Opinion
No. CV 05 4001479
April 19, 2006
MEMORANDUM OF DECISION
On February 6, 2004, the plaintiff, Linda Noel, in her capacity as administratrix of the estate of Nicholas Flexer, commenced an action against William F. Porter (Porter), arising out of a September 7, 2002 all terrain vehicle (ATV) accident that resulted in the death of the plaintiff's decedent Nicholas Flexer (Flexer). The accident occurred when Porter, the operator of the ATV, lost control of the vehicle and failed to negotiate a curve in the road thereby causing the vehicle to leave the roadway and collide with rocks and trees. Flexer, who was riding as a passenger on the vehicle, was thrown from the vehicle and died. In Noel v. Porter, Superior Court, judicial district of New London, Docket No. CV 04 0568629 (August 30, 2004, Hurley, J.), the plaintiff recovered a judgment against Porter in accordance with a written stipulated agreement between the parties in the amount of $1.5 million plus interest.
At the time of the accident, Porter was a resident in the household of his parents, Michael and Karen Porter, who were insured under a homeowner's policy (policy number HP 219-04-51) issued by the defendant, Merrimack Mutual Fire Insurance Company (Merrimack), for the premises at 9 Stetson Road in Griswold, Connecticut. At the time of the incident, the family had sold 9 Stetson Road and were living in an apartment located at 35 Russell Street in Jewett City, Connecticut, while their new home at 7 Stetson Road in Griswold was being built. On the date of the accident, the defendant, Peerless Insurance Company (Peerless), insured Michael and Karen Porter under a homeowner's/renter's policy (policy number PLB 4562195) for the premises at 35 Russell Street, Apartment 27.
Because the judgment remains unpaid, the plaintiff, pursuant to General Statutes § 38a-321, brought the present action against Peerless and Merrimack, alleging breach of contract, negligence and bad faith as to each defendant. The complaint alleges, inter alia, that each defendant breached its contractual obligations to Porter in one or more of the following ways: by failing to provide legal counsel to defend the wrongful death action against Porter; by failing to adequately investigate the claim; by failing to make a settlement offer to the plaintiff on behalf of its insured after suit was brought; by failing to provide counsel and provide the contractual benefits of the policy of liability insurance; by failing to meet a reasonable insured's expectations as to insurance protection and coverage regarding the claim arising out of the death of Flexer; by de facto denying coverage to its insured; and by failing to satisfy the judgment. In each defendant's respective answer, the insurance carriers raise numerous special defenses, including a claim that the insured's (Porter) failure to notify the insurer of the underlying suit in the judicial district of New London discharged each defendant from liability. The plaintiff, in turn, denies each and every allegation in the defendants' special defenses.
General Statutes § 38a-321 provides in relevant part: "Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment."
On September 8, 2005, a motion for summary judgment was filed by Merrimack as to counts five through eight of the plaintiff's complaint accompanied by supporting affidavits and documentation. On October 20, 2005, the plaintiff filed a memorandum of law in opposition, accompanied by supporting affidavits and documentation. The plaintiff filed a cross motion for summary judgment on October 24, 2005 against Merrimack.
On October 24, 2005, Peerless filed a motion for summary judgment as to counts one through four of the complaint, accompanied by a supporting affidavit and documentation. Peerless filed a supplemental memorandum of law in support of its motion for summary judgment on October 28, 2005. On November 14, 2005, the plaintiff filed a memorandum of law in opposition to Peerless' motion for summary judgment, as well as a supplemental memorandum of law in opposition to Peerless' supplemental memorandum of law. Additionally, on November 14, 2005, the plaintiff filed an amended cross motion for summary judgment against Merrimack and Peerless, as well as additional supplemental affidavits. Merrimack filed a reply brief on November 18, 2005. All motions for summary judgment will be addressed in this decision.
I. CT Page 7475
"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). "[T]he `genuine issue' aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred . . . A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002)."In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . Once the moving party has met its burden . . . 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, 881 A.2d 194 (2005).
II.
Both of the defendants argue that there is no genuine issue of material fact and that each is entitled to summary judgment as a matter of law on two separate grounds. First, the defendants contend that the Porters did not provide the insurers with prompt notice of the plaintiff's underlying suit against William Porter, as required by each respective insurance policy, and that failure to notify the insurers of the suit materially prejudiced the defendants. Next, the defendants claim that the underlying incident is outside of the coverage afforded by each respective insurance policy.
The defendants raise essentially identical arguments in their respective memorandums of law in support of the motion for summary judgment. Accordingly, the court will address these arguments together.
"In this state, an insurance policyholder who fails to give an insurer timely notice of an insurable loss does not forfeit his insurance coverage if he can prove that his delay did not prejudice his insurer." Taricani v. Nationwide Mutual Ins. Co., 77 Conn.App. 139, 140, 822 A.2d 341 (2003), citing Aetna Casualty Surety Co. v. Murphy, 206 Conn. 409, 417-18, 538 A.2d 219 (1988). In Aetna Casualty Surety Co. v. Murphy, 206 Conn. 409, 417-18, 538 A.2d 219 (1988), the Supreme Court held that an insured's failure to give prompt notice to the insurer of an insurable claim as required by the insurance policy does not result in an unconditional discharge of an insurer's liability under its insurance contract. Rather, in recognition of the purposes of such notice provisions and the fact that insurance contracts are actually contracts of adhesion, the court determined that a disproportionate forfeiture may result and could be avoided where the insured could demonstrate that the delayed notice resulted in no material prejudice to the insurer. Id., 416-20. Thus, "absent a showing of material prejudice, an insured's failure to give timely notice does not discharge the insurer's continuing duty to provide insurance coverage." Id., 418. "[T]he burden of establishing lack of prejudice must be borne by the insured. It is the insured who is seeking to be excused from the consequences of a contract provision with which he has concededly failed to comply." Id., 419-20.
In the present case, the defendants argue that the Porters' failure to notify the insurers of the underlying suit violated the notice provision in each defendant's respective insurance policy, which provides in relevant part: "In case of an accident or `occurrence,' the `insured' will perform the following duties that apply . . . Promptly forward to us every notice, demand, summons or other process relating to the accident or `occurrence.'" Though the burden of proof rests with the plaintiff to establish a lack of prejudice, the court will first set forth the claims of prejudice advanced by the defendants. The defendants claim each was prejudiced by the failure to notify in that the insurers learned of the underlying suit only after judgment had been entered without giving the insurers a chance to appear and defend. In its memorandum in support of its motion for summary judgment, both Peerless and Merrimack contend that the "prejudice is extreme and obvious where, as herein, the insured has compounded the breach of a condition precedent in the policy by failing to give notice of the suit, and by thereafter entering into a collusive stipulated judgment well above the policy limits." The defendants assert that the stipulated judgment was entered into purely for the advantage of the insured, which prejudiced both defendants because neither insurer had an opportunity to appear and respond to the underlying suit. In response, the plaintiff argues that the defendants have not been prejudiced where both carriers were aware of the underlying occurrence, both had an opportunity to investigate the same, and further, the plaintiff has since offered to vacate the stipulated judgment.
The notice provision in both insurance policies submitted by the parties is identical.
Each respective insurance policy at issue in this case has a liability limit of $300,000 per occurrence. The defendants argue that the stipulated judgment in the amount of $1.5 million exceeds the policy limits.
The affidavits and other documentary proof submitted by the parties establishes that the defendants were notified of the plaintiff's claim approximately one year before filing suit in the judicial district of New London. In fact, the matter had been under investigation by both insurance companies during that year. Therefore, the defendants cannot argue that the insurers were materially prejudiced by lack of notice of the claim and a resultant inability to investigate. However, the affidavits and supporting documentation submitted by the parties equally demonstrates that the defendants never received notice of the underlying suit and resulting stipulated judgment until December 2004 (Merrimack) and January 2005 (Peerless), several months after the judgment was entered. Merritt River Partners v. American Safety Casualty Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 04 4004159 (January 23, 2006, Thompson, J.) (distinguishing between notice of a claim and a suit).
Furthermore, the plaintiff conceded at oral argument on December 19, 2005, that she did not send a courtesy copy of the complaint to the defendants.
Although the plaintiff has submitted several affidavits opposing summary judgment, the court finds that these affidavits do not sufficiently rebut the defendants' argument that notice of the suit was never given to the insurers. Nor do the plaintiff's affidavits contain any factual basis for a claim that the defendants were not materially prejudiced by the Porters' failure to notify. Therefore, the court finds that such late notice deprived the defendants of the opportunity to appear and defend, thus resulting in prejudice to the insurers. Accordingly, the court concludes that the plaintiff has failed to meet her burden of proof on the issue of lack of prejudice to the defendants.
The plaintiff has submitted affidavits from William Porter, Karen Porter, Attorney Katherine Meshako, Attorney Charles Norris, and Attorney Beth Steele.
Based upon the foregoing reasons set forth above, the court finds that there is no genuine issue of material fact concerning the insured's failure to notify and any resulting prejudice to the defendants. Therefore, the defendants are entitled to judgment as a matter of law. Accordingly, Peerless' and Merrimack's motion for summary judgment is granted. The plaintiff's cross motion for summary judgment against both defendants is denied.
In light of the court's decision in this memorandum, it need not address the remaining grounds for summary judgment brought by the parties.