Opinion
No. CV 03 0829611 S
November 29, 2004
MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT
In this action, Reliance Insurance Company as subrogee, seeks to recover from defendant's Virginia Ransom and Lesha A. Vining, sums it paid to its insured Lishan Thomas Ku, for property damage he sustained in an accident on June 26, 2001, with a motor vehicle operated by Ransom as an employee of Vining. The plaintiff is insolvent and in liquidation by virtue of an order of liquidation entered in the Commonwealth Court of Pennsylvania on October 3, 2001.
The defendants filed this motion for summary judgment on February 9, 2004, claiming that the statute of limitations, General Statutes § 52-584 has expired since this action was not commenced until October 3, 2003, well past the two-year deadline of June 26, 2003.
Plaintiff claims, that as an insurance company in liquidation, it could bring this action within two years after the order of liquidation, i.e. until October 3, 2003.
General Statutes § 38a-926 provides in relevant part:
(b) The liquidator may, upon or after an order for liquidation, within two years or such time in addition to two years as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered.
Defendants argue that, even if General Statues § 38a-926 is applicable, it only applies to "certain actions" and this particular action brought on behalf of one particular insured rather than all policyholders as a group is not covered under the statute.
The defendants also argue that because the plaintiff is a subrogee of Ku, it has assumed the same rights and obligations as Ku, who would have been bound by the two-year statute of limitation under General Statute § 52-584.
Lastly, the defendants argue that under General Statute § 38a-923(a)(6), the Liquidator is authorized to bring suit on behalf of the insurer to collect debts "owed," and this unliquidated negligence claim cannot be considered as a debt "owed."
In this case, there is no dispute as to the date of the incident, the date of the liquidation order and the date this action was commenced. The non-moving party has not submitted any evidence demonstrating any genuine issues of material fact. The only issue in dispute is which statute of limitation is applicable. The defendants argue that, because the action involves a property damage claim, General Statute § 52-584 is applicable. The plaintiff argues that, because it is an insurer in liquidation, General Statute § 38a-926 is applicable.
General Statute § 38a-926(b) provides that "[t]he liquidator may, upon or after an order for liquidation, within two years or such time in addition to two years as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer . . ." (Emphasis added.) No Connecticut cases have addressed this particular statute but other states that have adopted the Model Insurers Rehabilitation and Liquidation Act have had cases dealing with the same provision. However, all those cases were brought by the commissioners of insurance of the respective states rather than the insolvent insurers. See generally, State v. Stockton, 129 N.C.App. 432, 499 S.E.2d 790 (1998), cert. vacated, 350 N.C. 57, 510 S.E.2d 374 (1999); Ins. Commissioner v. Aageson Thibo Agency, 226 Mich.App. 336, 573 N.W.2d 637 (1997), cert. denied, 459 Mich. 867, 585 N.W.2d 300 (1998); and Wilcox v. Geneva Rock Corp., 911 P.2d 367, 368 (Utah 1996).
The wording of the statute makes it clear that the statute does not apply to suits brought by the insolvent insured itself. Limiting the application of § 38a-926 to the liquidator rather than the insolvent insurer does not bar the insolvent insurer from bringing suit, but only within the statute of limitation applicable to the underlying cause of action. It is concluded that General Statutes § 52-584 is the controlling statute in this case because General Statutes § 38a-926 does not apply because the plaintiff is the insolvent insurer, not "the liquidator" bringing suit on behalf of the insolvent insurer.
Furthermore, in this case, the Pennsylvania Order of Liquidation explicitly enjoins the plaintiff from "the institution or further prosecution of any actions in law or equity on behalf of or against Reliance." (Page 9, paragraph 21, section (f)).
Since this action is time barred, the motion for summary judgment is granted.
Wagner, JTR