Opinion
No. CV 04 4000385 S
July 17, 2009
MEMORANDUM OF DECISION
The plaintiffs Susan E. Holick and Thomas Sabol instituted this action against the defendant Allstate Insurance Company seeking to recover underinsured motorist benefits from an automobile liability insurance policy issued by the defendant. In its answer to the complaint, the defendant has asserted two special defenses relevant to the present consideration. In the first special defense, the defendant alleges that the plaintiffs failed to institute suit within the applicable statute of limitations. In the second special defense, the defendant alleges that the plaintiffs failed to institute suit within the time provisions of General Statutes § 38a-336(g)(1). By stipulation, the parties agreed to bifurcate the trial of this action so that a bench trial would be held first on the defendant's first two special defenses. This evidentiary hearing was held on April 2, 2009. The parties' post-trial memoranda were completed and filed by May 9, 2009. The court makes the following findings of fact.
General Statutes § 38a-336(g)(1) provides the following:
No insurance company doing business in this state may limit the time within which any suit may be brought against it or any demand for arbitration on a claim may be made on the uninsured or underinsured motorist provisions of an automobile liability insurance policy to a period of less than three years from the date of accident, provided, in the case of an underinsured motorist claim the insured may toll any applicable limitation period (A) by notifying such insurer prior to the expiration of the applicable limitation period, in writing, of any claim which the insured may have for underinsured motorist benefits and (B) by commencing suit or demanding arbitration under the terms of the policy not more than one hundred eighty days from the date of exhaustion of the limits of liability under all automobile bodily injury liability bonds or automobile insurance policies applicable at the time of the accident by settlements or final judgments after any appeals.
The Presiding Judge for the Civil Docket of this Judicial District referred these issues from the regular civil docket to the undersigned, to be tried on the Complex Litigation Docket.
On February 9, 2000, the plaintiff Susan Holick was operating a vehicle owned by her mother, Marie Palladino, and insured under an insurance policy issued by the defendant. The plaintiff Thomas Sabol was a passenger in the vehicle. This vehicle, while being operated by Holick, was involved in a collision with a vehicle operated by Shawna Mylen. As a result of the collision, the plaintiffs instituted an action against Mylen.
On November 6, 2002, the plaintiffs' attorney, Patrick Zailckas, sent a letter memorandum to Vincent Caggiano, a "Senior Account Agent" for the defendant, advising the defendant of the plaintiffs' intent "to pursue a claim for underinsured motorist benefits" under the insurance policy issued by the defendant covering Palladino's vehicle. Subsequently, the plaintiffs settled their claims against Mylen. In a letter dated December 9, 2003, Mylen's attorney forwarded the settlement checks to Attorney Zailckas and instructed him to hold the checks in escrow pending his receipt of the withdrawal of the lawsuit against Mylen. (Exhibit F.)
Although the defendant contends that this letter of intent (Exhibit B) was neither mailed nor received, the court finds that the evidence established both mailing and receipt. Additionally, although the defendant offered no evidence on this issue, the defendant also claims that Caggiano was not an agent of Allstate authorized to receive the letter of intent on behalf of the defendant. On this issue, the court further finds that the evidence established that Caggiano had authority to receive the letter of intent on behalf of the defendant. For example, the evidence indicates that Caggiano confirmed that Palladino's vehicle was insured by the defendant and made this confirmation on Allstate letterhead as the senior "Account Agent-Allstate." (Exhibit C.)
On December 15, 2003, the withdrawal of action was executed and the settlement checks were deposited by Attorney Zailckas. The withdrawal of action was filed on December 18, 2003.
Attorney Zailckas gave Holick her part of the settlement proceeds through a check drawn from his client's fund account. This check cleared Zailckas' client's fund account on December 18, 2003. The present action was instituted against Allstate on June 14, 2004.
DISCUSSION
The insurance policy at issue provides that "[a]ny legal action against Allstate must be brought within three years from the date of the accident." Based on this provision, the defendant argues that it is entitled to judgment because the plaintiffs' accident with Mylen occurred on February 9, 2000, and the present action was not instituted until June 14, 2004, more than three years later. In response to this argument, the plaintiffs claim that this three-year limitation provision of the policy was tolled under the provisions of General Statutes § 38a-336(g)(1). The defendant, on the other hand, contends that the plaintiffs also failed to comply with the provisions of General Statutes § 38a-336(g)(1). The court agrees with the defendant.
General Statutes § 38a-336(g)(1) provides that no insurance company doing business in this state may limit the time within which suit may be brought against it for uninsured or underinsured insurance benefits "to a period of less than three years from the date of the accident," except that in the case of an underinsured motorist claim, the insured may toll the applicable limitation period. See n. 1. The insured may toll this period by (1) notifying the insurer in writing of the claim for underinsured motorist benefits prior to the expiration of the applicable limitation period and (2) commencing suit not more than one hundred eighty days from "the date of exhaustion of the limits of liability under . . . [the negligent party's] automobile insurance policies applicable at the time of the accident by settlement . . ." See n. 1.
The facts indicate that the plaintiffs advised the defendant in writing of their claim for underinsured motorist benefits within the three-year limitation period of the policy. This notification was accomplished by Attorney Zalickas' November 6, 2002 letter memorandum sent to Caggiano. This letter was sent within three years of the date of the accident that occurred on February 9, 2000. The plaintiffs, however, failed to institute suit within one hundred eighty days from "the date of exhaustion." The court finds that the date of exhaustion was December 15, 2003, the date on which Attorney Zalickas received and deposited the settlement checks. Scalise v. American Employers Ins. Co., 67 Conn.App. 753, 789 A.2d 1066 (2002). This action was not instituted until June 14, 2004, more than one hundred and eighty days later. Because suit was not instituted within one hundred and eighty days after exhaustion, the plaintiffs have not complied with and cannot take advantage of the tolling provisions of General Statutes § 38a-336(g)(1). Consequently, the plaintiffs' underinsured motorist action against the defendant is time barred under the terms of the policy.
The plaintiffs make two arguments to avoid this result. They first argue that the date of exhaustion is December 18, 2003, which is the date on which the settlement checks received by Holick cleared Attorney Zalickas' clients' fund account. The plaintiffs concede that such a finding would conflict with Scalise v. American Employers Ins. Co., supra 67 Conn.App. 753, which held that the date of exhaustion is the date on which the settlement checks were received for deposit. The plaintiffs encourage the court to adopt Judge Flynn's dissenting opinion in that case. This court agrees with the holding reached in the Scalise decision, but in any event, as a matter of law, the court would be precluded from accepting the plaintiffs' invitation to follow the dissenting opinion.
The court notes that even under Judge Flynn's reasoning, the "date of exhaustion" would be the date the settlement checks cleared for deposit into Attorney Zailckas' client's find account, and not the later date that the disbursement check given to Holick by Zailckas cleared his client's fund account. See Scalise v. American Employers Ins. Co., supra 67 Conn.App. 753 (Flynn, J., dissenting).
The plaintiffs' second argument is that because the defendant's insurance policy does not itself provide for the tolling of the policy's three-year limitation provision as allowed by General Statutes § 38a-336(g)(1), the policy's three-year limitation provision should be deemed void and the six-year limitation period of General Statutes 52-576(a) should control. The plaintiffs do not cite any persuasive authority to support this argument and the court rejects it. As previously explained, General Statutes § 38a-336(g)(1) provides that the insured themselves "may toll any applicable limitation period" by satisfying the conditions of the statute. Consequently, the plaintiffs could have availed themselves of the statute in order to toll the applicable three-year limitation period imposed by the policy, but they failed to do so. See Tracy v. Allstate Ins. Co., 76 Conn.App. 329 (2003) (the tolling provisions of § 38a-336(g)(1) apply to insurance policies containing a limitation period of three years or more).
General Statutes § 52-576(a) provides the following:
No action for an account, or on any simple or implied contract, or on any contract in writing, shall be brought but within six years after the right of action accrues, except as provided in subsection (b) of this section.
The plaintiffs rely on cases rejecting the limitation provision of an insurance policy and applying the six-year limitation period of General Statutes § 52-576(a) when the policy imposes a time period for instituting suit that is less than the three-year time period provided by General Statutes § 38a-336(g)(1). See, e.g., Gohel v. Allstate Ins. Co., 61 Conn.App. 806, 768 A.2d 950 (2001). These cases are distinguishable from the facts presented here because the defendant's policy provides for a three-year limitation period consistent with § 38a-336(g)(1). The court finds the holding of Tracy v. Allstate Ins. Co., 76 Conn.App. 329, 819 A.2d 859 (2003) to be more applicable and controlling. In Tracy, the Appellate Court rejected an argument that the six-year limitation period of § 52-576(a) should apply, rather than the tolling provision of § 38a-336(g)(1), when the policy itself failed to allow for tolling and its language was allegedly ambiguous.
CONCLUSION
Therefore, the court finds that the defendant, Allstate Insurance Company, has sustained its burden of proving its first and second special defenses. Accordingly, judgment enters in favor of the defendant Allstate Insurance Company and against the plaintiffs Susan E. Holick and Thomas Sabol on the complaint.
So ordered this 17th day of July 2009.