Opinion
No. CV 07 4024573
October 30, 2007
MEMORANDUM OF DECISION MOTION FOR SUMMARY JUDGMENT, NO. 111
At issue is whether Colony Insurance Company has a duty to defend its insureds, Rudy's Bar and Grill, Inc. and Omer Ipek, from a lawsuit filed against them by an intoxicated patron (Resulovski) who later was injured driving a motor vehicle.
At the time of Resulovski's accident, Rudy's had a commercial general liability (GCL) policy issued by Colony Insurance Company (Colony). On February 22, 2007, Colony filed this complaint against both Rudy's and Resulovksi, seeking a declaratory judgment that it has no duty to defend or indemnify Rudy's in connection with Resulovski's action against them. Colony later amended its complaint to include Omer Ipek d/b/a Rudy's Bar Grill, Inc. as a party defendant. On June 13, 2007, Colony filed a motion for summary judgment on the grounds that two policy exclusions, one involving use of an auto and the other involving the provision of alcohol to intoxicated individuals, bar insurance coverage for Resulovski's claims. Rudy's filed memorandums in opposition to the motion. On September 4, 2007 the parties argued the motion to the court.
FACTS
On December 15, 2006, Andrea Resulovski filed a three-count complaint against Rudy's Bar Grill, Inc. (Rudy's) and Rudy's permittee, Omer Ipek. Resulovski alleged that on November 27, 2005, she was served alcohol at Rudy's while she was intoxicated. After Resulovksi left Rudy's, her "motor vehicle was caused to crash and collide" at an intersection while Resulovski was operating the vehicle. The crash allegedly resulted in permanent injuries to Resulovski.
In count one, Resulovski alleged that her injuries resulted from her intoxication, and that she was entitled to recovery under Connecticut's Dram Shop Act, General Statutes § 30-102. In count two, Resulovksi alleged reckless and/or wilful misconduct on the part of the defendants and their agents in that they wilfully sold and served her alcohol after she was intoxicated, knowing that she would consume it "while intoxicated and would become more intoxicated or stay intoxicated," that she would be driving thereafter and that operation of her vehicle while intoxicated would constitute an unreasonable risk of injury to Resulovski. In count three, Resulovski alleged that the defendants were negligent in that they failed to supervise and train employees regarding the recognition and handling of intoxicated individuals, failed to ask whether Resulovski had driven to the bar and/or would be driving upon leaving, failed to warn Resulovski of the dangers of driving while intoxicated, failed to prevent her from driving, failed to have enough employees to discover Resulovski's intoxicated state and failed to have adequate instructions regarding the service of alcohol to Rudy's patrons. Both counts two and three incorporate the allegation in count one that Rudy's provided Resulovksi with alcohol when she was already intoxicated.
On July 10, 2007, the court, Robinson, J, granted the defendants' motion to strike counts one and three. See Resulovski v. Ipek, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 07 5002218 (July 10, 2007, Robinson, J.).
DISCUSSION
"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.) Grey v. Stamford Health System, Inc., 282 Conn. 745, 750, 924 A.2d 831 (2007). "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 . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
Because the current case involves an insurer's duty to defend, additional rules and standards are relevant to the court's analysis. Specifically, "[i]t is the function of the court to construe the provisions of the contract of insurance . . . The [i]nterpretation of an insurance policy . . . involves a determination of the intent of the parties as expressed by the language of the policy . . . [including] what coverage the . . . [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy . . . [A] contract of insurance must be viewed in its entirety, and the intent of the parties for entering it derived from the four corners 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 . . .
"In construing the duty to defend as expressed in an insurance policy, `[t]he 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 . . . Hence, if the complaint sets forth a cause of action within the coverage of the policy, the insurer must defend.' . . . `If an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured.'" (Citations omitted; emphasis in original; internal quotation marks omitted.) Hartford Casualty Ins. Co. v. Litchfield Mutual Fire Ins. Co., 274 Conn. 457, 463, 876 A.2d 1139 (2005).
Total Liquor Liability Exclusion.
Colony argues that the "Total Liquor Liability Exclusion" (liquor exclusion) relieves it of any duty to defend Rudy's. That provision bars coverage for
"[b]odily injury" or "property damage" for which any insured may be held liable by reason of:
(1) Causing or contributing to the intoxication of any person;
(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.
Colony asserts that because count one is based on General Statutes § 30-102, a statute relating to the sale of alcoholic beverages, coverage is barred under subsection three of the liquor exclusion. Colony further claims that the allegations in count one that Resulovski was sold alcohol while intoxicated and that the collision occurred as a consequence of her intoxication bar coverage under subsections one and two of the liquor exclusion.
Regarding count two, Colony posits that the allegations of reckless and/or wilful misconduct are all linked to the sale and service of alcohol to Resulovski after she was already intoxicated, and coverage is therefore barred under subsections one and two of the liquor exclusion. Colony also argues that an allegation in count two that the sale of alcohol to Resulovski after she was intoxicated violated General Statutes § 30-86(b), which prohibits the sale or delivery of alcohol to minors and intoxicated persons, is barred under subsection three.
Initially, Rudy's spent little time contesting Colony's assertions regarding counts one and two, and instead focused its arguments on count three. It noted that there are nine specifications of negligence and that only one claim needs to fall outside the liquor exclusion in order to trigger Colony's duty to defend. Rudy's argued that count three includes several such claims, namely that: 1) it failed to inquire whether Resulovski drove her car to its bar and/or would be driving her car upon leaving the bar; 2) it failed to warn Resulovski of the dangers of driving while intoxicated; and 3) it failed to take Ms. Resulovski's keys in order to prevent her from driving in an intoxicated state, and/or otherwise failed to prevent Resulovski from operating a motor vehicle.
Regarding count three, Colony first counters that any duty of care that Rudy's allegedly owed to Resulovski stemmed from Rudy's provision of alcohol to her, which contributed to her intoxicated state, thereby implicating subsections one and two of the liquor exclusion. In its reply memorandum, filed after the court, Robinson, J., granted Rudy's motion to strike counts one and three of Resulovski's complaint, Colony asserts that only count two can be considered for purposes of a duty to defend analysis, and that for the reasons outlined earlier, the allegations in count two clearly trigger no such duty.
Not surprisingly, Rudy's now insists that the court must still consider the allegations in count three even though that count was stricken. Although it relies on Hartford Casualty Ins. Co. v. Litchfield Mutual Fire Ins. Co., supra, 274 Conn. 457, that case does not bolster Rudy's position. Hartford Casualty stated that "[a]n insurer may be obligated to provide a defense not only based on the face of the complaint but also if any facts known to the insurer suggest that the claim falls within the scope of coverage . . . Where the insurer has sufficient knowledge to show that a claim falls within coverage even though not properly pleaded to [invoke] coverage, the carrier cannot make the face of the complaint argument." (Internal quotation marks omitted.) Id., 466-67. Rudy's suggests that the allegations of count three are "facts" know to the insurer. The court will consider all of Resulovski's allegations as they may be relevant to its analysis.
On August 23, 2007, Resulovski filed an amended complaint. Rather than repleading counts one and three, she intentionally left those counts blank in order to preserve her right to appellate review. "Jurisdictions differ with regard to which version of a complaint should be considered in determining an insurer's duty to defend," in that some courts refer only to the latest amended pleadings while others look only to the allegations contained in the initial pleadings to determine whether any duty to defend exists. Nationwide Mutual Ins. Co. v. Mortensen, 222 F.Sup.2d 173, 182 (D.Conn. 2002). In the absence of appellate Connecticut authority, several federal and superior courts have chosen the former option. Electric Ins. Co. v. Santo, Superior Court, judicial district of Waterbury, Docket No. CV 06 4011494 (August 6, 2007, Upson, J.); Fortin v. Hartford Underwriters Ins. Co., Superior Court, complex litigation docket at Middletown, Docket No. X04 CV 03 0103483 (April 6, 2005, Quinn, J.); see Nationwide Mutual Ins. Co. v. Mortensen, supra, 222 F.Sup.2d 182. While this court might be similarly inclined to rely only on the most recent pleadings under typical circumstances, it will consider all three counts of Resulovski's initial complaint in light of the fact that Resulovski has neither abandoned nor repleaded the stricken counts.
Rudy's cites Wentland v. American Equity Ins. Co., supra, 267 Conn. 592, to bolster its assertion that the allegations in count three trigger a duty to defend. In Wentland, the plaintiffs in the underlying complaints sued a bar owner, alleging that an underage drinker lost control of her car due to her "consumption of alcohol" at the bar. Id., 597. In Wentland, the plaintiffs never alleged, however, that the driver was intoxicated. Id., 607. At issue was whether the allegations of "consumption of alcohol" were sufficient to trigger subsection one of the liquor exclusion in the bar owner's insurance policy, which was identical to the Colony policy in that it barred coverage for liability resulting from "[c]ausing or contributing to the intoxication of any person." Id., 599, 603.
After finding that the allegations did not bar coverage under subsection one of the liquor exclusion, the Supreme Court specifically stated that it "express[ed] no opinion as to the applicability of subsections (2) or (3)," which were also identical to those subsections in the Colony policy. Id., 601-02. Additionally, the court noted that "[i]nterpreting [the liquor] exclusion to bar all claims dependent upon the sale or service of alcohol expands its reach beyond that which its explicit terms provide, and would render superfluous the specific language of subsections (2) and (3) of the liquor liability exclusion." Id., 610-11.
The facts of Wentland distinguish it from the claims of Resulovski in this case. Whereas the underlying complaint in Wentland did not include allegations of intoxication, Resulovski specifically alleged that she was intoxicated. Colony does not assert that all claims dependent upon the sale or service of alcohol fall within the liquor exclusion, but rather that claims dependent upon the sale or service of alcohol to an intoxicated person fall within the liquor exclusion. Wentland does not address this argument. Additionally, Colony argues that coverage is barred not just under subsection one (the only subsection analyzed by the Wentland court), but under multiple subsections of the liquor exclusion.
As Colony notes, in cases with fact patterns similar to the current case, courts have found that the liquor exclusion bars coverage. For instance, in Berlin Corp. v. Continental Casualty Co., Superior Court, judicial district of Hartford, Docket No. CV 06 4021653 (April 27, 2007, Graham, J.) (43 Conn. L. Rptr. 292, 292), the plaintiffs in the underlying complaints alleged that prior to the car accident in which they were injured, the minor responsible for the accident purchased and consumed alcoholic beverages at a beverage mart and became intoxicated as a result. The plaintiffs sued the beverage mart, alleging various negligent acts such as failure to determine the minor's age and failure to train and/or supervise its agents regarding age identification. Id., 293. The beverage mart's insurer declined to defend the suit due to a liquor exclusion identical to Colony's. Id. The court found that the allegations of negligence were all "related to, and predicated upon, the alleged acts of furnishing alcohol to a minor and contributing to the intoxication of that person." Id., 294. It then determined that coverage was barred under subsections one and two of the liquor exclusion, which involve contributing to the intoxication of a person and furnishing alcohol to a minor (among other things), respectively. Id.
In support of its assertion that the liquor exclusion does not apply, Rudy's presents a hypothetical in which Resulovski enters Rudy's already intoxicated, and Rudy's refuses to serve her additional alcohol. According to Rudy's, under those circumstances it would still be required to ask her about her transportation plans, to warn her of the dangers of driving while intoxicated, and to prevent her from driving while intoxicated. Because Resulovski plainly alleged that Rudy's did serve her alcohol upon her arrival when she was already intoxicated, this exercise is purely academic and does not impact the court's analysis.
Here, Resulovski's allegations of negligence are all predicated upon the acts of contributing to the intoxication of a person or furnishing alcohol to a person under the influence of alcohol. Rudy's has not provided this court with any reason to deviate from the logic employed in Berlin Corp. See also Jones v. Penn-America Ins. Co., supra, Superior Court, Docket No. X07 CV 000079440 (finding no duty to defend based on a liquor exclusion identical to Colony's, where liability for negligent training and supervision, among other things, could result only if the plaintiff "allege[d] and prove[d] that employees . . . proximately caused or contributed to [the underage drinker's] intoxicated state by furnishing her with liquor").
Rudy's argues for the first time in its response to Colony's reply memorandum that "[a]n issue of material fact is raised regarding Rudy's knowledge of the consequences of Rudy's actions." Rudy's at no point elaborates on this statement, and this bare assertion is insufficient to withstand summary judgment. See Zielinski v. Kotsoris, supra, 279 Conn. 319. Additionally, Rudy's claims in its response that count two does not fall within the liquor exclusion because the allegations of recklessness mirror the negligence allegations. Notwithstanding Rudy's contention, count two is clearly excluded from coverage because each allegation is linked to the sale and service of alcohol to Resulovski after she was already intoxicated. Lastly, Rudy's asserts that as a matter of equity, Colony must continue to defend Rudy's because the facts at trial may only establish negligence on Rudy's part. There would be nothing equitable, however, about requiring Colony to continue to defend Rudy's when the court has already determined that the allegations of negligent conduct are also barred from coverage.
Accordingly, the Colony liquor exclusion, which involve contributing to the intoxication of any person and furnishing alcoholic beverages to a person under the influence of alcohol, respectively, apply to exclude coverage for the allegations in count two of Resulovski's complaint even if the insurer has knowledge of the allegations of count three. As already noted the allegations of count one also fall with the policy exclusion language.
The Auto Exclusion
Colony contends that summary judgment in its favor is also warranted because of the "Absolute Auto, Aircraft and Water Exclusion" (auto exclusion) in the Colony policy. The auto exclusion contains the following language:
[This insurance does not apply to] "[b]odily injury" or "property damage" arising out of or resulting from the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft. Use includes operation and "loading or unloading."
The policy further states that
[t]his exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft.
According to Colony, each count of Resulovski's complaint reflects that her injuries arose out of her operation and use of "any" vehicle, and her claims are therefore excluded from coverage.
In Hogle v. Hogle, 167 Conn. 572, 577, 356 A.2d 172 (1975), the Connecticut Supreme Court stated that "it is generally understood that for liability for an accident or an injury to be said to `arise out of the `use' of an automobile for the purpose of determining coverage under the appropriate provisions of a liability insurance policy, it is sufficient to show only that the accident or injury `was connected with,' `had its origins in,' `grew out of,' `flowed from,' or `was incident to' the use of the automobile, in order to meet the requirement that there be a causal relationship between the accident or injury and the use of the automobile." Because Resulovski's injuries stem from her car crash, they are clearly "connected with" her use of her automobile.
Rudy's does not, however, dispute that Resulovski's alleged injuries arose out of the use of an automobile. Rather, it counters that no connection exists between Resulovski's use of her automobile and the insured (i.e., Rudy's), and that the absence of a nexus renders the auto exclusion inapplicable. More specifically, Rudy's interprets the auto exclusion to bar coverage only for injuries related to any insured's auto, as opposed to just any auto. Rudy's further asserts that to the extent that the meaning of "any" is ambiguous in this context, it must be construed in Rudy's favor. Lastly, Rudy's posits that to interpret the policy to exclude coverage for injury arising out of use of any auto would result in an unconscionable gap in coverage for insureds.
In response to Colony's discussion of a prior version of the auto exclusion to bolster its interpretation of "any," Rudy's argues that the court may look only to the express language of the current policy to determine the parties' intent. It insists that extrinsic evidence may be assessed only if the auto exclusion is ambiguous, in which case summary judgment would be improper. The court finds that because the express language of the current auto exclusion is clear, there is no need to consider past versions.
Notwithstanding Rudy's contrary arguments, Colony has no duty to defend in this instance. The auto exclusion does not distinguish between cars owned and operated by Rudy's and cars owned and operated by patrons. It precludes coverage for bodily injury stemming from "any auto," and Resulovski's car unequivocally falls under the umbrella of "any." See Mallozzi v. Nationwide Mutual Ins. Co., 72 Conn.App. 620, 627-28, 806 A.2d 97, cert. denied, 262 Conn. 915, 811 A.2d 1292 (2002) (discussing the generalizing effects of the terms "an" and "any" in the disputed auto liability coverage provision). Rudy's assertion that "any" is ambiguous in this context is insufficient to make it so. See Wentland v. American Equity Ins. Co., 267 Conn. 592, 600, 840 A.2d 1158 (2004) ("Although policy exclusions are strictly construed in favor of the insured . . . the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous").
Rudy's cites Federal Ins. Co. v. New Coal Co., 415 F.Sup.2d 647 (W.D.Va. 2006), a declaratory judgment action applying Virginia law, for the proposition that Colony needed to expand upon its definition of "any auto" in order to avoid ambiguity. The insurance policy at issue in Federal Ins. Co. stated that "[t]his insurance does not apply to bodily injury or property damage arising out of the ownership, maintenance, or use of any auto, by the insured or any other person or organization." Id., 652. The court determined that the phrase "any other person" meant "a stranger to the insurance contract." Id., 653. Because the auto accident that sparked the controversy was caused by "any other person," the court found that the insurer had no duty to defend. Id. Although Rudy's argues otherwise, the fact that the Federal Ins. Co. policy contained additional language that explicated the meaning of "any auto" does not mean that the language in the Colony policy is necessarily ambiguous.
Rudy's contention that Colony's interpretation of the auto exclusion would result in an "unconscionable gap" in coverage is also unpersuasive. The issue presented in this action is not whether there is a gap in coverage between a commercial auto policy, dram shop policy and a general commercial liability policy. The only policy before the court is the GCL policy and the question before the court is whether the GCL policy must respond under the terms of the coverage to the specific allegations of the Resulovski complaint. Rudy's relies on Travelers Indemnity Co. v. Citgo Petroleum Corp., 166 F.3d 761, 769 (5th Cir. 1999). The Travelers court merely noted that the insurance policies that the parties "bargained for here were interlocked and mutually exclusive," such that some accidents were covered under an auto policy and other accidents were covered by a comprehensive general liability policy, but no single accident would be covered under both policies.
Although Rudy's sets forth a hypothetical to showcase the purported unconscionability of the coverage gap, the conjectural fact pattern presented bears no relevance to the factual allegations in the underlying complaint before the court, and thus has no bearing on the court's analysis.
As Colony rightly notes, if Rudy's had wanted to ensure full coverage, nothing precluded it from buying additional policies (and indeed it may have). A separate liquor liability policy would presumably cover Resulovski's lawsuit. See Jones v. Penn-America Insurance Co., Superior Court, complex litigation docket at Tolland, Docket No. X07 CV 000079440 (November 10, 2003, Sferrazza, J.) (noting that businesses can "procure insurance specifically aimed at liquor liability risk"); see also Hermitage Ins. Co. v. Walters, 882 F.Sup. 31, 32 (D.Conn. 1995) (explaining that the defendant bar operator had been warned that general liability policies do not cover liability for liquor sales and that the purchase of a separate dram shop liquor liability policy would be prudent). If Rudy's chose not to purchase additional policies, the court has no duty to rewrite the Colony policy so that the terms are more favorable to Rudy's. Accordingly, coverage is also barred due to the auto exclusion.
For the foregoing reasons, Colony's motion for summary judgment is granted.
Colony also argues that the allegations of wilful and reckless misconduct in count two do not qualify as an "occurrence," a prerequisite to coverage under the Colony policy. In light of the fact that summary judgment is warranted in Colony's favor for other reasons, the court does not need to address this issue.