Opinion
No. CV 06-4021653
June 2, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
An order granting summary judgment in this case was originally entered on May 22, 2010.
In the remaining count of an eight-count amended complaint, the plaintiffs, Berlin Corporation ("Berlin Corp."), d/b/a CT Beverage Mart, and Stephen T. Downes ("Downes"), Permittee, sue the defendant Smith Brothers Insurance, Inc. ("Smith Brothers"), their former insurance agency, for professional negligence. The complaint, filed on February 9, 2006, alleges the following facts. On or about March 12, 2004, David Zaleski ("Zaleski"), was involved in a motor vehicle accident when the vehicle he was operating collided with a vehicle operated by Martin Levine ("Levine"). Levine and the other injured parties sent timely notice to the plaintiffs alleging that Zaleski was intoxicated at the time of the accident and that his intoxication was due to alcohol purchased at CT Beverage Mart, a package store owned and operated by the plaintiffs. Levine also alleged that Zaleski was under the legal age of twenty-one years when the alcohol was purchased, and therefore, the plaintiffs were liable for negligence. At the time of the accident, the plaintiffs had a business liability policy with a liquor liability exclusion with coverage in the amount of $1,000,000, issued by CNA and purchased through the defendant. The plaintiffs further allege that this coverage became insufficient in 2003 in the wake of changes to the law regarding liability for package store owners under General Statutes § 30-102, the Dram Shop Act as revised by Public Act 03-9l. Specifically, the plaintiffs claim that the defendant was negligent in that (1) it should have explained to the plaintiffs the risks involved under the changes to the law; (2) that it failed to advise the plaintiffs of the change in the law; (3) that the defendant knew or should have known that this failure would expose the plaintiffs to additional liability; and (4) that the defendant was negligent in failing to review the terms of the policy with the plaintiffs. Pending before the court is the defendant's motion for summary judgment.
Continental Casualty Company ("CNA"), the plaintiffs' insurer, was also a defendant. On April 27, 2007, the court (Graham, J.), granted CNA's motion for summary judgment as to counts six, seven, and eight of the complaint which constituted all of the counts against that defendant. In addition, on November 2, 2006, the court (Wiese, J.), granted a motion to strike disposing of counts two, three, four and five of the complaint against the defendant Smith Brothers Insurance, Inc. Therefore, the only remaining counts is count one which alleges professional negligence.
The policy in question was first purchased in 2001 for the policy period of October 19, 2001 through October 19, 2004.
On February 4, 2003, the Connecticut Supreme Court issued a ruling in Craig v. Driscoll, 262 Conn. 312, 813 A.2d 1003 (2003), holding that the Dram Shop Act, General Statutes § 30-102, did not pre-empt or preclude a common law action for the negligent service of alcohol. In so doing, the Supreme Court, in effect, eliminated the statutory cap of $20,000 maximum recovery per person or $50,000 in the aggregate, in actions for injuries caused by intoxicated adults against purveyors of alcohol. In direct response to this decision, effective June 3, 2003, the legislature amended the Dram Shop Act and raised the statutory cap on damages to $250,000 for an injured person or persons and prohibited common law negligence actions against sellers of alcoholic liquor to a person twenty-one years of age or older. Significantly, for the purpose of this case, the revised Dram Shop Act did not contain a cap nor did it prohibit negligence actions against sellers of alcoholic liquor for injuries caused by persons under the age of twenty-one.
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007).
"Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." (Citations omitted.) Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989).
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. 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 . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue." (Citations omitted; internal quotation marks omitted.) American Express Centurion Bank v. Head, 115 Conn.App. 10, 15, 971 A.2d 90 (2009). "A motion for summary judgment shall be supported by such documents as may be appropriate, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admissions and the like." Practice Book § 17-45.
I
In support of its motion for summary judgment, the defendant argues that there is no genuine issue of material fact in that the plaintiffs were aware they did not have liquor liability coverage; that the plaintiffs did not specifically request the relevant insurance from the defendant; and that the defendant had no duty to keep track of relevant changes to Connecticut law and advise the plaintiffs accordingly. The defendant also claims by way of special defense that the plaintiffs' complaint is barred by the statute of limitations. In response to the motion, the plaintiffs argue there is a genuine issue of material fact in that an insurance agent or broker owes a duty, as they define it, to its insureds, and that there is a genuine issue of material fact as to the defendant's breach of that duty. The plaintiffs further argue that the statute of limitations argument made by the defendant must fail as the wrong they allege is part of a continuing course of conduct between the parties.
As evidence in support of the motion for summary judgment, among several other documents, the defendant has submitted the following documents: (1) a copy of the deposition of Brigham Metcalfe, founder, partner and business manager of Berlin Corp.; (2) a copy of the deposition of Stephen Downes, founder and partner of Berlin Corp., and permittee of CT Beverage Mart; (3) a copy of the deposition of David Soule, insurance agent to the plaintiffs employed by the defendant Smith Bros. Insurance Inc.; (4) copy of an email between David Soule and Christine Bannon (another employee of the defendant insurance company) and fax communication between Bannon and Metcalfe regarding an inquiry concerning liquor liability coverage in February 2003; (5) several pages of "Connecticut Spirit," the newsletter of the Connecticut Package Stores Association of which Stephen Downes was president in 2003; and (6) several memoranda containing minutes from three meetings of the Connecticut Package Stores Association held in February, March and April 2003. In opposition, the plaintiffs submit as evidence: (1) the signed, sworn affidavit of Brigham Metcalfe, founder and current partner of Berlin Corp; and (2) portions of the deposition testimony of David Soule.
In Connecticut, the liability for professional negligence of an insurance agent or broker is well established. "An insurance agent owes a duty to his principal to exercise reasonable skill, care and diligence in effecting the insurance, and any negligence or other breach on his part which defeats the insurance will render him liable to his principal for the resulting loss . . . `Where he undertakes to procure a policy affording protection against a designated risk, the law imposes upon him an obligation to perform with reasonable care the duty he has assumed, and he may be liable for loss properly attributable to his default.'" Ursini v. Goldman, 118 Conn. 554, 559, 173 A. 789 (1934) "[S]elling insurance is a specialized field with specialized knowledge and experience, and an agent has the duties to advise the client about the kind and extent of desired coverage and to choose the appropriate insurance for the client . . . [T]he client ordinarily looks to his agent and relies on the agent's expertise in placing his insurance problems in the agent's hands." Dimeo v. Burns, Brooks McNeil, Inc., 6 Conn.App. 241, 244, 504 A.2d 557, cert. denied, 199 Conn. 805, 508 A.2d 31 (1986).
Connecticut appellate authority exists to support the proposition that the standard of care owed by an insurance agent is equal to that owed by an insurance broker. In Tolbert v. Connecticut General Life Ins. Co., 257 Conn. 118, 125, 778 A.2d 1 (2001), an insurance broker and an insurance agent were cited as being treated equally for purposes of the agency relationship between an insured and the insurance agent. See also Cheshire Brass Co. v. Wilson, 86 Conn. 551, 557, 86 A. 26 (1913).
The "reasonable skill, care and diligence" required of a broker includes a duty to at least "see that his client has proper coverage." Dimeo v. Burns, Brooks McNeil, Inc., 6 Conn.App. 241, 244, 504 A.2d 557, 559, cert. denied, 199 Conn. 805, 508 A.2d 31 (1986). In Dimeo, the Appellate Court approved a trial court instruction correctly explaining a broker's duty of care: "[S]elling insurance is a specialized field with specialized knowledge and experience, and . . . an agent has the duties to advise the client about the kind and extent of desired coverage and to choose the appropriate insurance for the client. The court told the jury that the client ordinarily looks to his agent and relies on the agent's expertise in placing his insurance problems in the agent's hands. The court instructed the jury that, if the agent performs these duties negligently, he is liable therefor, just as other professionals are . . . The court further instructed the jury, on the basis of the expert testimony produced in the case . . . that an agent has the duty to explain uninsured motorist coverage, to explain the consequences of not having a sufficient amount of such coverage, to recommend the proper amount, and to attempt to procure that amount and offer it to the client." Id. at 244-45.
The defendant argues that its duty of care to the plaintiffs was satisfied when in February 2003, in response to the plaintiffs' request, they promptly obtained quotes for liquor liability insurance and communicated that information to them. The plaintiffs counter that the defendant failed to recommend the purchase of liquor liability insurance coverage to them and to explain the risks inherent in not carrying such coverage. The plaintiffs further claim that the defendant failed to explain the exposure of the plaintiffs to liquor liability actions involving the sale of alcohol to minors and failed to review the policies provided to the plaintiffs. Based on the memoranda and exhibits submitted by the parties, the issue before the court is whether the claimed failures to act by the defendant constituted a breach of its duty to the plaintiffs as their insurance agent and whether there exists any issue of fact regarding this issue that precludes summary judgment.
The defendant submitted several documents in support of the claim that it met its duty of care. In particular, at the hearing on the motion for summary judgment, the defendant presented a copy of an email, dated February 3, 2003 (over one year prior to the Zaleski accident), from David Soule, the insurance agent formerly assigned to the plaintiffs' account, directed to Christine Brannon, a colleague at Smith Brothers, regarding the plaintiffs' request for pricing of liquor liability insurance coverage. The email reads, "Christine, I spoke to Brigham this morning. We need to price out liquor liability. Can it be done through the package or is Pomerleau the only option? Also Brigham would like optional quotes for taking a higher deductible on his packages (5,000 and 10,000)." (Defendant's Exhibit D, 1/25/10, p. l.)("Def. Ex. D, p.) The defendant also submitted in evidence a fax transmission from Christine Brannon to "Brigham Metcalf (sic), CT Beverage Mart," dated February 18, 2003, fifteen days after the request for pricing was made. The subject line of the fax cover sheet reads as follows: "Re: Liquor Liability Quote," and contains information regarding premium costs for different limits of liability at each of five locations. The fax also contains the following note: "Brigham — I've secured an `indication' for liquor liability coverage. The company must review a completed application before confirming any price. But I think this will give you what you need. If you'd like to pursue this coverage, please let me know and I'll send the applications to you. Thank you!" (Emphasis added.) (Defs. Ex. D, p. 2.) These documents indicate that the defendant not only supplied the plaintiffs with a quote on liquor liability insurance, but also that they furnished it expeditiously in response to the plaintiffs' specific request. The plaintiffs have not come forward with any evidence that they in turn responded to this communication or requested any further information regarding liquor liability coverage which the defendant failed or neglected to provide in breach of its duty of care as an insurance agent.
Presumably, Brigham Metealfe, a founder, partner and business manager of Berlin Corp.
There is no indication in the material submitted by either side the meaning of the reference to "Pomerleau."
This exhibit was presented at oral argument on the motion for summary judgment held 1/25/10. Defendant had it premarked as Exhibit D even though there is another Exhibit D included as an attachment to its memorandum.
The plaintiffs have argued that their misunderstanding of the Dram Shop Act led to their purchasing a policy from the defendant that left them exposed and liable, and that the defendant was negligent in not correcting or informing them as to the extent of their exposure to liability. In response to these assertions, the defendant has submitted documents that support its claim that the plaintiffs assertions are untrue and that, in fact, the plaintiffs were in a position to know and understand about changes in the law. First, as exhibits to its memorandum of law in support of the motion for summary judgment, the defendant submitted copies of the March and June 2003 issues of "Connecticut Spirit," a newsletter published and circulated by the Connecticut Package Stores Association ("CPSA"), to its member package stores. The March 2003 issue discusses the Supreme Court's ruling in " Craig v. Driscoll," and its impact on the Dram Shop Act noting that "[prior to Craig] permittees of alcohol (package store and bar owners) obtained some insulation of liability when people were injured by drunk drivers. Previously there were maximum caps on permittees of $20,000 or $50,000 when it was found that the bar owner or their agent negligently served alcohol. Now, the Supreme Court reinterpreted the statute to mean that those injured can have more remedies available to them against the permittee. Now victims can sue for other variations of negligence that don't have the same cap of $20,000 in place. Therefore, permittees can be sued with no caps in place protecting them." (Emphasis added.) (Defendant's Memorandum of Law in Support of the Motion for Summary Judgment, Exhibit I at 2.) (Hereinafter "Def. Mem., Ex __.") The June 2003 issue of the newsletter contains a "Legislative Wrap-Up," which addresses the legislature's revision of the Dram Shop Act. It noted that "[the] Governor signed the revised Dram Act in June 2003. Under the act, liabilities are increased to $50,000 per person . . . and $250,000 per occurrence . . . All further suits against the seller for negligence in the sale of alcoholic beverages are prohibited. An individual can still sue for reckless sale and negligent sale to a minor." (Emphasis added.) (Def. Mem., Ex. I at 5.) Significantly, at the time this newsletter was published, Stephen Downes, the permittee of CT Beverage Mart, was also the president of the CPSA, publisher of "Connecticut Spirit."
Second, the defendant also submitted as exhibits the minutes of three separate meetings of the CPSA board of directors held on February 12, 2003, March 12, 2003 and April 9, 2003. (Def. Mem., Ex. L.) The minutes note the attendance of Stephen Downes at each of the meetings and list his name and address on the stationary of the CPSA as "President." The minutes of February 12, 2003 indicate that "[the] Dram Act ruling by the Supreme Court was discussed. This case now allows permittees of bars and package stores to be sued with no cap on the liability, merely by proving negligence." The minutes of March 12, 2003 state that "Dram Shop [liability] continues to exist although now the Supreme Court has allowed another option for defendants to sue under. This cause of action has NO caps unlike the Dram Shop Act." Finally, the minutes of April 9, 2003 briefly notes in the "Legislative Agenda for 2003" subheading that "Dram Shop liability was discussed and the liability associated with it. There are new bills to be introduced to help curb the unlimited, non-capped liability."
Although the plaintiffs dispute that liquor liability coverage was discussed between the parties and argue that the defendant did not inform the plaintiffs of the risks the plaintiffs faced under the revision of the Dram Shop Act, the foregoing documents seriously undermine the credibility of these arguments. In support of their contentions, the plaintiffs submitted the affidavit of Brigham Metcalfe, a founder, partner and business manager of Berlin Corporation. In the affidavit, Metcalfe states that "[the defendant] never explained or advised that a distinction exists between Dram Shop coverage and liquor liability coverage," and that "[the defendant] knew that [the plaintiffs] had made a decision not to purchase Dram Shop coverage because it was thought that the only exposure [the plaintiffs] faced involved selling alcohol to a customer who was already intoxicated and that the claim would be limited to the caps set forth in the Dram Shop statute." (Affidavit of Brigham Metcalfe, ¶¶ 10 and 12.) Undermining these averments by Metcalfe is the inquiry he made to Soule in February 2003 and Downes' involvement with the CPSA and the efforts of that organization to keep its members informed of new developments in the law following the Craig v. Driscoll decision and leading up to the passage of the revision to the Dram Shop Act in June 2003. Certainly, the CPSA communications were clear about the changes in the law and the ramifications for package store owners in connection with the sale of alcohol to underage drinkers. There is no evidence that the defendant knew of any claimed misunderstanding of the Dram Shop Act, as revised in June 2003 on the part of the plaintiffs; nor is there any evidence that such a misunderstanding really existed. What does exist is deposition testimony from Metcalfe wherein he acknowledged that he had discussed liquor liability coverage with Soule in the past and declined to purchase it based on the cost. (Def. Mem., Ex. C., Metcalfe depo., 8/24/09, pp. 17-18.)
In addition, Metcalfe testified at his deposition that he was aware of the liquor liability exclusions in the plaintiffs' general liability policy and that it excluded coverage arising out of sales to individuals under the legal drinking age or under the influence of alcohol. He also acknowledged that he knew that "other policies were available that would provide coverage for these things." Most perplexing in light of his affidavit is that Metcalfe testified at his deposition that he knew that the law had changed which is why he contacted Soule to revisit the issue of liquor liability in February 2003. (Def. Mem., Ex. G, Metcalfe depo., 9/14/09, pp. 134-37.) Despite this testimony and all the other evidence presented by the defendant, the plaintiffs persist in their claim that post- Craig v. Driscoll and following the revision of the Dram Shop Act, effective June 3, 2003, they misunderstood the implication of the changes in the law regarding the caps and that the defendant had an affirmative obligation to advise them that they were exposed to greater liability. They cite no authority that the duty of an insurance agent extends so far. To the extent that the plaintiffs seek a finding of such a duty in this case, the court respectfully declines to do so on the factual record presented.
In relevant part, the policy states that "[this] insurance does not apply to . . .'bodily injury' or `property damage' for which any insured may be held liable by reason of . . . [the] furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol . . ." (Def. Mem., Ex. K at 3.)
In addition, based on the evidence submitted by the plaintiffs in opposition to the motion for summary judgment, there is no evidence to support the plaintiffs' claim that the defendant was anything other than the plaintiffs' insurance agent and not a consultant or legal advisor. Thus, this case differs from OCI Chemical Corp. v. AON Corp., Superior Court, Judicial District of Stamford, Docket No. CV 05 4003935S (Aug. 14, 2008, Downey, J.), cited by the plaintiffs. In that case, the court found that the defendant insurance brokerage breached its duty of care as an insurance brokerage when it "pitched" itself as expert in risk management services and offered to conduct a full analysis of the plaintiff's insurance policies to identify and fill gaps in coverage and then thereafter failed to recommend insurance to the plaintiff chemical company covering the plaintiffs transport of chemicals via railroads. Unlike the defendant in OCI Chemical, in the instant case, there is no evidence that the defendant assumed a comparable duty or acted in any other capacity than as an agent to procure specific coverages as requested by the plaintiffs throughout the relationship.
Although the plaintiffs submitted a document containing descriptions of the plaintiffs' coverages for a policy period 10/19/01 — 10/19/02 that has a cover sheet bearing the title of "An Insurance and Risk Management Program . . ." there is no evidence beyond this cover sheet to support the plaintiffs' claim that the defendant assumed the responsibility of serving as a risk manager for the plaintiff as the defendant did in OCI Chemical Corp. v. AON Corp.
Based on the foregoing, the court finds that there is no genuine issue of material fact as to the duty of care owed by the defendant to the plaintiffs or as to whether the defendant satisfied that duty. The only evidence the plaintiffs have submitted that speaks to the possibility of a breach of a duty by the defendant is the affidavit of Metcalfe which the court finds contradictory when considered in light of his deposition testimony and totally insufficient to raise an issue of material fact necessitating a trial.
II
The defendant also argues that the plaintiffs' claim is barred by the statute of limitations, and that therefore summary judgment is appropriate on this basis as well. In making this argument, the defendant relies on General Statutes § 52-577 which it raised by way of special defense and in its motion for summary judgment. Section 52-577 provides as follows: "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." The defendant's reliance on § 52-577 is misplaced. Under Connecticut law, negligence and medical malpractice actions are governed by General Statutes § 52-584 which provides in relevant part as follows: "No action to recover damages for injury to the person . . . caused by negligence . . . shall be brought but within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered, and except that no such action may be brought more than three years from the date of the act or omission complained of . . ."
Our courts have held that "the Statute of Limitations must be specially pleaded. Practice Book § 120 . . . Consequently, it applies only when properly pleaded, otherwise there is no orderly way in which a plaintiff can plead in a reply facts, such as absence from the state, which make such a special defense inefficacious in a particular case . . . Such a statute, if available as a defense, must be pleaded, and if a party fails to plead it he is deemed to have waived it and the plaintiff may recover notwithstanding the period has run . . . [A] trial court [will be] in error in interposing the Statute of Limitations as a defense on its own motion." (Citations omitted; internal quotation marks omitted.) Marlin Rockwell Employees Credit Union v. Brown, 3 Conn. Cir. Ct. 569, 571, 221 A.2d 862 (1966). See also Martino v. Scalzo, 113 Conn.App. 240, 967 A.2d 339 (2009). The rationale for this holding lies with the nature of statutes of limitation. Because [the statute of limitations] is procedural it is subject to waiver." Diamond National Corporation v. Dwelle, 164 Conn. 540, 543 (1973).
A party raising a special defense of the statute of limitations must identify the statute that is allegedly applicable sufficient to apprise the court and the opposing party of the nature of the party's claim or recovery will be barred. See Cue Associates v. Cast Iron Associates, 111 Conn.App. 107, 111-12, 958 A.2d 772 (2008). See also Practice Book § 10-3 ("[w]hen any claim made in a complaint, cross claim, special defense, or other pleading is grounded on a statute, the statute shall be specifically identified by its number"). "[N]otice to the other party is the critical consideration in determining the sufficiency of a party's pleading.' Cue Associates v. Cast Iron Associates, 111 Conn.App. 112.
The defendant herein pleaded § 52-577, the statute of limitations for actions sounding in tort, and failed to plead § 52-584, which applies to actions in negligence, the cause of action set forth in the plaintiffs' complaint. As a result, the parties arguments on this issue were confusing at best. The defendant having thus asserted an inapplicable statute of limitations, the court concludes that the plaintiffs were not sufficiently apprised of the nature of the defendant's special defense. Accordingly, the defendant has waived its right to assert the statute of limitations as a defense.
CONCLUSION CT Page 12035
Although the motion for summary judgment fails on the grounds of the statute of limitations, for the other reasons previously stated in this memorandum, the defendant's motion for summary judgment is hereby granted.