Opinion
No. 4100708
December 23, 2005
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT #109
BACKGROUND
The plaintiff, Juacikino Cipriano, alleges that on October 8, 2003, his dwelling house was destroyed by fire. At the time of the fire, the plaintiff alleges that his dwelling house was insured by a policy issued to him by the defendant, Patrons Mutual Insurance Company. The plaintiff further alleges that he has fulfilled the terms, conditions and requirements of the policy, but he has not been paid for any losses or damages sustained to his dwelling house in accordance with the terms and conditions of the insurance policy.
On July 14, 2005, the defendant filed a motion for summary judgment, with accompanying memorandum of law, on the grounds that there are no genuine issues of material fact regarding the allegations in count one of the plaintiff's complaint, and as a matter of law, the defendant is entitled to judgment on its motion. More specifically, the defendant moves on the ground that "the applicable policy of insurance excludes coverage when the property is destroyed by fire due to vandalism and when the property is vacant for 30 days in a row prior to the fire . . ." With the motion for summary judgment, the defendant submits as evidence, among other things, the insurance policy in question, the plaintiff's deposition, affidavits, two investigation reports conducted by the Connecticut department of public safety and an independent company indicating the fire was a result of arson, the plaintiff's proof of loss, and a letter from the defendant denying the plaintiff's claim for coverage.
On September 30, 2005, the plaintiff filed a memorandum of law in opposition to the motion for summary judgment. With the memorandum of law in opposition, the plaintiff submits as evidence, the insurance policy in question, the letter from the defendant denying plaintiff's claim for coverage, and case law. On October 12, 2005, the defendant filed a reply memorandum to the plaintiff's opposition.
The defendant's motion for summary judgment is now before the court.
SUMMARY JUDGMENT LAW
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 . . . 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." (Citations omitted; internal quotation marks omitted.) Barrett v. Montesano, 269 Conn. 787, 791-92, 849 A.2d 839 (2004).
ARGUMENT
The defendant argues in support of its motion that the fire that destroyed the plaintiff's dwelling house was set by human hands and that the dwelling house had been vacant for more than 30 days in a row, thereby excluding the damages and losses from coverage pursuant to the insurance policy issued by the defendant to the plaintiff for the period of April 7, 2003 to April 7, 2004.
Both parties have submitted identical insurance policies (plaintiff's exhibit B; defendant's exhibit A).
The evidence provided by the defendant, namely the transcript of the deposition of the plaintiff and the affidavit of Jaime Esquilin, a former tenant at the dwelling house, demonstrates that the dwelling house had been vacant for at least 60 days prior to the fire. (See defendant's exhibit C and D.) Furthermore, the defendant provides two investigative reports by the Connecticut department of public health and the Acacia Investigations Co., which both concluded that the fire was set by human hands and was not of accidental means. (See defendant's exhibits E and F.) The plaintiff has not countered this assertion with any evidence to the contrary. Therefore, there are no genuine issues of fact that the fire was the result of arson and that the dwelling house was vacant for more than 30 days prior to the fire.
However, as the parties argue, the gravamen of the present case is whether the term "vandalism," as stated in the insurance policy, includes the act of arson. The defendant argues that the fire damage was the result of vandalism, and acts of vandalism upon a dwelling house vacant for more than 30 days are not covered under the insurance policy. The defendant contends that the term "vandalism" includes the act of arson. The plaintiff argues that, in reviewing the insurance policy as a whole, an insured may not be able to discern what "vandalism" means, as that term is used in the separate sections of the insurance policy. Moreover, if the term is determined to be ambiguous as to one section of the policy, it should be ambiguous as to all sections.
ANALYSIS
"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 . . . When interpreting a contract, 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 . . .
"It is a basic principle of insurance law that policy language will be construed as laymen would understand it and not according to the interpretation of sophisticated underwriters, and that ambiguities in contract documents are resolved against the party responsible for its drafting; the policyholder's expectations should be protected, as long as they are objectively reasonable from the layman's point of view. However, [a] court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity, and words do not become ambiguous simply because lawyers or laymen contend for different meanings." (Citations omitted; internal quotation marks omitted.) R.T. Vanderbilt Co. v. Continental Casualty Co., 273 Conn. 448, 462-63, 870 A.2d 1048 (2005).
In the present case, the defendant relies primarily on Costabile v. Metropolitan Property and Casualty Ins. Co., 193 F.Sup.2d 465 (D.Conn. 2002), for the proposition that the term "vandalism" is not ambiguous in the policy at issue in the present case. In Costabile, the plaintiffs brought suit against the defendant insurance company for, inter alia, breach of an insurance contract. The plaintiffs owned a family home which was rented out to tenants and insured by the defendant through a landlord rental dwelling policy. After the house was vacant for more than a year and a half, the house was damaged by fire. After an investigation, it was found that the fire was caused by arson and the defendant denied coverage under an exclusion in the policy for vandalism or malicious mischief when the premises are vacant for more than 30 consecutive days. The court found that the insurance policy at issue provided for both "all risk" and "named perils" type coverage, depending upon the property coverage at issue. Id., 474. The court further found, employing Connecticut law, that the term "vandalism" was ambiguous depending upon which section of the policy was being reviewed. The court then concluded that the coverage for personal property, which contained both "fire" and "vandalism" as separate causes of loss, was ambiguous as to whether "vandalism" included incendiary fires. Id., 476.
The court, however, acknowledged that there appeared to be no Connecticut case law interpreting the term "vandalism" in an exclusion to coverage under an insurance policy. Costabile v. Metropolitan Property Casualty Ins. Co., 193 F.Sup.2d 465, 475 (D.Conn. 2002).
As to the coverages for dwellings and private structures (the all-risk section of the policy), the Costabile court concluded that the term "vandalism" was not ambiguous. The court reasoned that: "All-risk policies, however, are not `all loss' policies — rather, all-risk policies, including the policy at issue here, often contain express written exclusions and implied exceptions that have been developed by the courts over the years . . . In short, [a] policy of insurance insuring against `all-risks' is to be considered as creating a special type of insurance extending to risks not usually contemplated, and recovery will usually be allowed, at least for all losses of a fortuitous nature, in the absence of fraud or other intentional misconduct of the insured, unless the policy contains a specific provision expressly excluding the loss from coverage." (Citations omitted; internal quotation marks omitted.) Id., 477. "Because vandalism is not defined by the policy, under the Connecticut rules of construction, it must be given its plain, ordinary meaning." Id. The court went on to consult Webster's dictionary defining "vandalism" and "arson," and concluded that an incendiary fire is included within the ordinary and plain meaning of the term "vandalism." Id., 477-78. Considering its reasoning, the court believed that the Connecticut Supreme court would conclude that arson is a type of vandalism. Id., 478.
The Costabile court, in construing the terms of the insurance policy at issue — in accord with the general rules of contract construction — relied on interpreting the terms of the insurance contract within the context of the distinct sections of the insurance policy in which they were found. This Court follows the rule when the words of an insurance contract are susceptible of two equally reasonable interpretations, the one sustaining the claim and coverage for the loss prevails. "When interpreting a contract, 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." (Citations omitted; emphasis added; internal quotation marks omitted.) R.T. Vanderbilt Co. v. Continental Casualty Co., supra, 273 Conn. 462. In the present case, Costabile is informative but, nevertheless, will not be followed as binding precedent of Connecticut common law pertaining to the construction of the insurance contract in this case.
In the present case, the policy at issue provides, in pertinent part:
"PERILS INSURED AGAINST-COVERAGES A, B, C, AND D
"Coverage A — Residence and Coverage B — Related Private Structures —
"We insure property covered under Coverages A and B for risks of direct physical loss, unless the loss is excluded under the Exclusions Applying to Coverages A and B or under the General Exclusions.
"Exclusions Applying to Coverages A and B:
* * *
"4. Vandalism, Burglary Damages, or Glass Breakage — We do not pay for loss caused by vandals, burglary damage, breakage of glass if the residence is vacant for more than 30 days in a row just before the loss. A residence being built is not vacant.
"Coverage C — Personal Property — We insure property covered under Coverage C against direct physical loss caused by the following perils, unless the loss is excluded under the General Exclusions:
"1. Fire or Lightning
* * *
"8. Vandalism — However, we do not pay for loss on the insured premises if the residence is vacant for more than 30 days in row just before the loss. A residence being built is not vacant." In addition, the policy provides in part:
"INCIDENTAL COVEPAGES
"This policy provides the following incidental Coverages. They are subject to all of the terms of the applicable Coverages A, B, or C.
* * *
"3 . . . We pay for loss to trees, plants, shrubs, or lawns on the insured premises caused by:
* * *
"a. fire or lightning, explosion, riot or civil commotion . . ."
* * *
c. vandalism; burglary damage; or, . . . theft."
The plaintiff argues that the defendant issued to him the insurance policy with coverages for his residence (coverage A), related private structures (coverage B), personal property (coverage C) and for incidental coverages. A review of the policy reveals that the term "vandalism" is not defined.
In United Capital Corp. v. Travelers Indemnity Co., 237 F.Sup.2d 270 (E.D.N.Y. 2002), the court was confronted with similar issues and a similar insurance policy as in the present case. In United Capital, the defendant denied the plaintiffs' insurance claim based on the conclusion that the policy excluded coverage for acts of "vandalism." It was determined that the plaintiffs' building had been damaged by fire caused by arson, and that the building had been vacant for more than 60 days. The insurance policy stated that the insurer would "pay for direct physical loss or damage to Covered Property . . . caused by or resulting from a Covered Cause of Loss. Covered Cause of Loss means risks of direct physical loss unless the loss is excluded . . ." Id., 272. In the section for vacancy exclusion, the policy stated that a building "where loss or damage has occurred has been `vacant' for more than 60 days before that loss or damage occurs, the [c]ompany will not pay for any loss or damage caused by any of the following, . . .: (1) Vandalism . . ." Id., 273. The policy did not "explicitly exclude coverage for `fire' or `arson' . . . under this provision." Id., 273.
The defendant argued that the policy "generally provides `all-risk' coverage, which means that [the] [p]laintiffs' loss is covered unless it is limited or excluded by other terms of the Policy. [The] [d]efendant contend[ed], however that the section regarding `Outdoor Property' provid[ed] `named perils' coverage, in which a loss is not covered by the Policy unless the peril which caused the loss is specifically listed." Id., 273-74. The plaintiffs contended that "arson is not subsumed under `Vandalism' and argue[d] that the listing [of] `Fire' and `Vandalism' as separate `Covered Causes of Loss' in the Outdoor Property Section, . . . at least creates an ambiguity as to whether arson is excluded from coverage." Id., 273.
The court stated that, "under the specific wording and format of the Policy, the [c]ourt finds that the Policy is at least ambiguous as to whether `Vandalism' in the Vacancy Exclusion includes arson. Because any ambiguity must be construed against the insurer as the drafter of the Policy, the [c]ourt finds for [the] [p]laintiffs on this issue and holds that the Vacancy Exclusion does not provide a basis for the denial of coverage." Id., 274. "Reading the policy as a whole . . . the [c]ourt believes that the Policy is ambiguous as to whether `Vandalism' includes arson. The fact that the Outdoor Property Section lists `Fire' and `Vandalism' as separate `Covered Causes of Loss' creates uncertainty as to which `Covered Cause of Loss' covers arson — `Fire' or `Vandalism.' Since `Fire' is listed as a `Covered Cause of Loss' and is not excluded in the Vacancy Exclusion, the Policy can reasonably be read to provide coverage for `Fire.'" Id., 276.
The New York Eastern District Court further concluded that "As the drafter of the Policy, [the] [d]efendant could have clearly excluded coverage for the fire at issue by defining `Vandalism' in the Policy to include arson, or conversely, to define `Fire' as accidental fires only. [The] [d]efendant could also have made use of a `total' vacancy exclusion. The [c]ourt also notes that the other excluded `Covered Causes of Loss' in the Vacancy Exclusion relate to less catastrophic losses, such as theft and attempted theft. The entire destruction of the building by fire does not seem to be consistent with the rest of the listed bases for exclusion." Id., 276-77. The court, in finding that the coverages in the policy were not clearly distinct and the same defined term is used in both coverages, concluded that this circumstance created an ambiguity throughout the policy, and therefore the policy must be construed in favor of the plaintiffs. Id., 277. See also MDW Enters v. CNA Ins. Co., 4 A.D.3d 338, 341, 772 N.Y.S.2d 79 (2004) (where the New York appellate court found that an all-risk insurance policy was ambiguous as to whether vandalism included arson; "ordinary business people generally view `vandalism' and `arson' as distinct perils"); Nationwide Mutual Fire Ins. Co. v. Nationwide Furniture, Inc., 932 F.Sup. 655, 657 (E.D.Penn. 1996) (where the court found that the undefined term of "vandalism" could not be read so broadly as to include "arson"; "[b]ecause fire and vandalism are listed in the policy as separate causes of loss, we conclude at best the word vandalism is ambiguous"); Battishill v. Farmers Alliance Ins. Co., 136 N.M. 288, 97 P.3d 620 (N.M.Ct.App. 2004), cert. granted, 2005 N.M Lexis 69 (N.M. 2005) (the court found that "vandalism" did not include arson, and a reasonable insured could interpret the terms in the separate coverages of an insurance policy as to permit coverage for arson); Dixon v. Safeco Ins. Co. of America, 2002 Wash.App. Lexis 2146 (Wash.Ct.App., September 6, 2002), cert. denied, 113 Wn.App. 1030 (2003) (the court found that "[w]here a homeowner's insurance policy treats `fire' and `vandalism and malicious mischief' as two distinct causes of loss and the terms are not defined, and average person would conclude that arson falls under the category of fire rather than vandalism and malicious mischief").
In the present case, the defendant has drafted an insurance policy where "vandalism" and "fire" are undefined terms. Reading the insurance policy as whole, the terms "vandalism" and "fire" are found to be included as separate perils covered under the personal property coverage (coverage C) and incidental coverages. In the exclusionary provision for the coverages of the residence (coverage A) and related private property (coverage B), "vandalism" is listed as an excluded loss. "Fire" is not mentioned. Construing the insurance policy as a whole, as the court must, it is apparent that ambiguity arises as to whether the term "vandalism" includes the act of intentionally setting a fire for incendiary purposes. Because the terms "vandalism" and "fire" are undefined, and are listed as two distinct perils in at least two separate sections of the policy, it is ambiguous as to which peril, "vandalism" or "fire," covers arson. Therefore, "vandalism," as it is listed in the exclusionary section, is susceptible of two reasonable interpretations.
Moreover, in the exclusions listed for coverages A and B, "vandalism" is included among other exclusions which appear minor in nature, such as "Burglary Damage" and "Glass Breakage." This is inconsistent with an interpretation that "vandalism" includes the violent and destructive nature of arson. See MDW Enters v. CNA Ins. Co., supra, 4 A.D.3d 341. Furthermore, as the court in MDW Enters notes, ordinary business people generally view arson and vandalism as separate perils. Id. If the defendant wanted the term "vandalism" to be unambiguous, it could have defined "vandalism" as to include non-accidental fires. See Nationwide Mutual Fire Ins. Co. v. Nationwide Furniture, Inc., supra, 932 F.Sup. 657.
In construing the insurance policy as a whole and giving "operative effect to every provision in order to reach a reasonable overall result," K.T. Vanderbilt Co. v. Continental Casualty Co., supra, 273 Conn. 462-63, it is submitted that the term "vandalism" is ambiguous and susceptible to alternative interpretations. As such, the insurance policy must be construed against the party responsible for its drafting. Id., 462-63
ORDER
The defendant's motion for summary judgment is hereby denied.