Opinion
Nos. X03 CV 01 0516170, X03 CV 02 0516171S
May 5, 2003
MEMORANDUM OF DECISION MOTION FOR SUMMARY JUDGMENT
On March 13, 2001, John R. Hyde brought an action in negligence on behalf of his ward, Jose Torres, captioned as John R. Hyde, Conservator of the Estate of Jose Torres v. Isidro Gonzalez-Aguillon and Millane Nurseries, Inc., Docket No. X03 CV-01-0516172S ("the underlying action"), seeking damages for injuries sustained by Torres after Gonzalez-Aguillon, his co-worker, struck him with a motor vehicle owned by their employer, Millane Nurseries. At the time of the accident, Millane Nurseries owned a commercial auto policy with SEACO Insurance Company ("SEACO"), in the primary amount of $1,000,000, and a commercial umbrella policy in the excess amount of $5,000,000, with United States Fire Insurance Company ("U.S. Fire"). Both policies provided liability coverage for motor vehicles owned by Millane Nurseries. Each policy contained a clause providing that, as a condition of coverage, Millane Nurseries and "any other involved `insureds'" must cooperate in the investigation or settlement of any claim or suit for bodily injury.
Section G.3 of the U.S. Fire commercial umbrella policy states in relevant part: "You and any other involved `Insureds' must . . . [c]ooperate with us in the investigation, settlement or defense of any `Claim' or `Suit' . . ." Similarly, Section IV, subsection A.2.b (3), of the SEACO commercial auto policy states in relevant part: "you and any other involved `insured' must . . . [c]ooperate with us in the investigation or settlement of the clam or defense against the `suit.'"
SEACO and U.S. Fire bring the captioned single count declaratory judgment actions alleging that Gonzalez-Aguillon has failed to cooperate pursuant to the terms of their policies and that the insurers are entitled to a declaration from the court to the effect that their obligations to defend and indemnify Gonzalez-Aguillon under the terms of the policies are thereby terminated and that the policies are rescinded as to him. Pursuant to Practice Book § 17-44, the plaintiffs now move for summary judgment based on their allegations of breach of the foregoing cooperation clause as well as the implied duty of cooperation owed by an insured to an insurer under the common law.
Although U.S. Fire and SEACO each brought separate declaratory actions and separate motions for summary judgment, their claims are essentially the same and are treated as such in this decision.
Hyde brought the underlying action pursuant to the motor vehicle exception of the Workers' Compensation Act, General Statutes § 31-293a, which allows personal injury actions against fellow employees based on negligence in the operation of a motor vehicle. The underlying action, however, is complicated by a recent decision of the Appellate Court, Szczapa v. United Parcel Service, Inc., 56 Conn. App. 325, 743 A.2d 622, cert. denied, 252 Conn. 951, 748 A.2d 299 (2000), which held that while § 31-293a authorizes a co-employee's action alleging negligence in the operation of a motor vehicle against a fellow employee, this exception does not authorize suits against the employer based on a theory of respondeat superior. Id., 332. Thus, pursuant to Szczapa, Hyde, as Torres' conservator, is barred from suing Torres' employer, Millane Nurseries, directly. Torres' only remedy, therefore, rises and falls in a suit directly against his co-employee, Gonzalez-Aguillon.
Section 31-293a provides in relevant part: "If an employee or, in case of his death, his dependent has a right to benefits or compensation under this chapter on account of injury or death from injury caused by the negligence or wrong of a fellow employee, such right shall be the exclusive remedy of such injured employee or dependent and no action may be brought against such fellow employee unless such wrong was wilful or malicious or the action is based on the fellow employee's negligence in the operation of a motor vehicle as defined in section 14-1." (Emphasis added.)
The undisputed facts relevant to the resolution of this motion for summary judgment are as follows: On July 17, 2000, Gonzalez-Aguillon, an employee of Millane Nurseries, was operating a motor vehicle owned by Millane Nurseries. Apparently failing to notice that his co-employee Torres was bent over behind the vehicle, Gonzalez-Aguillon ran over Torres, rendering him a quadriplegic. On the day of the accident, Gonzalez-Aguillon gave a signed statement to Cromwell Police. A certified copy of the Cromwell Police Department report dated July 19, 2000, two days after the incident, reflects an exceptionally thorough investigation of the accident and the accident scene, including measurements of the scene, photographs of the scene as well as the motor vehicle operated by Gonzalez-Aguillon, examination of the victim's clothing, and statements from two witnesses at the scene, Gonzalez-Aguillon and the victim. In addition, the investigating officers had the motor vehicle operated by Gonzalez-Aguillon towed to the town garage for inspection and investigation whereupon they took more photographs of the vehicle and its driveshaft safety bracket while positioned both on and off the vehicle. With the consent of one of the owners of Millane Nurseries, the investigating officers conducted a search of the interior of the vehicle.
Gonzalez-Aguillon's statement to the police, dated July 17, 2000, reads as follows: "I am employed by Millane Nurseries. On 7/17/00 at approx 2:05 p.m. I was driving one of the vans on the property. I was on a paved road known to us as [S]outhridge Rd. As I was driving down the road[,] I stopped to give a fellow employee a soda. When I stopped there was a Terex machine and a blue van stopped in front of me. After the employee took the soda and got back into the machine, I decided to move my van off the road so the blue van that was stopped in front of me could leave.
I looked in my mirrors [and] did not see anyone and began to back-up off the road to the north. I backed up a short distance and stopped. At that time the operator of the machine began to yell stop there is someone trapped under the van. I didn't move the van and called for help. There was a passenger in the van[,] Juan Guillen-Frias. The van I was operating was CT Farm 39086."
Gonzalez-Aguillon was a resident alien at the time of the accident on July 17, 2000. He did not have a Connecticut motor vehicle operator's license; nor was he a registered Connecticut voter or a Connecticut property owner. Gonzalez-Aguillon's neighbors reported that he left home the night of the accident and seemed "panicked." (Affidavit of Orlando J. Cardenas, June 6, 2001, ¶ 8.) Since the date of the accident, Gonzalez-Aguillon has never returned to work at Millane Nurseries (Affidavit of Laurie Ballachino, June 5, 2001, ¶ 7); and has neither been seen nor heard from by any person known to the parties in these actions.
SEACO was made aware of the accident through Millane Nurseries on the day it occurred. (Deposition of Robert E. Kloiber, July 31, 2001, p. 12.) Several affidavits of Millane Nurseries employees submitted by the plaintiffs in support of the motions for summary judgment, including those of Laurie Ballachino, the human resource manager, Orlando Cardenas, the production and field shipping manager, and Michael Millane, the vice president and treasurer, reflect extensive cooperation by Millane Nurseries in connection with the effort to locate Gonzalez-Aquillon after the day of the accident.
Within forty-eight hours after the accident, an adjuster hired by SEACO attempted, as part of his initial investigation, to locate Gonzalez-Aguillon by going twice to an address provided by Millane Nurseries. Sometime between September and October 2000, the adjuster reported to SEACO in writing that Gonzalez-Aguillon had not been located. (Kloiber Deposition, pp. 25-30.) No other attempt was made by the plaintiffs to locate Gonzalez-Aguillon until December 4, 2000, when a SEACO senior claims manager sent Gonzalez-Aguillon a letter to his last known address by certified mail informing him that he "must extend his fullest cooperation to all representatives of this company [SEACO], who have been assigned to work on this matter." (Affidavit of Robert E. Kloiber, February 28, 2002, ¶ 4.) The letter was returned to SEACO marked "undeliverable." Sometime between the return of the December 4, 2000 letter, and March 22, 2001, SEACO hired a private investigator to locate Gonzalez-Aguillon in Connecticut. The private investigator was unable to find him. Id. ¶ 5. (Kloiber Affidavit, ¶ 5.)
At some unspecified time after the accident and prior to March 9, 2001, SEACO hired Ralph G. Eddy, Esq., and the law firm of Regnier, Taylor, Curran Eddy, to defend Millane Nurseries and Gonzalez-Aguillon in the underlying action. On or about March 9, 2001, Eddy mailed a letter in English and Spanish asking Gonzalez-Aguillon to contact him about the accident and the underlying action. No contact was ever made. On or about March 22, 2001, Robert E. Kloiber, a senior vice president in the claims department at SEACO, sent Gonzalez-Aguillon a letter by certified mail informing him that failure to cooperate in the defense of the underlying action could compromise his insurance coverage and defense of the lawsuit. (Kloiber Affidavit, ¶ 4.) SEACO never received a response to this letter. On or about June 5, 2001, Attorney Eddy interviewed Gonzalez-Aguillon's former supervisor and a co-worker. Neither had any knowledge of where Gonzalez-Aguillon was or might be located. (Affidavit of Ralph G. Eddy, August 2, 2001, ¶ 4.)
In March or April 2001, an associate in Attorney Eddy's law firm hired a private investigator to search the State of California, the State of Texas, and the country of Mexico, in an effort to locate Gonzalez-Aguillon, on the theory that as a seasonal worker, he might be located in one of these places. The private investigator was unable to locate Gonzalez-Aguillon in any of these areas. (Kloiber Affidavit ¶ 8.) SEACO concedes that its search for the defendant did not begin in earnest until nearly five months after the accident. (Kloiber Deposition, pp. 33-34.) This delay was due to the fact that SEACO was in receivership and, consequently, "the company was going through . . . changes" and was in a "state of flux." (Kloiber Deposition, pp. 33-34.)
SEACO's counsel stated at oral argument that SEACO was at the time of the accident in receivership under the control of the Department of Insurance for the State of Massachusetts and has not written any insurance coverage for the past two years.
I
A motion for summary judgment shall be granted "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." (Internal quotation marks omitted.) Miles v. Foley, 253 Conn. 381, 385, 752 A.2d 503 (2000). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." Gold v. Greenwich Hosp. Ass'n, 262 Conn. 248, 253, 811 A.2d 1266 (2002). "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.) Appleton v. Board of Education, 254 Conn. 205, 209, 757 A.2d 1059 (2000). Summary judgment is appropriate only if a fair and reasonable person could conclude only one way. Miller v. United Technologies Corp., 233 Conn. 732, 751, 660 A.2d 810 (1995).
II
The issue before the court is whether the plaintiffs' claims of a failure to cooperate on part of Gonzalez-Aguillon are sufficient to relieve them of the duty to defend and indemnify Gonzalez-Aguillon in the underlying action.
Hyde additionally argues that a declaratory judgment is inappropriate to resolve a carrier's rights and responsibilities. This argument has no merit. "There is no question that a declaratory judgment action is a suitable vehicle to test the rights and liabilities under an insurance policy." St. Paul and Marine Ins. Co. v. Shernow, 22 Conn. App. 377, 380, 577 A.2d 1093 (1990).
"[I]n the absence of estoppel, waiver or other excuse cooperation by the assured in accordance with the provision of the policy is a condition the breach of which puts an end to the insurer's obligation," Arton v. Liberty Mutual Ins. Co., 163 Conn. 127, 133, 302 A.2d 284 (1972). The lack of cooperation, however, must be substantial or material. Curran v. Connecticut Indemnity Co., 127 Conn. 692, 696, 20 A.2d 87 (1941); Rochon v. Preferred Accident Ins. Co., 118 Conn. 190, 198, 171 A. 429 (1934). It is for the claimant "to show that the absence of the insured was excused or justified." O'Leary v. Lumbermen's Mutual Casualty Co., 178 Conn. 32, 38, 420 A.2d 888 (1979).
"The purpose of the cooperation provision is to protect the interests of the insurer. If insurers could not contract for fair treatment and helpful cooperation from the insured, they would, at the very least, be severely handicapped in determining how and whether to contest the claim, and might, in addition, be particularly susceptible to possible collusion between the participants in the accident." (Citations omitted; internal quotation marks omitted.) Arton v. Liberty Mutual Ins. Co., supra, 163 Conn. 134. "This is particularly true where the insured is the only nonadversary source of information available to the insurer . . . Conduct on the part of an assured [that] makes it impossible for the insurer to get in touch with him in the face of an impending trial, although diligent search is made for him, could rarely, if ever, be regarded as an unsubstantial or immaterial failure to cooperate." (Citations omitted; emphasis added; internal quotation marks omitted.) Id.
While an insured has an unequivocal duty to cooperate with an insurer, an insurer may only properly claim a failure on the part of the insured to cooperate when it has engaged in a "diligent search . . . for [the insured]" in the first instance. Id. Although Connecticut precedent is sparse on this issue, the Supreme Court of Utah wrote with clarity on the justification for the requirement of due diligence on the part of the insurer.
[I]n order to assure the protection intended for an injured person, it is appropriate for the trial court to scrutinize with particular care what the insurer has done to obtain the cooperation of the insured. In view of the anomalous situation where the insurance company has received compensation for undertaking a responsibility which it may be able to avoid by failing to discharge on part of its duty, it is proper to require a showing that the company used the same degree of diligence to secure the insured's cooperation that would have been exercised by a reasonable and prudent person where the cooperation of the insured would be to its advantage in protecting it against liability, rather than to relieve it therefrom.
Peterson v. Western Casualty and Surety Co., 19 Utah 2d 26, 30-31, 425 P.2d 769 (1967).
The reasoning provided in Peterson is well suited to the case at bar. SEACO was unquestionably notified of the accident on the day it occurred. It was therefore incumbent upon SEACO, as the primary insurer, to make a diligent and timely search for Gonzalez-Aguillon if his cooperation was deemed essential. Instead, due to the distraction of impending receivership, SEACO, by its own admission, delayed almost five months to make a deliberate effort to locate him. Given what they knew about his actions immediately following the accident, it is not surprising that by December 2000, the trail for him had gone cold. Specifically, while Gonzalez-Aguillon gave a detailed statement to police after the incident, he appeared "panicked" upon returning home that night and subsequently failed to return to work. A failure to hold the plaintiffs accountable for possibly not performing a diligent and timely search would be tantamount to creating an incentive for insurance companies to stall on similar files and hope for the disappearance of an insured, thereby leaving them absolved of liability. An insurer cannot be permitted to ignore clues that an insured might make himself permanently unavailable. This is particularly the case where, as here, the plaintiffs knew that Gonzalez-Aguillon was a seasonal immigrant worker and had the capability of disappearing into his home country or into the general population of other migrant workers. See Peterson v. Western Casualty and Surety Co., supra, 19 Utah 2d 31.
Since U.S. Fire was the excess insurer, it relied upon the primary insurer, SEACO, to make a diligent search and inquiry for Gonzalez-Aguillon. Just as U.S. Fire explicitly alleges that it "could have relied upon and monitored in [SEACO's] investigation and search" for the purpose of finding lack of cooperation by Gonzalez-Aguillon, the quality of SEACO's search and inquiry for Gonzalez-Aguillon subsequent to the accident is imputed to U.S. Fire. (See Plaintiff U.S. Fire's Memorandum of Law in Support of Motion for Summary Judgment, p. 15.)
Courts have held that when "an insured completely fails to communicate with the insurer regarding an accident, [a] violation of [the cooperation] provision is patent." (Internal quotation marks omitted.) American Country Insurance Co. v. Bruhn, 289 Ill. App.3d 241, 250, 682 N.E.2d 366, 224 Ill. Dec. 805, leave to appeal denied, 174 Ill.2d 553, 686 N.E.2d 1157 (1997). See also Curran v. Connecticut Indemnity Co., 127 Conn. 692, 696, 20 A.2d 87 (1941). These decisions, however, implicitly assume that the insured is in a position to receive adequate notice of his responsibility to cooperate with the insurer. In the present case, it is not clear that Gonzalez-Aguillon's failure to communicate with the plaintiffs, and his subsequent disappearance, constitutes a substantial and material breach of Gonzalez-Aguillon's duty to cooperate with the insurer. This is particularly true in light of the fact that Gonzalez-Aguillon appeared to make a good faith effort at cooperation by filing a police report on the day of the accident. The court is also troubled by the fact that Gonzalez-Aguillon was an "insured" under the employer's liability policies by virtue of his employment with Millane Nurseries. He did not pay premiums and there is no evidence that he was privy to the terms of the policy. Neither party has claimed that Gonzalez-Aguillon was in any way informed of a responsibility or duty to the insurer before or immediately after the accident.
The fact that the plaintiffs eventually made an extensive or "exhaustive" search at some point in time does not necessarily resolve the issue of whether they were diligent in their efforts. Under the circumstances, there remains a genuine issue of material fact whether the plaintiffs made a diligent search and inquiry to locate Gonzalez-Aguillon in an effort to obtain his cooperation. In addition, the court finds that there is also an issue of fact as whether Gonzalez-Aguillon's failure to respond to efforts by the plaintiffs to contact him constitutes a breach of the cooperation clause under all the circumstances. After all, he gave a forthright and complete statement to the Cromwell Police immediately following the accident that was corroborated by the victim, two other witnesses and an extensive police investigation. As noted previously, Gonzalez-Aguillon was an "insured" under the SEACO and U.S. Fire policies only by virtue of his employment with Millane Nurseries. He did not apply for the insurance, did not pay premiums and there is no evidence that he was even aware of the cooperation clause or any other term of the policies. In addition, it is not clear that he would have had anything further to offer beyond the sworn statement he gave to the police. For these reasons, the motions for summary judgment must be denied.
III
Even if the issue of the plaintiffs' diligence and Gonzalez-Aguillon's cooperation were not in dispute, the plaintiffs' attempt to absolve themselves of all liability, solely on grounds that Gonzalez-Aguillon failed to cooperate, is also tenuous in light of the public policy considerations embodied in motor vehicle exception of the Workers' Compensation Act, General Statutes § 31-293a.
In the underlying action, Hyde is seeking damages on behalf of Torres in excess of those benefits already received by Torres pursuant to the Workers' Compensation Act. Section 31-284 (a) of the act states, "An employer . . . shall not be liable for any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment or on account of death resulting from personal injury so sustained . . ." Under this scheme, an employee compromises his right to a common law tort action against his employer for work-related injuries in exchange for relatively quick and certain compensation. Mingachos v. CBS, Inc., 196 Conn. 91, 97, 491 A.2d 368 (1985). Nevertheless, the legislature and our Supreme Court have carved out § 31-293a and other exceptions to this general bar against tort actions in the employment context. See Blancato v. Feldspar Corp., 203 Conn. 34, 43, 522 A.2d 1235 (1987) (allowing illegally employed minor to state cause of action against employer); Jett v. Dunlap, 179 Conn. 215, 221, 425 A.2d 1263 (1979) (permitting action against employer by employee for intentional torts committed by employer).
While § 31-293a permits Hyde to bring an action in negligence on behalf of Torres against Gonzalez-Aguillon, his fellow employee, this provision does not authorize Hyde to penetrate the exclusivity of the Workers' Compensation Act by bringing an action in respondeat superior against Millane Nurseries, as was held in Szczapa v. United Parcel Service, Inc., supra, 56 Conn. App. 332. Thus, if this court were to hold that the plaintiffs were not required to defend and indemnify Gonzalez-Aguillon in the underlying action due to his alleged failure to cooperate, Torres, through Hyde, his conservator, would be left with an action in negligence against an absconding uninsured defendant. Such a result would undermine the public policy established by the legislature as manifested in the motor vehicle exception to the Workers' Compensation Act.
Our Supreme Court has expressed disapproval of disproportionate forfeitures based upon a party's failure to adhere to technical aspects of an insurance contract. See Aetna Casualty and Surety Co. v. Murphy, 206 Conn. 409, 413 (1988) (noting that "the rigor of [the strict compliance principle] has increasingly been tempered by the recognition that the occurrence of a condition may, in appropriate circumstance, be excused in order to avoid `disproportionate forfeiture' ").
12 H.R.Proc., Pt. 9, 1967 Sess., pp. 3813, 4035, remarks of Representative Paul Pawlak: "Section 5. This section [§ 31-293a] stops third-party suits against fellow employees since such employee usually is unable to meet any judgment involving serious injuries. However, the section specifically permits suits against fellow employees where the injury or death was the result of willful or malicious wrong by such fellow employee or involves the operation of a motor vehicle. We are here trying to make sure that a fellow employee cannot ordinarily be sued for simple negligence on the job, but we do not believe that he should be protected against willful or malicious wrong, nor do we believe he should be protected if the employee is injured as a result of a motor vehicle accident."
Accordingly, for all the foregoing reasons, the plaintiffs' motions for summary judgment are denied.
Peck, J.