Opinion
FBTCV176068795S
04-08-2019
Ruby Estavien v. Progressive Casualty Insurance Company et al.
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Stewart, Elizabeth J., J.
MEMORANDUM OF DECISION ON DEFENDANT SACOTO AGENCY, LLC’S MOTION TO DISMISS AND MOTION FOR SUMMARY JUDGMENT
STEWART, J.
The plaintiff, Ruby Estavien, sued the defendant, Sacoto Agency, LLC (Sacoto), in negligence for its alleged failure to procure underinsured motorist ("UIM") coverage at the same level as liability coverage when it asked the co-defendant, Progressive Casualty Insurance Company ("Progressive"), to increase the liability coverage limits to $1.5 million. Amended Complaint, count two (no. 108.00). The plaintiff is the granddaughter of the named insured, Paul Noel, who was Sacoto’s client. Id. Although the plaintiff had no interactions with Sacoto, she is a beneficiary of the policy’s UIM coverage section because she is a blood relative of Noel and lives with him. Id.
After the plaintiff was seriously injured in an automobile accident and only recovered $120,000.00 from her driver and the tortfeasor, she attempted to recover under the Progressive policy, but Progressive declined to pay, citing UIM limits of only $50,000.00. The plaintiff then brought this action, suing Progressive for breach of contract and Sacoto for negligence. Sacoto moved for summary judgment on the grounds that (1) its negligence, if any, was not the proximate cause of the plaintiff’s injuries, and (2) the requirements of General Statutes § 38a-336(a)(2) do not apply to the plaintiff’s grandfather’s policy. Motion for Summary Judgment (No. 130.00). The court denied the motion on those grounds. Memorandum of Decision (No. 130.10). However, because this defendant had made a one-sentence reference questioning whether it owed a duty to the plaintiff, this court asked for supplemental briefing on that issue. Id. at 1, 9 n.1.; Order (No. 130.20). In addition, the court asked for supplemental briefing on the issue of standing, which implicates subject matter jurisdiction. Id. Thereafter, this defendant filed a motion to dismiss asserting lack of standing. (No. 155.00). The court held oral argument on both issues on March 25, 2019.
I. STANDING
"The issue of standing implicates subject matter jurisdiction ..." Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213, 982 A.2d 1053, 1060 (2009) ("Wilcox"). "Subject matter jurisdiction is the power of the court to hear and determine cases of the general class to which the proceedings in question belong." (Internal quotation marks omitted.) Tolly v. Department of Human Resources, 225 Conn. 13, 29, 621 A.2d 719, 727 (1993). Once subject matter jurisdiction has been raised, the court must determine whether it has jurisdiction "before it can move one further step in the cause; as any movement is necessarily the exercise of jurisdiction." Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 839 n.6, 826 A.2d 1102, 1109 (2003). Therefore, the court will analyze the issue of standing first.
"Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter in controversy ... When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue ... Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes ... standing by allegations of injury [that he or she has suffered or is likely to suffer]. Similarly, standing exists to attempt to vindicate arguably protected interests ..." Wilcox, supra, 214, 982 A.2d 1053, 1060-61.
"Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved ... The fundamental test for determining [classical] aggrievement encompasses a well-settled twofold determination: first, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the subject matter of the challenged action], as distinguished from a general interest, such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action] ... Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest ... has been adversely affected." (Citations omitted; Internal quotation marks omitted.) Wilcox, supra, 214-15, 982 A.2d 1053, 1061; see also Handsome, Inc. v. Planning & Zoning Commission, 317 Conn. 515, 526, 119 A.3d 541, 548-49 (2015).
"[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ... clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute ... It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Citations omitted; internal quotation marks omitted.) Wilcox, supra, 294 Conn. 213-14, 982 A.2d 1060.
Research revealed one Superior Court case that ruled on the issue of standing to sue an insurance broker for negligence. Grossenbacher v. Ericson Agency, Superior Court, Docket No. CV- 97-0073518-S (April 10, 2000, DiPentima, J.). The plaintiff husband in Grossenberger alleged that the insurance broker had failed to advise him of appropriate coverage and caused him to lose assets he jointly owned with his wife when she injured a third party in an automobile accident and their liability coverage was inadequate. The court in that case found that this allegation was sufficient for a direct injury, and held that the husband had standing. Id.
Notably, the Grossenberger court also held that the insurance broker owed no duty to the plaintiffs because they had only retained the broker for homeowners insurance, not for automobile insurance. Superior Court, Docket No. CV-97-0073518.
The plaintiff husband in Grossenberger was an actual client of the insurance broker, albeit for homeowner’s insurance, not the automobile insurance at issue. By contrast, this plaintiff is a resident relative insured who was not the direct client of the insurance broker. Research revealed no Connecticut state case law on the standing of third parties to sue insurance brokers. The plaintiff urges the court to follow Wilcox, supra, and hold that she has standing on the basis of that case. While the court agrees that Wilcox sets forth the classical aggrievement test for standing, there are significant factual differences between Wilcox and the present case. Specifically, the plaintiffs in Wilcox were not third parties for purposes of the Supreme Court’s decision that they had standing. Additionally, the defendant at issue in the Wilcox standing analysis was an insurance company, whereas in the present case the defendant is an insurance broker. Therefore, Wilcox is not factually on point.
In their capacities as members of a limited liability company, the plaintiffs were third parties, but the Supreme Court analyzed standing based on their individual capacities.
In Wilcox, the two individual plaintiffs were members of a limited liability company. 294 Conn. 209, 982 A.2d 1058. The automobile policy at issue listed the limited liability company and one of the individuals as a named insured. Id., 215, 982 A.2d 1061. The other individual was an insured under the terms of the policy, but was not a named insured. Id., 216, 982 A.2d 1062. The Supreme Court held that each of them had a specific, personal and legal interest in those policies and that the defendant insurance company had injuriously affected those interests when it denied coverage. Id., 216-18, 982 A.2d 1061-62. Based on these findings, the Supreme Court concluded that they had standing to sue the defendant insurance company for breach of contract and various other claims (not including negligence). Id., 211, 219, 982 A.2d 1064.
In the present case, the plaintiff alleges that she was injured in a car accident, that the $120,000 she recovered from her driver and the tortfeasor were not enough to pay for her care, that she is a resident relative of Noel and therefore an insured for purposes of the Progressive policy UIM coverage, that Progressive has not paid her claim, that the defendant was the insurance broker for Noel, and that the defendant negligently failed to advise Noel regarding UIM coverage. Amended Complaint, count two (no. 108.00). The court holds that the Supreme Court’s holding that an insured (who is not a named insured) has a specific, personal and legal interest in an insurance policy applies here such that the plaintiff satisfies the first prong of the classical aggrievement test. Nevertheless, Wilcox does not answer the question raised by the second prong of classical aggrievement, i.e., did the defendant, an insurance broker for the plaintiff’s grandfather, injuriously affect that specific, personal and legal interest?
Research reveals one federal case, applying Connecticut case law, that held that third parties had standing to sue an insurance broker. O&G Industries, Inc. v. Aon Risk Services Northeast, Inc., 922 F.Supp.2d 257, 265-66 (D.Conn. 2013). The third parties were participants in a Contractor Controlled Insurance Program ("CCIP") who wanted to sue the contractor’s insurance broker for failure to procure coverage in excess of the CCIP. Id., 261. The United States District Court for the District of Connecticut held that they were third-party beneficiaries of a service agreement to procure insurance between the client and the insurance broker and that therefore, they had standing to bring contract claims against the broker. Id., 265-66. Additionally, the court held that they also had standing to sue the broker in tort because a duty of care arose from the contract or "from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act." Id., 266. Although O&G Industries, Inc. is distinguishable from the case at bar because there was no written agreement between Noel and this defendant, its discussion of Connecticut law regarding foreseeability is applicable here. As set forth in more detail in the "Duty" section below, this court holds that the plaintiff was a foreseeable beneficiary of the policy, and as such, she has alleged enough to meet the second prong of the classical aggrievement test. "Standing exists to attempt to vindicate ‘arguably’ protected interests." Wilcox, supra, 294 Conn. 217, 982 A.2d 1061. Applying the two prongs of the classical aggrievement test, the court finds that the plaintiff has made at least a colorable claim that she has a specific, personal and legal interest that has been injuriously affected by the actions or inactions of this defendant.
There is one final concept of standing that the court should consider. A plaintiff cannot have standing if her injuries are too remote, indirect and derivative with respect to the defendant’s conduct. Handsome, Inc., supra, 317 Conn. 526, 119 A.3d 549; Ganim v. Smith & Wesson Corp., 258 Conn. 313, 344, 780 A.2d 119-20 (2001). In Ganim, the Supreme Court observed that this determination is "part of the judicial task, based on policy considerations, of setting some reasonable limits on the legal consequences of wrongful conduct. In this respect, it is akin to, if not precisely the same as, the judicial task of determining whether a tortfeasor owes a duty to one who has been injured, albeit indirectly, by the tortfeasor’s conduct." 258 Conn. 349, 780 A.2d 120. The Supreme Court held that there was no standing for a mayor and a city to sue firearms manufacturers, trade associations and retail sellers because there were "numerous steps between the conduct of the various defendants and the harms suffered by the plaintiffs" and therefore the injuries were too remote from their conduct and too derivative of the injuries of others. Id., 355-65, 780 A.2d 124. By contrast, in the present case, the plaintiff is only one step removed from the defendant’s client and is a foreseeable beneficiary of the policy that the defendant obtained for its client. Therefore, the court does not find her injuries to be too remote. Her injuries also are direct, not derivative or indirect. Therefore, the court concludes that the plaintiff has standing to sue this defendant.
The defendant cites Ulbrich v. Groth, Superior Court, judicial district of Waterbury, Docket No. CV-06-084016022 (January 13, 2009, Stevens, J.) for the proposition that if there is no duty in a negligence case, there is no standing. Ulbrich in turn relies upon two Connecticut Supreme Court cases: Connecticut Mutual Life Ins. Co. v. New York & New Haven Railroad Co., 25 Conn. 265, 274-75 (1856) and Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 815 A.2d 1188 (2007). This court chooses not to rely on those two decisions for this proposition. The Connecticut Mutual Life case held that an insurance company could not sue a railroad for the death of its insured because it was not in privity. It has since been superseded by subrogation common law and statute. The Fort Trumbull Conservancy case held that there was standing and denied the motion to dismiss, but it held that there was no duty and upheld a motion to strike.
II. DUTY
"The essential elements of a cause of action in negligence are well established: duty; breach of that duty; causation; and actual injury." RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 384, 650 A.2d 153, 155 (1994). "The existence of a duty is a question of law and [o]nly if such a duty is found to exist does the trier of fact then determine whether the defendant violated that duty in the particular situation at hand." (Internal quotation marks omitted.) Id., 384, 650 A.2d 153, 155. "The test for the existence of a legal duty of care entails (1) a determination of whether an ordinary person in the defendant’s position, knowing what the defendant knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result, and (2) a determination, on the basis of a public policy analysis, of whether the defendant’s responsibility for its negligent conduct should extend to the particular consequences or particular plaintiff in the case ... The first part of the test invokes the question of foreseeability, and the second part of the test invokes the question of policy." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 250, 765 A.2d 505, 509 (2001).
Our Supreme Court has defined the duty that an insurance broker owes its principal, the policyholder, in Ursini v. Goldman, 118 Conn. 554, 173 A. 789 (1934). The court ruled that the broker is the agent of the policyholder in negotiating the policy, and
he owes a duty to his principal to exercise reasonable skill, care, and diligence in effecting the insurance, and any negligence or other breach of duty on his part which defeats the insurance which he undertakes to secure 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 held liable for loss properly attributable to his default. The principal may sue either in breach of the contract or in tort for breach of the duty imposed by it.(Citations omitted.) Id., 559, 173 A. 791. Connecticut courts continue to apply this standard. See, e.g., Precision Mechanical Services, Inc. v. T.J. Pfund Associates, Inc., 109 Conn.App. 560, 565, 952 A.2d 818, 821 (2008) (reversing grant of summary judgment in favor of broker); Dimeo v. Burns, Brooks & McNeil, Inc., 6 Conn.App. 241, 244, 504 A.2d 557, 559 (1986) (affirming jury verdict for broker).
As to underinsured motorist coverage, our Appellate Court has held "as a matter of law, that [the broker] had a duty to explain underinsured/uninsured motorist coverage to the plaintiff, to explain the consequences of not having a sufficient amount of coverage based on the plaintiff’s individual circumstances and to attempt to procure that amount of coverage and offer it to the plaintiff." Byrd v. Ortiz, 136 Conn.App. 246, 256, 44 A.3d 208, 215 (2012) (reversing grant of motion to strike negligence claims against agent).
This court previously held that the terms of § 38a-336(a)(2) apply to Noel’s policy. Memorandum of Decision (no. 130.10). Therefore, that statute could give rise to a duty owed by the defendant to at least Noel as the policyholder. A broker’s "duty to use care may arise from a contract, from a statute, or from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act." Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 630-31, 910 A.2d 209, 216 (2006); Precision Mechanical Services, Inc., supra, 109 Conn.App. 564 n.4, 952 A.2d 821; O&G Industries, Inc., supra, 922 F.Supp.2d 266.
Section 38a-336(a)(2) requires that the limits for that underinsured motorist coverage be equal to the limits for liability coverage unless the policyholder signs a written informed consent form for lower limits:
Notwithstanding any provision of this section, each automobile liability insurance policy issued or renewed on and after January 1, 1994, shall provide uninsured and underinsured motorist coverage with limits for bodily injury and death equal to those purchased to protect against loss resulting from the liability imposed by law unless any named insured requests in writing a lesser amount, but not less than the limits specified in subsection (a) of section 14-112. Such written request shall apply to all subsequent renewals of coverage and to all policies or endorsements that extend, change, supersede or replace an existing policy issued to the named insured, unless changed in writing by any named insured. No such written request for a lesser amount shall be effective unless any named insured has signed an informed consent form that shall contain: (A) An explanation of uninsured and underinsured motorist insurance approved by the commissioner, (B) a list of uninsured and underinsured motorist coverage options available from the insurer; and (C) the premium cost for each of the coverage options available from the insurer. Such informed consent form shall contain a heading in twelve-point type and shall state: "WHEN YOU SIGN THIS FORM, YOU ARE CHOOSING A REDUCED PREMIUM, BUT YOU ARE ALSO CHOOSING NOT TO PURCHASE CERTAIN VALUABLE COVERAGE WHICH PROTECTS YOU AND YOUR FAMILY. IF YOU ARE UNCERTAIN ABOUT HOW THIS DECISION WILL AFFECT YOU, YOU SHOULD GET ADVICE FROM YOUR INSURANCE AGENT OR ANOTHER QUALIFIED ADVISER."
In the present case, the duty discussed above is what the defendant owed to Noel, the defendant’s client. He is not a party to this suit. Instead, the sole plaintiff is his granddaughter, who, as a resident and blood relative, is insured under the policy.
The court’s research reveals only two Connecticut trial court cases discussing whether an insurance broker or agent owed a duty to third parties. Neither is factually on point. The defendant relies heavily on Gaulin v. Travelers Home & Marine Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV-08-5023353 (June 8, 2012, Woods, J.) , for its causation argument. In Gaulin, the plaintiff attempted to recover underinsured motorist benefits under an insurance policy issued to his live-in girlfriend. The plaintiff had his own insurance policy and was driving his own car at the time of the accident. The car was not insured under his girlfriend’s policy, nor was he within the definition of relatives under his girlfriend’s policy. Accordingly, although the court found that the harm to the plaintiff was foreseeable to the defendant agent, the court held that the nexus between the plaintiff’s harm and the agent’s alleged negligent advice to the girlfriend was too attenuated as a matter of public policy to impose a duty.
The other case is the United States District Court for the District of Connecticut’s decision in O&G Industries, Inc., supra, 922 F.Supp.2d 257. The court found that there was a written service contract between the policyholder and the broker and that the third parties were third-party beneficiaries to that contract. Id., 265-66. Relying on the law discussed above that a duty can arise from a contract or from foreseeable harm, the court held that the broker owed these third parties a duty. Id., 266.
In the present case, the plaintiff falls in a range between the plaintiffs in Gaulin and O&G Industries, Inc. Unlike the plaintiff in Gaulin, the plaintiff in the present case is clearly a "relative" who is covered for underinsured motorist benefits under the Progressive policy. However, there is no written contract between Noel and the defendant as there was in O&G Industries, Inc.
The plaintiff argues that this court should apply Restatement (Second) of Torts § 324A, relied upon by our Supreme Court to support its recognition of a duty to third parties in Gazo, supra . Section 324A is entitled "Liability to Third Person for Negligent Performance of Undertaking," and it provides in relevant part that:
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.
In Gazo, the Supreme Court considered liability based on subsection (b) and held that, at least in the circumstances of that case, Section 324A(b) recognized a duty from the contractor responsible for snow removal to third-party members of the public who would be using the sidewalk. 255 Conn. at 252-53, 765 A.2d 505.
This court only found two cases in the annotations to § 324A that referred to insurance brokers or insurance agents. Neither case was on point. Graham v. Milky Way Barge, Inc., 923 F.2d 1100, 1108 (5th Cir. 1991) (negligent failure to warn); Huber v. Hovey, 501 N.W.2d 53, 58 (Iowa 1993) (negligent inspection).
In this case, the plaintiff argued at oral argument that there is a duty under subsections (a) or (c). Based on the record before it on summary judgment, this court cannot conclude as a matter of law whether either subsection imposes a duty. Preliminarily, the issue of whether when the defendant fulfilled Noel’s request to increase the liability limits of the policy, it should have recognized that an increase in the UIM limits "as necessary for protection of the [plaintiff]" is a question of the standard of care, which is not before the court, and also appears to be an issue of disputed fact. Second, both subsections (a) and (c) call for the resolution of questions of fact. Accordingly, the court cannot conclude on the basis of the present record that the defendant did or did not owe the plaintiff a duty based on Section 324A(a) or (c).
In the Restatement (Third) of Torts, Section 324A has been rewritten as Section 43 Duty to Third Parties Based on Undertaking to Another. The court has not found any Connecticut case adopting that section of the Third Restatement and therefore does not consider it.
With so little guidance from Connecticut case law, this court will undertake the traditional foreseeability and public policy analysis of whether the defendant owed a duty to the plaintiff.
A. Foreseeability
Our Supreme Court has observed that "the nature of duty, and the specific persons to whom it is owed, are determined by the circumstances surrounding the conduct of the individual ... Although it has been said that no universal test for [duty] has ever been formulated ... our threshold inquiry has always been whether the specific harm alleged by the plaintiff was foreseeable to the defendant." (Citation omitted; emphasis added; internal quotation marks omitted.) Nazami, supra, 280 Conn. 630-31, 910 A.2d 216. As set forth above, the test for foreseeability is "whether an ordinary person in the defendant’s position, knowing what the defendant knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result." Gazo, supra, 255 Conn. 250, 765 A.2d 509.
Under this test, the plaintiff and the specific harm she suffered, being the victim of an underinsured motorist, were foreseeable to the defendant. The policy’s Uninsured Motorist (UM) and UIM coverage endorsement defines "insured" in relevant part as "if the named insured shown on the Declarations Page is a natural person: (i) you or a relative." Pl. Ex. M (no. 140.00). The named insured is Paul Noel. Id. The policy defines "relative" as "any person living in the household in which the named insured resides who is related to the named insured by blood, marriage, or adoption, including a ward or foster child. This term only applies if the named insured is a natural person." Id. The insuring agreement provides: "we will pay for damages ... which an insured is legally entitled to recover from an owner or operator of an uninsured auto because of bodily injury: 1. Sustained by any insured; 2. Caused by an accident; and 3. Arising out of the ownership, maintenance, or use of an uninsured auto." Id. Therefore, if there was a breach of duty relating to procuring UIM coverage, it would be foreseeable that a relative, such as the plaintiff, would be subject to the specific harm she alleges in count two.
Even in Gaulin, where the live-in boyfriend was not covered by the policy, the court held that the harm to him was foreseeable. Superior Court, judicial district of Hartford, Docket No. CV-08-5023353.
The defendant argues that the harm to the plaintiff was not foreseeable because the defendant and the plaintiff were not in privity. Although the court agrees that the defendant was not in privity with the plaintiff, the court holds that that lack of privity is not an obstacle to finding that the harm to the plaintiff was foreseeable. Privity is a contract concept. As the Supreme Court recognized in Coburn v. Lenox Homes, Inc., "the requirement of privity should only be applicable to actions growing out of contract theory and should be irrelevant to tort actions." 173 Conn. 567, 574, 378 A.2d 599, 602 (1977). Foreseeability, not privity, is the "ultimate test" of whether there is a duty of care, according to the Supreme Court. Id., 603, 378 A.2d 599. The court permitted a subsequent purchaser of a home to sue the builder, holding that "there is no reason why the builder-vendor should not be liable for the effects of his negligence if they were foreseeable." Id., 378 A.2d 599. Later, the Supreme Court held that an architect was liable to third parties, stating "[i]t is now the almost universal rule that the contractor is liable to all those who may foreseeably be injured by the structure ... when the work is negligently done." (Internal quotation marks omitted.) Zapata v. Burns, 207 Conn. 496, 517, 542 A.2d 700, 711 (1988). Further, in Gazo, supra, the court extended this principle to a contractor hired to remove ice and snow from sidewalks and held that the contractor owed a duty to unknown third parties who might walk upon the sidewalks. 255 Conn. 253-54, 765 A.2d 510-11. The Appellate Court recently came to the same conclusion when it held that privity was not required to establish foreseeability in Bloomfield Health Care Center of Connecticut, Inc. v. Doyon, 185 Conn.App. 340, 356, 197 A.3d 415, 425 (2018). In that case, the court held that a conservator owed a duty of care to a nursing home to submit a Medicaid application for his ward, who was a patient at the home. Id., 378, 197 A.3d 437. Therefore, this court holds that privity is not required to find that this plaintiff and the harm that she incurred were foreseeable to this defendant.
Coburn did, however, hold that the lack of privity was a bar to bringing a warranty claim. 173 Conn. 572-73, 378 A.2d 601.
By contrast, when a mortgagee who was not named in an insurance policy as an insured attempted to sue the insurance company for breach of contract, arguing that he was a foreseeable beneficiary, the court held that it was improper to try to import the concept of foreseeability into the law of contracts. Reyes v. Nautilus Insurance Co, Superior Court, judicial district of New Haven, Docket No. CV-10-6013254 (March 6, 2012, Wilson, J.) . Similarly, in a case relied upon by the defendant, Hilario’s Truck Center, LLC v. Rinaldi, 183 Conn.App. 597, 193 A.3d 683 (2018), the Appellate Court held that a party who was not a named insured could not sue the insurance company for breach of contract based on a theory of being a foreseeable beneficiary.
B. Public Policy
"[T]he conclusion that a particular injury to a particular plaintiff ... possibly is foreseeable does not, in itself, create a duty of care." (Internal quotation marks omitted.) Ryan Transportation, Inc. v. M&G Associates, 266 Conn. 520, 528, 832 A.2d 1180, 1186 (2003). "The test for determining whether a legal duty exists is a two-prong analysis that includes: (1) a determination of foreseeability; and (2) a public policy analysis." Monk v. Temple George Associates, LLC, 273 Conn. 108, 114, 869 A.2d 179, 184 (2005). "[I]n considering whether public policy suggests the imposition of a duty, [courts] ... consider the following four factors: (1) the normal expectations of the participants in the activity under review; (2) the public policy of encouraging participation in the activity, while weighing the safety of the participants; (3) the avoidance of increased litigation; and (4) the decisions of other jurisdictions ... [Courts] apply these four factors [to decide whether] imposing a duty of care on the defendants ... is not inconsistent with public policy." (Citation omitted; internal quotation marks omitted.) Id., 118, 869 A.2d 184; see also Munn v. Hotchkiss School, 326 Conn. 540, 550, 165 A.3d 1175 (2017).
It does not appear that any Connecticut court has conducted a public policy analysis as to whether an insured person who is not the named insured should be within the class of people to whom an insurance agent owes a duty. Therefore, this court will now undertake that analysis.
1. Normal Expectations of the Participants in the Activity
"[I]n determining the normal expectations of the parties, our appellate courts have often looked to Connecticut’s existing body of common law and statutory law relating to th[e] issue." (Citations omitted; internal quotation marks omitted.) Bloomfield Health Care Center of Connecticut, LLC, supra, 185 Conn.App. 359, 197 A.3d 426. As discussed above, the Supreme Court has held that an insurance broker "owes a duty to his principal to exercise reasonable skill, care, and diligence in effecting the insurance, and any negligence or other breach of duty on his part which defeats the insurance which he undertakes to secure will render him liable to his principal for the resulting loss ..." Ursini, supra, 118 Conn. 559, 173 A. 791. Connecticut law also imposes specific duties in connection with procuring UIM coverage. See, e.g., Byrd, supra, 136 Conn.App. at 256, 44 A.3d 208. The issue here is whether that broker would expect to owe that duty to someone other than the principal, in this case, a resident blood relative who was insured under the policy.
At this point, the court will again consider the defendant’s argument that there is no privity and no direct relationship between it and the plaintiff. See Bloomfield Health Care Center of Connecticut, LLC, supra, 185 Conn.App. at 562-63 and n.5, 197 A.3d 428-29 (considering defendant conservator’s argument that he had no direct relationship with the plaintiff in its discussion of this public policy factor). The defendant argues that Gazo and other cases holding defendants liable to third parties do not apply here because the courts continue to require privity between plaintiff and defendant in professional negligence cases except where the plaintiff was an intended third-party beneficiary of those services. The court previously has held that foreseeability, not privity, is the proper test for imposition of a duty, but the court also will consider whether there is a public policy reason to limit an insurance broker’s duty to its clients and not extend it to others insured under the policy it procures.
The defendant relies on cases where non-clients sued attorneys and mental health professionals. See, e.g., Jacoby v. Brinckerhoff, 250 Conn. 86, 735 A.2d 347 (1999); Zamstein v. Marvasti, 240 Conn. 549, 692 A.2d 781 (1997); Fraser v. United States, 236 Conn. 625, 674 A.2d 811 (1996); Krawczyk v. Stingle, 208 Conn. 239, 543 A.2d 733 (1988). The case law involving attorneys is distinguishable. As the Supreme Court noted in Krawczyk, "[c]ourts have refrained from imposing liability when such liability had the potential of interfering with the ethical obligations owed by an attorney to his or her client." 208 Conn. 246, 543 A.2d 735. The court went on to conclude that imposing liability to third parties under the circumstances of that case "would not comport with a lawyer’s duty of undivided loyalty to the client." Id., 543 A.2d 735.
By contrast, insurance brokers are not subject to rules akin to the Rules of Professional Conduct that govern the conduct of lawyers. Indeed, insurance agents do not owe an undivided loyalty, but instead they typically owe duties to both the insurance company and their client. Another Superior Court case allowed negligence claims against an insurance agent to be assigned by a client tortfeasor to an injured party, even though a claim against an attorney would not be assignable. Esposito v. CPM Ins. Services, Inc., 50 Conn.Supp. 283, 922 A.2d 343 (2006) . That court observed that "the insurance agent-client relationship is a commercial relationship not comparable to the attorney-client relationship, shaped by centuries of tradition and jurisprudence." Id., 922 A.2d 343. The Appellate Court also has distinguished the attorney-client relationship from the conservator-ward relationship for that same reason. Bloomfield Health Care Center of Connecticut, Inc., supra, 185 Conn.App. 362-63 n.5, 197 A.3d 428-29.
The attorney-client relationship and the mental health professional-patient relationship cases are distinguishable for the additional reason that in each of the cases raised by the defendant, the interests of the third party would have been antithetical to the client. It was for this reason that the Supreme Court distinguished them in Gazo, supra, 255 Conn. 251-52, 765 A.2d 510; see also Bloomfield Health Care Center of Connecticut, LLC, supra, 185 Conn.App. 362-63 n.5, 197 A.3d 428-29. Here, by contrast, there is no interest of the plaintiff that would interfere with the interests of Noel as the defendant’s client. They both share an interest in obtaining UIM coverage. Based on the foregoing analysis of this factor, the normal expectations of the parties, the court holds that it would not be inconsistent with public policy for insurance brokers to owe a duty to parties insured under the policy at issue.
2. The Public Policy of Encouraging Participation in the Activity vs. The Avoidance of Increased Litigation
The court considers the second and third factors together as the appellate courts have done in recent cases. See, e.g., Munn, supra, 326 Conn. 560, 165 A.3d 1167; Bloomfield Health Care Center of Connecticut, LLC, supra, 185 Conn.App. 371, 197 A.3d 433. As the Appellate Court recently recognized, "with respect to the third factor which contemplates the concern of increased litigation, it is [often] easy to fathom how affirmatively imposing a duty on the defendants ... could encourage similarly situated future plaintiffs to litigate on the same grounds; that is true anytime a court establishes a potential ground for recovery." Bloomfield Health Care Center of Connecticut, LLC, supra, 185 Conn.App. 371, 197 A.3d 433. "Because of this, in considering these two factors, our Supreme Court at times has employed a balancing test to determine whether, in the event that a duty of care is recognized by the court, the advantages of encouraging participation in the activity under review outweigh the disadvantages of the potential increase in litigation." Id., 197 A.3d 433 (citing examples where the balance had tipped in favor of and against recognizing a new duty).
There is no question that extending the duty of insurance brokers to all parties insured under UIM provisions of an automobile policy would increase litigation beyond that which would be expected if only the brokers’ clients could sue in negligence. The relevant inquiry under the above balancing test is, whether extending a duty already owed to this universe of third parties would further encourage insurance brokers to use reasonable care in their procurement of automobile insurance, and if so, whether the advantages of encouraging that behavior would outweigh the negative effects of the likely increased litigation.
The court cannot find that extending any duty arising from § 38a-336(a)(2) beyond the client to third parties insured under a policy that is procured would further encourage or discourage brokers from using reasonable care. Neither of the parties provided the court with any evidence or law bearing on this second factor, and the court has not found any relevant law relating to this issue. Therefore, the court concludes that the second factor is neutral, and when weighed against the likelihood of increased litigation, the court cannot find that it outweighs the negative effects of increased litigation.
Unlike automobile liability coverage, which is required by § 38a-335(d) to apply to "the named insured and relatives residing in such insured’s household unless any such relative is specifically excluded by endorsement," UIM coverage is not required by any statute to apply to relatives residing in the named insured’s household. Cf. Middlesex Ins. Co. v. Quinn, 225 Conn. 257, 264-65, 622 A.2d 572, 575-76 (1993) (holding that it did not violate public policy for insurance company to exclude UM/UIM coverage for resident relative who owned his own car).
3. The Decisions of Other Jurisdictions
The fourth factor requires this court to look at decisions of other jurisdictions to consider whether they have held that insurance brokers owe a duty to third parties beyond the client in the automobile policy context. The court will consider the public policy behind those cases and whether that public policy suggests that it would be inconsistent with Connecticut public policy to find that the defendant owed a duty to the plaintiff in the present action.
Research did not reveal any cases in other jurisdictions that specifically ruled on whether an insurance broker or agent owed a duty to an insured resident blood relative with regard to UM or UIM coverage. The most factually on point decision comes from Florida, which requires that a plaintiff must establish that not only he or she was insured under the policy, but that he or she was an intended beneficiary of the contract between the named insured and the broker. That decision, Rihon v. Wilson, 415 So.2d 94 (Fla.Dist.Ct.App. 1982), held that a Belgian exchange student who resided with the named insured and was driving her car when he was seriously injured by an uninsured motorist, could not sue the named insured’s agent for failure to increase UM coverage because he had not alleged these requirements in his negligence complaint. For the reasons set forth earlier in this decision, this court does not believe that Connecticut would impose both of these two pre-conditions to sue in negligence.
In the other UM and UIM cases from other jurisdictions, the plaintiffs were passengers who were not relatives. For example, the Tennessee Court of Appeals held that a passenger could sue the driver’s agent in contract as a would-be third-party beneficiary for failure to procure UM coverage. Waddell v. Davis, 571 S.W.2d 844 (Tenn.Ct.App. 1978). Further, that court held that the test for allowing the passenger to proceed is whether the plaintiff would have been insured if there had been a policy. Although the plaintiff in that case also sued in negligence, the court did not address that claim. The remaining two cases were brought by taxicab passengers against the taxicab company’s insurance brokers for failure to procure UM coverage. In each case, the court held that no duty was owed to the passengers. Napier v. Bertram, 191 Ariz. 238, 954 P.2d 1389 (1998); Oathout v. Johnson, 88 A.D.2d 1010, 451 N.Y.S.2d 932 (3d Dept. 1982). The Arizona Supreme Court in Napier recognized that "[u]nder special circumstances our courts have imposed liability on a professional to the extent that a foreseeable and specific third party is injured by the professional’s actions." 954 P.2d 1393. The court went on to observe that there was a "common thread" among these cases— "a foreseeable risk of harm to a foreseeable non-client whose protection depended on the actor’s conduct." Id. It declined to follow decisions in other states that had imposed duties to non-client victims of insurance brokers’ failures to procure liability insurance, noting that this "would impose on agents a duty to a vast number of non-clients— literally all who reside in or travel in this state." Id., 1395.
In New Jersey, a statute prohibits clients from suing their brokers in negligence for failure to procure UM/UIM coverage. Section 17:28-1.9 of the New Jersey Statutes was enacted in 1993 to confer immunity on brokers except for instances of willfulness, wantonness or gross negligence after a flood of litigation against brokers for negligence in UM/UIM advice. Pizzullo v. New Jersey Manufacturers Ins. Co., 196 N.J. 251, 266, 952 A.2d 1077, 1086 (2008).
Since research revealed so few cases discussing whether there was a duty to non-clients in the context of UM or UIM coverage, the court also considers the cases that have discussed whether brokers owe a duty to third-party victims to procure liability coverage. The holdings in these decisions fall in three categories: (1) holdings that permitted third-party victims to sue in negligence or contract, (2) holdings that permitted third-party victims to sue in contract only, and (3) holdings that barred the right to sue altogether.
The Appellate Division of the New Jersey Superior Court held that an accident victim could sue the driver’s insurance agent in negligence for allowing an automobile policy to lapse. Werrmann v. Aratusa, Ltd., 266 N.J.Super. 471, 630 A.2d 302 (App.Div. 1993). That court in Werrmann reasoned that an insurance broker owes a duty to members of the public because (1) there was a reasonable foreseeability of harm to members of the general public, and (2) an innocent member of that general public might be left without means of redress as a result of negligence. Id., 475. The court also held that an injured party would have a claim as a third-party beneficiary of the agreement between the insured and the agent because members of the general public are deemed intended beneficiaries of that contract. Id., 476. Similarly, the North Carolina Court of Appeals held that accident victims could sue the driver’s insurance broker for negligently failing to procure insurance. Johnson v. Smith, 58 N.C.App. 390, 293 S.E.2d 644 (1982). In Johnson, the court held that the duty to the victims arose from the contract between the tortfeasor driver and his broker, and since the amount the victims were seeking was well within the amount of coverage required by state statute, the victims could sue the broker directly.
Courts have been less willing to impose a duty when the coverage at issue is an optional coverage not required by statute. For example, the Massachusetts Supreme Judicial Court in Flattery v. Gregory, 397 Mass. 143, 489 N.E.2d 1257 (1986), affirmed the dismissal of a negligence claim brought by an accident victim against an insurance broker who allegedly failed to procure optional liability coverage that would have raised the limits. In reaching that conclusion, the court distinguished its earlier decisions that permitted plaintiffs to sue brokers for failure to procure workers’ compensation insurance. The court in Flattery stated that "[i]n each of the cited cases involving workmen’s compensation insurance, the plaintiff rightfully and foreseeably expected the insurance to be in effect and relied on it. The expectation was rightful and foreseeable because the insurance was mandated by statute ... [H]owever, the plaintiff clearly did not foreseeably rely on the [tortfeasor driver’s] motor vehicle being insured in an amount greater than that required by [the Massachusetts statute]." Id., 1260. The court did, however, hold that the plaintiff could go forward with a contract claim. It held that when a driver enters into a contract with a broker to procure liability insurance, the point is to insure the driver for judgments against him by the driving public, and therefore a member of that public with a judgment against the driver is an intended beneficiary of that contract. Id., 1262. Additionally, the Illinois Appellate Court also held that members of the general public were intended beneficiaries of the contract between the driver and the broker, and therefore, an accident victim could sue a driver’s broker for breach of that contract. Gothberg v. Nemerovski, 58 Ill.App.2d 372, 208 N.E.2d 12 (1st Dist. 1965).
Other states’ courts have held that any duty owed by an insurance broker to third parties is limited in scope or does not exist. The United States District Court for the Northern District of Ohio held that the duty only runs to "direct, intended and specifically identifiable" beneficiaries of the contract between the driver and the broker. Emahiser v. Complete Coverage Ins., LLP, 53 F.Supp.3d 1025, 1030-31 (N.D. Ohio 2014). The court observed that this holding brought together two Ohio-law concepts. The first was that brokers generally do not owe a duty to third parties and the second was that third parties can maintain negligence claims when they are known to the agent and readily identifiable. Id., 1031. The court specifically rejected the notion that the driving public as a whole is a sufficiently specific intended beneficiary, agreeing with the Arizona Supreme Court in Napier, supra, that it would impose on agents and brokers a "vast number of non-clients." Id. Finally, the Louisiana Court of Appeals held that third-party victims have no right at all to sue in negligence for failure to procure coverage. Chisley v. Smith, 986 So.2d 222 (La.Ct.App., 2d Cir. 2008).
This court will now consider how the public policy rationales from the cases from other jurisdictions bear on whether to recognize a duty in the present case. Although a few jurisdictions held that there was a duty to the general public or that the general public is the intended beneficiary of the contract between the broker and the client, most courts were not willing to go that far. Indeed, their concern about exposing brokers to so many potential claimants motivated many of the restrictions they imposed. This court agrees that it is not appropriate, nor is it necessary here, to recognize a duty to the general public.
However, it would be consistent with most of the public policy enunciated in the cited cases to hold that there could be a duty owed by an insurance broker to an insured, even if that insured is not the broker’s client. Someone who is insured by a policy being procured by or subject to advice being given by a broker typically would be a foreseeable party, and often that person would be identifiable. The universe of these people would be much smaller than the general public recognized by some of these other jurisdictions and by the Connecticut Supreme Court in Gazo as potential plaintiffs.
The court is mindful of the discussion in Flattery and Johnson about whether to impose a duty when the amount of coverage at issue is above that required by statute. Because the court has not been asked to and declines to opine on the standard of care to which this defendant had to conform, it does not address this issue. Moreover, the court recognizes that there are a number of factual issues that must be resolved to flesh out the exact nature of any duty owed by the defendant to the plaintiff. The court simply holds that the case law from other jurisdictions does not foreclose the possibility that the defendant owed a duty to the people insured under the automobile policy here.
Taking into account all four public policy factors, the court holds that it would not be inconsistent with Connecticut public policy to impose a duty on insurance brokers to individuals and entities who are insured under the UM or UIM coverage sections of automobile insurance policies that are the subject of their undertaking for their clients. The court does not rule on whether any duty would be owed by an insurance broker to anyone else beyond this narrow class of people.
CONCLUSION
For the foregoing reasons, this court denies the motion to dismiss for lack of standing. Additionally, the court denies the motion for summary judgment, as well as the motion to dismiss, on the issue of lack of duty.