Opinion
No. CV01 038 97 72 S
July 1, 2004
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#111)
This action arises out of an automobile collision that occurred on June 9, 1996, on Interstate 95 in Westport, Connecticut. At the time of the accident, Juan B. Mateo, an employee of Manhattan Valley Paralegal Service, Inc. (Manhattan), was driving a vehicle owned by his employer, and Christopher Rysz and Alex Kalajian were driving their own vehicles. As a result of Mateo's vehicle colliding with the rear of Rysz's car, the latter struck the rear of Alex Kalajian's car.
On October 30, 2001, Alex Kalajian filed a five-count complaint against Government Employees Insurance Company (GEICO), the insurer of his family policy, and served the Connecticut insurance commissioner with the summons and complaint. On November 1, 2001, GEICO was served with the summons and complaint. In count one, Alex Kalajian alleges that Mateo's negligent operation of his vehicle was the cause of the injuries and damages that he sustained as a result of the collision. He seeks monetary damages for the injuries claimed to have been sustained as a result of the accident. The same claim is made in counts two through five by the following passengers in the vehicle operated by Alex Kalajian: Vartui Kalajian; a minor daughter, Liana Kalajian; a minor son, Armen Kalajian; and Krikor Kechichian respectively. Alex Kalajian along with the four passengers, who are all residents of New York, seek underinsured motorist benefits under his GEICO policy for each count in accordance with the uninsured motorist provisions of General Statutes § 38a-336. At the time of the accident, Alex Kalajian had an insurance policy though GEICO that gave him underinsurance limits of $100,000 per person and $300,000 per occurrence liability limits.
At the time of the accident, Manhattan and its employees were insured by Allstate. The policy had liability coverage of $25,000 per person and $50,000 per occurrence. On April 20, 2001, the suit filed against Mateo and Manhattan was settled and general releases were provided for Mateo and Manhattan.
General Statutes § 38a-336 provides in relevant part:
(a)(1) Each automobile liability insurance policy shall provide . . . underinsured motorist coverage . . . with limits for bodily injury . . . for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of . . . underinsured motor vehicles . . .
(b) An insurance company shall be obligated to make payment to its insured up to the limits of the policy's . . . underinsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured's . . . underinsured motorist coverage, exceed the limits of the insured's . . . underinsured motorist coverage.
GEICO moved for summary judgment asserting that New York law applies to Alex Kalajian's insurance policy, and that Alex Kalajian failed to satisfy the notice requirement for Supplemental Uninsured Motorist (SUM) claims as provided in the policy. Alex Kalajian filed a memorandum of law in opposition of GEICO's, accompanied by a letter from his attorney. Alex Kalajian argues therein that even though New York law applies, questions of material fact exist as to when he knew that Mateo and Manhattan were underinsured and whether it was reasonable for him to have provided notice on the date he knew that they were underinsured to GEICO.
"[The] standards governing . . . a trial court's decision to grant a motion for summary judgment are well settled. Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Citations omitted; internal quotation marks omitted.) Lombardo's Ravioli Kitchen, Inc. v. Ryan, 268 Conn. 222, 237, 842 A.2d 1089 (2004).
In the motion for summary judgment, GEICO alleges that Alex Kalajian did not provide timely notice of his claim for underinsurance benefits as required within the uninsured motorist section of the policy. The GEICO policy provides in relevant part: "Notice and Proof of Claim: As soon as practicable, the insured or other person making claim shall give us written notice of claims under this SUM coverage." (Emphasis in original.) GEICO further claims that Alex Kalajian gave his first notice of his claim five years after the accident and three years after he had actual knowledge of Manhattan's policy limits and Mateo's lack of insurance. GEICO maintains that there is no genuine issue of material fact in dispute and based on applicable principles of New York law, it is entitled to judgment as a matter of law because Alex Kalajian failed to comply with the condition precedent of the policy which requires written notice to the insurer "as soon as practicable."
As a threshold matter, this court must decide whether Connecticut or New York law applies to the insurance policy. Under Connecticut law, although "an insured's untimely filing of notice of a claim with the insurer may constitute a failure to comply with a condition under the insurance contract, such a failure does not automatically discharge the insurer from liability on its insurance contract." (Internal quotation marks omitted.) SNET v. Zurich American Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 01 0456771 (May 15, 2003, Robinson-Thomas, J.). "[T]he failure of an insured to meet a contractual time limitation with respect to a notice of claim may be excused if the insurer suffered no material prejudice from the delay . . . [and] prejudice to the insurer will be presumed." (Internal quotation marks omitted.) Hotkowski v. Aetna Life Casualty Co., 224 Conn. 145, 148-49, 617 A.2d 451 (1992).
Under Connecticut law the court should inquire to determine whether the party who received the untimely notice was materially prejudiced by the delay caused by the notice "[A] proper balance between the interests of the insurer and the insured requires a factual inquiry into whether, in the circumstances of a particular case, an insurer has been prejudiced by its insured's delay in giving notice of an event triggering insurance coverage. If it can be shown that the insurer suffered no material prejudice from the delay, the nonoccurrence of the condition of timely notice may be excused because it is not, in Restatement terms, a material part of the agreed exchange. Literal enforcement of notice provisions when there is no prejudice is no more appropriate than literal enforcement of liquidated damages clauses when there are no damages." (Internal quotation marks omitted.) Aetna Casualty Surety Co. v. Murphy, 206 Conn. 409, 417-18, 538 A.2d 219 (1988). "[T]he existence or nonexistence of prejudice from delayed notice should be determined on a factual basis, [with] the burden of establishing lack of prejudice . . . borne by the insured." Aetna Casualty Surety Co. v. Murphy, supra, 419.
Under New York law, "[a]n insured must give notice of a SUM claim within a reasonable period of time after the insured knew, or should have known, there would be the need for such a claim." Murphy v. New York Central Mutual Fire Ins. Co., 307 App.Div.2d 689, 763 N.Y.S.2d 177, 178 (2003). "Where an insurance policy requires an insured to provide notice of an accident or loss as soon as practicable, such notice must be provided within a reasonable time in view of all the facts and circumstances of the case . . . Providing timely notice to an insurer is a condition precedent to recovery . . . and the failure to satisfy the notice requirement, absent a valid excuse, vitiates the policy." (Citations omitted.) Maxi-Aids, Inc. v. General Accident Ins. Co. of America, 303 App.Div.2d 469, 756 N.Y.S.2d 431, 432 (2003). "Where a protracted delay in giving notice has occurred, the burden rests upon the insured to tender sufficient admissible evidence to raise a question of fact as to the reasonableness of the delay." (Internal quotation marks omitted.) Murphy v. New York Century Mutual Fire Ins. Co., supra, 179.
Because a conflict of law exists between Connecticut and New York law, the court must determine which law to apply. Our "Supreme Court has ruled that, in order to decide a conflict of law issue Connecticut courts must look to the guiding principles of the Restatement (Second) of Conflicts of Law. O'Connor v. O'C'onnor, 201 Conn. 632, [ 519 A.2d 13] (1986)." Bonelli v. Giguere, Superior Court, judicial district of Hartford, Docket No. CV 02 0819257 (February 18, 2004, Hale, J.T.R.). "Connecticut's choice of law approach for contracts is the `most significant relationship' test of the Restatement (Second) [Conflict of Laws § 188 (1971)]. Reichhold Chemicals v. Hartford Accident Indemnity Co., 252 Conn. 774, 781, 750 A.2d 1051 (2000). That case states: With respect to liability insurance contracts, the starting point is § 193 of the Restatement (Second), supra, which creates a rebuttable presumption in favor of the state where the insured risk is located. In order to overcome this presumption, another state's interest must outweigh those of the state where the insured risk is located and must be sufficiently compelling to trump the § 193 presumption. Section 6(2) of the Restatement (Second), supra, provides the criteria by which that overriding interest should be evaluated . . ." (Citations omitted; internal quotation marks omitted.) American States Ins. Co. v. Allstate Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 970567571 (November 13, 2003, Wagner, J.T.R.) ( 36 Conn. L. Rptr. 58, 60).
"Being a contract for insurance, § 193 of the Restatement (Second) is also implicated. The validity of a contract of fire, surety or casualty insurance and the rights created thereby are determined by the local law of the state which the parties understood to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship under the principles in § 6 to the transaction and the parties, in which event the local law of the other state will be applied. Accordingly, the court shall consider these contacts before considering the § 6 principles." (Internal quotation marks omitted.) Crockwell v. Government Employees Ins. Co., Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 99 0090777 (October 2, 2001, Gilardi, J.).
"Section 6 [of the Restatement (Second)] is entitled Choice-of-Law Principles and reads as follows: (1) a court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law . . . (2) Where there is no such directive the factors relevant to the choice of the applicable rule of law [are set forth in section 6(a)]." (Internal quotation marks omitted.) Bonelli v. Giguere, supra, Superior Court, Docket No. CV 020819257. "Section 6(a) . . . which is applicable to all substantive areas, sets forth seven overreaching considerations in determining which state has the `most significant relationship': (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied." (Internal quotation marks omitted.) American States Ins. Co. v. Allstate Ins. Co., supra, 36 Conn. L. Rptr. 60.
"Connecticut has no statutory directive of its own on choice of law." Bonelli v. Giguere, supra, Superior Court, Docket No. CV 02 0819257.
"Subsection (2) of § 145 . . . provides: Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue. Dugan v. Mobile Medical Testing Services, Inc., . . . 265 Conn. [791], 801-02 [ 830 A.2d 752 (2003)]." (Internal quotation marks omitted.) MMG Ins. Co. v. Church, Superior Court, judicial district of New London, Docket No. 566314 (January 30, 2004, Hurley, J.T.R.).
In the present case, the policy was issued in New York and the plaintiffs listed their New York residence with the insurer. In the accident report, the plaintiffs noted that their residence is in Flushing, New York and that Kalajian possesses a New York driver's license. The policy demonstrates that the risk would be located principally in New York because of the multiple references to the New York Comprehensive Motor Vehicle Insurance Reparations Act and the New York Vehicle and Traffic Law. Carol Musial, GEICO claims examiner, stated the following in her affidavit: "At the time that policy number 76714280 was issued, [Kalajian] was residing [in] Flushing, New York and said policy covered the insured's vehicle which was also located in Flushing, New York. The policy issued to [Kalajian], and applicable to the June 9, 1996 accident, was a New York Insurance policy, which was based upon New York Insurance Laws and Regulations in effect at the time." The only contacts with Connecticut are that the accident occurred in the state, and the underlying action was brought in Connecticut. Accordingly, the court may infer that the negotiation of the contract occurred in New York, and find that the place of contracting was in New York. Furthermore, the location of the subject matter of the contract and the domicile of the plaintiffs are in New York. By applying conflict of law rules, New York law should be implemented to decide if Alex Kalajian failed to meet the notice requirement in the policy.
"In the underinsurance context, the phase `as soon as practicable' is construed to require the insured to give notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured . . . Moreover, underinsurance analyses are intensely fact specific and therefore particularly well suited for determinations of timeliness of notice on a case-by-case basis . . . Accordingly, fact-finding proceedings are required to determine whether the delay in plaintiff's ascertaining the limits of the tortfeasor's coverage was due to any lack of due diligence on his part . . ." (Citations omitted; internal quotation marks omitted.) Banks v. American Manufacturers Mutual Ins. Co., 306 App.Div.2d 120, 762 N.Y.S.2d 588, 589-90 (2003). Furthermore, the court applies an "objective standard as to what constitutes reasonable ascertainment." Matter of Metropolitan Property Casualty Ins. Co. v. Mancuso, 93 N.Y.2d 487, 495, 715 N.E.2d 107, 693 N.Y.S.2d 81, 85 (1999). Courts will [also] determine whether notice was given as soon as practicable based on circumstances and factors they consider relevant to that determination." Id.
"[The court notes that the phrase `as soon as practicable'] is the very language used by the New York Insurance Department in its standard form of endorsement . . . set forth in Regulation 35-D . . . Indeed, the phrase . . . has been commonly used in insurance policies and has a long history of judicial interpretation and application." (Citation omitted.) Matter of Metropolitan Property Casualty Ins. Co. v. Mancuso, 93 N.Y.2d 487, 494, 715 N.E.2d 107, 693 N.Y.S.2d 81, 84 (1999).
A delay of a year or more in reporting a matter to an insurer may "[prejudice] the latter's ability to defend against the underlying claim. Where . . . a policy requires that the insurer be notified of a potential claim `as soon as practicable,' failure to satisfy this condition precedent to coverage relieves the insurer of responsibility . . . Certainly the fact that the injured [parties needed medical attention] will put [a] plaintiff to the test in this respect." (Citations omitted; emphasis added; internal quotation marks omitted.) Frenchy's Bar and Grill v. United International Ins. Co., 251 App.Div.2d 177, 675 N.Y.S.2d 31, 32 (1998). "A delay of over two years is unreasonable as a matter of law . . . and shifts the burden to the insured to provide a reasonable excuse for the delay or establish due diligence in ascertaining the insurance coverage of the vehicles involved in the accident . . ." (Citations omitted.) Matter of the Arbitration Between State Farm Mutual Automobile Ins. Co. and Ibrahim Hernandez, 275 App.Div.2d 989, 713 N.Y.S.2d 618, 619 (2000). Moreover, once the "defendant [makes] a . . . prima facie case for summary judgment upon proof that [the] plaintiff's notice of claim was not given until approximately 23 months following the accident . . . the burden [shifts] to [the] plaintiff to tender sufficient admissible evidence to raise a question of fact as to the reasonableness of the delay or, put another way, to demonstrate that [the] plaintiff did not know or could not reasonably have known that the [tortfeasor] was underinsured . . ." Unwin v. New York Central Mutual Fire Ins. Co., 268 App.Div.2d 669, 700 N.Y.S.2d 580, 582 (2000).
Alex Kalajian filed suit against Manhattan and Mateo in March of 1997. He learned of the amounts of the insurance coverage available to Manhattan in August of 1998. Further, in his answers to his interrogatories, he stated that he had no knowledge of Mateo's insurance coverage, and that his attorney had spent two years investigating the matter. Given that a delay in excess of two years is unreasonable as a matter of law, he must provide a reasonable excuse or show due diligence in ascertaining Mateo's coverage. Although Alex Kalajian's attorney stated in the letter attached to his memorandum of law that he attempted to elicit a response from Mateo's counsel, any failed prior attempts to gain a response from Mateo should have put Alex Kalajian on notice as to Mateo's lack of additional insurance coverage. At a minimum, Alex Kalajian could have reasonably ascertained Mateo's insurance status prior to settlement negotiations and immediately filed a SUM claim with GEICO. In addition, it would be prejudicial to compel GEICO to consider a SUM claim in 2004 for an accident that occurred in 1999, absent a timely request to do so. Alex Kalajian has not demonstrated the existence of a disputed material fact under the substantive law of New York as to why he did not provide GEICO with timely notice of the possible claims, and therefore, GEICO's Motion for Summary Judgment is hereby granted.
RUSH, J.