Opinion
No. CV-06-5001344 S
April 13, 2006
MEMORANDUM OF DECISION RE MOTION TO DISMISS
The plaintiffs, Margaret and Harry Bogen ("Bogens"), who are both residents of the State of Illinois, claim to have been injured on August 13, 2004 when a vehicle operated by the named defendant and owned by Vito Bonanno crossed the double line on Route 80 in East Haven and collided with the plaintiffs' vehicle. The plaintiffs have brought this action against the Bonannos and also against Erie Insurance Exchange ("Erie"), a Reciprocal Insurance Exchange organized under the laws of Pennsylvania and with its principal place of business in Pennsylvania. The Bogens allege that Erie provides them with, inter alia, uninsured and underinsured motorist coverage, and they imply, without specifically so alleging, that the Bonannos are either uninsured or underinsured.
Erie has now filed a timely motion to dismiss based on an alleged lack of personal jurisdiction. "A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Emphasis in original; internal quotation marks omitted.) Gurliacci v. Mayer, 218 Conn. 531, 544, 590 A.2d 914 (1991). "Because a lack of personal jurisdiction may be waived by the defendant, the rules of practice require the defendant to challenge that jurisdiction by a motion to dismiss." (Internal quotation marks omitted.) Knipple v. Viking Communications, Ltd., 236 Conn. 602, 605-06, 674 A.2d 426 (1996). "[A] motion to dismiss challenging the court's jurisdiction [requires] a two part inquiry . . . The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Id., 606. "If a challenge to the court's personal jurisdiction is raised by a defendant, either by a foreign corporation or by a nonresident individual, the plaintiff must bear the burden of proving the court's jurisdiction." Id., 607-08. The motion to dismiss admits all facts that are well-pleaded, invokes the existing record and must be decided upon the face of the record alone. Barde v. Board of Trustees, 207 Conn. 59, 62, 593 A.2d 1000 (1988).
The parties agree that Erie is a foreign corporation with its home office in Erie, Pennsylvania. It is registered with the Connecticut Insurance Department solely in connection with its reinsurance business. It neither solicits motor vehicle liability insurance business nor issues automobile liability insurance policies in this state. The parties also agree that the only basis upon which the plaintiff might be able to exercise long-arm jurisdiction over Erie is pursuant to General Statutes § 38a-25, which makes the Insurance Commissioner the "agent for receipt of service of legal process on . . . foreign and alien insurance companies authorized to do business in this state in any procedure arising from or related to any transaction having a connection with this state." The plaintiff claims to have made valid service on Erie in this case by serving the Insurance Commissioner.
The first question that the court must consider, therefore, is whether assuming that there is a close enough connection between the transaction and the state, the mere fact that Erie is registered in this state to conduct an entirely different kind of insurance business is sufficient to make it amenable to service of process through the Insurance Commissioner. The court has found no Connecticut law on this subject, but there is some indication that being registered in a state for the sole purpose of supplying reinsurance is not a sufficient basis for personal jurisdiction in connection with actions based on other aspects of the carrier's business which it does not undertake in that state. In the only case on the subject found by the undersigned, the United States District Court for the Southern District of New York has held that simply supplying reinsurance in a given state does not give rise to personal jurisdiction under the "transacting business test" without some further contact. Birmingham Fire Ins. Co. v. KOA Fire Mar. Ins. Co., 572 F.Sup. 962 (1983). Our statute, however, uses the phrase "authorized to do business in this state," and this may be difference from actually transacting business for purposes of determining whether Erie is amenable to service upon the Commissioner under General Statutes § 38a-25.
The court will assume for these purposes, without actually deciding the issues, that by being registered in this state to provide reinsurance, Erie has made itself amenable to service of process upon the Insurance Commissioner despite the fact that it conducts no motor vehicle insurance business in this state. Even with that assumption, the court must still consider whether the transaction which created the contract of insurance between the Bogens and Erie has a "connection" with this state within the meaning of General Statutes § 38a-25. The dispositive issue in this case is therefore whether this proceeding, a civil action for damages allegedly due pursuant to an uninsured/underinsured motor vehicle insurance policy, arises from or is related to a "transaction having a connection with this state."
The question, of course, is not whether the plaintiff has a cause of action against the defendant Erie at all. Clearly, the plaintiffs could have brought an action against Erie in Pennsylvania and, assuming that Erie does business in Illinois, in that state as well. The plaintiffs, however, have sought to combine their action with one against the alleged tortfeasors, as they are entitled to do, and the question is whether the "transaction" upon which this lawsuit is based . . . a contract to provide, inter alia, uninsured/underinsured motorist coverage . . . has "a connection" with this state.
Section 38a-336(b) requires that an insurer pay its insured up to the limits of the policy's [underinsured] motorist coverage after the liability limits of all other applicable insurance policies have been exhausted by payment of judgments or settlements . . . This statutes does not require exhaustion — as a condition precedent to instituting an action against the [insurance] carrier." (Internal quotation marks omitted.) Petro v. Jarvis, Superior Court, judicial district of Waterbury, Docket No. CV 97 0139906 (December 17, 1998, Pellegrino, J.) ( 23 Conn. L. Rptr. 371). "Neither the decisional law nor the statutory law of Connecticut precludes [commencement of an action seeking underinsured motorist benefits prior to the exhaustion of the tortfeasor's liability policy]. Indeed, the filing of such a claim has been approved." McGrimley v. Karpicky, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 98 349304 (April 21, 1998, Melville, J.) ( 22 Conn. L. Rptr. 55, 56). "[I]n the absence of a contrary provision in the claimant's motor vehicle policy, an action for underinsurance benefits can be brought at any time prior to the expiration of the time limitation of that statute." Coelho v. ITT Hartford, 251 Conn. 106, 107, 752 A.2d 1063 (1999). Although "an action for underinsured motorist benefits does not accrue until the limits of liabilily under the tortfeasor's policy have been exhausted;" id., 111, "a claim for underinsured motorist benefits can be initiated in advance of exhaustion." Id., 112.
Although the parties have given the court no details surrounding the circumstances under which the policy was issued, it is nonetheless apparent that the contract of insurance was not signed in this state, so that the "transaction" is not connected with this state on that basis. The accident itself, of course, has a rather significant connection with this state, having occurred here, and the essence of the Bogens' argument appears to be that Erie has contracted to compensate them for damages inflicted by an uninsured or underinsured motorist, no matter where those damages are inflicted, including within the State of Connecticut. That much is true. But the plaintiffs then go on to argue that because that transaction contemplates liability under the contract for any damages sustained in Connecticut, the relationship between the transaction and the State of Connecticut is close enough to give this court personal jurisdiction over Erie.
Neither counsel nor the court has succeeded in finding a case on point in Connecticut. The courts of several other states, however, have considered similar issues and have uniformly concluded that the sale of an automobile insurance company does not, in and of itself, create connections with every state in which the insured happens to drive his vehicle. A Florida case, Strickland Ins. Group v. Shewmake (Fla.Dist.Ct.App. 5th Dist. 1994), 642 So.2d 1159, 1161 (1994), for example, held where the insurer and the insured were both out-of-state residents at the time the contract of insurance was issued, the fact that there was an accident in Florida did not give Florida courts jurisdiction over the insurer even if the insured had subsequently moved to Florida. "The policy of insurance," the court explained, "can not be read so broadly as to allow the insurer to be sued wherever the insured is involved in an accident, even though the contract of insurance applies to accidents and losses which occur in any of the 50 states . . ." Strickland, 642 So.2d at 1161. See, also, Hall v. Scott, 416 So.2d 223 (La.App. 1st Cir. 1982); Batton v. Tennessee Farmers, 736 P.2d 2 (Ariz. 1987); Carter v. Mississippi Farm Bureau Casualty, 109 P.3d 735 (Mont. 2005); New York Central Mutual v. Johnson, 688 N.Y.S.2d 681 (A.D.2d 1999); Tennessee Farmers v. Harris, 833 S.W.2d 850 (Ky.App. 1992).
In Illinois Farmers v. Koehr, 834 S.W.2d 233, 235 (Mo.App. 1992), the court rejected
the argument that by selling a policy of automobile insurance the company has `minimum contacts' with every state in which its insured may operate a vehicle. Entering into an insurance contract with a resident of a particular locality is not analogous to placing a product into the stream of commerce where it may be sold to the consuming public in various locations. A dealer who sold an allegedly defective automobile in New York to a New York resident did not become subject to Oklahoma jurisdiction because the defect caused a collision and personal injuries when the automobile was operated in that state. World-wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).
The logic of these cases is persuasive, and this court has been unable to find any decisional law to the contrary. If, as in Illinois Farmers v. Koehr, the sale of a policy of insurance lacks "minimum contacts" with the state in which the accident occurs, then the sale of such a policy must also be said to lack a "connection" with Connecticut in this case. The court concludes, therefore, that under circumstances where, as here, a foreign insurance company issues a motor vehicle policy with uninsured/underinsured coverage to a resident of another state, and an accident occurs in the State of Connecticut, the fact that the accident occurred here is not sufficiently connected to the transaction which produced the contract between the parties such as to give the courts of this state jurisdiction over the insurer. This is so despite the fact that the insurer is registered with the Insurance Commissioner to conduct business of a different sort, in this case, reinsurance.
The motion to dismiss is therefore granted.