Opinion
No. CV04 4001636 S
July 7, 2008
MEMORANDUM OF DECISION RE MOTIONS FOR SUMMARY JUDGMENT #115 #118
The plaintiff, Margaret Jacaruso and the defendant Nationwide Mutual Insurance Company have both moved for summary judgment in this action for underinsured motorists benefits. The plaintiff's claim arises from a motor vehicle accident on March 13, 2004. The parties have submitted a stipulation of facts to the court. The parties have each filed a memorandum of law in support of their position. They have also agreed that the memorandum of law filed by each party in support of their motions may be utilized by the court as a memorandum of law in opposition to the motion for summary judgment filed by the other party. The court will issue one decision which will apply to the plaintiff's motion for summary judgment dated August 8, 2007 and the defendant Nationwide's motion for summary judgment also dated August 8, 2007.
The subject accident occurred on March 13, 2004 in Stratford, Connecticut when a vehicle operated by Richard Lebski collided with a vehicle operated by the plaintiff. At the time, Beatrice Picone was a passenger in the plaintiff's vehicle. Both the plaintiff and her passenger, Picone, sustained personal injuries and damages as a result of the accident, and both filed legal actions against Lebski in which they alleged his negligence caused their injuries. At the time of the accident Lebski was insured under a liability policy with GEICO Insurance with limits of $50,000 per person and $100,000 per occurrence. GEICO paid the plaintiff Jacaruso and her passenger Picone the sum of $50,000 each, thereby exhausting the policy limits of Lebski's insurance coverage. In the legal action filed by Picone against Lebski, Picone v. Lebski et al., Docket No. CV04 4001685, Superior Court judicial district of Fairfield at Bridgeport [39 Conn. L. Rptr. 735], Picone also named Jacaruso as an additional defendant, alleging that Jacaruso's negligence also caused the accident and Picone's injuries. Nationwide paid the sum of $400,000 to Picone on behalf of Jacaruso to settle Picone's claim against Jacaruso partially under the liability portion of Jacaruso's subject policy and partially under umbrella insurance coverage.
See Picone v. Lebski et al, Docket No. CV04 4001685, Superior Court, judicial district of Fairfield at Bridgeport.
Jacaruso's present claim is for underinsured motorist benefits under the provisions of her Nationwide Mutual Insurance Company policy having a limit of $300,000. Nationwide claims it is entitled under said policy to a credit against the $300,000 of underinsured motorist coverage for the $50,000 Jacaruso received from Lebski's GEICO policy and for the $400,000 Nationwide paid to Picone under the liability portion of Jacaruso's policy with Nationwide. Therefore, Nationwide concludes that there is no remaining uninsured/underinsured coverage available to Jacaruso, and Nationwide is entitled to judgment as a matter of law.
In opposition to Nationwide's argument, Jacaruso claims that Nationwide is only entitled under the policy to a credit of $50,000 paid to Jacaruso by Lebski's insurer GEICO. Therefore, underinsured motorist coverage benefits of $250,000 remain available to Jacaruso from the original $300,000 of coverage available pursuant to the terms of her policy with Nationwide.
I Summary Judgment
The law regarding a review of a motion for summary judgment is well-settled. "Summary judgment is a method of resolving litigation when 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 . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." (Citations omitted.) Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "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 . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 399, 876 A.2d 522 (2005). "[S]ince litigants ordinarily have a constitutional right to have issues of fact decided by a jury . . . the moving party for summary judgment is held to a strict standard . . . of demonstrating his entitlement to summary judgment." (Citation omitted; internal quotation marks omitted.) Kakadelis v. DeFabritis, 191 Conn. 276, 282, 464 A.2d 57 (1983). "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." (Internal quotation marks omitted.) Martel v. Metropolitan District Commission, 275 Conn. 38, 46, 881 A.2d 194 (2005).
II Discussion
Nationwide argues that the reduction is justified by the policy language. It concludes that it is entitled to a credit for the $50,000 paid by Lebski to Jacaruso; the $50,000 paid by Lebski to Picone; and the $400,000 paid by Jacaruso to Picone under Jacaruso's liability coverage pursuant to her policy with Nationwide. The total of $100,000 paid by Lebski to Jacaruso and Picone are payments by a liable party, and thus, Nationwide claims it is entitled to this reduction. Nationwide further argues that as the policy language states that policy coverage limits will be reduced by "any amount paid by or for any liable parties," it is also entitled to a credit for the $400,000 paid on behalf of Jacaruso to Picone to settle Picone's liability claim against Jacaruso in Picone v. Lebski et al, Docket No. CV04 4001685, Superior Court, judicial district of Fairfield at Bridgeport, as Jacaruso was also deemed to be a liable party. Nationwide argues that Section 38a-334-6(d)(1)(A)(B)(C) of the Regulations of Connecticut State Agencies entitles Nationwide, pursuant to its policy, to reduce its coverage by "any amount made by or for any liable parties." This reduction would apply to all payments to any injured parties and not just a particular claimant. See Nichols v. Salem Subway Restaurant, 98 Conn.App. 837, 844 (2006); Allstate Ins. Co. v. Lenda, supra, 34 Conn.App. 334.
In opposition, Jacaruso claims that Nationwide is only entitled under the policy to a credit against the underinsured motorist limit of $300,000 for the $50,000 paid by GEICO to Picone. The plaintiff maintains that the Nationwide policy language does not provide for the reduction authorized by the Regulations of Connecticut State Agencies § 38a-334-6(d)(1)(c), and thus, the $400,000 paid to Picone by Nationwide in behalf of the plaintiff under the liability portion of the plaintiff's policy does not reduce the underinsured motorist coverage available to the plaintiff.
"It is the function of the court to construe the provisions of the contract of insurance." (Internal quotation marks omitted.) O'Brien v. United States Fidelity Guaranty Co., 235 Conn. 837, 842, 669 A.2d 1221 (1996). A limitation of liability on uninsured or underinsured motorist coverage must be construed most strongly against the insurer. American Universal Ins. Co. v. DelGreco, [ 205 Conn. 178, 196, 530 A.2d 171 (1987)]. Furthermore, any ambiguity in policy language regarding coverage must be construed against the insurer. Avis Rent A Car System, Inc. v. Liberty Mutual Ins. Co., 203 Conn. 667, 672, 526 A.2d 522 (1987).
"An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract and enforced in accordance with the real intent of the parties as expressed in the language employed in the policy. The policy words must be accorded their natural and ordinary meaning. Under well established rules of construction, 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 citations omitted.) (Internal quotation marks omitted.) Allstate Ins. Co. v. Lenda, 34 Conn.App. 444, 452, 642 A.2d 22 (1994) cert. denied, 231 Conn. 906 (1994). A limitation of liability on uninsured or underinsured motorist coverage must be construed most strongly against the insurer. American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 196, 530 A.2d 171 (1987). This rule of construction may be not applied, however, unless the policy terms are indeed ambiguous. Kelly v. Figueiredo, 223 Conn. 31, 37, 610 A.2d 1296 (1992). Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous. Allstate Ins. Co. v. Lenda, supra, 34 Conn.App. 452; Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758, 763-64, 621 A.2d 258 (1993).
The purpose of underinsured motorist coverage is to provide an insured who is injured in an accident with the same resources he would have had if the tortfeasor had liability insurance equal to the amount of the insured's uninsured/underinsured motorist coverage. J. Berk M. Jainchill, Connecticut Law of Uninsured and Underinsured Motorist Coverage (3d Ed. 2004) § 1.3, p. 23; see also Doyle v. Metropolitan Property Casualty Ins. Co., 252 Conn. 79, 85, 743 A.2d 156 (2000). It is not the purpose to guarantee full compensation for a claimant's injuries. Florestal v. Governmental Employees Ins. Co., 236 Conn. 299, 310, 673 A.2d 474 (1996). "Indeed, underinsured motorist protection is not intended to provide a greater recovery than would have been available from the tortfeasor . . ." Dimmock v. Allstate Insurance Co., 84 Conn.App. 236, 241-42, 853 A.2d 543, cert. denied, 271 Conn. 923, 859 A.2d 577 (2004). An insurer, however, may not by contract reduce its liability for such uninsured or underinsured motorist coverage except as 38a-334-6 of the Regulations of Connecticut State Agencies expressly authorizes. Allstate Ins. Co. v. Ferrante, 201 Conn. 478, 483, 518 A.2d 373 (1986); Dixon v. Empire Mutual Ins. Co., 189 Conn. 449, 452-53, 456 A.2d 335 (1983).
Whether the application of credits for other payments reduces uninsured/underinsured coverage involves two issues. The first issue is whether the reduction is justified by the policy language, and the second issue is whether the policy language is justified by the applicable regulation, Section 38a-334-6 of the Regulations of Connecticut State Agencies. See, Nichols v. Salem Subway Restaurant, supra, 98 Conn.App. 842.
Regulations of Connecticut State Agencies § 38a-334-6(d) exclusively governs the grounds upon which such uninsured and underinsured insurance may be excluded or limited. Section 38a-334-6(d) reads as follows:
(1) The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of section 14-112 of the General Statutes, except that the policy may provide for the reduction of limits to the extent that damages have been
(A) paid by or on behalf of any person responsible for the injury,
(B) paid or are payable under any workers' compensation law, or
(C) paid under the policy in settlement of a liability claim.
The plaintiff's policy with Nationwide states in relevant part:
The limits of this coverage and/or any amounts payable under this coverage, whichever is less, will be reduced by: (a) any amount paid by or for any liable parties.
The plaintiff maintains that the policy language is not intended to credit Nationwide for payments made under the liability coverage of the subject policy, as Nationwide elected not to include the language authorized by § 38a-334-6(d)(1)(c). Therefore the policy does not comport with the language of the regulation. "[I]f the policy comports with the language of the regulation, it will be deemed to provide that same level of protection permitted by the regulation . . . In order for a policy exclusion to be expressly authorized by [a] statute [or regulation], there must be substantial congruence between the statutory [or regulatory] provision and the policy provision." (Citation omitted; internal quotation marks omitted.) Nichols v. Salem Subway Restaurant, supra, 98 Conn.App. 844; Vitti v. Allstate Ins. Co., supra, 245 Conn. 176; Lowrey v. Valley Forge Ins. Co., 224 Conn. 152, 156, 617 A.2d 454 (1992). It is the plaintiff's position that § 38a-334-6(d)(1)(A) gives a credit for payments made by tortfeasors outside of the policy, while § 38a-334-6(d)(1)(c) gives credits made for payments inside the policy under the liability section of the policy. The subject policy language, according to the plaintiff, only includes language that comports with § 38a-334-6(d)(1)(A) and not § 38a-334-6(d)(1)(c).
"Section (6)(d)(1) [now § 38a-334-6(d)(1)(A) of the insurance regulations applies generally to third-party liability payments . . . Section 6(d)(3) [now § 38a-334-6(d)(1)(c) applies generally to payments made under the subject policy." Berk and Jainchill, Connecticut Law of Uninsured and Underinsured Motorist Coverage, 2nd Ed., § 6.2, footnote 8, p. 357.
Pursuant to the language of the policy, Nationwide is entitled to reduce its available underinsurance motorist coverage by "any amount made by or for any liable parties." This reduction applies to all payments to any injured parties and not just a particular claimant. Nichols v. Salem Subway Restaurant, supra, 98 Conn.App. 844; Allstate Ins. Co. v. Lenda, supra, 34 Conn.App. 334. In Nichols, it was determined that § 38a-334-6(d)(1)(c) permitted a carrier to reduce its coverage limits by any payments, including payments made to other claimants. Similarly, in Allstate Ins. Co. v. Lenda, supra, the court permitted the carrier to reduce uninsured motorist coverage by all monies paid to multiple victims as opposed to a particular claimant. The policy in Allstate v. Lenda provided that the limits of the coverage:
will be reduced by: (1) all amounts paid by the owner or operator of the uninsured auto or anyone else responsible. This includes all sums paid under the liability coverage of this or any other policy.
Allstate Ins. Co. v. Lenda, supra, 34 Conn.App. 452-53.
The court also held that the credit was authorized pursuant to § 38a-334-6(d)(1)(A) Regulations of Connecticut State Agencies, which permits a reduction of limits to the extent damages have been paid by or on behalf of anyone responsible for the injury.
The court specifically stated that the phrase "the injury" as used in the Regulation does not refer to one's specific injury, but rather relates to the person who paid or on whose behalf damages have been paid. Allstate Ins. Co. v. Lenda, supra, 34 Conn.App. 455.
The court agrees with the defendant Nationwide that both §§ 38a-334-6(d)(1)(A) and 38a-334-6(d)(1)(c) authorize a reduction of underinsured motorist limits by virtue of settlement payments made by any persons to the various claimants. Nationwide's policy language allows for a reduction of uninsured motorist coverage limits for "any amount paid by or for any liable parties." The language falls within the scope of the subject regulations. Nationwide made payment for its insured, the plaintiff, to settle the liability claim that the passenger Picone had brought against the plaintiff. While there are differences in the policy language and the regulations, any differences are immaterial, as the defendant argues. In order for a policy exclusion to be expressly authorized by the statute, there must be substantial congruence between the statutory provision and the policy provision. (Citations omitted; internal quotation marks omitted.) Chmielewski v. Aetna Casualty Surety Co., 218 Conn. 646, 674, 591 A.2d 101 (1991). The policy language need not match the exact wording of the regulation. The defendant's policy language is an attempt to combine the provisions of §§ 38a-334-6(d)(1)(A) and 38a-334-6(d)(1)(c), and is not an attempt to alter the material phrase of the regulation. Nichols v. Salem Subway Restaurant, supra, 98 Conn.App. 845.
Additionally, the policy language is not ambiguous as the plaintiff argues. "It is a basic tenet of insurance policy interpretation that the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous." (Internal quotation marks omitted.) Nichols v. Salem Subway Restaurant, supra, 98 Conn.App. 843; Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758, 764, 621 A.2d 258 (1993). "[T]he meaning of policy language ordinarily is drawn from the context in which it is used [and] [t]here is no presumption that language in insurance contracts is inherently ambiguous." (Citation omitted; internal quotation marks omitted.) Mallozzi v. Nationwide Mutual Ins. Co., 72 Conn.App. 620, 626-27, 806 A.2d 97, cert. denied, 262 Conn. 915, 811 A.2d 1292 (2002).
III Conclusion
The various tortfeasor payments resulting from the subject accident total $500,000. Lebski paid the sum of $50,000 each to Jacaruso and her passenger Picone. In addition, Nationwide paid Picone $400,000 to settle Picone's negligence claim against Jacaruso. The Nationwide policy provided underinsured motorist benefits of $300,000 combined single limit. The policy limits are reduced by these applicable payments. There is no available uninsured motorist coverage for the plaintiff. Where credits, set-offs or deductions reduce policy limits to zero, summary judgment is appropriate. See Fuentes v. City of New Haven, Superior Court, judicial district of New Haven at New Haven No. CV 03-0475791 (Dec. 8, 2005, Zoarski, J.T.R.), 40 Conn. L. Rptr. 443.
Accordingly, Nationwide Mutual Insurance Company's Motion for Summary Judgment dated August 8, 2007, is hereby granted, and the plaintiff, Margaret Jacaruso's Motion for Summary Judgment dated August 8, 2007, is hereby denied.