tort claim has expired under the applicable statute of limitations is barred from asserting an uninsured motorist claim because the insured would no longer be "legally entitled to recover" any damages from the tortfeasor as required by the policy language. It further asserts that Connecticut's negligence statute of limitations, General Statutes § 52-584, is applicable because the accident occurred in Connecticut and the plaintiffs cannot get jurisdiction over the tortfeasor in any other jurisdiction. Nationwide concludes that, because the plaintiffs neglected to bring an action against the tortfeasor in the present case within two years as provided for by § 52-584, they are no longer "legally entitled to recover" damages and are barred from recovery of uninsured motorist benefits.
The plaintiffs argue that nothing in the policy or the North Carolina case law cited by Nationwide requires them to first obtain a judgment against the tortfeasor before becoming entitled to uninsured motorist benefits. The plaintiffs do not address the argument that their claims are time barred or whether, if those claims are in fact barred, they are no longer "legally entitled to recover" damages and ineligible for uninsured motorist benefits. AIG does not dispute Nationwide's interpretation of North Carolina law or that the plaintiff would be barred from recovering uninsured motorist benefits under North Carolina law.
For the reasons stated below, the court need not determine whether North Carolina law requires that the plaintiffs first obtain a judgment against the tortfeasor before bringing a cause of action against Nationwide.
In Brown v. Lumbermens Mutual Casualty Co., 285 N.C. 313, 320, 204 S.E.2d 829 (1974), the Supreme Court of North Carolina held that the plaintiff was not "legally entitled to recover" uninsured motorist benefits for his decedent's wrongful death at the hands of an uninsured motorist when the plaintiff had failed to bring the uninsured motorist claim within the two-year statute of limitations for wrongful death actions. It acknowledged that "[t]he argument generally accepted by the courts of last resort which have considered the question is that despite the necessity that the insured establish that a tort was committed by the uninsured motorist, and that injury resulted, the action is nevertheless one based upon the insurance contract, on which the liability of the insurer depends, and that the contract limitation period therefore controls." (Internal quotation marks omitted.) Id., 317. The court stated that, nevertheless, "it would indeed constitute `antics with semantics' to say that a litigant with a stale tort claim, one against which the applicable statute of limitations has been specifically pleaded, remains `legally entitled to recover' when his remedy has been taken away! To be `legally entitled to recover damages' a plaintiff must not only have a cause of action but a remedy by which he can reduce his right to damage to judgment." Id., 319.
In other words, under North Carolina law, "a plaintiff's right to recover against his insurer under the [uninsured motorist] endorsement is derivative and conditional on plaintiff being legally entitled to recover against the tortfeasor." Williams v. Holsclaw, 128 N.C.App. 205, 210, 495 S.E.2d 166, aff'd, 349 N.C. 225, 504 S.E.2d 784 (1998). "[A] claim against [an uninsured motorist] carrier is actually one for the tort allegedly committed by the uninsured motorist . . . For that reason, the statute of limitations applicable to the uninsured motorist controls as to the [uninsured motorist] carrier as well." (Citation omitted; internal quotation marks omitted.) Eckard v. Smith, 166 N.C.App. 312, 326, 603 S.E.2d 134 (2004), aff'd, 360 N.C. 51, 619 S.E.2d 503 (2005). In practical terms, this means that the insurer may assert the same defenses as the tortfeasor could have asserted were the tortfeasor named as the defendant, including the statute of limitations applicable to the underlying claim. See Brown v. Lumbermens Mutual Casualty Co., supra, 285 N.C. 319-20.
Because the statute of limitations for negligence is procedural in nature, the law of the forum, i.e., Connecticut law, provides the applicable statute. Somohano v. Somohano, CT Page 22764 29 Conn.App. 392, 393, 615 A.2d 181 (1992). The applicable statute of limitations is General Statutes § 52-584, which provides, in relevant part: "No action to recover damages for injury to the person, or to real or personal property, caused by negligence . . . shall be brought but within two years from the date when the injury is first sustained . . ." There is no dispute that the accident occurred July 18, 2007, and that service of process was made on Nationwide on August 17, 2009, more than two years following the accident. There is also no dispute that the plaintiffs have brought no action against the tortfeasor.
If the plaintiffs had named the tortfeasor as a defendant in this action in lieu of Nationwide, the tortfeasor would have been able to invoke the two-year statute of limitations in § 52-584 as a defense. Accordingly, when the terms of the Nationwide policy are construed under North Carolina law, the court must conclude that the plaintiffs are no longer "legally entitled to recover" damages from the tortfeasor and are therefore no longer entitled to uninsured motorist benefits under the Nationwide policy.
III
CONCLUSION
For the above reasons, the court finds that there is no genuine issue of material fact. Furthermore, Nationwide is entitled to judgment as a matter of law on the basis of the expiration of the two-year statute of limitations contained in § 52-584. Therefore, the motion for summary judgment is granted.
It is so ordered.