Opinion
No. CV99-0155209S
February 27, 2004
MEMORANDUM OF DECISION
The plaintiff, Sepe, was involved in an automobile accident on June 2, 1999. The allegations of the complaint claim that the defendant, Bethke, was negligent in the operation of his motor vehicle, thus causing the accident and resulting injuries the plaintiff suffered.
The defendant, Bethke, at the time of accident, carried liability insurance with a $20,000.00 policy limit. That amount was paid in full to the plaintiff. The plaintiff now continues to prosecute his claim against his own insurance company, Colonial Penn, for underinsured motorist benefits.
The parties, the plaintiff Sepe and the defendant Colonial Penn, have filed this joint motion for summary judgment. The parties agree that there are no factual issues in dispute and that the only issues are the application of the law to this set of facts.
The plaintiff claims that as a result of his injuries, be sustained lost wages and loss of earning capacity. Pursuant to these claims, the plaintiff did apply for and receive Social Security disability benefits as well as private insurance disability benefits.
The parties have asked the court to determine two issues, relative to the payment and receipt of these benefits by the plaintiff. The first issue is whether Public Acts 2000, No. 00-143 ( P.A. 00-143) was intended to be applied retroactively with regard to the Social Security disability benefits paid to the plaintiff. The second issue is whether private disability insurance benefits should be treated as Social Security disability benefits under P.A. 00-143 and General Statutes § 38a-336(b). The parties seek determination by the court on these issues so that the amount to be paid to the plaintiff, if anything, by Colonial Penn under the underinsured motorist benefits provision of the plaintiff's automobile policy may be adjusted and reduced accordingly.
(I) Whether P.A. 00-143 Should Be Applied Retroactively
Public Act 00-143 states the following.
An Act Concerning Federal Benefits In Automobile Accident Cases.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Subsection (b) of section 38a-336 of the general statutes is repealed and the following is substituted in lieu thereof:
(b) 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 policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured's uninsured and underinsured motorist coverage, exceed the limits of the insured's uninsured and underinsured motorist coverage. In no event shall there be any reduction of uninsured or underinsured motorist coverage limits or benefits payable for amounts received by the insured for Social Security disability benefits paid or payable pursuant to the Social Security Act, 42 U.S.C. § 301, et seq. The limitation on the total amount of recovery from all policies shall not apply to underinsured motorist conversion coverage purchased pursuant to section 38a-336a.
Approved May 26, 2000. Effective October 1, 2000.
(Emphasis in original.)
The legislative history which led to the passage of P.A. 00-143 focused on the Supreme Court decision of Vitti v. Allstate Ins. Co., 245 Conn. 169, 713 A.2d 1269 (1998). In Vitti, the Supreme Court concluded that Social Security disability benefits received by a plaintiff may be used to reduce the amount of underinsured benefits coverage available to be paid to a plaintiff.
It is clear from the language used by the legislature in P.A. 00-143 that the legislature's intent was to overrule the Supreme court's decision in Vitti. In reviewing the legislative history, it is important to review Representative Lawlor's remarks regarding the Vitti decision. Specifically, in. explaining the effect of the Vitti decision, Representative Lawlor states: "I think that's a great injustice. That is based on a policy that was not adopted in the Legislature." See 43 H.R. Proc., Pt. 11, 2000 Sess., pp. 3619-21.
"In order to determine whether an act should be characterized as clarifying legislation, we look to the legislative history to determine the legislative intent." State v. Magnano, 204 Conn. 259, 278, 528 A.2d 760 (1987). In Magnano, the Supreme Court determined after review of the legislative history for Public Acts 1985, No. 85-112 that it was intended to clarify the original intent of General Statutes § 52-146k(b). The court found the amendment was "a classic reaction to a judicial interpretation that was deemed inappropriate." Id., 283. The court further stated:
Once litigation brought that ambiguity to light, the legislature acted to remove any doubt about its earlier intentions. Its action in [1985] therefore invokes the principle of statutory construction that [i]f the amendment was enacted soon after controversies arose as to the interpretation of the original act, it is logical to regard the amendment as a legislative interpretation of the original act . . . Even though the legislative clarification was prompted by a judicial decision that the legislature deemed mistaken, such a clarification does not constitute an invasion of judicial authority. Like legislatures, judges are fallible. The legislature has the power to make evident to us that it never intended to provide a litigant with the rights that we previously had interpreted a statute to confer. CT Page 2705
(Citation omitted; internal quotation marks omitted.) Id., 283-84.
The Magnano court after this analysis concluded as follows. "Where an amendment is intended to clarify the original intent of an earlier statute, it necessarily has retroactive effect." Id., 284.
The principles espoused in the Magnano decision were recently upheld once again by the Supreme Court in Bhinder v. Sun Co., 263 Conn. 358, 819 A.2d 822 (2003) ( Bhinder II). The court in Bhinder II acknowledges that "[i]n the present case, the legislative purpose of P.A. 99-69, § 1(0), was to clarify the statute and restore the law to where it was before our decision in Bhinder I." Id., 374. The court noted that "the nature of clarifying legislation is necessarily retroactive because it explains what the intent of the legislature was when the prior statute was enacted." Id., 373-74.
Therefore, in applying the reasoning of Magnano and Bhinder II decisions to the issue before the court regarding P.A. 00-143 and its retroactive effect, it appears indisputable that P.A. 00-143 was intended to apply retroactively. Not only does P.A. 00-143 specifically overrule the decision in the Vitti case, supra, but it clarifies the legislature's intent as to the application of General Statutes § 38a-336(b). This clarification was in response to the Vitti decision, and therefore is necessarily retroactive.
This court concludes that as applied to this case, P.A. 00-143 is to be applied retroactively and therefore, any and all Social Security disability benefits received by the plaintiff may not be used to reduce underinsured motorist benefits available to the plaintiff through his policy with Colonial Penn.
The second issue presented to this court is whether private disability insurance benefits should also be excluded from reduction of underinsured motorist benefits as Social Security disability benefits are under P.A. 00-143 and General Statutes § 38a-336(b).
After thorough review, there does not appear to be any Appellate Court cases which can shed any light on this issue. The Superior Court cases cited by the parties have taken varying approaches in concluding either one way or the other on this issue and/or the similar issue of whether private disability insurance benefits are subject to collateral source reduction.
The question before this court is whether there is a distinction that can be made between Social Security disability benefits and private insurance disability benefits that would make treating private insurance disability benefits different than Social Security disability benefits for purposes of reduction from underinsured motorist benefits.
The court looks to the regulations in this area for assistance and guidance. The salient provision for review is § 38a-334-b(d) of the Regulations of Connecticut State Agencies. When the Supreme Court undertook its review in the Vitti case, § 38a-334-6(d) of the Regulations of Connecticut State Agencies read as follows.
The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of section 14-112 of the general statutes, except that the policy may provide for the reduction of limits to the extent that damages have been
(1) paid by or on behalf of any person responsible for the injury,
(2) paid or are payable under any workers' compensation or disability benefits law, or
(3) paid under the policy in settlement of a liability claim . . .
(Emphasis added.)
It should be noted that these regulations were amended, effective November 1, 2000. The new provisions of § 38a-334-6(d) of the Regulations of Connecticut State Agencies state the following.
(d) Limits of liability.
(1) The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of Section 14-112 of the General Statutes, except that the policy may provide for the reduction of limits to the extent that damages have been
(A) paid by or on behalf of any person responsible for the injury,
(B) paid or are payable under any workers' compensation law, or
(C) paid under the policy in settlement of a liability claim.
Curiously, in amending this section, the language is nearly identical to the prior language but for the omission under subsection (B) of the language "or disability benefits law." By reading this section as amended, it is now extremely clear to this court that the intention was to eliminate any disability benefits from consideration for reduction from uninsured or underinsured motorist benefits.
In reviewing the timing of this amended regulation, it should be noted that its passage and effective date were one month after the effective date of P.A. 00-143 as noted earlier in this decision. It is obvious to this court, that the intent of the regulations amendment is to have the amended General Statutes § 38a-336 conform with § 38a-334-6(d) of the Regulations of Connecticut State Agencies. If the intent was to limit the non reduction of disability benefits to only Social Security disability benefits, then this provision of the regulations would have mirrored the statutory language of P.A. 00-143. The fact that the regulation has completely omitted all disability benefits leads this court to conclude that this issue can only be reconciled in one way. "[W]hen the court engages in statutory analysis, it `consider[s] its . . . parts . . . to render a reasonable overall interpretation.'" Esposito v. Waldbaum's, Inc., 78 Conn. App. 472, 478, 827 A.2d 747 (2003).
This court finds that Social Security disability benefits are those benefits available to a claimant through the public sector. By comparison, private insurance disability benefits are available through a private insurance policy. However, both benefits are provided for the same reason, i.e. to compensate an individual for loss of income due to an inability to engage in employment previously maintained.
It is abundantly clear to this court that the difference between Social Security disability benefits and private insurance disability benefits is a difference without a meaningful distinction.
Therefore, this court concludes that private insurance disability benefits must be treated the same as Social Security disability benefits under the provisions of § 38a-334-6(d) of the Regulations of Connecticut State Agencies and General Statutes § 38a-336. Since this court has previously found that Social Security disability benefits may not be used to reduce underinsured motorist benefits available to the plaintiff in this action by retroactive application of P.A. 00-143, then this court also holds that private insurance disability benefits may not be used to reduce underinsured motorist benefits available to the plaintiff in this action.
Wherefore, summary judgment shall enter in favor of the plaintiff as to both issues present to the court for determination by the parties.
Agati, J.