Opinion
No. 128895
October 24, 2005
MEMORANDUM OF DECISION
On June 25, 2004, the plaintiffs, Helen and Marcia Kenneth, filed an eight-count substituted complaint against the defendants, One Beacon Insurance Co. (One Beacon) and Ralph H. Learned, doing business as B.P. Learned Co (Learned). In counts one and two, the plaintiffs allege the following. One Beacon breached a homeowners insurance policy by failing to pay the plaintiffs for property damage resulting from a fire at the plaintiffs' residence, 124 Goodwin Road, Canterbury, Connecticut. On or before January 4, 2003, One Beacon issued the insurance policy to insure the plaintiffs' property. On or about January 4, 2003, the plaintiffs resided at the said property, and maintained their personal property therein. On or about January 4, 2003, the property and the contents maintained therein were damaged by a fire. The plaintiffs suffered losses such as damaged personal property, relocation expenses and emotional distress. In addition, the plaintiff, Helen Kenneth, suffered disruption of her recuperation from heart surgery and associated medical costs.
Counts one though two have virtually identical factual allegations, but each count is brought separately by each plaintiff. Likewise for counts three through four, five through six and seven through eight.
Furthermore, the plaintiffs allege that soon after the fire, they submitted to the defendants a claim for benefits to cover their damages. On or about November 10, 2003, the plaintiffs' claim was denied by One Beacon on the basis that the claim was not covered by the insurance policy issued by One Beacon. The plaintiffs allege they have complied with the insurance policy provisions relating to the investigation of the loss; they have demanded payments; and One Beacon has refused to pay. As a result, the plaintiffs allege financial losses. CT Page 13940-ei
In counts three and four, the plaintiffs allege that Learned was negligent in its failure to advise the plaintiffs that the homeowners insurance policy did not insure the plaintiffs' property. In addition, the plaintiffs allege that Learned was negligent for its failure to procure appropriate insurance coverage for the plaintiff. As a direct and proximate result of the negligence, the plaintiffs allege that they were denied coverage for their losses.
In counts five and six, the plaintiffs allege that One Beacon is vicariously liable for the actions of Learned, its agent. In counts seven and eight, the plaintiffs allege that One Beacon was negligent in its failure to advise the plaintiff that the homeowners insurance policy did not insure the plaintiffs' property. Furthermore, the plaintiffs allege that One Beacon was negligent in its failure to procure appropriate insurance coverage and train and supervise agents who write insurance policies on behalf of One Beacon. As a direct and proximate result of the negligence, the plaintiffs allege that they were denied coverage for their losses.
On December 9, 2004, One Beacon filed a motion for summary judgment, with accompanying memorandum of law, as to counts one, two, five, six, seven and eight, on the ground that there are no genuine issues of material fact that "under the homeowners policy at issue, the plaintiffs' claim is barred by the one year suit limitation, the policy is void because title to the property substantially changed, the plaintiffs are not insureds, the agent [Learned] represented the plaintiffs, and One Beacon owed no duty to the plaintiffs."
On February 16, 2005, Learned filed a motion for summary judgment, with accompanying memorandum of law, on the ground that Learned is entitled to judgment as a matter of law as to the plaintiffs' claims for negligence found in counts three and four of the operative complaint.
Learned moves for summary judgment as to the plaintiffs' complaint dated December 31, 2003. The operative complaint, however, is the plaintiffs' substituted complaint dated June 24, 2004. The substituted complaint was filed without objection and is therefore deemed filed by consent. See Boynton v. Bethel, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 98 0348808, n. 2 (July 21, 2005, Gilardi J.); Practice Book § 10-60(a)(3). As such, the only counts addressed to Learned in the operative complaint are counts three and four sounding in negligence. The court will therefore review the grounds in Learned's motion for summary judgment and the arguments in its memorandum of law, as they relate to counts three and four.
On February 18 and April 20, 2005, the plaintiffs filed an objection to One Beacon's and Learned's motions CT Page 13940-ej for summary judgment, respectively. On April 28 and May 12, 2005, One Beacon and Learned each filed a reply to the plaintiffs' objection, respectively. On June 24, 2005, the plaintiffs filed a response to One Beacon's reply, and in turn, on July 1, 2005, One Beacon filed a reply to plaintiffs' response.
One Beacon's and Learned's motions for summary judgment are now before the court.
DISCUSSION Motion for Summary Judgment #122
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.) Barrett v. Montesano, 269 Conn. 787, 791-92, 849 A.2d 839 (2004).
One Beacon argues that the insurance policy contains a provision stating that: "No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss." (One Beacon's exhibit B). One Beacon contends that they were served with process on January 7, 2004, more than one year after the plaintiffs suffered loss as a result of the fire, which occurred on January 4, 2003. A review of the court record reveals that the marshal served process to One Beacon on January 8, 2004, more than one year from the date of the fire and the plaintiffs' losses. CT Page 13940-ek
Both parties state in their memorandums of law that the fire occurred on January 4, 2003.
The plaintiffs counter that General Statutes § 52-593a saves their claims from the one-year limitation of suit provision in the policy. The plaintiffs argue that pursuant to § 52-593a, the marshal, who received the summons and complaint on January 2, 2004, two days prior to the expiration of suit date, had an additional thirty days in which to serve One Beacon with process.
General Statutes § 52-593a provides: "(a) Except in the case of an appeal from an administrative agency governed by section 4-183, a cause or right of action shall not be lost because of the passage of the time limited by law within which the action may be brought, if the process to be served is personally delivered to a state marshal authorized to serve the process and the process is served, as provided by law, within thirty days of the delivery. CT Page 13940-er
(b) In any such case, the state marshal making service shall endorse under oath on such state marshal's return the date of delivery of the process to such state marshal for service in accordance wit this section."
"The Connecticut Supreme Court has long held that a contractual condition in an insurance policy requiring an action to be brought with a particular time period is a part of the contract . . . [and] is valid and binding upon the parties. Chichester v. New Hampshire Fire Ins. Co., [ 74 Conn. 510, 513, 51 A. 45 (1902)]. Thus, [the] [plaintiffs'] non-compliance with such a provision is a complete defense, unless the plaintiff in his reply alleges facts sufficient in law to excuse his nonperformance of the condition. See [ Id., 546]; see also Bocchino v. Nationwide Mutual Fire Ins. Co., 246 Conn. 378, 383-84, [ 716 A.2d 883] (1998); Monteiro v. American Home Assurance Co., 177 Conn. 281, 283, [ 416 A.2d 1189] (1979) (reaffirming Chichester)." (Internal quotation marks omitted.) Craig v. Colonial Penn Insurance Co., 335 F.Sup.2d 296, 302 (D.Conn. 2004).
"[The] provision requiring suit to be brought within one year does not operate as a statute of limitations . . . Instead, [t]his condition is a part of the contract so that it controls the rights of the parties under the contract and, hence, such rights must be governed by the rules of law applicable to contracts . . ." (Citations omitted; internal quotation marks omitted.) Green v. Royal Indemnity Co., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 03 0283499 (June 8, 2004, Weisse, J.) citing Monteiro v. American Home Assurance Co., supra, 177 Conn. 283.
Moreover, an insurance policy that contains a provision limiting the time period to bring suit cannot be affected by General Statutes § 52-593a. "Section 52-593a applies only to limitations provided by law. It does not purport to apply to limitations provided by contract. It is a fundamental principle of statutory interpretation CT Page 13940-el that where the language of the statute is clear and unambiguous there is no room for judicial construction . . . We are not permitted to read words into a statute merely because in our opinion such a construction might produce a desirable result . . . If the legislature desired to make delivery of process to a sheriff applicable not only in cases involving limitation periods established by statute but also in those established by contract, it had the right and power to enact that legislation, but it did not do so." (Citations omitted.) Sacks Realty Co. v. Newark Ins. Co., 34 Conn.Sup. 564, 566, 377 A.2d 858 (1976). See also Corrigan v. Merrimack Mutual Fire Insurance Co., Superior Court, judicial district of New London at Norwich, Docket No. CV 114762 (November 24, 1998, Mihalakos, J.) ( 23 Conn. L. Rptr. 441).
The plaintiffs argue that the federal district court case, Cocco v. Preferred Mutual Insurance Co., 637 F.Sup. 94 (D.Conn. 1986), stands for the proposition that § 52-593a applies to insurance contracts. However, the Connecticut courts that have discussed this issue have overwhelmingly found that § 52-593a does not apply to contractual limitations of suit. See Sacks Realty Co. v. Newark Ins. Co., supra, 34 Conn.Sup. 564; Corrigan v. Merrimack Mutual Fire Insurance Co., supra, 23 Conn. L. Rptr. 441; Pagano v. Allstate Ins. Co., Superior Court, judicial district of New Haven, Docket No. 93 0345215 (June 23, 1994, Hartmere, J.) ( 12 Conn. L. Rptr. 29); Cherry v. Aetna Casualty Surety Co., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 92 0512960 n. 1 (February 23, 1993, Aurigemma, J.) ( 8 Conn. L. Rptr. 412); Flanders Pharmacy, Inc. v. Norfolk Dedham Mutual Fire Insurance Co., Superior Court, judicial district of Hartford-New Britain at Hartford (February 13, 1992, Hennessey, J.) ( 6 Conn. L. Rptr. 32). Therefore, in accordance with the weight of the authority of Connecticut case law, and in light of the undisputed facts that the fire occurred on January 4, 2003, and given that service of process was rendered on One Beacon on January 8, 2004, (more than one year after the fire loss), this court finds that § 52-593a does not save the plaintiffs' breach of contract claims set forth in counts one and two. Therefore, One Beacon's motion for summary judgment is granted as to counts one and two of the CT Page 13940-em plaintiffs' substituted complaint.
Because the court grants summary judgment as to counts one and two on the above grounds, it need not address any further arguments addressed by the parties as to counts one and two.
In counts five and six, the plaintiffs claim that One Beacon is vicariously liable for the acts of Learned. One Beacon argues that it is entitled to summary judgment as to counts five and six because Learned is an independent agent and owes a duty to the plaintiffs to advise and procure proper insurance, and therefore is an agent of the plaintiffs, not One Beacon. Moreover, One Beacon submits a certified affidavit by Randy Smith, the regional general adjuster for One Beacon (One Beacon's exhibit B). Smith avers in the affidavit that Learned is an independent agent through which One Beacon sells its homeowners insurance policies. One Beacon carries the burden of demonstrating that there is no genuine issue as to any material fact in regards to Learned not being an agent of One Beacon for purposes of vicarious liability.
"[T]he three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking." (Internal quotation marks omitted.) Hallas v. Boehmke Dobosz, 239 Conn. 658, 673, 686 A.2d 491 (1997). Whether agency exists is normally a question of fact; however, the existence of agency becomes a question of law when no reasonable juror could find actual or implied agency under the circumstances. Id., 674.
Moreover, "[a]pparent authority must be derived not from the acts of the agent but from the acts of his principal. [T]he acts of the principal must be such that (1) the principal held the agent out as possessing sufficient authority to embrace the act in question, or knowingly permitted him to act as having such authority, and (2) in consequence thereof the person dealing with the agent, acting in good faith, reasonably believed, under all the circumstances, that the agent had the necessary authority." Id., 674. However, it is important to note that an independent insurance agent does not become an agent of an insurer "simply by collecting and remitting premiums for the insurer's CT Page 13940-en ultimate benefit . . . To [hold] otherwise would effectively make agents out of all independent insurance brokers." Id., 675 n. 16.
The affidavit of Randy Smith submitted by One Beacon simply states that: "One Beacon Insurance Company uses independent agents to sell its homeowners policies . . . B.P. Learned Co. was an independent agent, through which the One Beacon Insurance Company sold its homeowners policies." One Beacon provides nothing else to prove that there is no agency relationship between it and Leaned. The averment of Smith simply is not enough to show that there are no genuine issues of material fact that an actual or implied agency relationship is nonexistent, and that there was no apparent authority for Learned to act on One Beacon's behalf. It bears repeating that the party moving for summary judgment has the burden of showing the absence of genuine issues of material fact. Barrett v. Montesano, supra, 269 Conn. 791-92. Moreover, as discussed above, "[t]he existence of agency is a question of fact to be determined by the trier of fact . . . It is therefore rarely appropriate for resolution by a motion for summary judgment." (Citation omitted; internal quotation marks omitted.) Franklin v. Murray, Superior Court, judicial district of Waterbury, Docket No. X01 CV 01 0170608 (March 12, 2004, Sheedy, J.). That is especially so in this case where One Beacon has provided insufficient proof to show the absence of agency. Therefore, One Beacon's motion for summary judgment as to counts five and six is hereby denied.
In counts seven and eight the plaintiffs allege that One Beacon is negligent for its failure to advise the plaintiffs that the homeowners policy in effect did not insure the plaintiffs, and its failure to procure appropriate insurance for the plaintiffs. Moreover, the plaintiffs allege that One Beacon was negligent in its failure to properly train and supervise its agents that write insurance policies for it. One Beacon argues that the plaintiffs must prove the elements of negligence. Additionally, One Beacon contends that it owed no duty to the plaintiffs. Moreover, One Beacon argues that it could not foresee that the plaintiffs were not insured under the policy. CT Page 13940-eo
The plaintiff, Marcia Kenneth, in her affidavit attached to her objection to the motion for summary judgment, avers that Ralph P. Kenneth died on January 11, 2002, and that Tammy Kenneth, the decedent's estranged wife, transferred the subject property to Richard Rothstein on October 16, 2002. One Beacon argues that Ralph P. Kenneth was the insured named under the homeowners policy and that Tammy Kenneth was listed as an additional insured. One Beacon contends that after the fire occurred on January 4, 2003, it first became aware that the insured had died and that Tammy Kenneth had quit-claimed the property to Rothstein. One Beacon contends that it refunded insurance premiums submitted after Tammy Kenneth transferred the property to Rothstein, and that the plaintiffs are not parties to the insurance contract.
"Issues of negligence are ordinarily not susceptible of summary adjudication but should be resolved by trial in the ordinary manner." (Internal quotation marks omitted.) Fogarty v. Rashaw, 193 Conn. 442, 446, 476 A.2d 582 (1984). Summary judgment is, however, a permissible vehicle to resolve the issue of duty, which is a question of law. Mozeleski v. Thomas, 76 Conn.App. 287, 290, 818 A.2d 893 (2003). Nevertheless, "[w]hile [t]he existence of a duty is generally a question of law that is subject to summary judgment . . . when the question of duty includes elements of both fact and law, summary judgment is inappropriate . . . That is to say, the existence of the duty or its absence often hinges on what the facts are, and if in dispute, a summary judgment decision ought not rest on the unsettled foundation." (Internal quotation marks omitted.) Backes v. Allstates Asphalt, Inc., Superior Court, judicial district of Windham at Putnam, Docket No. CV 01 0064944 (August 20, 2003, Foley, J.).
Although One Beacon contends and demonstrates through its exhibits that the plaintiffs were not the named insureds on the policy, One Beacon has not supplied evidence showing that a duty was not created between the time the property was transferred to a third party and when One Beacon denied the plaintiff's claim for coverage. See footnote 6 of this decision. As evidenced in Plaintiffs' exhibit A and One Beacon's exhibit F, premiums for the insurance policy were remitted by the plaintiffs and accepted by One Beacon after the property was transferred to the third party. In light of these facts, the court finds that genuine issues of fact exist as to whether a duty arose during that time period. A summary judgment in favor of One Beacon as to counts seven and eight would rest on an unsettled foundation. Accordingly, One Beacon's motion for summary judgment as to counts seven and eight is hereby denied.
Motion for Summary Judgment #125
Learned moves for summary judgment as to the alleged negligence in counts three and four and argues that the factual allegations do not support the negligence claims. Learned argues, inter alia, that the plaintiffs did not have any legal interest in the subject CT Page 13940-ep property, and, as such, there was no type of insurance it could have provided for the plaintiffs. Learned supplies as evidence a deposition of Martha E. Kenneth (Learned's exhibit A). The plaintiffs argue, inter alia, that a fiduciary duty existed between Learned and the plaintiffs. In addition, the plaintiffs argue that they told the agent of the death of the named insured and that the additional named insured transferred the subject property to a third person. Moreover, the plaintiffs contend that Learned knew of the circumstances that might give rise to problems concerning the insurance coverage. The plaintiffs argue that despite this knowledge, Learned did nothing to inform them of the potential problems, all the while accepting the insurance premiums from the plaintiffs. The plaintiffs submit a counter-affidavit by the plaintiff, Marcia Kenneth, in which she avers that Learned had knowledge of the circumstances, that Learned knew she was not named as an insured on the policy, and continued to accept premiums from the plaintiffs.
As stated above, issues of negligence are ordinarily unsusceptible for adjudication at summary judgment, and should be addressed at trial. Fogarty v. Rashaw, supra, 193 Conn. 446. Moreover, in the context of issues of insurance coverage, "[b]ecause of the increasing complexity of the insurance industry and the specialized knowledge required to understand all of its intricacies, the relationship between an insurance agent and a client is often a fiduciary one . . . The question of whether an agent has a duty to advise an insured about the adequacy of coverage hinges upon whether a special relationship exists between the parties . . . The existence of such a relationship presents a question of fact . . ." (Internal quotation marks omitted.) Thompson Peck v. Reliance Ins. Co. Superior Court, judicial district of New Haven at Meriden, Docket No. CV 99 0267491 (April 28, 2005, Tanzer, J.). In the present case, the plaintiffs have demonstrated by counter-affidavit that there are genuine issues of material fact that a duty and relationship arose between Learned and the plaintiffs. Therefore, Learned's Motion for summary judgment is hereby denied as to counts three and four. CT Page 13940-eq
CONCLUSION
For all the foregoing reasons, One Beacon's motion for summary judgment as to counts one and two of the plaintiffs' substituted complaint is hereby granted. One Beacon's motion for summary judgment as to counts five, six, seven and eight is hereby denied. Learned's motion for summary judgment as to counts three and four is hereby denied.