Opinion
CV146049603
06-25-2018
Frank CIRILLO et al. v. Donald P. BURNS et al.
UNPUBLISHED OPINION
OPINION
Jon C. Blue, Judge of the Superior Court
The Motion For Summary Judgment now before the court seeks summary judgment on the Twelfth, Thirteenth, and Fourteenth Counts of the First Amended Complaint. (No. 110.) Each of the counts in question is directed against Connecticut Underwriters, Inc. ("Underwriters"), one of the codefendants in this action. For reasons expressed below, the Motion must be granted.
This action was commenced by service of process on August 1, 2014, by Frank Cirillo and Claudette Goyette. There are four defendants: Donald P. Burns; Burns & Kelly Insurance, LLC ("Burns & Kelly"); Underwriters; and Western World Insurance Company ("Western"). The First Amended Complaint consists of seventeen counts. The three counts attacked by the Motion now before the court are the counts directed against Underwriters.
The First Amended Complaint alleges that Cirillo and Goyette co-own a rental property in Torrington. In 2012, they were sued by one Courtney Pappalardo, who alleged that she fell on ice on their property on February 7, 2011. A default judgment was entered against the defendants in that case. On April 1, 2013, the court awarded Pappalardo $76,283.19 in damages and costs. Pappalardo v. Goyette, No. CV12-6007177 (Litchfield J.D. 2013).
Cirillo and Goyette had an insurance contract with Western, allegedly providing coverage for legal actions such as that filed by Pappalardo. They allege that they purchased this contract "through" Burns and Underwriters. Burns allegedly told them that the policy provided coverage and that Western would take care of the matter. Western, however, did not appear, and a default entered.
The plaintiffs’ allegations against Underwriters are as follows. Underwriters is a surplus lines insurance broker for Western. It failed to apprise Cirillo and Goyette of the status of the Pappalardo action and "did not take sufficient action to assist the Insureds in obtaining the benefits of the Policy." The Twelfth Count alleges negligence against Underwriters. The Thirteenth Count alleges breach of contract. The Fourteenth Count alleges a violation of the Connecticut Unfair Insurance Practices Act ("CUIPA"), Conn. Gen. Stat. § 38a-815, et seq.
Underwriters filed the Motion For Summary Judgment now before the court on March 1, 2018. It seeks summary judgment on the Twelfth Count because both it did not have a duty to the plaintiffs and because it did not breach a duty if there was one. It seeks summary judgment as a matter of law on the Thirteenth Count on the ground that the plaintiffs were not third party beneficiaries of the contract. It seeks summary judgment on the Fourteenth Count on the ground that "the alleged conduct does not establish a ‘general business requirement.’ " The Motion was argued on June 25, 2018. The counts in question will now be considered in order.
Twelfth Count
The Twelfth Count alleges negligence. It specifically alleges that "Underwriters failed to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the insurance profession in that it failed to take reasonable and necessary action to ensure that the Insureds would be provided with a defense and indemnity for the Pappalardo Lawsuit under the Policy."
The evidence submitted by the parties establishes that Underwriters is a surplus lines insurance broker licensed by the State of Connecticut. A surplus lines broker allows insurance agents to obtain insurance coverage from surplus lines insurers for risks that otherwise would not be covered in the market. See Harbor Insurance Co. v. Groppo, 208 Conn. 505, 506-07 n.2, 544 A.2d 1221 (1988).
On January 19, 1987, Underwriters signed a contract ("Contract") with Western under which Underwriters agreed to act as agent for Western in the State of Connecticut. The Contract allows Underwriters to "[s]olicit, accept and bind risks" and to "[c]ancel such policies, certificates, endorsements and binders at the discretion of the Agent where such cancellation is legally possible." It does not impose any duty on Underwriters with respect to insured persons. The Contract further provides that it is to be construed in accordance with the laws of New Jersey.
On July 17, 2010, Western issued an insurance policy ("Policy") to Cirillo and Goyette covering the Torrington property in question. The Policy obliges Western to pay damages incurred as a result of bodily injury occurring on the property and to defend the insured against any suit seeking damages for such bodily injury. Underwriters is listed as the "Producer," but the Policy imposes no obligations on the Producer. The Policy provides that any notice of cancellation will be mailed "to the first Named Insured’s last mailing address known to us." The Named Insured is stated to be Cirillo and Goyette. Both are stated to have the mailing address of 116 Newgate Road in Oxford.
Following issuance of the Policy, an inspection revealed discrepancies between information provided by Burns on the insurance application and the condition of the property. After Burns failed to provide further information, Underwriters notified Burns, Cirillo and Goyette by certified mail sent to 116 Newgate Road in Oxford that the Policy would be cancelled effective October 4, 2010. The Policy was officially cancelled on October 5, 2010. Underwriters first learned of the Pappalardo action on November 13, 2013- after judgment had entered in that case and more than three years following the cancellation of the Policy.
The parties disagree as to whether the Policy was effectively cancelled in October 2010. Underwriters points out that it sent notice of the cancellation to 116 Newgate Road- the address of the Insureds stated in the Policy. Cirillo has submitted an affidavit stating that he lived at 116 Newgate Road at the time in question but never received notice of the cancellation. Goyette has submitted a separate affidavit that, following a romantic breakup with Cirillo, she moved away from 116 Newgate Road in 2007 and did not subsequently receive mail from that address, including any notice of cancellation.
The situations of the two plaintiffs must be analyzed separately.
The effectiveness of the notice to Cirillo must be resolved by the mailbox rule. That rule "provides that a properly stamped and addressed letter that is placed into a mailbox or handed over to the United States Postal Service raises a rebuttable presumption that it will be received." Echavarria v. National Grange Mutual Insurance Co., 275 Conn. 408, 418, 880 A.2d 882 (2005). The only evidence that Cirillo submits to support his allegation that he did not receive the notice of cancellation is his own uncorroborated affidavit. This submission is legally insufficient to overcome the presumption. The notice in question was sent by certified mail. "[T]here is no evidence that the envelope had been returned by the postal authorities with an endorsement showing failure of delivery." Daniels v. Statewide Grievance Committee, 72 Conn.App. 203, 212, 804 A.2d 1027 (2002). "Denial of receipt by the insureds, standing alone, is insufficient to rebut the presumption. In addition to a claim of no receipt, there must be a showing that routine office practice was not followed or was so careless that it would be unreasonable to assume the notice was mailed." Nassau Insurance Co. v. Murray, 386 N.E.2d 1085, 1086 (N.Y. 1978). See 29 Am. Jur.2d Evidence § 277 (2008).
The effectiveness of the notice of cancellation is more easily resolved with respect to Goyette. According to her own affidavit, she moved away from 116 Newgate Road in 2007. In 2010, however, she willingly became a party to the Policy, which lists her address as 116 Newgate Road. There is no evidence that she ever supplied any new address to either Western or Underwriters. As mentioned, the Policy requires notice of cancellation to be mailed to the last known address of the Named Insureds. Goyette was a Named Insured. Under these circumstances, she gave materially false information to Western and Underwriters. The mailbox rule need not be invoked. Goyette is the author of her own misfortune. She has nothing to complain about here.
Under these circumstances, the Policy was canceled prior to Pappalardo’s fall. Underwriters owed no duty of care to Cirillo. It certainly owed no duty of any kind to Goyette, who supplied materially false information as to her address.
Thirteenth Count.
The Thirteenth Count alleges breach of contract. It specifically alleges that Cirillo and Goyette were third-party beneficiaries of the Contract between Underwriters and Western.
As mentioned, the Contract provides that it is to be construed in accordance with the laws of New Jersey. Under New Jersey law, "The determining factor as to the rights of a third-party beneficiary is the intention of the parties who actually made the contract. They are the persons who agree upon the promises, the covenants, the guarantees; they are the persons who create the rights and obligations which flow from the contract ... Thus the real test is whether the contracting parties intended that a third party should receive a benefit which might be enforced in the courts." Ross v. Lowitz, 120 A.3d 178 (N.J. 2015). (Internal quotation marks and citation omitted.)
The Contract here, which is now in evidence, does not suggest that Underwriters and Western intended insured persons to receive a benefit which might be enforced in the courts. Under the contract, Western is the principal, and Underwriters is an agent. It is hornbook law that, "Unless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to a contract." 2 Restatement (Second) of Agency § 320 (1958). Western was a disclosed principal in the Policy with the plaintiffs here. Underwriters did not become liable under either the Policy or the Contract. Moreover, even if Underwriters had some agency liability prior to the issuance of the Policy; see Lewis v. Michigan Millers Mutual Insurance Co., 154 Conn. 660, 664, 228 A.2d 803 (1967); it plainly had no such liability after the Policy was cancelled.
In denying a motion to strike the Thirteenth Count, Frechette, J. did not have the benefit of being able to review the Contract, which was not then in evidence.
Fourteenth Count
The Fourteenth Count alleges a CUIPA violation. A plaintiff alleging a CUIPA violation must submit evidence that the insurance company in question committed violations "with such frequency as to indicate a general business practice." Conn. Gen. Stat. § 38a-816(6). No such evidence has been submitted here. Under these circumstances, the allegations of the Fourteenth Count must fail.
Conclusion
The Motion For Summary Judgment is granted in its entirety.