Opinion
No. CV 08 5016132
May 27, 2009
MEMORANDUM OP DECISION RE MOTION FOR SUMMARY JUDGMENT (#110)
Before this court is a motion for summary judgment filed by the defendants, Connecticut Local Risk Management Agency (CIRMA), and the City of West Haven, requesting that this court grant judgment because underinsured motorist (UIM) coverage available under the insurance policy at issue is limited to $40,000. The plaintiff, David Perez, opposes the motion arguing that the amount of the underinsured coverage is at issue. For reasons more fully set forth in this decision, the court grants the defendants' motion.
FACTS
The plaintiff, who was employed as a police officer by defendant West Haven, was involved in an automobile collision with an underinsured motorist on March 7, 2007. In the present action, he alleges that he sustained serious injuries as a result of the March 2007 motor vehicle accident. CIRMA, a licensed municipal insurer, issued an automobile liability policy to West Haven that covered the motor vehicle used by the plaintiff. The policy contained a general liability limit of $1 million, and included uninsured/underinsured motorist coverage. The plaintiff exhausted the coverage limits of the tortfeasor's motor vehicle policy. But, he claims that the bodily injury limits thereof did not fully compensate him for his injuries. Therefore, he alleges in this action that the tortfeasor's vehicle was underinsured. The plaintiff requested UIM benefits from West Haven, and the city responded that it was only liable for such benefits up to $40,000 per occurrence.
In their memorandum, the defendants indicate that the tortfeasor paid the plaintiff $20,000. The parties have not, however, presented evidence on this issue.
In count one, the plaintiff seeks UIM benefits from the defendants. In count two, the plaintiff seeks a declaratory judgment stating that the defendants are obligated to provide him with uninsured/underinsured motorist coverage of up to the $1 million limit of West Haven's general liability obligation. The plaintiff alleges that West Haven cannot limit his recovery under the UIM portion of the policy because it did not comply with the requirements for requesting a lesser amount of such coverage, as set out in General Statutes § 38a-336(a)(2). On March 24, 2008, the defendants filed an answer and special defense in which they deny, inter alia, that West Haven did not comply with the requirements for limiting its UIM coverage to $40,000.
On June 30, 2008, the defendants filed a Motion for Summary Judgment (#110) as to count two on the ground that they are entitled to judgment on the plaintiff's request for a declaratory judgment because West Haven is only liable for UIM coverage in the amount of $40,000 per incident. They attached numerous documents to their memorandum that they contend demonstrate that there are no issues of material fact in dispute as to whether West Haven complied with the statutory requirements for reducing UIM coverage. On November 20, 2008, the plaintiff filed an Objection (#116) to the motion on the basis that disputed issues of fact exist as to whether West Haven sufficiently complied with the statutory requirements to reduce its UIM coverage. Specifically, the plaintiff argues that the documents submitted by the defendants are inadequate substitutes for the informed consent form required by the statute. The defendants filed a Reply (#117) on December 11, 2008. This court heard oral argument on February 17, 2009.
DISCUSSION
"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." (Internal quotation marks omitted.) Martinelli v. Fusi, 290 Conn. 347, 354-55, 963 A.2d 640 (2009).
"The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the non-moving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45] . . ." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
The defendants' motion raises the issue of whether West Haven complied with the requirements of § 38a-336(a)(2) to reduce its UIM benefits to $40,000; and if so, whether the defendants are entitled to a declaratory judgment on this issue, as a matter of law. There is no dispute in this case that West Haven did not use the informed consent form referred to in § 38a-336(a)(2), and instead relied upon the correspondence between the defendants. The dispute is whether the correspondence was sufficient to comply with the "informed consent" requirements of the applicable general statutes section. The defendants argue that it was sufficient to reduce the city's coverage. The plaintiff disagrees.
General Statutes § 38a-336(a) provides in relevant part:
"(1) Each automobile liability insurance policy shall provide . . . uninsured and underinsured motorist coverage . . . with limits for bodily injury or death not less than those specified in subsection (a) of section 14-112, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and underinsured motor vehicles . . . because of bodily injury . . . Each insurer licensed to write automobile liability insurance in this state shall provide uninsured and underinsured motorists coverage with limits requested by any named insured upon payment of the appropriate premium . . .
General Statutes § 14-112(a) provides in relevant part: "To entitle an person to receive or retain a motor vehicle operator's license or certificate of registration of any motor vehicle . . . the commissioner shall require from such person proof of financial responsibility to satisfy any claim for damages by reason of personal injury to, or the death of, any one person, of twenty thousand dollars, or by reason of personal injury to, or the death of, more than one person on account of any accident, of at least forty thousand dollars . . ."
"(2) Notwithstanding any provision of this section to the contrary, each automobile liability insurance policy . . . 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 which extend . . . 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 which shall contain; (A) An explanation of uninsured/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 ADVISE FROM YOUR INSURANCE AGENT OR ANOTHER QUALIFIED ADVISER.' . . .
"(b) An insurance company shall be obligated to make payment to its insured up to the limits of the policy's uninsured and underinsured motorist coverage after the limits of liability under all bodily injury liability . . . 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 uninsured and under insured motorist coverage, exceed the limits of the insured's uninsured and underinsured motorist coverage."
The Appellate Court has explained that a municipality "is required to provide underinsured motorist coverage on certain municipal motor vehicles, pursuant to General Statutes § 38a-336(a), to protect city employees from the costs of accidental injuries that occur while the employee drives a covered vehicle in the course of his employment." Boynton v. New Haven, 63 Conn.App. 815, 823-24, 779 A.2d 186, cert. denied, 258 Conn. 905, 782 A.2d 136 (2001). "The relationship between the city's liability coverage and its underinsured motorist coverage is indirectly addressed in General Statutes . . . §§ 38a-335(a) and 38a-336(a)(2). [The parties] look to these sections for answers to the thorny and disputed question of how much underinsured motorist coverage the city must provide. Section 38a-335(a) permits the statutorily enumerated class of motor vehicle owners to limit their mandatory insurance coverage to the minimum of $20,000 per person and $40,000 per accident." (Emphasis in original.) Id., 824-25. In turn, "[§ 38a-336(a)(2)] does not mandate the amount of coverage to be provided. That gap is filled by the statutory minimum specified in [General Statutes] § 14-112, which defines the limit of the city's fiscal obligation. The applicability of the statutory minimum is reasonable because the exposure of commercial insurers is not unlimited." Id., 827.
General Statutes § 38a-335(a) provides in relevant part: "Each automobile liability insurance policy shall provide insurance . . . against loss resulting from the liability imposed by law, with limits not less than those specified in subsection (a) of section 14-112, for damages because of bodily injury or death of any person . . . arising out of the ownership, maintenance or use of a specific motor vehicle or motor vehicles within any state . . ."
Before reducing uninsured/underinsured coverage, § 38a-336(a)(2) requires the insured to complete a specific and detailed informed consent form. According to statute, such request for reduced coverage must include: an explanation of the uninsured/underinsured motorist insurance approved by the commissioner; a list of the underinsured/uninsured options available from the insurer; and the premium cost for each of the coverage options. The Informed Consent Form also contains advisory language, cautioning the insured about what a reduction in coverage means and advising that the insured seek advice from an insurance agent if he/she has questions. This informed consent provision, set out in § 38a-336(a)(2), did not become effective until January, 1994. From 1984 to 1994, a policyholder was only required to submit a written request for a lesser amount of uninsured/underinsured motorist coverage.
Interpreting the predecessor statute to § 38a-336(a)(2), in 1991 the Supreme Court held that an individual policy holder's written request to reduce his family's uninsured motorist coverage was not effective unless all of the insureds named in the policy signed the request. Nationwide Mutual Ins. Co. v. Pasion, 219 Conn. 764, 770-71, 594 A.2d 468 (1991). The court reasoned that "to permit the signature of one named insured to bind other, possibly uniformed, named insureds would circumvent the legislature's intent that the decision to reduce uninsured motorist coverage by consumers be an informed one." Id., 771.
Following the amendment of § 38a-336(a)(2), with its new and more rigorous requirements, the Supreme Court modified this holding as it applies to uninsured motorist coverage for vehicles in a commercial fleet policy in Frantz v. United States Fleet Leasing, Inc., 245 Conn. 727, 714 A.2d 1222 (1998). "A fleet insurance policy refer[s] to any insurance policy designated as a fleet or garage policy, or any insurance policy covering a number of vehicles owned by a business, a governmental entity, or an institution." (Internal quotation marks omitted.) Frantz v. United States Fleet Leasing, Inc., supra, 245 Conn. 729 n. 3. In Frantz, the court agreed with the defendants' contention that "to construe [the] statutory provision to require the written consent of all named insureds on a commercial fleet policy would place an unreasonable and unintended burden on insurers because . . . the number of prospective insureds under a fleet policy is likely to be substantial." Id., 738. The court noted "the fact that commercial fleet insurance gives rise to a significantly different set of expectations and considerations than does personal automobile insurance." Id., 741-42.
Further, the court reasoned that "[a]lthough a corporation . . . may be considered a `consumer' of insurance in the broadest sense of that word, we do not believe that a company that . . . is covered under a commercial fleet policy, falls within the class of consumers that the legislature sought to protect in requiring the signature of all named insureds under § 38a-336(a)(2)." Id., 739. As the court noted, `[I]t is highly likely . . . that the . . . personnel who negotiated the insurance provisions of the [insurance] contract . . . were fully aware of the relative cost of uninsured motorist coverage and the implications of their decision . . ." Id., 739. The court presumed that such personnel will have the expertise to ensure that informed decisions are made regarding their institution's insurance policies. As such, it concluded that the legislature's purpose in enacting § 38a-336(a)(2) would not be circumvented if commercial fleet policy holders did not comply with the statute's signature provision. Accordingly, the court decided that, in the context of a fleet policy, "strict adherence" to the written consent rule under § 38a-336(a)(2) "is both unreasonable and impracticable." Id., 740.
In subsequent cases involving plaintiff employee's claim for uninsured or underinsured motorist benefits from his or her employer's policy, the appellate courts have similarly declined to require fleet policy holders to strictly adhere to the consent form requirements set out in § 38a-336(a)(2). Kinsey v Pacific Employers Ins. Co., 277 Conn. 398, 892 A.2d 959 (2006); McDonald v. National Union Fire Ins. Co. of Pittsburgh, 79 Conn.App. 800, 831 A.2d 310, cert. denied, 266 Conn. 929, CT Page 8959 837 A.2d 802 (2003); and Boynton v. New Haven, supra, 63 Conn.App. 815.
In Kinsey v. Pacific Employers Ins. Co., 277 Conn. 398, 891 A.2d 959 (2006), the court adopted the reasoning of Frantz in concluding that "there is no reason to require strict adherence to the twelve-point type requirement of § 38a-336(a)(2) in the context of a commercial fleet policy. [The policy holder], which had more than 2,700 employees and was insured under a commercial fleet policy covering more than 1,000 vehicles, is not a member of the class of consumers that the legislature sought to protect when it enacted that typeface requirement. Indeed . . . [the policy holder's] vice president of risk, who signed the informed consent form on behalf of [the policy holder], attested to the fact that when she endorsed the form, she was `fully cognizant of the availability, relative costs and benefits of uninsured and underinsured motorist coverage as well as the implications of selecting minimum coverage limits,' and that her endorsement reflected `a conscious decision,' on behalf of [the policy holder], `to select uninsured/underinsured motorist limits of $40,000 in Connecticut.' Under the circumstances, we are unwilling to conclude that [policy holder's] request for a reduction in uninsured and underinsured motorist coverage was ineffective even though, contrary to the dictates of § 38a-336(a)(2), the heading of the informed consent form in which the request appeared was printed in eight-point type rather than twelve-point type." Id., 413-14.
Similarly, in McDonald the Appellate Court, explained that "[t]he purpose of § 38a-336(a)(2), including the provision requiring that insurers inform consumers of the premium cost for each of the underinsured motorists coverage options available, is to facilitate consumers' decision-making process and to ensure that they give informed consent to reduced coverage. We do not believe that a company such as [the policy holder], which insures a fleet of vehicles to carry on a large commercial enterprise, falls within the class of consumers that the legislature sought to protect when it mandated the disclosure of premium costs under § 38a-336(a)(2). Consequently, the fact that the informed consent form in the present case did not contain a statement of premium costs does not defeat the election by [the policy holder] to reduce its underinsured motorists coverage limits to $20,000." Id., 807.
In Boynton v. New Haven, supra, 63 Conn.App. 828-29, the court addressed the question of whether a self-insured municipality can limit its liability to the statutory minimum if it does not comply with the statutory requirement of documenting its intention in writing. The court concluded that it could do so. It reasoned that the city's status as a self-insurer "with respect to its fleet of passenger motor vehicles bears a closer resemblance to fleet insurance generally. [And] `fleet insurance gives rise to a significantly different set of expectations and considerations than does personal automobile insurance.' Frantz v. United States Fleet Leasing, Inc., [ supra, 245 Conn. 741-42]." Id., 828.
Connecticut Appellate Courts have repeatedly recognized that one of the purposes of § 38a-336 is to protect insurance policy holders. "`[T]he primary legislative purpose in requiring a written request for a reduction in uninsured motorist coverage is to ensure that one named insured not be bound, to his or her detriment, by the unilateral decision of another named insured to seek such a reduction . . . Such a concern has little or no applicability in the context of a commercial fleet policy.' . . ." Id., 739. Such purpose does not require the same of individual policy holders as of fleet policy holders. "In light of this legislative purpose, we are persuaded that it would be an exercise in futility to require the city to file a written request to itself. We presume that the legislature did not intend such an outcome . . . The plaintiff's reliance on the written waiver requirement stated in § 38a-336(a)(2) is, therefore, unfounded." Boynton v. New Haven, supra, 63 Conn.App. 828-29.
The Supreme Court and the Appellate Court have declined to require strict adherence to the requirements of § 38a-336(a)(2) when a fleet insurance policy was involved, as long as there was evidence that the personnel responsible for negotiating the corporation's or municipality's insurance policy made an informed decision to decrease the limits of the policyholder's uninsured/underinsured motorist coverage. As articulated by the courts in Frantz, McDonald, Kinsey and Boynton, the legislature's intent in enacting § 38a-336(a)(2) was to ensure that consumers made informed decisions when they consider whether to decrease the limits of their uninsured/underinsured motorist coverage. When there is evidence that the corporate or municipal personnel charged with negotiating the insurance contract made a purposeful and knowing decision to reduce the policy holder's uninsured/underinsured motorist coverage limits, the precise requirements of § 38a-336(a)(2) need not be adhered to because the purpose of the statute would have already been accomplished. Applying the rationale in the holdings of these cases, this court concludes that West Haven was not compelled to strictly comply with the informed consent form requirements of § 38a-336(a)(2) as long as there was evidence that the city's personnel made an informed decision to reduce the city's uninsured/underinsured motorist limits.
See also Simpson v. National Union Fire Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 98 0579769 (September 8, 2000, Peck, J.) (28 Conn. L. Rptr. 64, 67) (relying on Franz, court concluded that "[r]equiring informed consent form in the context of a commercial fleet policy to include specific language of § 38a-336 `would [not] further the legislative goal of ensuring that consumers are informed of the relative cost of this type of insurance'"). But see Brown v. ITT Hartford Life Annuity Ins. Co., Superior Court, judicial district of Waterbury, Docket No. CV 970158294 (April 17, 2001, Holzberg, J.) (29 Conn. L. Rptr. 613, 616) (court held that "because the statutory language of § 38a-336(a)(2) does not exempt municipalities and corporations from the informed consent form requirement, and there is no appellate authority providing . . . such an exemption, the informed consent form requirement . . . applies to all insureds, including municipalities").
The defendants submitted nine exhibits in support of their motion, including affidavits from CIRMA's vice-president of underwriting, Steven Bixler, and West Haven's director of finance, Richard Legg. According to these exhibits, on the date of the accident, West Haven maintained a fleet insurance policy with CIRMA for city-owned vehicles. (Exhibit 6 — Declarations of Coverage.) It is undisputed that during the relevant period of time, the city owned approximately 250 vehicles. (Exhibit 9 — Bixler Affidavit, paragraph 17.)
In 2005, West Haven sought a proposal for insurance from CIRMA through their insurance agent, Erin Higby. (Exhibit 9 — Bixler Affidavit, paragraph 3; Exhibit 9 — Legg Affidavit, paragraph 8.) Initially, on June 15, 2005, CIRMA sent a proposal of insurance to West Haven that provided the city with $1 million of uninsured/underinsured motorist coverage. (Exhibit 1 — Proposal, page 2; Exhibit 9 — Bixler Affidavit, paragraphs 4-5; Exhibit 9 — Legg Affidavit, paragraphs 8-9.) Legg instructed Higby to reject this policy, and instead obtain a policy with minimum coverage. (Exhibit 9-Legg Affidavit, paragraph 10.) In an email from Higby to Bixler she states that West Haven "is in need of minimum statutory UM/UIM limits only." (Exhibit 2 — Higby Email.) In response to Higby's request, CIRMA submitted an amended quotation that only provided uninsured/underinsured motorist coverage up to $40,000 per incident. (Exhibit 3 — Proposal; Exhibit 9 — Bixler Affidavit, paragraph 7; Exhibit 9 — Legg Affidavit, paragraph 11.)
Upon receiving this amended quote, which included an overall reduction in premium cost, Legg sent a letter instructing the agent to accept the offer on behalf of the city. (Exhibit 9 — Legg Affidavit, paragraphs 11-12; Exhibit 4 — Letter from Legg to Marsh USA.) Pursuant to Legg's instruction to bind this coverage, CIRMA issued a policy of insurance to West Haven, that included uninsured/underinsured motorist limits of $40,000. (Exhibit 5 — Declarations of Coverage; Exhibit 9 — Bixler Affidavit, paragraph 9.) The evidence submitted by the defendants clearly indicates that West Haven made a purposeful decision to reduce the city's uninsured/underinsured motorist coverage to $40,000.
In paragraph 14 of Legg's affidavit, he stated, "[t]he City was aware of the relative costs and purposes of the coverage, and desired the lesser amount." (Exhibit 9 — Legg Affidavit, par. 14). In his affidavit, Bixler attested that West Haven desired to "cap its ultimate exposure for uninsured/underinsured motorist coverage both as to cost of premiums and the dollar exposure it presented at the higher amount." (Exhibit 9 — Bixler Affidavit, paragraph 7.) Both Bixler and Legg acknowledged that West Haven was aware of the amount of money that the city would save as a result of this change in the policy. (Exhibit 9 — Bixler Affidavit, paragraph 7; Exhibit 9 — Legg Affidavit, paragraph 11.) Additionally, in her March 17, 2005 letter to the Commissioner of Insurance, Carol Silverstein, the West Haven City Risk Manager, acknowledged that "the City of West Haven is a self-insurer for the minimum statutory limits of $20,000/$40,000 for Uninsured/Underinsured Motorist Coverage." (Exhibit 7 — Silverstein letter.) Therefore, this court concludes that the defendants' evidence also establishes that West Haven made an informed decision.
Accordingly, West Haven complied with the requirements of § 38a-336(a)(2) in reducing its UIM coverage, as that provision has been applied by our appellate courts to fleet insurance policies. Evidence that the fleet policy holder made an informed decision is all that is required under this analysis. Since this court finds that there are no issues of fact in dispute as to whether defendant West Haven made an informed decision, the defendants are entitled to a declaration that West Haven's UIM coverage is limited to $40,000. The court grants the defendants' motion for summary judgment as to Count Two of the Complaint.