Opinion
No. HHB-CV-08-4016936
December 3, 2009
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT — #110; DEFENDANT'S CROSS MOTION FOR SUMMARY JUDGMENT — #111
I. Nature and History of Proceedings
Currently pending in the judicial district of New Haven is a thirty-two-count complaint filed against nine defendants, including the defendant in this declaratory judgment action, wherein the plaintiff in the New Haven action, Maria Gargano, is seeking monetary damages from the defendants for unfair treatment, including her expulsion from the Branford Gridiron Club. At all times alleged in the several counts against Donna Limone in the New Haven complaint, Limone was insured under a homeowners and umbrella insurance policy issued by Allstate.
DN-NNH-07-5011900, Gargano v. Town of Branford, et al.
Allstate has filed a suit against Limone, it's insured, in this judicial district, claiming that there is no coverage under either the homeowner's policy #084721641 or the umbrella policy #019371664 for the various allegations levied against Limone in the New Haven complaint. In this declaratory judgment action, Allstate asserts that it has no obligation to defend and no obligation to indemnify Limone in the New Haven action as the events alleged in the underlying complaint implicate intentional, willful and purposeful conduct and are, therefore, not an "occurrence" as defined in the two Allstate policies. Furthermore, Allstate claims that certain provisions in each of the policies exclude coverage for conduct which is deemed "intentional, which is the type of conduct attributed to Limone in the underlying New Haven complaint. Allstate alleges that there is a bona fide and substantial question regarding the issue of coverage under the two policies that require determination by the court via a declaratory judgment.
Allstate is currently defending Limone in the New Haven action on a reservation of rights.
On March 31, 2009, Allstate filed its motion for summary judgment (#110) claiming that it has no duty to defend and no duty to indemnify it's insured under either of the policies it issued to Limone as the conduct attributed to her, as alleged in the comprehensive underlying complaint, does not implicate coverage. The motion was accompanied by a memorandum and several exhibits, including a copy of each of the subject policies. On May 28, 2009, Limone filed her objection and a cross-motion for summary judgment (#111) claiming that a substantial question of material fact exists as to whether or not the actions alleged in the underlying complaint implicate intentional conduct by her. Limone asserts that the intentional acts exclusionary provision contained in the umbrella policy does not apply to allegations of libel and slander levied against her by Gargano in the New Haven action. The defendant, therefore, asks the court to deny Allstate's motion for summary judgment and to grant her cross-motion requesting that the court order Allstate to continue to defend her in the underlying action. The defendant's objection and motion was accompanied by a memorandum of law and several exhibits, including a copy of the most recent underlying complaint. On June 15, 2009, Allstate filed its reply.
In reaching its decision to deny Allstate's motion for summary judgment and find that Allstate does have an obligation to defend under the umbrella policy and to grant the defendant's cross motion relative to that policy, the court has reviewed all of the above referenced documents, and many of the cases cited by the parties.
II. The Underlying New Haven J.D. Complaint
Maria Gargano, the plaintiff in the New Haven action, has filed a complaint against the following nine defendants: the town of Branford; the Branford Board of Education; the Branford public schools; the superintendent of the Branford school system; the Branford Gridiron club; Anthony Mortali and his spouse, Sandy Mortali; Elizabeth Sattleberger; and Donna Limone, the defendant in this action and Allstate's insured. Contained within the thirty-two-count complaint are six counts brought against Limone. All of those counts are based on certain core allegations which are contained in paragraphs #1 though #31 of Count One of the underlying complaint. Thus, a detailed summary of those core allegations is essential for a complete understanding of the various causes of action levied against the defendant in this case. "An insurer must look at two documents when determining whether a claim has insurance coverage: 1) the policy [or policies] under which coverage is sought; and 2) the language of the complaint against the insured. The insurer's duty to defend its insured depends on whether the complaint against the insured states facts which appear to bring the claimed injury within the policy coverage." Edelman v. Pacific Employers Insurance Company, judicial District of Hartford/New Britain, December 11, 1997, Aurigemma, J., cert. denied, 249 Conn. 918 (1999).
A. The Core or Foundation Allegations
In Count One of her complaint, the plaintiff identifies each of the defendants and their relationship to the Branford Gridiron club, which was a school-related fund-raising booster club that raised funds for the Branford high school football team. The defendant, Donald Limone, was, at all times referred to in the plaintiff's complaint, the vice president of the club. The plaintiff alleges that in 2006, she starting asking questions concerning the policies and record-keeping practices of the club and, as a result, was intimidated and bullied into silence by the officers of the club, including Limone, as the plaintiff claims she was in fear that the club would retaliate against her young son and adversely affect his play on the gridiron. In September and October of 2006, the plaintiff continued her questioning, however, the officers of the club persisted in their refusal to provide information to the plaintiff, concerning, according to the plaintiff, "the corrupt, dishonest, secretive and manipulative way in which the board members were operating the club." The plaintiff further alleges that the board implemented a policy that only those members with an eighty percent attendance record would be permitted to vote, thereby depriving the plaintiff of her voting rights. The plaintiff further alleges that following the meetings of the fall of 2006, the board members began to " harass, defame and retaliate against the plaintiff and ultimately revoked her membership, falsely accusing the plaintiff of causing discord via misinformation and distorting the facts, as a result of which the board, according to the plaintiff, falsely reported the receipt of many complaints against her. The plaintiff further alleges that all of the club's doings with regard to the refusal to provide the plaintiff with the requested information and the circumstances leading to her expulsion from the club were communicated by the plaintiff to the Branford Board of Education, which took no action. The plaintiff alleges that as a result of her communication to the Board of Education, the board members of the gridiron club contacted the coach and others, falsely accusing the plaintiff and her family of unspecified "criminal lies and threats" and repeatedly stated that they "intended to make the plaintiff's life miserable." Finally, in January 2007, the plaintiff received another letter from the gridiron club, reiterating her status as a non-member thereof. The last two paragraphs of Count One allege that the gridiron club was negligent and that the plaintiff has suffered both economic and non-economic losses, including emotional and physical harm and distress, and that her reputation and standing in the community has been damaged.
B. The Counts Against Donna Limone Count Twenty-Three
It is noteworthy that the allegations in this count, based upon negligence, are virtually identical to those contained in Count One.
Count Twenty-Four
The allegations contained in this count are nearly identical to those of Count One except the plaintiff alleges that the actions of Limone involved an unreasonable risk of causing her emotional distress and were likely to result in the plaintiff's illness or bodily harm and that the actions constituted negligent infliction of emotional distress.
Count Twenty-Five
The allegations comprising this count are virtually identical to those in count one with the notable exception of the following three paragraphs, each of which are also contained in counts twenty-six, twenty-seven and twenty-eight:
#42. The defendant was not acting in good faith.
#43. The defendant was not acting within the scope of "his" [her?] official functions and duties.
#44. The damages and injuries caused the plaintiff by the defendant was caused by the reckless, willful or wanton misconduct of the defendant.
Emphasis added.
The plaintiff further alleges as follows:
#45. The actions and omissions of the defendant Donna Limone described above were extreme and outrageous.
#46. The actions of the defendant were intentional.
#47. The actions of the defendant were likely to cause emotional distress, did cause emotional distress and that emotional distress was severe.
Emphasis added.
This count is based on a theory of intentional infliction of emotional distress.
Count Twenty-Six
The allegations in this count are identical to those contained in the previous count, with the notable addition of paragraph #45, which alleges: "The actions of the defendant Donna Limone constitute conversion." No specifics are provided as to what property was allegedly taken from the plaintiff by this defendant.
Count Twenty-Seven
This count is based upon a theory of libel and is comprised of, except for identifying the cause of action in paragraph #35, allegations identical to those in Count Twenty-Five.
Count Twenty-Eight
This count is identical to the previous count, except "libel" is replaced by "slander" in paragraph #35. Common to all six counts against this defendant is the prayer for relief, which states as follows: "WHEREFORE, the plaintiff claims judgment against the defendant Donna Limone for compensatory damages, punitive damages, attorneys fees, costs of this action and such other damages as permitted in law and equity." Emphasis added.
III. Claims of The Parties A. As To Allstate's Motion For Summary Judgment
Referring to several of the provisions in the Allstate policies, the insurer argues that none of the allegations contained in the several counts against its insured in the New Haven complaint constitute an "occurrence" under either policy and that the gist of the allegations contained in that complaint implicate conduct on the part of Limone that can only be regarded as "intentional" relative to which coverage is excluded under each policy. For these reasons, Allstate asserts that it has no duty to defend the underlying action and no duty to indemnify the insured for any judgment entered against her in that action. Allstate argues that the use by the plaintiff in the New Haven action of phrases such as "intentionally intimidated and bullied" and "harassed, defamed, retaliated and made false accusations" can only refer to conduct which was intentional, importing affirmative acts and foreseeable outcomes that cannot, under Connecticut insurance case law, be deemed to be sudden unintended or unforeseen events. See Allstate Insurance Company v. Barron, 269 Conn. 394, 408, note #10 (2004). Furthermore, Allstate argues that the exclusionary provisions in each of the policies are applicable in this case, based upon the explicit assertions in the New Haven complaint that Donna Limone acted intentionally, willfully, recklessly and wantonly for the purpose of making Gargano's life miserable by employing harassment, intimidation, defamation and threats. Citing Judge Bryant's opinion in Allstate Insurance Company v. Campagna, U.S. district court for the district of Connecticut (#3:07-CV-00098), August 27, 2008 and Judge Robinson's decision in Nationwide Mutual v. Mazur, judicial district of New Britain (CV98-0489231), June 3, 1999, Allstate asserts that such conduct on the part of its insured, as alleged in the New Haven complaint, cannot reasonably be deemed as negligent conduct and is clearly conduct which was intended by Limone. As Allstate correctly points out, it is the allegations in the underlying complaint, when compared to the policy provisions, which determines coverage.
To justify its position, Allstate refers to the following policy provisions:
The Homeowner's Policy
Section II-Family Liability and Guest Medical Protection — Losses We Cover Under Coverage
Subject to the terms, conditions and limitations of this policy Allstate will pay damages, which insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies, and is covered by this part of the policy.
Exclusionary Language:
1. We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of an insured person. This exclusion applies even if:
a) such bodily injury or property damage is of a different kind or degree than intended or reasonably expected; or
b) such bodily injury or property damage is sustained by a different person than intended or reasonably expected.
Relevant Definitions
4. "Bodily Injury" — means physical harm to the body, including sickness or disease . . .
9. "Occurrence" — means an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period, resulting in bodily injury or property damage.
The Umbrella Policy
Excess Liability Insurance-Coverage XL . . . When We Pay Allstate will pay when an insured becomes legally obligated to pay for personal injury or property damage caused by an occurrence.
Exclusionary Language
This policy will not apply:
8. to bodily injury or property damage resulting from:
a) an act or omission intended or expected to cause bodily injury or property damage. This exclusion applies even if the bodily injury or property damage is of a different kind or degree, or is sustained by a different person or property than is intended or expected.
Relevant Definitions
3. "Bodily injury" — means:
a) physical harm to the body, including sickness or disease, death or disability
b) shock, mental anguish or mental injury
7. "Occurrence" means an accident or a continuous exposure to conditions. An occurrence includes personal injury and property damage caused by an insured while trying to protect persons or property from personal injury or property damage.
8. "Personal injury" — means:
a) bodily injury;
b) libel; slander; misrepresentation; humiliation; defamation of character; invasion of rights of privacy;
Italics emphasis added.
B. As To Limone's Cross Motion For Summary Judgment
On May 28, 2009, Limone filed her response to Allstate's motion for summary judgment that was a combination of her objection thereto and her own cross-motion for summary judgment, which seeks a ruling from the court that Allstate is obligated under both insurance policies to continue to provide her with a defense of the underlying New Haven action. Limone asserts that the allegations in the New Haven complaint sufficiently allege an "occurrence" and that Allstate has failed to demonstrate that the allegations in the New Haven complaint fall under any policy exclusionary provision. Limone argues that, at the very least, there is a genuine issue of material fact as to whether the conduct attributed to Limone in the underlying complaint was "intentional." Furthermore, as to the umbrella policy, Limone claims that the inclusion of libel, slander and defamation of character in the definition of "personal injury" precludes the operation of the intentional acts exclusion provided in said policy and obligates Allstate to continue to provide her with a defense in the underlying action as it has a contractual duty to do so.
Allstate's insured, cites, inter alia, DaCruz v. State Farm Casualty Co., 268 Conn. 675, 688 (2004), wherein our Supreme Court held that the duty of an insurer to defend is triggered if the underlying complaint alleges facts that could "potentially" fall within the scope of the policy coverage. Limone argues that two well-established principles of Connecticut insurance law should govern this court's interpretation of the Allstate policies involved in this case. Limone, therefore, cites Judge Aurigemma's opinion in Edelman, supra, for the proposition that any ambiguity within the provisions of an insurance policy should be construed in favor of the insured, i.e., in favor of coverage and further cites our Supreme Court's opinion in Moore v. Continental Casualty Co., 252 Conn. 405, 409 (2000), which held that policy exclusions should be strictly construed in favor of the insured.
Limone vehemently argues that numerous paragraphs in the underlying New Haven complaint address the conduct of Limone as that of a board member simply carrying out her duties as an obedient vice president. Thus, Limone asks this court to conclude that there is a material question of fact as to whether her actions were intended to cause any harm to the plaintiff or, rather, whether her actions were motivated by her intent to discharge her official duties. This court, however, finds it difficult to adopt that interpretation given the fact that counts Twenty-Five through Twenty-Eight of the New Haven complaint allege that, "the defendant was not acting within the scope of his [her?] official functions and duties."
That paragraph first appears in paragraph #43 of Count Twenty-Five and is thereafter incorporated into each of the remaining counts lodged against Limone.
Limone urges the court to apply the Supreme Court's holding in Suarez v. Dickmont Plastics Corporation, 229 Conn. 99, 111 (1994), a case involving the interpretation of intentional conduct under the workers' compensation act, to this case, which involves the interpretation of an insurance policy, which is a contract between the policyholder and its insurer. In Suarez, the Court held that intent is ordinarily inferred from one's conduct under the facts and circumstances of a particular case, thus whether an actor knows the consequences of his or her conduct are substantially certain is a question of fact to be determined by the trier of fact and is not appropriate for summary judgment. Citing Vermont Mutual v. Walukiewicz, 290 Conn. 582, 594 (2009), for the Court's most recent definition of "accident" as an event lacking intention or necessity, Limone argues that the allegations in the underlying New Haven complaint could be broadly interpreted as conduct on her part which was not intended. The defendant cites two trial court cases which have denied summary judgment, sought under the intentional conduct exclusionary provision of insurance policies, even when the acts attributed to the insured in the underlying complaint appear to have been motivated by clear intent, such as assault and battery.
See Aetna Casualty and Surety v. Gentile, judicial district of New Haven (CV93-035207), June 24, 1997, Silbert, J. [ 20 Conn. L. Rptr. 17], and Assurance Co. of America v. Cabeleiro, Judicial district of Fairfield (CV-98-0355615), June 16, 1999, Skolnick, J. For a different approach to the issue, see State Farm Fire and Casualty Co. v. Bullock, judicial district of New Haven (CV-07-387111), May 30, 1997, Blue, J. [ 19 Conn. L. Rptr. 599], a case cited by Allstate, which will be herein more particularly referred to.
Moreover, Limone, citing O'Brien v. John Hancock Mutual Life Insurance Co., 143 Conn. 25, 29 (1955), correctly points out that the burden of demonstrating that the allegations in the underlying complaint import conduct which is excluded by the policy is placed upon the insurer, not the insured. Limone asserts that, in this case, the burden of demonstrating that the allegations contained in the underlying New Haven complaint cast that pleading "solely and entirely" within the policy exclusions and that said allegations are capable of no other interpretation is a burden that must be undertaken by Allstate. Allstate Ins. Co. v. Devin, 50 Conn.Sup. 140, 148 (2006). Limone argues that Allstate is unable, consistent with the rules governing summary judgment, to adequately discharge that burden.
Additionally, Limone refers to certain policy language, hereinafter quoted, that obligates its insurer to defend any suit for damages against her even if the allegations in the underlying complaint are groundless, false or fraudulent.
Although the defendant urges the court to adopt in its ruling some or all of the arguments summarized herein, which the defendant asserts are applicable to the homeowners policy and the umbrella policy, the defendant specifically argues that the exclusionary language contained in the umbrella policy cannot be applied to deny coverage, therefore, under that policy Allstate clearly has an obligation to continue to provide her with a defense in the underlying action.
The Policy Provisions
In support of her position, Limone refers to certain provisions of each of the Allstate policies, some of which have been previously set forth herein. As to the homeowner's policy, Limone urges the court to consider the following paragraph under the heading, " Coverage X":
We may investigate or settle any claim or suit for covered damages against an insured person. If an insured person is sued for these damages, we will provide a defense with counsel of our choice, even if the allegations are groundless, false or fraudulent. We are not obligated to pay any claim or judgment after we have exhausted our limit of liability.
As to the umbrella policy, Limone, in her memorandum, quotes the policy definitions of "occurrence," "bodily injury" and "personal injury," each of which have been quoted earlier herein. Limone, however, strongly urges the court to give special consideration to the following provisions contained in the umbrella policy:
Defense We Will Provide
Allstate will defend an insured sued as the result of an occurrence covered by this policy even if the suit is groundless, false or fraudulent.
" Personal Injury" means-:
a) bodily injury;
d) libel; slander; misrepresentation; humiliation; defamation of character; invasion of rights of privacy; . . .
Italicized emphasis added.
Although the defendant does not re-quote the exclusionary language in the umbrella policy, she strongly urges this court deem significant the absence of "personal injury," a term the definition of which includes libel and slander, from that important policy provision.
IV. Applicable Law A. Declaratory Judgment
The plaintiff brings this action pursuant to Practice Book Section 17-54 et seq. and has met the three conditions provided in Section 17-55. The plaintiff has the requisite legal interest in bringing this action, as there is a bona fide substantial question and uncertainty on the issue of coverage under both the homeowners and umbrella Allstate policies issued to Limone and on the issue of whether Allstate has an obligation to defend and an obligation to indemnify its insured based on the policy provisions and the allegations in the underlying New Haven complaint. "The purpose of a declaratory judgment action is to secure an adjudication of rights, where there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties. It is axiomatic that no insurer is bound to provide indemnification or a defense beyond the scope of the coverage described in the insurance contract, the policy." St. Paul Fire and Marine Insurance Co. v. Shernow, 22 Conn.App. 377, 380-81 (1990); affirmed at 22 Conn. 823 (1992). The request made by Limone that the court determine the duty to defend and by Allstate that the court determine both the duty to defend and the duty to indemnify fulfills the very purpose of a declaratory judgment.
See. 17-55 provides that: A declaratory judgment action may be maintained if all of the following conditions have been met:
(1) The party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights or other jural relations;
(2) There is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties; and
(3) In the event that there is another form of proceeding that can provide the party seeking the declaratory judgment immediate redress, the court is of the opinion that such party should be allowed to proceed with the claim for declaratory judgment despite the existence of such alternate procedure.
B. Summary Judgment
The appellate court has explained the nature and purpose of a motion for summary judgment in Baldwin v. Curtiss, 105 Conn.App. 840, 848 (2008):
Practice Book Section 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 non-moving party. The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden, the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.
C. Coverage Issues
In Edelman v. Pacific Employers Insurance Company, supra, Judge Aurigemma stated:
Issues of insurance coverage and contractual disputes are particularly appropriate for summary judgment, because the meaning of the insurance contract presents questions of law unsuitable for jury resolution. Terms of an insurance policy are to be construed according to the general rules of contract construction. If the underlying complaint does not state a claim which appears on its face, to be within the terms of the policy coverage, an insurer is entitled to summary judgment. An insurer must look at two documents when determining whether a claim has insurance coverage: 1) the policy under which coverage is sought; and 2) the language of the complaint against the insured. The insurer's duty to defend its insured depends on whether the complaint against the insured states facts which appear to bring the claimed injury within the policy coverage. The insurer may not look beyond the policy or the complaint and may not infer facts extrinsic to these documents when assessing an insured's entitlement to insurance coverage. Whether an insured has coverage under an insurance contract generally presents a question of law.
D. Interpreting an Insurance Policy
"[A] contract of insurance must be viewed in its entirety, and the intent of the parties for entering it derived from the four comers of the policy . . . [giving the] words [of the policy] their natural and ordinary meaning . . . [and construing] any ambiguity in the terms . . . in favor of the insured." Hartford Casualty Insurance Co. v. Litchfield Mutual Fire Insurance Co., 274 Conn. 457, 463 (2005). When language contained in a policy of insurance manifests some ambiguity, our Supreme Court has applied the rule that ambiguous insurance contracts are to be construed in favor of the insureds to provide coverage. Buell Industries, Inc. v. Greater New York Mutual Insurance Co. et al., 259 Conn. 527, 555 (2002). "When interpreting [an insurance policy], we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result." Taylor v. Mucci, 288 Conn. 379, 384-85 (2008). Emphasis added. Our Supreme Court has recently further instructed on the manner in which a trial court should interpret the provisions of insurance policies:
"The applicable standards governing our review are well settled. "[C]onstruction of a contract of insurance presents a question of law for the [trial] court which this court reviews de novo . . . [T]he terms of an insurance policy are to be construed according to the general rules of contract construction . . . 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." (Citation omitted; internal quotation marks omitted.) Galgano v. Metropolitan Property Casualty Ins. Co., 267 Conn. 512, 519, 838 A.2d 993 (2004). In evaluating the expectations of the parties, we are mindful of the "principle that provisions in insurance contracts must be construed as laymen would understand [them] and not according to the interpretation of sophisticated underwriters and that the policyholder's expectations should be protected as long as they are objectively reasonable from the layman's point of view." (Internal quotation marks omitted.) Connecticut Medical Ins. Co. v. Kulikowski, 286 Conn. 1, 16, 942 A.2d 334 (2008).
"If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning . . . However [w]hen the words of an insurance contract are, without violence, susceptible of two [equally responsible] interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted . . . [T]his rule of construction favorable to the insured extends to exclusion clauses." (Internal quotation marks omitted.) Galgano v. Metropolitan Property Casualty Ins. Co., supra, 267 Conn. 519. Emphasis added.
Vermont Mutual Ins. Co. v. Walukiewcz, supra, 290 Conn. 591-92.
E. Duty to Defend — Duty To Indemnify
In DaCruz v. State Farm Fire and Casualty Co., 268 Conn. 675, 687-88 (2004), our Supreme Court pointed out the significant distinction between an insurer's duty to defend and duty to indemnify:
As we repeatedly have stated, the duty to defend is considerably broader than the duty to indemnify. [A]n insurer's duty to defend, being much broader in scope and application than its duty to indemnify is determined by reference to the allegations contained in the [underlying] complaint . . . The obligation of the insurer to defend does not depend on whether the injured party will successfully maintain a cause of action against the insured but on whether he has, in his complaint, stated facts which bring the injury within the coverage. If the latter situation prevails, the policy requires the insurer to defend, irrespective of the insured's ultimate liability . . . It necessarily follows that the insurer's duty to defend is measured by the allegations of the complaint. Moreover, "[i]f an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured. In contrast to the duty to defend, the duty to indemnify is narrower: while the duty to defend depends only on the allegations made against the insured, the duty to indemnify depends upon the facts established at trial and the theory under which judgment is actually entered in the case." Thus, the duty to defend is triggered whenever a complaint alleges facts that potentially could fall within the scope of coverage, whereas the duty to indemnify arises only if the evidence adduced at trial establishes that the conduct actually was covered by the policy. Because the duty to defend is significantly broader than the duty to indemnify, "where there is no duty to defend, there is no duty to indemnify."
(Internal quotation marks and citations omitted.)
F. Occurrence
As noted, both policies obligate Allstate to pay damages for which an insured becomes legally obligated to pay because of bodily injury arising from an occurrence to which the policy applies. As also noted, while both policies contain within the definition of "occurrence" the term "bodily injury" only the umbrella policy adds "personal injury" to its definition of occurrence." Each policy defines occurrence as an "accident." If there is no occurrence as defined in the policies there is no obligation to defend or to indemnify. Based on the policy definitions, therefore, if there is no "accident," Allstate has neither an obligation to defend nor indemnify. Since the policies do not define the term "accident" we must turn to the courts for guidance. "The word "accident" has been defined as "[a]n unintended and unforeseen injurious occurrence; "Black's Law Dictionary (7th Ed. 1999); "an occurrence for which no one is responsible;" Messina v. New Haven, 119 Conn. 166, 168, 174 A. 188 (1934); and "an event of unfortunate character that takes place without one's foresight or expectation." Metropolitan Life Ins. Co. v. Aetna Casualty Surety Co., 255 Conn. 295, 307, 765 A.2d 891 (2001). Allstate Insurance Co. v. Barron, supra, 408. Thus, according to our Supreme Court, an accident and, therefore, in terms of the Allstate policies' definition, an occurrence is an event that transpires absent intent.
G. Intentional Acts
The case of American National Fire Insurance Co. v. Schuss, 212 Conn. 768 (1992), is instructive on the issue of what constitutes an intentional act. The case involved the setting of a fire in a synagogue; the opinion was written by Justice Borden, who observed that:
It is axiomatic, in the tort lexicon, that intentional conduct and negligent conduct, although differing only by a matter of degree; are separate and mutually exclusive. The distinction between intentional and unintentional invasions draws a bright line of separation among shadings of almost infinitely varied human experiences. Although in a given case there may be doubt about whether one acted intentionally or negligently, the difference in meaning is clear.
As Holmes observed, even a dog knows the difference between being tripped over and being kicked. (Internal quotation marks and citations omitted; emphasis added.)
Oliver Wendell Holmes, The Common Law 3 (1881).
Id. 775-76.
Judge Blue's well-written decision in State Farm Fire and Casualty Co. v. Bullock, judicial district of New Haven (CV-07-38711), May 30, 1997 [ 19 Conn. L. Rptr. 599], provides further insight on the issue. The case involved an altercation that took place between the minor son of the plaintiff in the underlying action and two of his high school classmates. The underlying complaint alleged, via numerous counts against State Farm's insured, that the minor victim was threatened, pushed around, assaulted and battered by the minor insured. The complaint included counts of assault and negligence. Judge Blue, in finding that Nationwide had no duty to defend, both under the policy definition of "occurrence" and the intentional and criminal acts exclusionary language, ruled "as a matter of law" that: "These allegations fail to state a claim of negligence — as distinct from a claim of intentional assault." In so ruling he cited the above statement from Justice Holmes and another truism found in Schuss, supra, 221 Conn. 777: "The same conduct cannot reasonably be determined to have been both intentionally and negligently tortious." Judge Blue added a truism of his own creation as an epilogue: "Our law does not recognize the concept of a reasonably prudent assailant. An unreasonably forceful assault remains an assault."
H. The Insurer's Obligation To Defend the Groundless Suit
As noted, Limone refers to similar provisions which are contained in each of the Allstate policies which obligate Allstate to provide a defense even if the allegations in the underlying action are "groundless false, or fraudulent." In the State Farm case, Judge Blue addressed this issue as well:
Under these circumstances, the general allegations of negligence in the third-party complaint simply cannot be reconciled as a legal matter with the specific allegations of fact contained in the same document. No different or additional facts are pleaded. It can be appropriately determined from the factual allegations in the complaint that there is no basis for a duty to defend. Under these circumstances, the general allegations of negligence in the third-party complaint are not dispositive. Allstate Insurance Co. v. Mugavero, 589 N.E.2d 365, 370-71 (N.Y. 1992).
This analysis is not inconsistent with the doctrine that an insurer has the obligation of defending groundless suits. See Flint v. Universal Machine Co., supra, 238 Conn. at 647. The suits referred to in the latter doctrine are factually groundless suits. Id. If, for example, the DaCruz complaint had alleged, without a shred of evidence, that Michael accidentally stumbled into David DaCosta, Allstate would plainly be compelled to defend the suit, regardless of its factually groundless character. But that is not what has happened here. The principle that an insurer must defend factually groundless accusations "cannot be reversed . . . to make the insurer's duty to defend depend upon the skill in pleading of a third party." Shepard Marine Construction Co. v. Maryland Casualty Co., 250 N.W.2d 541, 542 (Mich.Ct.App. 1976).
There is another practical concern here as well, aptly expressed by Judge Griffin of the Florida District Court of Appeal. "[A]bsent considerations of insurance . . . it would never occur to a lawyer to plead this plainly intentional tort as negligence." Allstate Insurance Co. v. Conde, 595 So.2d 1005 1008-09 (Fla.Dist.Ct.App. 1992) (Griffin. J., concurring). As Judge Griffin goes on to explain:
The problem is that such a pleading creates a perfect conspiracy between a plaintiff and the insured . . .
The plaintiff pleads negligence in a case like this because he wants a deep pocket from which to satisfy a judgment or, even better, to obtain a settlement. Normally when a defendant is sued on a theory that is inadequately pleaded, he gets the claim dismissed or, if the claim is invalid under controlling law, he gets a summary judgment. But in cases such as this the normal antidotes for invalid claims do not work. An insured defendant is often totally committed to the negligence pleading of the plaintiff because as long as the negligence claim is included in the complaint, the insured must be provided a defense on the intentional tort claim, a benefit he would not have if the spurious negligence claim were missing.
It is also more likely the insurer will come up with the money to settle the entire case based on the cost of defending the negligence claim . . . In a case where neither the plaintiff nor the defendant wants the covered claim disposed of, it is most unlikely to disappear.
This court agrees with the above legal and practical analysis and finds that these two policy provisions cannot be employed to trigger the insured's duty to defend, when, per the "occurrence" and exclusionary language a court finds, as a matter of law, that there is no such duty based upon the allegations in and the gravamen of the underlying complaint.
V. Discussion A. In General
In deciding whether or not Allstate has a duty to defend Limone in the underlying New Haven action this court has considered the principles established in the cited cases. For the purposes of this case five of those principles standout. First in considering Allstate's motion for summary judgment this court must view the allegations in the New Haven complaint in a light most favorable to Limone's claim that either or both of the policies afford coverage, at least, for the purposes of Allstate's obligation to defend it's insured. Second, that the documents which the court must consider in deciding the issues raised herein by the parties are the underlying New Haven complaint and the two Allstate insurance policies. Third, if the allegations in the underlying complaint even possibly fall within the coverage provided by one or both of the Allstate policies, this court must impose upon Allstate the obligation to defend its insured in the New Haven action now pending against her. Fourth, that in broadly assessing the allegations contained within the four corners of the underlying complaint, that the conduct attributed to Limone cannot be deemed to be, at the same time, both intentional and negligent. Finally, that even though the court is obligated to interpret each of the Allstate policies by giving the words therein their ordinary and natural meaning, the court is also obligated to consider the entire policy and to apply any ambiguity found to exist in favor of the insured, i.e., Donna Limone.
B. The Homeowner's Policy CT Page 488
As noted, Allstate's claim that it has no obligation to defend and no obligation to indemnify is based upon the assertion that the definitions of occurrence and the exclusionary provision contained in each of the Allstate policies combine to exclude coverage. Based upon the allegations in the underlying complaint, the gravamen of which is intentional conduct on the part of it's insured, this court is compelled to agree with Allstate that, even viewing the allegations in the New Haven complaint as broadly as possible to trigger coverage, the conduct attributed therein to Limone cannot be deemed to be a product of negligence and can only be viewed as conduct that was intended by her to achieve the reasonably probable consequences allegedly suffered by Gargano as a result of her actions. In the New Haven complaint the plaintiff therein specifically assigns to Limone, while not acting within the scope of her duties as vice president of the gridiron club, conduct characterized as intimidating, harassing, bullying, retaliatory, outrageous, willful, wanton and motivated by bad faith. The insertion of counts based on theories of negligence (Count Twenty-Three) and negligent infliction of emotional distress (Count Twenty-Four) does not comport with the aforementioned conduct and does not devalue such conduct as mere negligence so as to trigger insurance coverage, at least, insofar as the four corners of the homeowner's policy is concerned. That policy's definition of an occurrence and its exclusion of intentional acts for claims based on "bodily injury" would clearly excuse Allstate from its obligation to defend, and therefore, from its obligation to indemnify Limone from any judgment entered against her in the underlying New Haven action. Where there is no obligation to defend, there is no obligation to indemnify. DeCruz v. State Farm Fire and Casualty Co., supra, 268 Conn. 688. Such, however, is not the case when we consider the umbrella policy in its entirety.
C. The Umbrella Policy
There are significant differences in the coverage that is provided in the two policies that Allstate issued to Donna Limone. Under Coverage X in the homeowner's policy, Allstate is obligated to pay for "bodily injury" arising from an "occurrence," while under coverage XL in the umbrella policy the insurer is obligated to pay for "personal injury" caused by an "occurrence." Although the definition of "bodily injury" is essentially the same in each of the policies, the definition of "personal injury" in the umbrella policy includes claims against Allstate's insured based upon: "libel; slander; misrepresentation; humiliation; defamation of character; invasion of rights of privacy." In the underlying New Haven complaint Count Twenty-Seven is based upon libel, while Count Twenty-Eight is based upon slander, both causes of action specifically included in the policy definition of "personal injury." Moreover, although the exclusionary provision in the umbrella policy specifically applies to intentional acts "intended or expected to cause bodily injury," the exclusionary paragraph 8. a) is devoid of any reference to intentional acts resulting in personal injury. The inclusion of libel and slander in the definition of "personal injury" and the omission of that phrase from the exclusionary provision, in light of the policy definition of "occurrence," creates within the umbrella policy an ambiguity that cannot be reconciled and that must be resolved in favor of Allstate's insured.
But for the inclusion of "personal injury," as defined in the umbrella policy, this court's analysis and finding relative to the definition of occurrence and the exclusionary provision in the homeowner's policy would be applicable to the umbrella policy. Based solely on that analysis, coverage under the umbrella policy would be denied. The inclusion, however, of "personal injury," the policy definition of which includes two causes of action lodged against Limone in the underlying complaint, and the failure to include "personal injury" in the exclusionary provision in the umbrella policy compels this court to abandon that analysis and to find that the resultant internal inconsistencies within the umbrella policy obligate Allstate to continue to defend Limone in the underlying action.
The case of Imperial Casualty Indemnity Co. v. State, 246 Conn. 313 (1998), supports this finding. In that case, the insurer sought a declaratory judgment that it was not obligated, under two policies, to defend or indemnify certain state police officers, who were sued in ten federal district court actions based upon alleged illegal wiretapping. The Supreme Court, one justice dissenting, reversed the trial court's decision to grant summary judgment to Imperial, finding that certain "internal inconsistencies" within the two insurance policies had to be interpreted to provide coverage to the officers. The court began its analysis by re-stating the general rule governing the interpretation of insurance contracts:
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. (Internal quotation marks omitted.)
Id., 325.
The insurer had relied on the definition of "occurrence" as an "accident" and argued that the conduct attributed to the officers in the underlying federal complaints was intentional. The defendants, however, pointed to the policy definition of "personal injury." The Court observed:
Although by defining an occurrence as "an accident" the policy attempts to limit coverage to conduct that is unintentional, this definition, when read in conjunction with the definition of personal injury, gives rise to an internal inconsistency. Specifically, the definition of personal injury indicates that certain injuries may be covered that could have resulted only from intentional conduct, such as false arrest, false imprisonment, malicious prosecution and actions brought under 42 U.S.C. § 1983, as well as many injuries that generally involve intentional conduct, such as assault and battery, libel, slander, defamation, discrimination and the violation of other rights, privileges and immunities secured by the constitution and laws of the United States or the state. The definition of occurrence as "an accident," however, appears to encompass only unintentional conduct. The result is that the policy purports to provide coverage for accidental, intentional torts that, of course, do not exist. In light of this inconsistency, it is impossible to determine solely on the basis of the policy's express language whether the conduct at issue in this case is covered. (Emphasis added.)
Id., 327.
The court agreed with the officers that "the word `accident' cannot be interpreted literally, but, instead, must be interpreted by considering the policy as a whole, and the definition of personal injury in particular." Id., 326-27. In finding that the allegations in the pending federal actions triggered coverage under the two applicable policies, the Court concluded:
A further reason to interpret the inconsistent policy language as encompassing intentional conduct is the general rule that ambiguous provisions in a contract are to be interpreted against the drafter. This rule applies to contracts of insurance; as long as there is ambiguity inherent in the policy that "emanate[s] from the language used in the contract rather than from one party's subjective perception of the terms. Because we have already determined, in this case, that it is the language of the policy itself that gives rise to an ambiguity, application of the rule is appropriate and serves to further support our conclusion that the policy must be interpreted to include coverage for intentional acts that result in personal injuries during the policy period.
Id., 329 (Internal quotation marks and citations omitted.)
VI. Conclusion
As our Supreme Court held in DaCruz, supra, the duty of an insurer to defend is much broader than the duty to indemnify and is dependent upon whether the allegations in the underlying complaint could even possibly trigger coverage under the policy or policies. In this case, given the inconsistencies in the umbrella policy that Allstate issued to Limone and the resultant ambiguity in the policy language, this court, in light of the libel and slander counts in the underlying complaint, finds that Allstate has a duty to defend Limone in that pending New Haven action. Allstate's motion for summary judgment is, therefore, denied and Limone's cross motion for summary judgment, insofar as the duty to defend is concerned, is granted.
As to Allstate's duty to indemnify under the umbrella policy, as the Court instructed in DaCruz, supra, Allstate's duty to indemnify may ultimately depend on the theory upon which any judgment which may be rendered against Limone on the underlying complaint is based. A judgment against her on the libel or slander count may well require indemnification by Allstate; on the other hand, any judgment that may be entered against her on the remaining four counts may regenerate the issue. In any event, a ruling on that issue in light of this court's ruling on Allstate's duty to defend would be premature.