Opinion
No. CV07 5002606-S
May 28, 2009
MEMORANDUM OF DECISION
This lawsuit results from a dispute over the coverage of an insurance policy regarding a settlement arising out of a sexual abuse case against the plaintiff, entitled Doe v. Abrahante, Superior Court, judicial district of New Haven, Docket No. CV 97 0404311.
On or about November 17, 2003, the parties in the underlying suit entered into a settlement agreement. As part of the agreement the parties stated that St. Paul and the YWCA [now Women and Families Center] would each pay $25,000.00 to the plaintiff in settlement of the action. The parties further agreed to submit for judicial determination the issue of whether, assuming judgment was entered against the plaintiff in count two of the underlying suit, the policy coverage is limited to $25,000.
It should, initially, be noted that "in ascertaining the meaning of the terms of the insured's policy, we are guided by well established principles. The interpretation of an insurance policy, like the interpretation of other written contracts, involves a determination of the intent of the parties as expressed by the language of the policy . . . The determinative question is the intent of the parties, that is, what coverage the . . . [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy . . . It is axiomatic that a contract of insurance must be viewed in its entirety, and the intent of the parties for entering it derived from the four corners of the policy . . . The policy words must be accorded their natural and ordinary meaning . . . [and] any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy . . . A necessary predicate to this rule of construction, however, is a determination that the terms of the insurance policy are indeed ambiguous. The fact that the parties advocate different meanings of the [insurance policy] does not necessitate a conclusion that the language is ambiguous . . . Moreover, the provisions of the policy issued by the defendant cannot be construed in a vacuum . . . They should be construed from the perspective of a reasonable layperson in the position of the purchaser of the policy." (Citation omitted; internal quotation marks omitted.) Community Action for Greater Middlesex County, Inc. v. American Alliance Ins. Co., 254 Conn. 387, 399-400, 757 A.2d 1074 (2000).
"As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading . . . The determination of whether an insurance policy is ambiguous is a matter of law for the court to decide." (Citations omitted.) Metropolitan Life Ins. Co. v. Aetna Casualty Surety Co., 255 Conn. 295, 305-06, 765 A.2d 891 (2001).
The relevant provisions of the insurance policy between the parties provide as follows:
"What This Agreement Covers. Bodily injury and property damage liability. We'll pay amounts any protected person is legally required to pay as damages for covered bodily injury, property damage or premises damage that: happens while this agreement is in effect; and is caused by an event." (Joint Stipulation of Facts, Court Exhibit 1, Insurance Policy, p. 1.)
" Bodily Injury means any physical harm, including sickness or disease, to the physical health of other persons. It includes any of the following that results at any time from such physical harm, sickness or disease: Mental anguish, injury or illness. Emotional distress. Care, loss of services, or death." (Joint Stipulation of Facts, Insurance Policy, p. 2.)
Page two of the insurance policy also defines "personal injury," and denotes seven "personal injury offenses" that are covered by the policy, including false arrest, malicious prosecution, wrongful entry, invasion of the right of private occupancy of a room, libel or slander, belittling the work of others and violation of the right of privacy. (Joint Stipulation of Facts, Insurance Policy, p. 2.) It is clear that the negligent supervision claim does not fall within any of these defined personal injury offenses, and as such, a personal injury analysis will not be conducted here.
"SEXUAL ABUSE LIMITATION ENDORSEMENT. This endorsement changes your Commercial General Liability Protection. How Coverage is Changed. There are four changes which are explained below. 1. The following is added to the Limits of Coverage section. This change limits coverage. Sexual abuse total limit. This limit is shown in the Coverage Summary. It is the most we'll pay for the combined total of all covered bodily injury, personal injury and medical expenses which result from all sexual abuse that: is sustained by all persons; and is committed in a policy year by all persons who otherwise qualify as protected persons. If the amount of this limit is not shown in the Coverage Summary, it will be considered to be the same as $100,000. Sexual abuse means any illegal or offensive physical act or contact of a sexual nature . . . Sexual abuse each person limit. This limit is shown in the Coverage Summary. It is the most we'll pay for the combined total of all covered bodily injury, personal injury and medical expenses which result from all sexual abuse that: is sustained by any one person; and is committed in a policy year by all persons who otherwise qualify as protected persons. If the amount of this limit is not shown in the Coverage Summary, it will be considered to be the same as $25,000. However, the most we'll pay for covered medical expenses is further limited by the following: Sexual abuse medical expenses each person limit. This limit is $5,000. It is the most we'll pay for all covered medical expenses which result from all sexual abuse that: is sustained by any one person; and is committed in a policy year by all persons who otherwise qualify as protected persons." (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 1.)
The sexual abuse limitation endorsement further reads: "2. The following is added to the General total limit section. This change limits coverage. The General Total limit doesn't apply to covered bodily injury, personal injury or medical expenses that result from sexual abuse committed by any person who otherwise qualifies as a protected person. Instead, the sexual abuse total limit applies. We explain that limit in the Sexual abuse total limit section." (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 2.)
"3. The following is added to the Personal injury each person limit section. This change limits coverage. The Personal injury each person limit doesn't apply to covered personal injury that results from sexual abuse committed by any person who otherwise qualifies as a protected person. Instead, the sexual abuse each person limit applies. We explain that limit in the Sexual abuse each person limit section." (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 2.)
Finally, the sexual abuse limitation provides that "4. The following is added to the Each event limit section. This change limits coverage. The Each event limit doesn't apply to covered bodily injury or medical expenses that result from sexual abuse committed by any person who otherwise qualifies as a protected person. Instead, the sexual abuse each person limit applies. We explain that limit in the Sexual abuse each person limit section." (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 2.)
The "NOTICE OF COVERAGE CHANGE FOR SEXUAL ABUSE LIMITATION ENDORSEMENT" provides in relevant part: "The meaning of sexual abuse has been changed. Specifically, we replaced `physical, mental or moral harassment or assault of a sexual nature against any person' with `any illegal or offensive physical contact of a sexual nature.' This change limits coverage. Sexual abuse medical expenses each person limit. This section has been added. This change limits coverage. Please read this endorsement carefully." (Joint Stipulation of Facts.)
"Connecticut law requires an issue of contract interpretation to be resolved by reading the contract in its entirety, with each provision read in light of the other provisions . . . and every provision [to] be given effect if it is possible to do so . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . . Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms." (Citation omitted; internal quotation marks omitted.) Connecticut Properties Tri-Town Plaza, LLC v. Seymour Cinema, Inc., 84 Conn.App. 569, 577, 854 A.2d 756 (2004).
"Each and every sentence, clause, and word of a contract of insurance should be given operative effect. Since it must be assumed that each word contained in an insurance policy is intended to serve a purpose, every term will be given effect if that can be done by any reasonable construction." Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 539, 791 A.2d 489 (2002).
"The insurance contract includes the printed form policy, declarations therein, and any endorsements thereto . . . In construing an endorsement to an insurance policy, the endorsement and policy must be read together, and the policy remains in full force and effect except as altered by the words of the endorsement; conversely the endorsement modifies, to [the] extent of the endorsement, the terms and conditions of the original insurance contract . . . If any irreconcilable conflict exists between provisions of the policy and provisions of an endorsement, then the latter must control." Schultz v. Hartford Fire Ins. Co., 213 Conn. 696, 705, 569 A.2d 1131 (1990).
In the instant case, count two of the May 1998 amended complaint in the underlying action provides in relevant part: "9. The aforementioned conduct by the Defendant Abrahante constitutes sexual assault and battery. 10. As a direct and proximate result of the Defendants aforementioned sexual assault and battery the minor Plaintiff has suffered damages including emotional distress and mental anguish. 11. As further direct and proximate result of the Defendant's aforementioned sexual assault and battery, the minor Plaintiff has required the treatment and care of psychologists, social workers, et cetera, all of which has and will continue to cost her and her parents losses and damages."
The plaintiff in the underlying case alleged, and the parties have stipulated (see Joint Stipulation of Facts, Court Exhibit 1 paragraphs 9 and 10), that sexual assault and battery occurred, from which emotional distress and mental anguish resulted, which required psychological treatment. The insurance policy defines bodily injury as physical harm resulting in mental anguish, injury or illness and emotional distress. The sexual abuse each person limit provides that the coverage for "the combined total of all covered bodily injury, personal injury and medical expenses which result from all sexual abuse that is sustained by one person" is limited to $25,000. (Emphasis added.) (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 1.) Neither party disputes that the plaintiff in the underlying action was sexually abused within the meaning of the sexual abuse limitation endorsement.
The sexual abuse limitation endorsement is not ambiguous in the present case. The description of bodily injury in the insurance policy; (Joint Stipulation of Facts, Insurance Policy, p. 2.); and the language of the sexual abuse limitation endorsement; (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 1.); when read together, as they must be, make clear that the parties intended to limit coverage for injuries resulting from sexual abuse to $25,000. The sexual abuse each person limit was changed by the unambiguous language of the sexual abuse limitation endorsement to $25,000 "for the combined total of all covered bodily injury" for each person. (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 1.) There is no ambiguity in the policy. See, e.g., Kelly v. Figueiredo, 223 Conn. 31, 37, 610 A.2d 1296 (1992) (finding assault and battery exclusion clause in insurance policy unambiguous where words at issue did not have multiple definitions).
Contrary to the plaintiff's argument, the bodily injury limit for sexual abuse is still limited to $25,000 by the sexual abuse each person limit on page one of the sexual abuse limitation endorsement, despite the omission of a specific limitation for the bodily injury each person limit section. The reason for inclusion of a general total limit section, a personal injury each person limit section and an each event limit section in the sexual abuse limitation endorsement, without a bodily injury each person limit section by itself, is made clear when compared to the insurance policy coverage summary and policy body. (Joint Stipulation of Facts, Sexual Abuse Limitation Endorsement, p. 2.) The body of the insurance policy specifically provides coverage limits for a general total limit, personal injury each person limit and an each event limit, but not a bodily injury each person limit. (Joint Stipulation of Facts, Insurance Policy, pp. 1, 6.) Thus, paragraphs two, three and four of the sexual abuse limitation endorsement mirror and modify these limits of coverage found in the body of the insurance policy.
The sexual abuse limitation endorsement clearly indicates which section of the insurance policy it modifies and to what extent. The inclusion of the sexual abuse each person bodily injury limit contained in paragraph one of the sexual abuse limitation endorsement, without an accompanying specific paragraph, does nothing to negate that limitation. As such, the plaintiff's argument is unsustainable when the sexual abuse limitation endorsement is read as a whole and compared to the insurance policy. "Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity Connecticut Properties Tri-Town Plaza, LLC v. Seymour Cinema, Inc., supra, 84 Conn.App. 577.
Accordingly, the unambiguous language of the sexual abuse each person limit contained in the sexual abuse limitation endorsement controls and the $25,000 limitation applies to the bodily injury claim in the present case. As the defendant has already paid that maximum benefit in settling the underlying case, the plaintiff is not required to provide further compensation under the insurance policy.