Opinion
HHDCV156063676S
12-08-2016
Allstate Insurance Company v. Juan Reyes dba Hair Pazazz
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
CESAR A. NOBLE, JUDGE
This declaratory judgment action comes before the court on the motion for summary judgment of the plaintiff, Allstate Insurance Company, (" Allstate") which asserts that a business exclusion provision in a homeowner's policy under which the defendant, Juan Reyes, doing business as Hair Pazazz, is otherwise an insured, relieves it of the duty to defend or indemnify Reyes. The court agrees with the plaintiff and grants summary judgment in its favor.
FACTS AND PROCEDURAL HISTORY
The following undisputed facts are pertinent to this decision. Allstate issued a homeowner's policy under which Reyes was insured and which identified the insured property as 1493 State Street, New Haven, Connecticut. Juan Reyes was sued as a defendant by a Gary Pellegrino in a complaint dated May 23, 2014 (the " Pellegrino complaint"). The Pellegrino complaint alleges that " on or about December 19, 2013 and for a long time prior to, the defendant, Joan [sic] Reyes d/b/a Hair Pazazz . . . through her agents, servants and employees, owned, managed, controlled and possessed property known as Hair Pazazz located at 1493 State Street, New Haven, . . . Connecticut." The complaint further alleges that Pellegrino " a business invitee" was injured on the premises when he grasped the metal handle of the front door and received an electric shock throwing him backwards. Allstate provided Reyes with a defense of the claims asserted by the Pellegrino complaint under a reservation of rights. Allstate thereafter brought the present action seeking a declaratory judgment that it has no obligation to provide a defense and/or indemnity to Reyes under a homeowner's policy No. 9 19 106961 5/09 (the " Policy") it issued. The policy provision relied upon by Allstate excludes coverage for " bodily injury . . . arising out of the past or present business activities of an insured person."
The declarations page identifies a Rubin Reyes as the named insured. Allstate has alleged in its complaint seeking a declaratory judgment that Juan Reyes was an insured under the policy and argues from this proposition in its motion for summary judgment.
The Pellegrino complaint contains what Allstate has referred to as a scrivener's error identifying Juan Reyes as " Joan Reyes."
Allstate filed its motion for summary judgment on March 8, 2016. Reyes filed his memorandum in opposition to the motion for summary judgment on August 10, 2016. Reyes' objection contains an affidavit that avers that he uses a small portion of 1493 State Street for his hairstyling business known as Hair Pazazz but the rest is used for his primary residence with his family. He considers Pellegrino a personal friend as much as he is a longtime customer who visits him at his shop almost every week. While Reyes provides haircutting services to Pellegrino on those occasions he frequently doesn't charge for the services and did not charge for the full haircut given to Pellegrino on the day of the incident. Finally, the alleged defective door handle provides a means of entrance and egress for the main house as well as the hairstyling business.
Reyes raises two arguments to Allstate's motion for summary judgment. The first is that his affidavit raises a question of fact as to whether Pellegrino was on the premises for business or social purposes and whether Reyes was motivated by profit in inviting him there. Secondly, the defendant asserts that because General Statutes § 52-557a eliminates any distinction between the standard of care owed to social guests and business invitees summary judgment is inappropriate.
General Statutes § 52-557a is entitled " Standard of care owed social invitee" and provides " The standard of care owed to a social invitee shall be the same as the standard of care owed to a business invitee."
Allstate filed its reply on August 12, 2016 and the matter was heard at oral argument on August 15, 2016.
STANDARD
" 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." Grenier v. Commissioner of Transportation, 306 Conn. 523, 534, 51 A.3d 367 (2012); Practice Book § 17-49. " In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." Community Action for Greater Middlesex County, Inc. v. American Alliance Insurance Co., 254 Conn. 387, 397-98, 757 A.2d 1074 (2000). " The court may address the merits of a declaratory judgment action upon a motion for summary judgment . . . Summary judgment is an appropriate method to determine whether an insurer has a duty to defend and indemnify an insured." New London County Mutual Insurance Co. v. Sielski, Superior Court, judicial district of Hartford, No. 126032774S (April 17, 2014, Wiese, J.) [58 Conn.L.Rptr. 57, ], aff'd, 159 Conn.App. 650, 123 A.3d 925 (2015).
ANALYSIS
An analysis of whether the plaintiff owed a duty to defend or to indemnify the defendant begins with an examination of the language of the policy, and the allegations of the underlying complaint. Cambridge Mut. Fire Ins. Co. v. Sakon, 132 Conn.App. 370, 375, 31 A.3d 849 (2011).
" Under our law, the 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 . . . 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 reasonable] 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." Liberty Mut. Ins. Co. v. Lone Star Industries, Inc., 290 Conn. 767, 795-96, 967 A.2d 1 (2009).
" [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." (Citations omitted, internal quotation marks omitted.) DaCruz v. State Farm Fire & Cas. Co., 268 Conn. 675, 687-88, 846 A.2d 849 (2004).
The Policy provides liability coverage under a provision which states " Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury . . . arising from an occurrence which this policy applies." It contains a number of exclusions from coverage including the business activities exclusion which states " we do not cover bodily injury . . . arising out of the past or present business activities of an insured person." Business is defined by the Policy as " any full or part-time activity of any kind engaged in for economic gain including the use of any part of any premises for such purposes." The Connecticut Supreme Court has interpreted " business pursuits" --a term similar to " business activities" --to contemplate " a continuous or regular activity engaged in by the insured for the purpose of earning a profit or a livelihood. The determination of whether a particular activity constitutes a business pursuit is to be made by a flexible fact specific inquiry." Pacific Indemnity Insurance Company v. Aetna Casualty & Surety Co., 240 Conn. 26, 33, 688 A.2d 319 (1997).
Connecticut courts have applied this definition for homeowner policy business exclusions that did not contain the exact term " business pursuits." In Cambridge Mutual Fire Ins. Co. v. Sakon, 132 Conn.App. 370, 376, 31 A.3d 849 (2011), the appellate court applied the " business pursuant" definition to a policy which contained an exclusion in the primary policy for losses" [a]rising out of or in connection with a business engaged in by an insured." See also, Holyoke Mut. Ins. Co. v. Schlechtweg, Superior Court, judicial district of Fairfield, Docket No. 01385439S (Sept. 19, 2003, Dewey, J.) (2003 WL 22291889, at *1) (applying definition to exclusion for " acts arising out of or in connection with a 'business' engaged in by an 'insured.') Notably the Superior Court in Allstate Insurance Co. v. Le, Superior Court, judicial district of Hartford, Docket No. 030826680 (April 1, 2004, Sheldon, J.) (2004 WL 870842) applied the definition of " business pursuits" to an identical " business activities" exclusion found in another Allstate policy.
The term " arising out of" is given an expansive interpretation under our law. The nexus between an accident, loss or injury is found to exist when it " was connected with, " " had its origins in, " " grew out of, " " flowed from, " or " was incident to" the excluded use or activity. Misiti, LLC v. Travelers Property Casualty Co. of America, 308 Conn. 146, 157-58, 61 A.3d 485 (2013).
A review of the plaintiff's complaint yields the conclusion that the business exclusion in the Policy operates to relieve Allstate of the obligation to defend or indemnify Reyes. The underlying complaint alleges that for a long time prior to December 29, 2013 Reyes through his " agents, servants and employees, owned, managed, controlled and possessed property known as " Hair Pazazz" and that Pellegrino was on the property as a " business invitee." The name of the property, " Hair Pazazz, " fairly gives rise to the inference that the property was used for a business purpose. The allegation that Reyes through his " agents, servants and employees, owned, managed, controlled and possessed" Hair Pazazz for " a long time" provides the basis for a finding of a continuous or regular activity. Finally, the allegation in the Pellegrino complaint that he was on the property as a " business invitee" clearly denotes an activity implicating a full or part-time activity of any kind engaged in for economic gain. " A business invitee is a person who is invited to enter or remain on land for a purpose directly or indirectly connected with business dealings with the possessor of the land." Gargano v. Azpiri, 110 Conn.App. 502, 506, 955 A.2d 593 (2008). Clearly the allegation indicates a profit motive on the part of Reyes. Cf. Howard v. Rogers, 19 Ohio St.2d 42, 46, 249 N.E.2d 804 (1969) (occupiers of school gymnasium premises conducting a dance therein for profit and plaintiff who paid a fee to attend was therefore a business invitee of defendants).
Reyes' objection to summary judgment relies upon his affidavit which suggests the potential of a mixed purpose of Pellegrino's presence on the property involving both social and business aspects. The facts alleged in his affidavit, however, do not raise a genuine issue of material fact because its assertions that he is friendly with Pellegrino and did not charge him for the haircut he received that day demonstrate only that Pellegrino's injuries arose out of, that is was " connected to" or was " incident to, " the cutting of hair which is the business activity conducted by Reyes on the insured property. The haircutting provided to Pellegrino by Reyes the day of his injury certainly arose out of the use of any part of the premises for business purposes.
Reyes' reliance on the argument that the elimination of any distinction between the standard of care owed to social guests and business invitees by § 52-557a suggests a public policy disfavoring business exceptions to insurance policy is misplaced. The argument conflates public policy principles relative to premises liability with those of insurance coverage. As to the latter, " [h]omeowners . . . liability policies typically exempt from coverage bodily injury or property damage arising out of or in connection with a business engaged in by an insured. People characteristically separate their business activities from their personal activities, and, therefore, business pursuits coverage is not essential for their homeowners' coverage and is excluded to keep premium rates at a reasonable level." (Citations omitted, quotation marks omitted.) Nationwide Mutual Insurance Co. v. Pasiak, 161 Conn.App. 86, 96, 127 A.3d 346 (2015).
CONCLUSION
Because the business activities exclusion of the Policy clearly and unambiguously relieves Allstate from its obligation under the Policy to defend or indemnify Reyes the motion for summary judgment is granted.