Opinion
No. CV02 039 42 50
June 27, 2003
MEMORANDUM OF DECISION
The plaintiff, Catherine Savoie, has brought an application to vacate an arbitration award rendered on June 3, 2002, in favor of the Respondent, Prudential Property and Casualty Insurance Company. The issue to be decided in this action is whether an uninsured/under-insured motorist carrier, where two tortfeasor are equally responsible, may limit its liability by taking credit for payments made to the injured party pursuant to the policies covering the two tortfeasors. The court heard oral argument on January 13, 2003, and has carefully considered the parties' thoughtful briefs and the arbitrators' decision (to include a dissent) as well as the applicable decisional and statutory law.
This action is an underinsured motorist claim brought by Catherine Savoie, the administratrix of the estate of her husband John Paul Savoie, who was killed in an automobile accident on November 17, 1992. John Paul Savoie was covered by a Prudential automobile insurance policy. The policy provided for uninsured/underinsured motorist coverage in the amount of $100,000 per person and $300,000 per accident. The plaintiff settled the underlying liability case with the two tortfeasors, Richard Courville and Michael Chueka and Fairfield Tobacco (driver-owner of second vehicle).
The parties stipulated to the following facts before the arbitrators:
1.) On November 17, 1992, John Paul Savoie was killed in an automobile accident on Route 7 in Norwalk, Connecticut.
2.) Savoie's death was caused by the negligence of Richard Courville, operating a vehicle owned by Rita Sara, and Michael Chueka, operating a vehicle owned by Fairfield County Tobacco and Candy Company.CT Page 7547-ak
3.) The total insurance available to Richard Courville was $150,000, which has been paid to the Estate of John Paul Savoie.
4.) The insurance company for Chueka and Fairfield has paid $250,000-$100,000 to the Estate of John Paul Savoie and $150,000 to Catherine Savoie.
Failure to exhaust all of the coverage provided Cheuka and Fairfield is not raised by the parties nor is it an impediment to the bringing of this underinsured motorist claim under Florestal v. Government Employees Ins Co., 236 Conn. 299 (1996).
5.) The total damages sustained by the Estate of John Paul Savoie and Catherine Savoie are in excess of $1 million dollars.
6.) The respondent, Prudential Insurance Company, provided the claimant underinsured coverage in the amount of $300,000.
7.) Catherine Savoie has received $99,406.58 in workers' compensation benefits from the State of Connecticut and has reimbursed $80,000.
8.) The percentage of negligence attributable to Richard Courville is 50% and the percentage of negligence attributable to Michael Chueka and Fairfield is 50%.
At the arbitration and in her brief here, the claimant argued Prudential was only entitled to a set-off of the $150,000 paid on behalf of Courville and that, under the apportionment principle established by Tort Reform II, Prudential was not entitled to any set-off for sums paid on behalf of Cheuka and Fairfield. The respondent, at arbitration and in its brief here, argued that, because the claimant had received a total of $400,000 ($150,000 from Courville's carrier and $250,000 from Cheuka's carrier) and because the respondent provided uninsured motorist coverage of $300,000, there was no claim for underinsured motorist benefits. On June 3, 2002, the arbitrators rendered their eight (8) page decision in favor of the respondent, relying primarily upon the language of the Prudential policy and Connecticut General Statutes § 38a-336 (b) and (d) as well as decisional law.
Connecticut General Statutes § 52-408 controls agreements to arbitrate and the forms of such agreements. That statute requires the agreement to be in writing. Arbitration is a creature of statute. Connecticut Union of Telephone Workers v. Southern New England Telephone Company, 148 Conn. 192, 197 (1961). "When parties mutually agree to submit their dispute to arbitration, judicial review is limited in scope CT Page 7547-al and the resulting award is not reviewable for errors of law or fact." Steiner v. Middlesex Mutual Assurance Co., 44 Conn. App. 415, 425 (1997), citing Hartford v. Board of Mediation Arbitration, 211 Conn. 7, 14 (1989); New Haven v. AFSCME, Council 15, Local 530, 208 Conn. 411, 415-16 (1988); Greater Bridgeport Transit District v. Amalgamated Transit Union, Local 1336, 28 Conn. App. 337, 343 (1992). "The continued autonomy of that process can be maintained only with a minimum of judicial intrusion." Thomas v. Commerford, 168, Conn. 54, 64 (1975). The plaintiff here challenges the arbitrators' decision by moving to vacate.
No issue is raised here regarding whether the agreement between these parties was written or, if not, whether the court lacks subject matter jurisdiction and the court does not address the same.
Connecticut General Statutes § 52-418a declares a decision may be vacated on the following grounds only: (1) award based on corruption, fraud or undue means; (2) evident partiality or corruption; (3) misconduct in refusing to postpone hearings or to hear evidence or other prejudicial misconduct; or (4) arbitrators exceeded power or no mutual, final and definite award. The claimant has neither raised nor argued any of these grounds. An award may also be vacated if (1) the award rules on the constitutionality of a statute or (2) the award violates clear public policy. Neither is argued here or is applicable. The claimant evidently urges — without specifically so stating — the decision of the arbitrators should be vacated based on the panel's disregard of the law. Despite the strong preference for upholding arbitration awards and the fact that courts generally cannot review such decisions for errors of fact or law, an award may be vacated if the arbitrators manifestly disregarded the law in reaching their decision. Garrity v. McCaskey, 223 Conn. 1 (1992) enunciated a three-prong test for determining manifest disregard of the law: (1) the error was obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator; (2) the arbitrator appreciated the existence of clearly governing legal principles but decided to ignore it; and (3) the governing law alleged to have been ignored by the arbitrator is well-defined, explicit and clearly applicable Id. at 9. To vacate, all three requirements must be met. Nothing suggests the arbitrators here chose to ignore applicable law; in fact, they carefully considered the law urged upon them by the claimant.
Connecticut General Statutes § 38a-336 (e) defines an underinsured motor vehicle as:
a motor vehicle with respect to which the sum of the limits of liability under all bodily injury, liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the CT Page 7547-am policy against which the claim is made . . .
Connecticut General Statutes § 38a-336 (b) provides:
An insurance company shall be obligated to make payment to its insured up to the limits of the policy's uninsured and underinsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements . . .
The Prudential policy issued Savoie limits Prudential's liability to "the limit of our liability less all amounts recovered for all damages, including damages for care or loss of services, arising out of bodily injury to one person as a result of any one accident." (Prudential policy, Part 5, P. 7 (emphasis added)). Also, Regulation 38a-334-6 (d) (1) (A), adopted pursuant to the statute, allows an insurance company to reduce its liability for damages that have been (1) paid by or on behalf of any person responsible for the injury and (2) paid or payable under any workers' compensation or other disability law or (3) paid under the policy in settlement of a liability claim.
The respondent argued and the arbitrators concluded the statute, regulation, and the Prudential policy were clear in that any damages to be paid by Prudential under its underinsured motorist coverage shall be reduced by the amount of all damages already recovered. Savoie had already received $400,000; that amount exceeds Savoie's $300,000 underinsured coverage. The legislative objective of the underinsured motorist statute was to give the injured insured the same recourse he would have had if the tortfeasor had carried liability insurance equal to the amount of the insured's uninsured motorist coverage. American Motorist Insurance Co. v. Gould, 213 Conn. 625 (1990). This coverage was not intended to "place the insured who is injured by an underinsured motorist in a better position than one who is harmed by a motorist having the same insurance as the insured." Id. at 631. Savoie has received $100,000 more from the tortfeasors than her underinsured motorist limits. Had she brought a claim only as against Courville and received the full $150,000 available under his policy limits and had she then brought a claim against Prudential, Prudential's exposure would only have been $150,000, (the difference between the underinsured coverage in the amount of $300,000 and the credit for the $150,000 already paid under the tortfeaser's liability policy). If neither of the tortfeasors had been insured, Savoie could only have received $300,000 from Prudential; Savoie could not have received a total of $600,000 from Prudential by collecting CT Page 7547-an $300,000 twice because there were two tortfeasers.
The plaintiff argued that, given two recent cases ( Collins v. Colonial Penn. Insurance Co., 257 Conn. 718, and Garcia v. ITT Hartford, 72 Conn. App. 588), the law of apportionment should apply and thus Prudential should only be entitled to a set-off for Courville's settlement but not for Chueka's. These cases are, as the arbitrators pointed out, distinguishable from the instant case. In both Collins, supra, and Garcia, supra, the plaintiff settled with one of the parties before asserting a claim against the other party. In Collins, the plaintiff settled with the uninsured motorist carrier first and then brought the defendant to trial: in Garcia, the plaintiff settled with the individual first and then brought a claim against the uninsured carrier. Both cases involved unidentified motorists. The Collins Court determined liability should be apportioned between the identified tortfeasor and the uninsured motorist carrier acting as a surrogate for the unidentified driver. In Garcia, the Court considered whether a party could recover under an uninsured motorist policy after settling with one tortfeasor for an amount that exceeded her policy. Relying on Collins, the Garcia Court ruled that a party could.
The arbitrators considered both cases and found them not applicable for a couple of reasons. Each of those cases involved an insurance company acting as a surrogate for an unidentified driver. In each of those cases, the parties either settled the claim as against the single tortfeasor (who was unidentified) and then brought a claim against the uninsured motorist carrier — or vice versa. Each of those cases dealt with or raised the issue of apportionment; the case at bar deals with the issue of set-off. The instant case is not about apportionment; the damages have been agreed upon; the apportionment of liability had been stipulated to be equal as between the tortfeasors based upon their respective negligence. Here, all parties were known and identified and all claims were settled prior to the arbitration. In Garcia, supra, and Collins, supra, the Court ruled that, since the claim of only one tortfeaser had been resolved, the remaining tortfeasor could not escape liability simply because the other party settled for an amount that was greater than the damages. The Court concluded the remaining tortfeasor in each case was liable for the damages assessed less the percentage of the settling tortfeasor's negligence. In the case at bar, the claims as against both tortfeasors had been resolved and there was no possibility of one tortfeasor evading liability. The arbitrators concluded the apportionment provisions of Tort Reform II did not re-write the statutes governing uninsured/underinsured motorist claims. Nor, they concluded, should the apportionment principles enunciated in Collins and Garcia negate the specific provisions of the Prudential policy to create CT Page 7547-ao separate uninsured/underinsured motorist coverage for each tortfeasor under the circumstances of this case. Unlike Collins and Garcia, the arbitrators here were not asked to apportion liability as between the two tortfeasors. The parties had already done that prior to submission. The sole issue before them was whether a claim against Savoie's uninsured/underinsured carrier was triggered following the settlement of the claims against both tortfeasors for the amounts stated and the release of those tortfeasors. It cannot therefore be said the arbitrators acted in manifest disregard of the law or that they ignored clearly applicable law and the plaintiff thus does not satisfy the Garrity, supra, test for vacating an award.
Conn. Gen. Stat. § 38a-336 (b) provides in part, ". . . in no event shall the total amount of recovery from all policies, including any amount recovered under the insured's uninsured and underinsured motorist coverage, exceed the limits of the insured's uninsured and underinsured motorist coverage."
Finally, this Court notes Savoie did not purchase "underinsured motorist conversion coverage" pursuant to Conn. Gen. Stat. § 38a-336a. Had an additional premium been paid and that coverage obtained, the definition of "underinsured motor vehicle" would be one "with respect to which the sum of all payments received by or on behalf of the covered person from or on behalf of the tortfeasor are less than the fair, just and reasonable damages in the covered person." Conn. Gen. Stat. § 38a-336a (e) (emphasis added). Had this optional coverage been purchased, the claimant would have been entitled to the "add-on" coverage here sought and would have been able to recover up to the limits of the applicable underinsured motorist coverage without regard to whether the tortfeasor's policy equaled or exceeded the underinsured motorist coverage so long as the amounts received were, as here, less than the damages to which these parties had stipulated. The arbitrators' decision is of course silent regarding that statute given the absence of any evidence Savoie had purchased such additional protection. This court notes only that, had the panel considered the same, it would not — under the facts of this case have changed their decision because consistent with the majority opinion.
The party challenging the award bears the burden of producing evidence sufficient to invalidate or avoid it, and only upon a showing that it "falls within the proscriptions of § 52-418 . . . or procedurally violates the parties' agreement" will the determination of an arbitrator be subject to judicial inquiry." (Citations omitted.) O G/O'Connell, Joint Venture v. Chase Family Ltd. Partnership, No. 3, 203 Conn. 133, 145-46, (1987); Malecki v. Burnham, 181 Conn. 211, 214 (1980).
The motion to vacate is denied and the arbitrators' decision is confirmed. Judgment for the defendant enters this date.
Sheedy, J. CT Page 7547-ap