Opinion
NNHCV136039284S
06-14-2017
Linda Piscatelli-Hunsaker v. Max Reichbart et al
Filed June 15, 2017
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Steven D. Ecker, J.
Plaintiff was injured in an automobile accident on December 19, 2012. She initially sued the at-fault driver, a young man named Max Reichbart, and Reichbart's grandfather, Robert Rosoff, who owned the vehicle driven by Reichbart at the time of the collision. At some point it became evident to plaintiff that the liability insurance covering those defendants may be inadequate to provide her with full compensation for her losses, and in May 2014, plaintiff added as a defendant Kemper Independent Insurance Co. (" Kemper"), her underinsured motorist (UIM) insurance carrier. Plaintiff settled her claims against Reichbart and Rosoff on or about April 26, 2016, for $100,000, which was the full amount of the automobile liability insurance coverage available to those defendants under a policy owned by Rosoff. Kemper, the remaining defendant, now contends that plaintiff is not entitled to UIM benefits because she failed to exhaust all applicable liability insurance policies available to the at-fault driver, Reichbart. See General Statutes § 38a-336(b). For the reasons that follow, the court finds that plaintiff has established her entitlement to UIM benefits under applicable law.
The statute provides in relevant part: " An insurance company shall be obligated to make payment to its insured up to the limits of the policy's uninsured and underinsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance polices applicable at the time of the accident have been exhausted by payment of judgments or settlements . . ."
A court trial on the issue of exhaustion was held on December 9, 2016. Testimony was taken from Max Reichbart and his mother, Pamela Reichbart. The evidence will be described in greater detail below, as necessary. The court has reviewed the trial transcript and all trial exhibits carefully. It has also read closely the various memoranda submitted by the parties, as well as the statutes, cases and other authorities cited in those submissions. In addition, the court has conducted its own research regarding certain legal issues.
Trial of the case was bifurcated by the court (Abrams, J.) so that the threshold issue of exhaustion could be decided first. See Docket Entry #170.10. A jury trial on the underlying issues of liability and damages will take place now that the exhaustion issue has been decided in plaintiff's favor.
The governing statutory framework is straightforward. As noted, § 38a-336(b) provides that UIM coverage is payable only after a plaintiff fully exhausts all applicable liability insurance available to the tortfeasor. See, e.g., General Accident Ins. Co. v. Mortara, 314 Conn. 339, 351-52, 101 A.3d 942 (2014); Ciarelli v. Commercial Union Ins. Cos., 234 Conn. 807, 811-12, 663 A.2d 377 (1995). The operative public policy " is to give a personal injury claimant access to insurance protection to compensate for the damages that would have been recoverable if the underinsured motorist had maintained an adequate policy of liability insurance, " the term " adequate" in this context meaning a policy or policies of liability insurance " equal to the amount of [the plaintiff's] uninsured motorist coverage." Florestal v. Government Employees Insurance Co., 236 Conn. 299, 310, 673 A.2d 474 (1996) (citations and inner quotation marks omitted).
The parties agree that General Statutes § 38a-336c(a) establishes the standard to be applied for determining whether a UIM claimant has satisfied the exhaustion requirement in any particular case. This provision, enacted in 2006, states in relevant part that the " [i]nsured, when making a claim for uninsured or underinsured motorist benefits, shall make reasonable efforts to establish what liability coverage there is for the owner and operator of an alleged uninsured or underinsured vehicle." The term " reasonable efforts" identifies the central focus of the exhaustion inquiry under § 38a-336c(a).
The legislature has not made it crystal clear exactly how the seemingly unqualified exhaustion requirement contained in § 38a-336(b) fits with the later-enacted " reasonable efforts" provision contained in § 38a-336c(a). It seems logical and sensible to understand the latter provision as qualifying the former; a claimant thus is entitled to UIM benefits upon a showing that the claimant (1) has made reasonable efforts to establish the available liability coverage, and (2) has exhausted the coverage found, by those efforts, to exist.
The court requested additional briefing and argument on this point prior to issuing this memorandum, because the court had been unable to locate any direct appellate guidance about the " fit" between § 38a-336(b) and § 38a-336c. (The few cases at the superior-court level provide somewhat inconsistent views. See Smith v. Long, HHD-CV-146052608, 2016 WL 7839831, at *2-*4 (J.D. Hartford, December 5, 2016) ; Lewis v. Blatche, No. CV136037128, 2015 WL 4775448, at *1-*5 (J.D. New Haven, July 2, 2015)). At oral argument on May 22, 2017, Kemper's counsel agreed that " reasonable efforts" by the claimant would be sufficient to satisfy the exhaustion requirement.
This construction makes sense for at least two reasons. First, as a practical matter, evidence of applicable liability insurance, by its nature, typically is in the possession of a third party-neither the UIM claimant nor the UIM carrier ordinarily will possess definitive knowledge of all liability insurance actually available to the at-fault driver and vehicle owner. In the uninsured context, the operator/owner may not even be identified; in the UIM context, they will be adverse to the claimant, and may be uncooperative. It would seem unfair to insist upon irrefutable evidence regarding the applicable liability coverage when such evidence is in the hands of one or more strangers to the contractual relationship between the UIM insured and insurer. By enacting § 38a-336c, the legislature addressed this problem of proof by providing that a claimant who makes reasonable efforts to determine the existence of liability insurance has satisfied the exhaustion requirement.
The court has read the legislative history of Section 1 of Public Act 06-104, which is codified as § 38a-336c. That history confirms that the statute was enacted due to concern that it had become " extremely difficult over the years for claimants to obtain their uninsured or underinsured benefits" without encountering " extremely considerable delay." 49 S. Proc., Pt. 8, 2006 Sess., p. 2572 (Sen. Crisco). The purpose of the " reasonable efforts" provision was " to make it much easier for those that come under the unfortunate situation of being in an accident with an uninsured or under-insured driver. And [the provision] would soften the burden of the [claimant] having to prove [the at-fault driver's uninsured or under-insured status, and thereby allow the claimant to] take advantage of their own insurance coverage much faster . . ." Id. at pp. 2574-75 (Sen. DeLuca). Speaking in favor of the bill, Representative D'Amelio stated that the final version was a compromise between the insurance industry and the " trial lawyers, " and would be helpful to " all of our constituencies, especially the consumers in the State of Connecticut . . ." 49 H.R. Proc., Pt. 16, 2006 Sess., pp. 5086-87. He pointed out in particular the problem of proof that would be obviated by the new legislation: " This will provide that the insured does not have to come up with affidavits or statements signed by the offending tortfeasor indicating that they did not have insurance, or indicating that they did not have sufficient insurance to cover the tort claims resulting from an auto accident." Id. at p. 5088. " It's difficult to prove a negative, " he observed, remarking on the need to avoid " placing an undue burden [of proof] on the insured . . ." Id. The " reasonable efforts" standard was the legislature's solution to this problem of proof.
Second, if the statutory scheme were construed to require definitive evidence of exhaustion, then § 38a-336c would be rendered meaningless, thus violating a cardinal rule of statutory construction. It would serve no purpose to legislate a " reasonable efforts" standard if a UM/UIM insurer could choose to refuse payment to a claimant meeting that standard. Likewise, a requirement of definitive proof is wholly inconsistent with the statutory provisions prohibiting the UM/UIM insurer from requiring an affidavit or written statement of exhaustion from the owner or operator of the at-fault vehicle as a condition of payment of UM/UIM benefits, see § 38a-336c(b) and § 38a-336c(c).
" It is a basic tenet of statutory construction that the legislature [does] not intend to enact meaningless provisions . . . Because [e]very word and phrase [of a statute] is presumed to have meaning . . . [a statute] must be construed, if possible, such that no clause, sentence or word is superfluous, void or insignificant." Tomick v. United Parcel Services, Inc., 324 Conn. 470, 483, 153 A.3d 615 (2016) (inner quotation marks and citation omitted); see also Wilkins v. Connecticut Childbirth and Women's Center, 314 Conn. 709, 724, 104 A.3d 671 (related statutes should be harmonized in accordance with superfluity canon).
The factual question to be determined is whether the plaintiff in this case has satisfied her burden of showing that she made reasonable efforts to establish what liability insurance coverage was available to the owner (Robert Rosoff) and operator (Max Reichbart) of the at-fault vehicle. Kemper argues that plaintiff has not met that burden. Its principal argument is that plaintiff failed to demonstrate that Reichbart, who lived with his parents at the time of the underlying incident, was not covered as a " resident relative" under the automobile liability policy or policies insuring the various motor vehicles owned by his parents. Kemper's argument is that plaintiff was obligated to disprove the existence of " resident relative" coverage, presumably by using legal process to obtain a copy of Reichbart's parents' insurance policy or policies in effect at the time of the incident to determine if each such policy contained an endorsement excluding him from coverage.
Kemper relies on the fact that Connecticut law in effect in 2012 (and to this day) requires that any automobile liability coverage for bodily injury and property damage liability " shall apply to the named insured and relatives residing in such insured's household unless any such relative is specifically excluded by endorsement." General Statutes § 38a-335(d). This is referred to as " resident relative" coverage.
The court disagrees with Kemper's analysis. As discussed, the governing statutory scheme does not require the UIM claimant to obtain absolute or definitive proof of the tortfeasor's (operator's or owner's) portfolio of available liability insurance. Indeed, the statute plainly states that the UIM claimant is not required even to produce a sworn statement from the operator or owner attesting to the lack of any additional coverage. See General Statutes § 38a-336c(c). What is required instead is that the claimant undertake reasonable efforts to determine the existence of all applicable liability insurance, and to exhaust those policies. This is not a meaningless requirement, and it plainly demands something more than mere sham or perfunctory gestures. But the purpose of the " reasonable efforts" statutory provision is to prohibit the insurance carrier from refusing to pay a UIM claimant until the claimant succeeds in forcibly extracting coverage information out of an unwilling and uncooperative tortfeasor. See above at pp. 3-4 & n.4.
In the present case, the court finds as a factual matter that plaintiff made reasonable efforts to determine the existence of all applicable liability coverage available to the operator and the owner of the at-fault vehicle. Her settlement with Max Reichbart and Robert Rosoff did not take place in the shadows, with a wink and a nod. To the contrary, she sued Reichbart and Rosoff, and later settled her lawsuit for the limits of all known liability coverage available to them only after serving each of them with a set of interrogatories and requests for production of documents (" discovery requests"), and receiving their respective responses to those requests. See Pl. Ex. 2 (Reichbart responses), Pl. Ex. 3 (Rosoff responses). Plaintiff followed a reasonable course of conduct by utilizing the official " standard form discovery" designed by Connecticut superior court judges specifically for use in all personal injury actions alleging liability based on the operation of ownership of a motor vehicle. See Practice Book 13-6(b) (Interrogatories--Form 201); Practice Book § 13-9 (Requests for Production--Form 204). These standard requests require a defendant to provide, among other things, detailed information as to any insurance policy under which an insurer may be liable to satisfy part or all of a judgment. See Form 201, Interrogatory Nos. 7 (insurance interrogatory) and 8 (excess-insurance interrogatory); Form 204, Request for Production No. 2 (requiring defendant(s) to produce copy of declarations page(s) for each insurance policy).
The required information includes the name(s) and address(es) of the insured, the amount of coverage under each policy, and the name(s) and address(es) of the insurer(s).
Rosoff and Reichbart each responded to the discovery requests propounded by plaintiff. In response to the insurance-related requests in particular, each of the individual defendants disclosed only one policy, a $100,000 liability insurance policy issued to Rosoff by Liberty Mutual (the " Liberty Mutual policy"). Plaintiff ultimately settled her case against Rosoff and Reichbart in exchange for payment of the coverage limits under the Liberty Mutual policy.
Plaintiff was entitled to rely on the accuracy and completeness of Reichbart's responses to her discovery requests. Indeed, the fundamental premise underlying the discovery process in civil litigation is that the requesting party is entitled to rely on the truth, accuracy and completeness of the responses:
The very integrity of the civil justice system depends on compliance with the discovery rules. Discovery cannot be a game of hide-and-seek. Our discovery system depends in large part on self-reporting. When discovery requests are made by a party, the party to whom the request is made has an obligation to respond accurately and fully.Hogue v. Fruehauf Corporation, 151 F.R.D. 635, 639 (N.D.Ill. 1993) (decided under Federal Rules of Civil Procedure). Parties in litigation must be able to rely with confidence on their adversary's discovery responses, and are entitled to consider those responses to be truthful, accurate, and complete. This is emphatically so with respect to discovery aimed at eliciting insurance-related information in personal injury cases. Parties settle cases every day based on the extent of available insurance coverage--information most often obtained through the discovery process. Our rules of discovery recognize and accommodate this reality by establishing a per se rule permitting discovery of this particular information as of right. See Practice Book 13-12 (" In any civil action[, ] the existence, contents and policy limits of any insurance policy under which any insurer may be liable to satisfy part or all of a judgment which may be rendered in the action . . . shall be subject to discovery by any party by interrogatory or request for production . . ."). The rule illustrates the importance of this information and designates the means by which it is ordinarily obtained.
The principles are equally fundamental under the rules of practice in Connecticut state court. The imperative of " full and frank disclosure" has been emphasized often in the context of financial disclosure in divorce cases. See Weinstein v. Weinstein, 275 Conn. 671, 687, 882 A.2d 53 (2005); Billington v. Billington, 220 Conn. 212, 219-21, 595 A.2d 1377 (1991); see also Ramin v. Ramin, 281 Conn. 324, 349, 915 A.2d 790 (2007) (noting importance of discouraging discovery gamesmanship and evasion of discovery obligations).
The standard discovery requests used by plaintiff include interrogatories and requests for production seeking disclosure of the very information that Kemper argues was not sought out or obtained by plaintiff. Kemper's theory is difficult to apprehend. It cannot be doubted that plaintiff was entitled to rely on the responses provided by the individual defendants. Standards of reasonableness surely did not require her to test the accuracy or completeness of those discovery responses by re-asking the questions again at Reichbart's deposition, or issuing confirmatory third-party discovery to Reichbart's parents. Cf. In re Amtrak Sunset Limited Train Crash, 136 F.Supp.2d 1251, 1260 (S.D.Ala. 2001) (" A party is entitled to rely on an opposing party's written responses to interrogatory questions; [she] is not required to ask a party-deponent every question in [his] deposition that the party had previously answered in the set of interrogatories . . . [A party is] not to be penalized for accepting as true [the responding party's] answers to the interrogatories . . ."). In sum, the court finds that plaintiff acted reasonably in her efforts to identify the liability insurance available to the individual defendants, and she was not required under the circumstances of this case to investigate the issue further under the " reasonable efforts" standard.
It bears noting that Kemper was not a helpless bystander to a discovery process outside of its control. Kemper was made a party to this lawsuit in May 2014, and, like plaintiff, was served with the individual defendants' discovery responses on October 23, 2014. See Pl. Exs. 2 and 3 (service certified to counsel for Kemper). If Kemper had reason to doubt the accuracy or completeness of those responses, it had every opportunity to conduct its own discovery and dig deeper, whether before or even after plaintiff settled her claims against the individual defendants in April 2016. Kemper, moreover, has presented no evidence that more extensive efforts would have uncovered additional liability insurance available to Reichbart, and there was no evidence presented at trial establishing the existence of any such additional coverage. (To be clear, the observations contained in this footnote are not meant to imply that Kemper carries the burden of proof regarding exhaustion. But the absence of evidence regarding additional coverage would seem to confirm the wisdom of the legislature's determination, embodied in § 38a-336c, that " reasonable efforts" is the most that should be required of a UIM claimant, in light of the difficulty often involved in ascertaining definitive proof of available coverage from the tortfeasor or his/her family members.)
Kemper may intend to suggest that special circumstances existed that should have put plaintiff on notice that the individual defendants' discovery responses were suspicious or of doubtful accuracy. The court rejects this suggestion. Plaintiff did not have a duty to test the accuracy or completeness of Reichbart's discovery responses simply because he lived with his parents, who themselves owned insured vehicles. It appears that Reichbart was using his grandfather's car because he was not allowed to drive his parents' vehicles. Though not necessary to the disposition of the case, it would be reasonable to infer under these circumstances that the parents wished to avoid the substantial expense involved in having their teenage son insured as a " resident relative" under their automobile liability insurance, and therefore obtained the relevant endorsement excluding such coverage. See, e.g., Progressive Northwestern Ins. Co. v. Rivera, Docket No. CV000802973, 2001 WL 1231866, at *2 n.1 (Superior Court, September 25, 2001) (noting premium reduction for endorsement containing " resident relative" exclusion). The court does not see any " red flags" or other circumstances that would have made plaintiff's efforts unreasonable.
Kemper argues that there is no evidence that plaintiff actually relied on the insurance information contained in the individual defendants' discovery responses. This argument, which Kemper has emphasized repeatedly, carries no weight, and borders on the bizarre. The inference of reliance is more than reasonable--it is obvious and virtually unavoidable. The insurance-related discovery requests are included as part of the standard discovery forms in automobile cases precisely because the information is of great importance to plaintiffs in the litigation process. To be more specific, plaintiffs, in consultation with their lawyers, rely on this information in making a variety of important decisions about such things as whether to pursue a prejudgment attachment of assets; whether to add or eliminate parties; whether to add or delete causes of action; whether to file an offer of compromise (and for what amount); whether to devote significant resources to a case (and the amount of such resources, both time and money); and--perhaps most critically and surely most frequently--whether to settle a case (and for how much). There was no need for the plaintiff or her lawyer in this case to testify at trial that she agreed to settle her claims against Reichbart and Rosoff for the limits of the Liberty Mutual policy in reliance on those defendants' discovery responses on the subject of insurance coverage. Of course she did. No other explanation has been proposed by Kemper, and no other inference is plausible under the circumstances.
In any event, it is not apparent to the court that the plaintiff, to establish exhaustion, must affirmatively prove her subjective reliance on the results of her efforts to identify all available liability coverage. The issue under § 38a-336c is whether plaintiff made reasonable efforts to determine what liability insurance existed. The test is an objective one. At least in the absence of any evidence of bad faith or collusion, defendant fails to explain or justify a need for an inquiry into plaintiff's subjective " reliance." If such reliance were required, the court would find that the requirement is met here, on the grounds set forth in the text preceding this footnote.
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The court finds that the exhaustion requirement has been satisfied. Counsel are directed to contact the New Haven civil caseflow office for the purpose of obtaining a date to begin jury selection for trial of the remaining issues.
It is so ordered.