Opinion
No. CV 09 6002555 S
April 9, 2010
MEMORANDUM OF DECISION RE DEFENDANTS' MATTERS TO DISMISS (102.00, 105.00)
On November 23, 2009, the plaintiff, JC Corporation (JC Corp.), filed a two-count complaint against the defendants, Connecticut First Insurance Group (First Ins.) and Continental Agency of Connecticut (Continental). This action arises out of a fire allegedly caused by the work of Interstate Fire Safety Co., Inc. and Interstate Fire Safety Cleaning Co., Inc. (collectively Interstate), on the plaintiff's premises. At the time of the incident, Interstate was insured by Essex Insurance Company (Essex), and First Ins. was the insurance agent hired by Interstate to procure this insurance from Essex. Continental, as the managing general agent or broker for Essex, calculated the premiums.
JC Corp.'s complaint alleges that it suffered the fire damage at its premises because of Interstate's negligence and thereafter sued Interstate. It is further alleged that Essex disclaimed coverage and commenced a declaratory judgment action in federal court seeking a judgment that Essex owed no duty to defend and indemnify Interstate against the claims made by JC Corp. Finally, it is alleged that First Ins. and Continental were negligent in securing proper insurance coverage for Interstate, and JC Corp "has been damaged" by this negligence. The complaint also alleges breach of contract.
On December 10, 2009, the defendant First Ins. filed a motion to dismiss the plaintiff's complaint, and a memorandum in support. On December 28, 2009, the defendant Continental filed a motion to dismiss the plaintiff's complaint, and a memorandum in support. The plaintiff filed an opposition to both motions to dismiss on January 20, 2010, in response to which Continental filed a reply on January 21, 2010, and First Ins. filed a reply on January 22, 2010. The matter was heard at short calendar on January 25, 2010.
DISCUSSION
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213, 982 A.2d 1053 (2009). According to Practice Book § 10-31(a), "a motion to dismiss shall be used to assert (1) lack of jurisdiction over the subject matter, (2) lack of jurisdiction over the person . . ." The motion, however, "is not designed to test the legal sufficiency of a complaint in terms of whether it states a cause of action." Pratt v. Old Saybrook, 225 Conn. 177, 185, 621 A.2d 1322 (1993).
The defendant First Ins. argues that the court lacks subject matter jurisdiction of this case, as it does not present a justiciable controversy, and the defendant Continental argues similarly that the plaintiff's claims are not ripe for adjudication and, therefore, do not present a justiciable controversy. Specifically, both First Ins. and Continental argue that the court lacks subject matter jurisdiction because this case is not ripe for adjudication, and because it is presently a controversy that is hypothetical in nature, a hypothetical injury or a claim contingent upon some event that has not and may never transpire.
The plaintiff responds that both motions to dismiss must be denied in accordance with Connecticut case law that provides that once an insurer declines coverage, a claim against a broker or agent is ripe and justiciable, and that the court, accordingly, has subject matter jurisdiction over the plaintiff's claim. Specifically, the plaintiff argues that Essex's refusal to cover the losses caused by Interstate to the plaintiff gives rise to a justiciable claim against defendants First Ins. and Continental. Further, the plaintiff's claims are ripe regardless of the pending coverage and negligence actions, and the additional prongs of the justiciability test are also satisfied.
The currently pending companion case is JC Corp. v. Interstate Fire Safety Equipment Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 07 5004458, and the pending declaratory judgment action is Essex Ins. Co. v. Interstate Fire Safety Equipment Co., Civil Action No. 3:07 CV 00919 CFD, filed in the United States District Court for the District of Connecticut, with a complaint dated June 6, 2007.
The defendant Continental replies that Essex has, in fact, not denied coverage, but rather that it is defending its insured under a reservation of rights and has commenced a declaratory judgment action seeking judicial determination of the scope of coverage under the policy. Continental argues that the issue of Essex's coverage obligations under the policy must be decided prior to the issues of liability in this case and the very viability of this case is contingent upon the outcome of the declaratory judgment case. The defendant First Ins. adopts the arguments raised by Continental, concluding that unless and until the plaintiff obtains a judgment against Interstate in the companion case, the present case involves only a hypothetical determination. Specifically, whether there is coverage and whether Interstate is liable to the plaintiff, are questions that must be resolved before it can be determined that the conduct of one or more of the defendants in the present case was negligent or constituted a breach of any contractual duty owed to the plaintiff, in addition to whether such conduct caused damages to the plaintiff.
"The principles that underlie justiciability are well established. Justiciability requires (1) that there be an actual controversy between or among the parties to the dispute . . . (2) that the interests of the parties be adverse . . . (3) that the matter in controversy be capable of being adjudicated by judicial power . . . and (4) that the determination of the controversy will result in practical relief to the complainant." (Internal quotation marks omitted.) Costantino v. Skolnick, 294 Conn. 719, 744 (2010).
"An issue regarding justiciability, which must be resolved as a threshold matter because it implicates this court's subject matter jurisdiction . . . raises a question of law." (Citation omitted; internal quotation marks omitted.) Esposito v. Specyalski, 268 Conn. 336, 347, 844 A.2d 211 (2004). "Justiciability and ripeness have been referred to by our Appellate Court as related doctrines . . . Although this court has not defined expressly the precise relationship between ripeness and justiciability, it is well settled in the federal courts that ripeness is one of several justiciability doctrines, including standing and mootness." (Citations omitted; internal quotation marks omitted.) Id., 346. "In light of the rationale of the ripeness requirement, to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements . . . we must be satisfied that the case before the court does not present a hypothetical injury or a claim contingent upon some event that has not and indeed may never transpire." (Citation omitted; internal quotation marks omitted.) Id., 346.
In Tri-State Contracting, LLC v. McGuire, Inc., Superior Court, complex litigation docket at Tolland, Docket No. X07 CV03 0080812 (September 10, 2003, Sferrazza, J.) ( 35 Conn. L. Rptr. 453) cited by Continental, the insurer commenced a declaratory judgment action against Tri-State, to determine whether coverage existed under a policy issued by the insurer to Tri-State, for a work-related claim by one of the Tri-State's employees. Subsequently, the Tri-State filed the above-cited action against the defendant, claiming damages "to the extent [the insurer] succeeds in its declaratory judgment action." Id., 453. Dismissing the case, the court held "there is no present controversy between Tri-State and [the defendant]. No controversy will arise between these two parties until or unless the declaratory judgment action is resolved in the favor of [the insurer]. This may never happen. As there is no present controversy between Tri-State and [the defendant], there is no issue for the court to adjudicate, and there is no practical relief affordable to the plaintiff. Accordingly, the court lacks jurisdiction to hear this claim for want of ripeness." Id., 454.
This declaratory judgment action is Patrons Mutual Ins. Co. of Connecticut v. Tri-State Contracting, LLC, Superior Court, judicial district of Tolland, Docket No. CV 03 0081221.
The allegations in this case are that the plaintiff sued Interstate, whose work allegedly caused the fire on the plaintiff's premises. Essex then filed a declaratory judgment action, stating that, should Interstate be held liable, Essex will not cover the losses, as the insurance contract did not cover the damages alleged.
The declaratory judgment complaint states in relevant part: "Pursuant to the language of the policy, Essex owes no duty to defend or any duty to indemnify in connection with the activities of the insured with respect to the cutting and/or trimming of the duct work because it does not fall within the scope of the business description and/or classification of risk afforded coverage." Exhibit A to Millsom Affidavit filed with Reply Memorandum of Continental.
The present case, in fact, is similar to Tri-State Contracting, LLC v. McGuire, Inc., supra, 35 Conn. L. Rptr. 453, because the insurance company had filed a declaratory judgment action just as in the present case, Essex has filed a declaratory judgment action against Interstate. This declaratory judgment action is currently still pending, just as the declaratory judgment action was still pending in Tri-State. However, in Tri-State the plaintiff alleged his recovery was contingent on the outcome of the declaratory judgment action.
In the present case JC Corp. has alleged it has already been damaged (see complaint, ¶ 41) and this court, when considering a motion to dismiss, must accept the allegations of a complaint at face value and consider them in the light most favorable to the plaintiff. Cogswell v. American Transit Ins. Co., 282 Conn. 505, 515, 923, A.2d 638 (2007). Thus the allegations in the two complaints are significantly different.
In addition, Essex has effectively denied coverage to Interstate by its allegations in its declaratory judgment complaint, although apparently it is presently providing a defense. See n. 3 supra. This denial of coverage was a significant factor in several Superior Court cases cited by the plaintiff which distinguish the holding in Tri-State. See Estate of Ridgaway v. Cowles Connell, Superior Court, judicial district of Middlesex, complex litigation docket, X04 CV03 0103516 (May 21, 2004, Quinn, J.); New England Oil Co., Inc. v. Invatech Assoc. Co., Inc., Superior Court, judicial district of Stamford-Norwalk, CV 04 0199586 (March 22, 2005, Dooley, J.); Balocca v. Guardian Life Ins., Co. Of America, Superior Court, judicial district of Waterbury, X10UWY CV05 4010142, complex litigation docket, (August 4, 2006 Munro, J.); Cambridge Mutual Fire Ins. v. Bemis, Superior Court, judicial district of New London, CV07 4007914 (April 30, 2008, Peck, J.). While it is not entirely clear in Tri-State whether coverage was denied by the allegations of the declaratory judgment action the significant difference between Tri-State and this case is, as noted, the allegation by JC Corp. that it has suffered present damage as distinct from hypothetical injury. See Estate of Ridgaway, supra ("the real crux of the matter"). Most of the other Superior Court cases cited above make the same distinction.
CONCLUSION
The court determines that the allegations in JC Corp.'s complaint are sufficient to establish the existence of a real dispute with the defendants. Furthermore, Essex has formally alleged in a judicial forum that there is no insurance coverage for JC Corp.'s claim against Interstate. It may be that the outcome of the federal declaratory judgment action or the outcome of the case against Interstate in this court will render the allegations in this case moot, but for the time being these allegations make the interests of the parties in this case adverse and create a matter in controversy capable of being adjudicated in this court. Therefore, the court finds this to be a justiciable matter, and the defendants' motions to dismiss are denied.