Summary
In Lord v. Litchfield, supra, page 127, the matter is discussed and the conclusion reached that there was no consideration which would support any contractual obligation.
Summary of this case from State ex Rel. Foote v. BartholomewOpinion
No. CV 04 0072645
October 26, 2005
MEMORANDUM OF DECISION
On April 23, 2004, the plaintiff, Lord Thompson Manor, Inc., filed a breach of insurance policy claim against the defendant, Litchfield Mutual Fire Insurance Company. Therein, the plaintiff alleges that it is a corporation operating a hotel/inn and that the defendant insured it under an insurance policy covering damages to its personal property and equipment. The plaintiff further alleges that it investigated a problem with its well used to supply water to its business by hiring a well repair company. During the investigation, the plaintiff alleges that efforts to remove the well's pump resulted in the pump's entombment underground causing damage to the well and pump. The plaintiff further alleges that the damage to both the well and pump forced the plaintiff to dig a new well and replace the pump. During the interim, the plaintiff alleges that the circumstances forced it to expend money to supply its business with water. The plaintiff alleges that these expenditures along with the cost of digging the new well and replacing the pump resulted in lost revenue, which the defendant was obligated to cover under its contract of insurance. As such, the plaintiff alleges that it submitted a claim to the defendant and the defendant declined to honor and pay the plaintiff for its losses.
On April 5, 2005, the defendant filed a motion for summary judgment on the ground that there is no genuine issue of material fact because the loss claimed by the plaintiff does not fall within the scope of coverage under the insurance policy. The defendant submitted a memorandum of law in support of its motion. On May 2, 2005, the plaintiff filed a memorandum of law in CT Page 13938-ga opposition.
"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." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 399, 876 A.2d 522 (2005). "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 . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving 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.) Martel v. Metropolitan District Commission, 275 Conn. 38, 46-47, 811 A.2d 194 (2005).
In its memorandum of law in support of its motion, the defendant argues that there is no genuine issue of material fact because the plaintiff cannot prove it sustained a loss to property covered by the insurance policy or that the loss was caused by a peril specified in the policy. The plaintiff counters that its loss is covered under the insurance policy and that the conflicting contentions create a genuine issue of material fact. CT Page 13938-gb
"Because the contract to be construed is a contract of insurance, the court must . . . be mindful of certain rules of construction." Proto v. Hermitage Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 040488254 (July 1, 2005, Lopez, J.). "[U]nder our law, the terms of an insurance policy are to be construed according to the general rules of contract construction . . . The determinative question is the intent of the parties, that is, what coverage the . . . [plaintiff] expected to receive and what the defendant was to provide, as disclosed by the provisions of the policy." (Citations omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 538-39, 791 A.2d 489 (2002). "Although [i]nterpretation of an insurance policy, like the interpretation of other written contracts, involves a determination of the intent of the parties as expressed by the language of the policy . . . and, thus, ordinarily presents a question of fact, when the language of the contract is clear and unambiguous, the court's determination of what the parties intended in using such language is a conclusion of law." (Citation omitted; internal quotation marks omitted.) Mount Vernon Fire Ins. Co. v. Morris, 90 Conn.App. 525, 541, 877 A.2d 910 (2005). "[I]n the absence of a claim of ambiguity, the interpretation of an insurance contract presents a question of law." Nationwide Mutual Ins. Co. v. Allen, 83 Conn.App. 526, 537, 850 A.2d 1047, cert. denied, 271 Conn. 907, 859 A.2d 562 (2004).
"If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning." (Internal quotation marks omitted.) Hertz Corp. v. Federal Ins. Co., 245 Conn. 374, 381-82, 713 A.2d 820 (1998). "To ascertain the commonly approved usage of a word, it is appropriate to look to the dictionary definition of the term." (Internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., supra, 259 Conn. 539. "[E]ach and every sentence, clause, and word of a contract of insurance should be given operative effect. Since it must be assumed that each word contained in an insurance policy is intended to serve a purpose, every term will be given effect if that can be done by any CT Page 13938-gc reasonable construction . . ." (Internal quotation marks omitted.) Id. "However, [w]hen the words of an insurance contract are, without violence, susceptible of two [equally responsible] interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted." (Internal quotation marks omitted.) Hertz Corp. v. Federal Ins. Co., supra, 245 Conn. 382. "Courts follow [this] rule, because the insurance company's attorneys, officers or agents prepare the policy, and it is their language that must be interpreted." (Internal quotation marks omitted.) Griswold v. Union Labor Life Ins. Co., 186 Conn. 507, 513-14, 442 A.2d 920 (1982). "[T]his rule of construction favorable to the insured extends to exclusion clauses." (Internal quotation marks omitted.) Id., 514.
This case presents a genuine issue of material fact as to whether the parties intended the insurance policy to cover the plaintiff's well water and therefore the defendant's motion for summary judgment is denied. Additionally, the defendant's motion for summary judgment fails because the defendant's interpretation of the insurance contract cannot prevail, the defendant has not met its burden of showing the lack of any genuine issue of material fact, the evidence must be viewed in light most favorable to the plaintiff, and the law supports interpreting the insurance policy's ambiguities in favor of the insured plaintiff.
To begin, the defendant argues that there is no genuine issue of material fact because the plaintiff cannot prove it sustained a loss to covered property caused by a peril specified in the insurance policy. Citing the insurance policy's General Conditions Part, the defendant asserts that the policy provides coverage for the property covered during the policy period. The defendant then skips, however, to the Coverages and Specific Perils Part without discussing other pertinent language. In order to ensure proper interpretation of this insurance policy, the court must read this policy in its entirety without overlooking applicable provisions.
"Generally, any matter admitted by the party to whom the request is made is conclusively established." (Internal quotation marks omitted.) Baughman v. Collins, 56 Conn.App. 34, 39, 740 A.2d 491 (1999), cert. denied, 252 Conn. 923, 747 A.2d 517 (2000). Plaintiff's Response to Request for Admissions # 109 admits that defendant's Exhibit A is a true and accurate copy of the insurance policy. Therefore, the policy is conclusively established and properly before the court.
Reading this insurance policy, its language states: "GENERAL CONDITIONS PART (PROPERTY COVERAGE) AGREEMENT CT Page 13938-gd In return for your payment of the required premium, we provide the Property Coverage described in this policy during the policy period. The Property Coverage is subject to the terms of this form and to the: Property Coverage Declarations. Coverage Parts. Perils Parts. Policy terms that relate to cancellation, changes made to the policy, examination of books and records, inspection and surveys, and assignment or transfer rights or duties. Other forms indicated in the Declarations." (Emphasis added.) (Defendant's Exhibit A, Form CP-100, General Conditions, p. 1.) The Declarations states: "This is your COMMERCIAL PACKAGE POLICY providing coverages at the locations as described on the Supplemental Declarations page of this policy." (Emphasis added.) (Defendant's Exhibit A, Declarations form.) Additionally, the Declarations also incorporates a number of forms including CP-95, the Utilities Interruption Perils Part. (Defendant's Exhibit A, Declarations.) Moreover, the Supplemental Declarations incorporates more policy forms and sets forth covered property including, "LOSS OF INCOME INCL UTILITY INTERRUPTION . . . [$ LIMITATION ON LIABILITY] . . . 300,000." (Emphasis added.) (Defendant's Exhibit A, Supplemental Declarations.)
Nothing in the insurance policy indicates what "incl" means.
The defendant does not address the Declarations, the Supplemental Declarations, and the Utilities Interruption Perils Part. A reading of the policy with attention to the entire policy unveils a genuine issue of material fact. The insurance policy makes explicit reference to "utility" both in Utility Interruption Perils Part and Supplemental Declarations. The genuine issue of material fact is whether the parties intended "utility" to include water service provided by the plaintiff's well.
The insurance policy is silent as to what constitutes a "utility." As a hospitality business, water is a valuable commodity and the plaintiff would want to protect itself from losses incurred as a result of the failure of its water source. Therefore, the plaintiff would have intended "utility" to include water. On the other hand, the defendant would want to incur the least amount of risk and would only want to insure utilities provided for by a public utility company. From the CT Page 13938-ge defendant's perspective, it would not have intended "utility" to include the plaintiff's well water. Whether "utility" covers the plaintiff's water source is a genuine issue of material fact.
In general, utilities can be described as basic amenities required to occupy property. Our case law commonly includes water as a utility. See, e.g., Woodgate II v. Enfield, Superior Court, judicial district of New Britain, Docket No. CV 02 0515611 (March 17, 2005, Aronson, J.T.R.); Kearns-Rodriguez v. Rodriguez, Superior Court Judicial district of Fairfield, Docket No. FA 02 0392884 (March 10, 2004, Fisher, J.); Mancini v. Suffield Water Pollution, Superior Court, judicial district of Hartford, Docket No. CV 01 0804672 (September 17, 2002, Hale, J.T.R.) ( 33 Conn. L. Rptr. 141, 142); Miskin v. Wroblewski, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 96 0561277 (September 26, 1997, Allen, S.T.R.) ( 20 Conn. L. Rptr. 497, 498); Bryan v. Bryan, Superior Court, judicial district of Hartford-New Britain, Docket No. 378117 (March 5, 1992, Jones, J.).
In its memorandum of law in support of the motion for summary judgment, the defendant alludes to this genuine issue by disregarding the utility language and framing the issue as one involving property. The defendant states, "[I]t is questionable if a well is even contemplated as a covered item in the Coverages Part," and, "[i]t is questionable whether the Plaintiff's well falls under the policy as covered property." (Defendant's memorandum in support of motion for summary judgment, pp. 3, 8.) The defendant's argument addresses the well as covered property but neglects to recognize the utility language and the water that came from the well.
The defendant argues that even assuming the plaintiff's well is covered, its motion for summary judgment should be granted because the plaintiff cannot prove that its loss was caused by a specific peril enumerated in the insurance policy. Further review of the defendant's memorandum in support of its motion for summary judgment and the insurance policy's provisions illuminates, however, the policy's ambiguities, which add to the question of the parties' intent. Assuming that well water constitutes a utility intended for coverage by the parties, an ambiguity arises between the Special Perils Part and the Utility Interruption Perils Part.
The defendant's brief contains no mention of the Utility Interruption Perils Part.
The Special Perils Part excludes coverage for utility failure. The Specific Perils Part states that the defendant covers risks of direct loss except those excluded or limited. Pursuant to the exclusions and limitations, the Special Perils Part states that the defendant does not pay for loss if one or more of the "Specified Exclusions" apply to the loss. Utility failure is included in the definition of "Specified Exclusions." As such, the policy states that it does not pay for direct physical loss if utility failure applies to the loss. CT Page 13938-gf
In contrast, however, the Utility Interruption Perils Part actually provides coverage for utility failure limited only by the exclusions and limitations clause provided for within that part. The Utility Perils Interruption Part states in relevant part: "UTILITY INTERRUPTION PERILS PART (Special Form): We insure against direct physical loss to covered property caused by the following perils. PERILS COVERED: In the following Perils Covered, the term `we cover' means `we insure against direct physical loss.' Utility Interruption — We cover risks of direct physical loss to covered property resulting from interruption of utility service due to damage to the utilities specified in the declarations, except as excluded or limited." (Form CP-95, Utility Interruption Perils Part, p. 1.) The exclusions and limitations section then identifies specific exclusions and declares that if any of the specific exclusions apply, the defendant will not pay for the loss. The discrepancy between the Specific Perils Part and the Utility Interruption Perils Part creates a contradiction obscuring whether the parties intended utility coverage. The parties' intent therefore, is a genuine issue of material fact.
The defendant further argues in support of its motion for summary judgment that the insurance policy held by the plaintiff is a named/specific risk policy, which is different from an all risk policy. Furthermore, the defendant argues that because the plaintiff holds a named/specific risk policy, it bears the burden of proving the loss was covered by the policy and that the loss was caused by a specific risk enumerated in the policy. This interpretation of the plaintiff's policy is unsupported by law and cannot prevail because the defendant bears the burden of proving the nonexistence of a genuine issue of material fact, and pursuant to our case law the insured plaintiff should receive the benefit of the court's interpretation of the policy.
This argument is improperly before the court on this motion. "In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact." (Internal quotation marks omitted.) Allstate Insurance Co. v. Barron, 269 Conn. 394, 405, 848 A.2d 1165 (2004). "The office of a motion for summary judgment is not to test for the legal sufficiency of the complaint, but is to test for the presence of contested factual issues." Burke v. Avitabile, 32 Conn.App. 765, 772, 630 A.2d 624, cert. denied, 228 Conn. 908, 634 A.2d 297 (1993). Although the court recently concluded that "[t]he use of a motion for summary judgment to challenge the legal sufficiency of a complaint is appropriate when the complaint fails to set forth a cause of action and the defendant can establish that the defect could not be cured by repleading"; Larobina v. McDonald, 274 Conn. 394, 401, 876 A.2d 522 (2005); this is not such a case.
The defendant argues that the plaintiff's policy is a named peril policy and cites to federal case law referring to specific peril policies. The defendant differentiates between all risk policies and named/specific risk policies, contending that named CT Page 13938-gg peril policies are those in which an insurer specifies the perils it will cover and the policy holder bears the risk of any unknown or unforeseen cause of damage. The defendant admits, however, that there is no Connecticut law on this point. Nevertheless, the defendant argues that because the plaintiff has a named/specific risk policy, it has a higher burden than an all risk policy holder. The defendant argues that this higher burden requires the plaintiff to show that it sustained loss or damage to covered property and that such loss or damage was caused by a specific peril.
The defendant's differentiation between all risk and named/specific risk policies provides little help to the issue before the court on a motion for summary judgment. "[V]irtually all insurance contracts include at least several restrictions on the risks that are to be transferred to the insurer . . . [and] sometimes the difference between [an all risk policy and a specific risk policy] seem to a reader to be more a matter of style than substance." R. Keeton A. Widiss, Insurance Law, A Guide to Fundamental Principles, Legal Doctrines, and Commercial Practices (Practitioner's Ed. 1998) p. 463. Moreover, the defendant's argument that the entire policy is a named/specific peril policy is in conflict with the policy's language. The Specific Perils Part states: "This Property Coverage is subject to the terms shown below. The General Conditions Part (Property Coverage) also applies." (Defendant's Exhibit A, Form CP-85. Specific Perils Part, p. 1.) As stated above, the General Conditions Part is subject to the Property Coverage Declarations, which incorporates the Utilities Interruption Perils Part and the Supplemental Declarations. Because the General Conditions Part applies, the court cannot deduce that the Specific Perils Part controls the entire insurance policy. Additionally, the Utility Perils Interruption Part states in relevant part: "UTILITY INTERRUPTION PERILS PART (Special Form)." (Emphasis added.) (Defendant's Exhibit A, Form CP-95, Utility Interruption Perils Part, p. 1.) The fact that the Utility Interruption Perils Part declares itself a special form indicates that it is not governed by the Special Perils Part. Further evidence that the Specific Perils Part does not control the entire policy is found in the language of CT Page 13938-gh the Specific Perils Part itself. The Specific Perils Part states in relevant part: "Specific Perils — When reference is made in this part to `specified perils,' we mean . . ." (Emphasis added.) (Defendant's Exhibit A, Form CP-85, Specific Perils Part, p. 1.) As such, the Specific Perils Part signals that its language applies to that particular part and therefore the entire policy cannot be subject to it. The contract's language opposes the defendant's differentiation between named/specified risk policy and all risk policies and as such, this argument provides little help to the defendant in meeting its burden of showing that there is no genuine issue of material fact.
In addition to the fact that the policy applies the specific peril language when used only in that part, the language contained in the Specific Perils Part provides for a much more expansive reading of the risks covered than the reading argued by the defendant. The Specific Perils Part states: "We insure against direct physical loss to covered property caused by the following perils." (Emphasis added.) (Defendant's Exhibit A, Form CP-85, Specific Perils Part. p. 1.) The court notes that the policy does not state that it insures against direct physical loss to property caused by the following "specific perils." The policy does state, however, "PERILS COVERED Risks — We cover risks of direct physical loss, except as excluded or limited. Specified Perils — When reference is made in this Part to `specified perils,' we mean aircraft; breakage of building glass; civil commotion; collapse of buildings; explosion; falling objects; fire; hail; leakage from fire extinguishing equipment; lightning; riot; sinkhole collapse; smoke; sonic boom; vandalism; vehicles; volcanic action; water damage; weight of ice, snow or sleet; and windstorm, all except as excluded or limited." (Defendant's Exhibit A, Form CP-85, Specific Perils Part, p. 1.) The perils covered pursuant to the Specific Perils Part are not exclusively specific perils but rather include both risks and specific perils. Because the perils covered pursuant to the Specific Perils Part include both risks and specific perils, the insurance policy's coverage appears more expansive than what the defendant's argument suggests. In light of our case law, the benefit of a reading should go to the CT Page 13938-gi insured, and in this ease the more expansive reading should go to the plaintiff and therefore the defendant's argument cannot prevail. At a minimum, the included risk language raises a genuine issue of material fact as to whether the problem with the well was a risk that the parties intended to cover. Because the defendant's argument cannot prevail, and a genuine issue of material fact exists, the defendant's motion for summary judgment is denied.
For the foregoing reasons the motion for summary judgment is denied.