Opinion
No. CV01 38 54 39 S
September 19, 2003
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
I. Facts of the Case
This is a declaratory judgment action brought by the plaintiff, Holyoke Mutual Insurance Company [hereinafter Holyoke] to determine a question of insurance coverage. Holyoke issued a homeowner's policy to the John and Josephine Schlechtweg, parents of the defendant John Schlechtweg III [hereinafter "the insured"]. Through a motion for summary judgment Holyoke seeks a declaration that it should not have to defend or indemnify the insured in a pending civil action, Christopher Barrow et al. v. Lenin Flores et al., (Superior Court for the Judicial District of Fairfield at Bridgeport) [hereafter "underlying action"].
The pertinent facts, as alleged in the instant complaint, are as follows: The insured resides in Fairfield, Connecticut with his parents. Holyoke issued a homeowner's insurance policy [hereafter "Holyoke policy"] for the period September 3, 1998 to September 23, 1999.
The underlying action arose during a party held on May 1, 1999 at the home of Raymond and Linda Quinlan. The plaintiffs Christopher Barlow and William Cassidy [hereinafter Barlow and Cassidy] allege that Raymond Quinlan, Linda Quinlan, their daughter Mary Ellen Quinlan and/or Megan Gabrien [hereinafter "the hosts"] organized the party, charged admission and served alcohol. At about 9:30 p.m. both plaintiffs were allegedly stabbed by the defendant Lenin Flores [hereinafter Flores].
Two counts in the underlying action are directed to the insured. In the fourth count the plaintiff Barlow alleges that the hosts hired the insured "to provide entertainment and security for said party." In paragraph 7 of that same count Barlow further alleges that he was injured due to the negligence and carelessness of the insured in that the insured: CT Page 10880-j
(a) failed to properly protect the plaintiff . . .
(b) failed to properly supervise the guests at the party . . .
(c) failed to provide adequate security for the guests at said party . . .
(d) failed to provide adequate police and/or security officers for said party . . .
Paragraph (f) repeats this allegation while additionally asserting that the insured should have known that there would be an altercation.
(e) failed to eject the defendant, Lenin Flores, from said party . . .
Paragraphs (g), (h) and (j) repeat the allegation that the insured failed to eject Flores from the party, further alleging that the insured should have known that Flows would engage in a violent altercation and should have known that Flores was intoxicated. The plaintiff further alleges that the insured owed the plaintiff a duty of due care.
(i) failed to prevent the service of alcoholic beverages . . .
(k) failed to provide properly trained security personnel . . .
(l) failed to properly supervise the defendant, Lenin Flores.
In count twelve Cassidy repeats the allegations of Count Four. Barlow and Cassidy also allege that the hosts "hired the defendant, Lenin Flores, to provide security for said party."
Counts five and twelve of the underlying complaint are directed to the insured's codefendants, the hosts. Nevertheless Barlow and Cassidy repeat the allegations of count four, paragraph 7.
Counts seven, eight, fifteen and sixteen, paragraph four.
In the instant declaratory judgment action, Holyoke has presented two arguments for denial of coverage. They address the second basis in the present ease. Section II, paragraph 1(b) of the Holyoke policy provides that coverage does not apply to acts arising out of or in "connection with a `business' engaged in by an `insured.' This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed or implied to be provides because of the nature of `business.' `Business' includes trade, profession or occupation." This exclusion is the basis for the instant motion for summary judgment.
In its motion for declaratory judgment Holyoke further alleged that the events caused by an "occurrence." The Holyoke policy defines occurrence as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results during the policy period in (a) Bodily injury; or (b) Property damage." The motion for summary judgment does not address this exclusion.
II. Applicable Law
A. Summary Judgment and Declaratory Judgment Actions
Connecticut Practice Book § 17-49 provides that summary judgment shall he 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. Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact, a party opposing summary judgment must substantiate its adverse claim by showing that there is a CT Page 10880-k genuine issue of material fact, together with the evidence disclosing the existence of such an issue. Connecticut Practice Book §§ 17-45, 17-46; Burns v. Hartford Hospital, 192 Conn. 451, 455, 472 A.2d 1257 (1984). In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. Strada v. Connecticut Newspapers, Inc., 193 Conn. 313, 317, 477 A.2d 1005 (1984). Summary judgment is "designed to eliminate the delay and expense of litigating an issue where there is no real issue to be tried." Wilson v. City of New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989).
Declaratory judgments are governed by Connecticut General Statutes § 52-29 and Connecticut Practice Book §§ 17-54, 17-55. Trial courts are afforded wide discretion in rendering declaratory judgment. Leoni v. Water Pollution Control Authority, 21 Conn. App. 77, 83, 571 A.2d 153 (1990). A declaratory judgment action, remedial in nature, should be liberally construed. Horton v. Meskill, 172 Conn. 615, 627, 376 A.2d 359 (1977); Connecticut Savings Bank v. First National Bank, 133 Conn. 403, 409, 51 A.2d 907 (1947). It is an appropriate method to determine whether an insurer has a duty to defend and indemnify its insured. Saint Paul Fire Marine Ins. Co. v. Shernow, 22 Conn. App. 377, 381, 577 A.2d 1093 (1990).
Connecticut General Statutes 52-29 provides:
(a) The Superior Court in any action or proceeding may declare rights and other legal relations on request for such a declaration, whether or not further relief is or could be claimed.
The declaration shall have the force of a final judgment.
Connecticut Practice Book Sections 17-54 provides:
The judicial authority will, in cases not herein excepted, render CT Page 10880-p declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity; or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future.
Connecticut Practice Section 17-55 provides:
A declaratory judgment action may be maintained if all of the following conditions have been met:
(1) The party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights or other jural relations;
(2) There is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties; and
(3) In the event that there is another form of proceeding that can provide the party seeking the declaratory judgment immediate redress, the court is of the opinion that such party should be allowed to proceed with the claim for declaratory judgment despite the existence of such alternate procedure.
A court can address the merits of a declaratory judgment action through a motion for summary judgment. Community Action for Greater Middlesex County, Inc. v. American Alliance Insurance Co., 254 Conn. 387, 397-98, 757 A.2d 1074 (2000). An insurer does not owe a duty to defend its insured simply because the insured has been sued. When an insurer argues that an insurance policy explicitly excludes from its coverage conduct alleged in an action against an insured, either party may file a motion for summary judgment to determine whether the insurer has a duty to defend the insured against the allegations of that complaint. Community Action, 254 Conn. at 395, 397; Conway v. Travelers Casualty, Superior Court Judicial District of Hartford, Docket No. 0588119 (Dec. 15, 2000, Rubinow, J.).
B. The Insurer's Duty to Defend
"[T]he principles governing our determination of this issue are well settled. [A]n insurer's duty to defend, being much broader in scope and application than its duty to indemnify, is determined by reference to the allegations contained in the [underlying] complaint . . . The 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 CT Page 10880-l 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." (Internal quotation marks omitted.) Board of Education v. St. Paul Fire Marine Ins. Co., 261 Conn. 37, 40-41, 801 A.2d 752 (2002). "Indeed, [i]f an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured . . . On the other hand, if the complaint alleges a liability which the policy does not cover, the insurer is not required to defend." (Citations omitted; internal quotation marks omitted.) Community Action, 254 Conn. at 399.
This court's discretion is limited. "The question of whether an insurer has a duty to defend its insured . . . is to be determined by comparing the allegations of the . . . complaint [in the underlying action] with the terms of the insurance policy." Community Action at 395. "Under Connecticut case law, it is the claim which determines the insurer's duty to defend; and it is irrelevant that the insurer may get information from the insured, or from any one else, which indicates, or even demonstrates, that the injury is not in fact `covered.'" (Internal quotations and citations omitted.) Exel Logistics, Inc. v. Maryland Casualty Co., 40 Conn. App. 415, 419, 671 A.2d 408 (1996).
When an insurer moves to determine the scope of its duty to defend an inured, "[t]he burden of proving an exception to a risk is on the insurer." O'Brien v. John Hancock Mutual Life Ins. Co., 143 Conn. 25, 29, 119 A.2d 329 (1955). "[T]he insurer has the burden of demonstrating that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and further, that the allegations in toto, are subject to no other interpretation." R.E.O., Inc. v. The Travelers Companies, Superior Court, judicial district of New Haven at New Haven, Docket No. 372522 (May 20, 1998, Silbert, J.), citing, New York v. Amro Realty Corp., 936 F.2d 1420, 1427 (2d Cir. 1991). See also Conway v. Travelers Casualty. The insurer must establish "With a high degree of certainty" that the exclusionary clause applies. Kelly v. Figueriredo, 223 Conn. 31, 37, 610 A.2d 1296 (1992). "If an allegation of the complaint falls even possibly within the coverage, then the insurance company must defend the insured." (Internal quotation marks and citations omitted; emphasis added.) Moore v. Continental Casualty Co., 252 Conn. 405, 409, 746 A.2d 1252 (2000); see also Community Action, 254 Conn. at 397-98; Imperial Casualty Indemnity Co, 246 Conn. 313, 324, 714 A.2d 1230 (1998). "On the other hand, if the [underlying] complaint alleges a liability which the policy does not cover, the insurer is not required to defend." (Internal quotation marks and citations omitted.) CT Page 10880-m Community Action, 254 Conn. at 399.
C. Exclusion in the Instant Policy
Turning to the insurance policy in the present action, Holyoke relies upon the argument that the insured was engaged in a business as that phrase is defined by his policy.
"[P]olicy words must be accorded their ordinary and natural meaning . . . [A]ny ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy . . . This rule of construction may not be applied, however, unless the policy terms are indeed ambiguous." (Citations omitted.) Hansen v. Ohio Casualty Ins. Co., 239 Conn. 537, 542-43, 687 A.2d 1262 (1996). "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 . . . It is axiomatic that 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 . . . The policy words must be accorded their natural and ordinary meaning . . . The fact that the parties advocate different meanings of the [insurance policy] does not necessitate a conclusion that the language is ambiguous . . . Moreover, [t]he provisions of the policy issued by the defendant cannot be construed in a vacuum . . . They should be construed from the perspective of a reasonable layperson in the position of the purchaser of the policy." (Internal quotation marks omitted.) Community Action, 254 Conn. at 399-400.
"[C]onstruction of a contract of insurance presents a question of law . . ." for the court. Travelers Insurance Co. v. Namerow, 257 Conn. 812, 827, 778 A.2d 168 (2001).
In the Holyoke policy there is an exclusion for bodily injury that arises out of business pursuits. The initial question is the meaning of the phrase business. "The term business pursuits encompassed two elements, continuity and profit motive. As to the first, there must be a customary engagement or a stated occupation; as to the latter, there must be shown to be such activity as a means of livelihood; gainful employment; means of earning a living; procuring subsistence or profit; commercial transactions or engagements . . . [F]or purposes of the business pursuits exclusion, the business engaged in by [the insured] need not necessarily be limited to his sole occupation or employment . . ." (Internal quotation marks and citations omitted) Pacific Indemnity, Ins. Co. v. Aetna Casualty Surety Co., 240 Conn. 26, 30-31, 688 A.2d 319 (1997). This business exclusion precludes coverage for an entire class of risks arising out of specified conduct. The intent of the insured is irrelevant. 16 Holmes' Appleman on Insurance (2d Ed. 2001) § 1161, p. 80. Part time or supplemental income qualifies as a CT Page 10880-n business. Pacific Indemnity Ins. Co., 240 Conn. at 33. "The determination of whether a particular activity constitutes a business pursuit is to be made by a flexible fact-specific inquiry." Pacific Indemnity Ins. Co., 240 Conn, at 33. In the present case, the insured's disk jockey enterprise constituted a business.
The next question is whether the injuries alleged in the underlying action arise from the insured's business pursuits." `[I]t is generally understood that for liability for an accident or an injury to be said to "arise out of" [an occurrence or offense], 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" [that occurrence or offense], in order to meet the requirement that there be a causal relationship between the accident or injury and [that occurrence or offense].' Hogle v. Hogle, 167 Conn. 572, 577, 356 A.2d 172 (1975), and cases cited therein. To `arise' out of means `to originate from a specified source.' Webster's Third New International Dictionary (1961); see also Black's Law Dictionary (7th Ed. 1999) (defining `arise' as '1. [t]o originate; to stem [from] . . . 2. [t]o result [from]'). `The phrase arising out of is usually interpreted as indicat[ing] a causal connection.' (Internal quotations omitted.) The exclusion `precludes coverage for an entire class of risks arising out of specified conduct, and does not turn on the intent of the insured.'" Covenant Insurance Co. v. Sloat, Superior Court Judicial District of Fairfield at Bridgeport, No. 385786 (May 23, 2003, Levin, J.) ( 34 Conn.L.Rptr. 687), quoting Essex Ins. Co. v. Yi, 795 F. Sup. 319, 324 n. 2 (N.D.Cal. 1992).
Turning to the case at hand, the allegations of the underlying action are controlling. Missionaries of the Co. of Mary, Inc. v. Aetna Casualty Surety Co., 155 Conn. 104, 110, 230 A.2d 21 (1967). "[T]he interpretation of pleadings is always a question of law for the court . . . Cahill v. Board of Education, 198 Conn. 229, 236, 502 A.2d 410 (1985). The court must view these pleadings broadly and realistically, rather than narrowly and technically." Beaudoin v. Town Oil Co., 207 Conn. 575, 587-88, 542 A.2d 1124 (1988). Construing the allegations of the underlying action, Barrows and Cassidy allege that the insured was engaged in a business at the time of the incident. They contend that the hosts hired the insured to provide entertainment and security for their party. The insured has not presented any evidence to refute these allegations. There is no question that the insured worked as a disk jockey on a continuous basis. The activity in the underlying action occurred at a party for which the insured, asked to provide those services, at a minimum supplied disk jockey equipment. He actually played a few songs. The specific terms of his arrangement with the hosts are not controlling. The allegations of the underlying action link his presence CT Page 10880-o at the party with the ultimate injuries sustained. The court finds that the alleged conduct in the underlying action, even if not clearly intentional, occurred in connection with a business engaged in by the plaintiff.
The insured did not sustain his burden of providing an evidentiary foundation to demonstrate that a genuine issue of material fact existed. Therefore the motion for summary judgment is granted.
DEWEY, J.