Opinion
No. CV-09-5030686S
December 17, 2010
RULING ON MOTION FOR SUMMARY JUDGMENT (#123)
This is a breach of contract action. This case was originally brought against both State National Insurance Company (SNIC) and Flanagan Associates, LLC., but on December 10, 2010 the plaintiffs withdrew the complaint against Flanagan Associates. Prior to that time, SNIC had filed a motion for summary judgment (#118) which was denied by the court (Keegan, J.) on May 5, 2010. On November 8, 2010, SNIC filed a "Renewed Motion for Summary Judgment" (#123) and the court heard argument on that motion on December 13, 2010. The dispositive issue on this motion for summary judgment is the effective date of a general liability insurance policy that SNIC issued to Jimdee LLC (Jimdee), one of the plaintiffs.
"[I]t is within the trial court's discretion to consider a renewed motion for summary judgment that has previously been denied where . . . additional or new evidence has been submitted which was not before the court in ruling upon the earlier motion for summary judgment." Mac's Car City, Inc. v. American National Bank, 205 Conn. 255, 262, 532 A.2d 1302 (1987). In support of its renewed motion, SNIC has submitted an affidavit from Charles Flanagan (Flanagan), the principal member and owner/operator of Flanagan Associates, LLC, the now withdrawn co-defendant, which was not before the court on the original motion for summary judgment. The plaintiffs urge the court to exercise its discretion and refuse to consider the renewed motion, claiming that SNIC could have procured Flanagan's affidavit earlier. While that may be true, the court is willing to consider the renewed motion because it raises a dispositive issue. See Chadha v. Charlotte Hungerford Hospital, 97 Conn.App. 527, 533, 906 A.2d 14 (2006); cf. Barnes v. Schlein, 192 Conn. 732, 473 A.2d 1221 (1984). A primary purpose of a motion for summary judgment is "to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v. New Haven, CT Page 1562 213 Conn. 277, 279, 567 A.2d 829 (1989). See Provencher v. Enfield, 284 Conn. 772, 793, 936 A.2d 625 (2007).
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact." D.H.R. Construction Co. v. Donnelly, 180 Conn. 430, 434, 429 A.2d 908 (1980). "The facts at issue [in a motion for summary judgment] are those alleged in the pleadings." (Internal quotation marks omitted.) McKinney v. Chapman, 103 Conn.App. 446, 450, 929 A.2d 355, cert. denied, 284 Conn. 928, 934 A.2d 243 (2007). When, as here, a defendant moves for summary judgment its burden is to "negate each claim as framed by the complaint [before] the burden shifts to [the] plaintiff to show that a genuine issue of fact exists justifying a trial." (Internal quotation marks omitted.) Gianetti v. United Healthcare, 99 Conn.App. 136, 141, 912 A.2d 1093 (2007).
In their revised complaint dated October 26, 2009, the plaintiffs alleged that Flanagan Associates, LLC. issued "a binder of insurance, securing coverage with . . . State National Insurance Company, Inc., insuring . . . Jimdee, LLC, under a Commercial General Liability policy," (First Count, ¶ 7) with an "effective date of . . . June 17, 2005." (First Count, ¶ 8). Thereafter, SNIC, notwithstanding a contractual obligation to do so, refused "to appear, defend and indemnify" Jimdee in a lawsuit brought against it by Peter Anaclerio (Anaclerio suit) for injuries that allegedly occurred on its premises on July 31, 2005. (First Count, ¶¶ 10, 11, 12.) In its answer, SNIC denied these allegations and filed a special defense that alleged that it had no contractual obligation to defend or indemnify because it had only provided coverage to Jimdee "for occurrences during the period of August 15, 2005 through August 15, 2006." (Special Defense ¶ 1.)
The court must determine whether SNIC's submissions in support of the renewed motion for summary judgment negate the claims made against it in the plaintiffs' complaint, specifically the allegation that the binder issued by Flanagan Associates contractually obligated SNIC to defend and indemnify the plaintiffs against the claims in the Anaclerio suit because it had an effective policy of insurance with the plaintiffs as of June 17, 2005. There is no factual dispute that Flanagan Associates issued a document captioned "Insurance Binder" dated June 17, 2005 to Jimdee, that "State National Insurance" is the named company on that document and that it contains effective dates of June 17, 2005 through August 17, 2005. (Memorandum in Support of Renewed Motion for Summary Judgment, ex. 6.) The only material factual issue is whether, at that time, Flanagan Associates had the authority to bind SNIC.
SNIC has submitted two affidavits (the Flanagan affidavit and the Kohl affidavit) to establish that there is no genuine issue of fact regarding the authority of Flanagan Associates to act on its behalf to bind insurance coverage. In the Flanagan affidavit ( id., ex. 8), Flanagan avers that at the relevant time he was a principal member, owner and operator of Flanagan Associates, that Flanagan Associates was not an agent of SNIC, "never had any authority to bind coverage of insurance on behalf of" or "to act on behalf of" SNIC and that, "to his knowledge" SNIC "first bound effective coverage for Jimdee, LLC, as requested, on August 15, 2005" but not before that date. The Kohl affidavit ( id., ex. 7), submitted by the vice-president for claims for RCA Insurance Group (RCA), also avers that Flanagan Associates did not have authority to issue or bind coverage on behalf of SNIC and that RCA was, at the relevant time, SNIC's "authorized agent and third party administrator" and "the only entity with authority to bind coverage of insurance on behalf of SNIC." Further, the affiant states RCA bound coverage for Jimdee on behalf of SNIC effective August 15, 2005 and no binder was issued by RCA or SNIC with an effective coverage date before August 15, 2005. Additional documentation that SNIC submitted supports the statements in the Kohl affidavit. ( Id., exs. 3, 4.)
"An insurance agent is a person expressly or impliedly authorized to represent an insurance company in its dealings with third persons." Lewis v. Michigan Millers Mutual Ins. Co., 154 Conn. 660, 664, 228 A.2d 803 (1967). "[I]n order to find an agency relationship, the agent must be working at the behest and for the benefit of the principal." Beckenstein v. Potter and Carrier, Inc., 191 Conn. 120, 138, 464 A.2d 6 (1983). The relationship may be established through evidence of actual authority, which may be express or implied, or through evidence of apparent authority based on the conduct, in both instances, of the principal.
Evidence of express actual authority requires direct evidence that the principal authorized the agent to act, the agent agreed to the undertaking and the principal remained in control of the transaction. Id. at 132-33. "Implied authority is actual authority circumstantially proved. It is the authority which the principal intended his agent to possess . . . Implied authority is a fact to be proven by deductions or inferences from the manifestations of consent of the principal and from the acts of the principal and [the] agent." (Citation omitted; internal quotation marks omitted.) Connecticut National Bank v. Giacomi, 242 Conn. 17, 70, 699 A.2d 101 (1997). Evidence of apparent authority are facts that establish "that semblance of authority which a principal, through his own acts or inadvertences, causes or allows third persons to believe his agent possesses." Lewis v. Michigan Millers Mutual Ins. Co., supra, 154 Conn. 665. "Furthermore, the party seeking to impose liability upon the principal [under a theory of apparent authority] must demonstrate that it acted in good faith based upon the actions or inadvertences of the principal." Beckenstein v. Potter and Carrier, Inc., supra, 191 Conn. 140-41.
Although "the existence of an agency relationship is a question of fact," (internal quotation marks omitted), Wesley v. Schaller Subaru, Inc., 277 Conn. 526, 543, 893 A.2d 389 (2006), summary judgment may be granted if the facts before the court demonstrate that the moving party would be entitled to a directed verdict upon them. Wilson v. New Haven, supra, 213 Conn. 279-80. The facts set forth in the Flanagan and Kohl affidavits so demonstrate. It is undisputed that Flanagan Associates did not have any authority to act as the agent of SNIC. To the contrary, at the relevant time, the undisputed facts demonstrate that Flanagan Associates was the agent of the plaintiffs and was acting as an insurance broker to procure insurance for them. Lewis v. Michigan Millers Mutual Ins. Co., supra, 154 Conn. 664. In the absence of any authority to act as SNIC's agent, the document entitled "Insurance Binder" issued by Flanagan Associates, upon which the plaintiffs rely, had no legal effect to bind SNIC to provide liability coverage to the plaintiffs as of June 17, 2005. Viewing all the facts in the light most favorable to the plaintiffs, the court finds that no reasonable fact finder could conclude that SNIC had provided liability insurance coverage to Jimdee, LLC before August 15, 2005. Accordingly, since the Anaclerio suit claimed his injury occurred on July 31, 2005, prior to the time that SNIC had provided liability coverage to Jimdee, SNIC had no duty to defend it or indemnify Jimdee and cannot be held liable for breach of contract.
At the plaintiffs' request, the court has considered their submission in opposition to the first motion for summary judgment (#121) that had appended to it a financing statement dated June 17, 2005 between Flanagan Associates and Center Street Lounge that includes a reference to a "pending" policy from SNIC, as well as excerpts of deposition testimony of the plaintiffs James Piscitelli and Derek Maloney taken in connection with the Anaclerio suit. Those documents support a finding that a reasonable fact finder would conclude that Flanagan was the plaintiffs' agent and not SNIC's agent. Clearly, Flanagan Associates owed a duty to the plaintiffs "to exercise reasonable skill, care, and diligence" to procure appropriate insurance coverage which would have ended upon the placement of a policy. See Precision Mechanical Services, Inc. v. T.J. Pfund Associates, Inc., 109 Conn.App. 560, 565, 952 A.2d 818, cert. denied, 289 Conn. 940, 959 A.2d 1007 (2008).
For the foregoing reasons, the motion for summary judgment, directed to the claims against SNIC in the first count of the revised complaint, is granted.
CT Page 1565