Opinion
No. MMX-CV-04-4000934 S
July 13, 2006
MEMORANDUM OF DECISION
FACTS
The plaintiff, John Shedrick, Jr., filed the present action on September 22, 2004, against the defendant, Trantolo Trantolo, LLC, arising out of its legal representation of the plaintiff in a lawsuit against First Financial Insurance Company (First Financial) and R.J. Vicino Insurance Agency (R.J. Vicino). The plaintiff alleges, in a one-count complaint, legal malpractice against the defendant.
On January 30, 2006, the defendant filed a motion for summary judgment accompanied by a memorandum of law and exhibits. On March 28, 2006, the plaintiff filed a memorandum of law in opposition together with exhibits. On April 10 and 18, 2006, the defendant and the plaintiff respectively filed a reply memorandum of law. Then, on April 21, 2006, the defendant requested permission to file another reply memorandum, to which the plaintiff objected on April 26, 2006.
DISCUSSION
"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).
"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." (Internal quotation marks omitted.) Boone v. William W. Backus Hospital, 272 Conn. 551, 558, 864 A.2d 1 (2005).
Two lawsuits underlie the present alleged legal malpractice action. In the initial lawsuit, Skedrick v. F.C.H., Inc., Superior Court, judicial district of Middlesex, Docket No. CV97 0080858 (case #1), the plaintiff sued F.C.H., Inc., doing business as the Farside Cafe (Cafe) and Karen Flanagan, the permittee, alleging negligent supervision and reckless service of alcohol. That lawsuit stems from the following allegations. On June 22, 1996, from approximately 12:30 a.m. until 2:00 a.m., the plaintiff was a patron at the Cafe. During this time period he became visibly intoxicated. He consumed a sufficient quantity of alcohol to cause him to become impaired. Upon departing the Cafe, he operated his vehicle under the influence of alcohol, and, as a result of his impairment failed to negotiate a curve resulting in a one-vehicle collision and injuries.
On February 2, 2000, a hearing on damages was held and a judgment entered for the plaintiff in the amount of $1,010,000 against Flanagan and the Cafe. This judgment remained unsatisfied. To enforce it, the plaintiff, now represented by the defendant, filed Shedrick v. First Financial Ins. Co., Superior Court, judicial district of Middlesex, Docket No. CV 01 0095721 (case #2) against First Financial (the Cafe's insurer) and R.J. Vicino (the Cafe's insurance agent). On October 10, 2001, the court granted R.J. Vicino's motion to strike, eliminating the agent as a defendant therein. Subsequently, First Financial filed a motion for summary judgment arguing that under the terms of the insurance policy for the Cafe an exclusion clause precluded coverage for injuries and damages arising from the service of alcohol. It argued that because the plaintiff's claims against the Cafe and Flanagan all related to the service of alcohol, First Financial had no duty to defend or indemnify its insureds. In its memorandum in opposition, the plaintiff argued that First Financial could not prove that the policy issued contained a liquor liability exclusionary clause, because only some, and not all, of the pages of the policy had been provided to him. At oral argument, after counsel for First Financial did produce the policy in its entirety with the exclusion clause therein, the plaintiff conceded that the basis of his defense was no longer valid and offered no defense to the other arguments. The motion for summary judgment was granted. On October 18, 2002, the defendant filed a motion to reopen, reargue, and reconsider that motion, which was denied.
In the case presently before the court, the plaintiff alleges legal malpractice against the defendant. The defendant moves for summary judgment on the ground that there are no genuine issues of material fact and it is entitled to judgment as a matter of law because the plaintiff cannot prove that any alleged negligence on the part of the defendant was the proximate cause of his alleged injuries. Specifically, the defendant argues that: (1) the plaintiff cannot establish but for the defendant's negligence he would have been successful in case # 2 in proving his direct action or that the defendant caused the plaintiff any damages, including his inability to collect on the judgment; (2) the plaintiff had no other viable claims against First Financial under the direct action statute; (3) there is no basis for any claims of bad faith because First Financial did not have a duty to defend and indemnify the Cafe; and (4) the plaintiff could not have maintained a cause of action against the insurance agent, R.J. Vicino. In support of his motion for summary judgment, the defendant submits several items of evidence.
The plaintiff argues in opposition that (1) the defendant failed to explore the validity of the liquor liability exclusion and whether this exclusion was illusory and/or against public policy; (2) the law pertaining to liquor liability exclusion was unsettled when the defendant conceded summary judgment on September 30, 2002; (3) the defendant failed to further explore whether the liquor liability exclusion language was part of the policy; (4) the defendant's failure to request a continuance to adequately respond to the motion for summary judgment at oral argument caused the plaintiff to lose the direct action claim against First Financial; and (5) the defendant's failure to oppose a motion to strike caused the plaintiff to lose his opportunity to pursue the collection of his judgment against R.J. Vicino. In support of the memorandum in opposition, the plaintiff submits his affidavit.
In the defendant's reply memorandum, it argues that attorneys are not liable for arguments that could have been raised and might have resulted in a change in the law or in a settlement offer, and, further, that any of the arguments that the plaintiff claims should have been raised in case #2, would not have changed the outcome. In response, the plaintiff argues in his reply memorandum that the law on liquor liability exclusion clauses was unsettled at the time that he brought his second lawsuit, and, therefore, the defendant should have pursued this argument. Lastly and because the defendant believes that the moving party is entitled to the last word, it filed a motion for permission to file another brief along with the brief, all of which was objected to by the plaintiff.
"Malpractice is commonly defined as the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss, or damage to the recipient of those services . . . Generally, to prevail in a case alleging legal malpractice, a plaintiff must present expert testimony to establish the standard of proper professional skill or care . . . Furthermore, the plaintiff must prove (1) the existence of an attorney-client relationship; (2) the attorney's wrongful act or omission; (3) causation; and (4) damages." (Internal quotation marks omitted.) Dixon v. Bromson Reiner, 95 Conn.App. 294, 297 (2006).
"If the underlying [claim] was never tried, the client essentially has a double burden of proof. First, the client must show that the attorney was negligent. Second, the client must establish that the underlying claim was recoverable and collectible." (Internal quotation marks omitted.) Alexandra v. Strong, 81 Conn.App. 68, 76, 837 A.2d 875, cert. denied, 268 Conn. 906 (2004), quoting 4 R. Mallen J. Smith, Legal Malpractice (5th Ed. 2000) § 30-17, p. 495.
The plaintiff argues that there is a genuine issue of fact as to whether he was damaged by the defendant's conduct in case #2. Therein, the plaintiff attempted to enforce its judgment from case #1 and alleged liability against First Financial under the direct action statute General Statutes § 38a-321 and negligence against R.J. Vicino. In the present case, the plaintiff must show that but for the defendant's alleged negligence he would have prevailed in his claims against First Financial and R.J. Vicino in the underlying case.
General Statutes § 38a-321, in relevant part, provides that: "Each insurance company which issues a policy to any person, firm or corporation, insuring against loss or damage on account of the bodily injury or death by accident of any person, or damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable, and the payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty . . . 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."
In the complaint, the plaintiff alleges, inter alia, that the defendant was negligent for allowing the motion for summary judgment to enter against him in case #2. In that action, First Financial argued that based on the language of the liquor liability exclusion clause of the insurance policy, it was not required to defend or indemnify the Cafe and Flanagan in the first lawsuit, case #1, brought by the plaintiff. The liquor liability exclusion clause in the policy states: "This insurance does not apply . . . (h) to bodily injury or property damage for which the insured or his indemnitee may be held liable (1) as a person or organization engaged in the business of manufacturing, distributing, selling or serving alcoholic beverages, or (2) if not so engaged, as an owner or lessor of premises used for such purposes, if such liability is imposed (I) by, or because of the violation of, any statute, ordinance or regulation pertaining to the sale, gift, distribution or use of any alcoholic beverage, or (ii) by reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person; but part (ii) of this exclusion does not apply with respect to liability of the insured or his indemnitee as an owner or lessor described in (2) above." At issue in the present case is section (h)(1) only. This particular section had not been litigated in Connecticut, but had been in other jurisdictions, at the time the plaintiff's case #1 was before the court.
In the following cases, the court in each jurisdiction examined this exclusion provision in the insurance policy. In Exclesior Ins. Co., v. Ponoma Park Bar Package Store, 369 So.2d 938 (Fla. 1979), the Supreme Court of Florida held that "[o]ur understanding of paragraph (h) is that it sets out two categories of persons excluded from coverage: (h)(1), those actively `engaged in the business' and (h)(2), owners and lessors of the premises such business is conducted upon. But the two qualifying clauses limit the scope of the exclusion `if such liability is imposed,' (I) because of a violation of an alcoholic beverage law or (ii), by reason of the dispensing of an alcoholic beverage to a minor or an intoxicated person.
"Pomona Park's argument is misconceived in focusing exclusively on exclusion (h)(1) and representing that it completely eliminates bar operators from coverage. Rather, the provisions of paragraph (h) should be construed together . . . Every provision in a contract should be given meaning and effect and apparent inconsistencies reconciled if possible . . . The construction advanced by Excelsior follows this guideline." (Citations omitted.) Id., 941. The court held that the insurance policy relieved the insurer of liability and it was not required to defend the bar under the liquor liability exclusion. See id., 942-43.
In U.S. Fidelity and Guaranty v. Griggs, 341 Pa.Super 286, 491 A.2d 267 (1985), the court stated that "[a]s found by the lower court, exclusion (h)(1) is clearly worded, conspicuously displayed, and unambiguously excludes the liquor liability coverage at issue in this case. [The insureds] argue that (h)(1) is meant to exclude coverage only to those persons engaged in the `sole' business of selling alcoholic beverages, and thus would not apply to them since they also sell food. We find this argument to be meritless. This would require the insertion of the word `sole' before `business' and would mean a rewriting of the contract. Where the language of a policy, including exclusion clauses, is clear and unambiguous, it cannot be construed to mean other than what it says . . . "Nor are we persuaded by [the insureds'] alternative argument that exclusion (h) taken as a whole, is structurally ambiguous. [The insureds] contend that subparts (1) and (ii) apply only to part (2). We do not agree; and find that subparts (I) and (ii) obviously apply, by the structure and language of the exclusion, to both parts (1) and (2). Furthermore, the liquor liability exclusion contained in (h) is more or less standard language in tavern general liability policies, and is generally recognized as accomplishing the result intended." (Citation omitted.) Id., 291. Based on the language of the insurance policy, the court concluded that the insured did not have a claim against the insurer for indemnification for alleged liability of an intoxicated patron's injuries. Id., 292-93.
In B.L.G. Enterprises, Inc. v. First Financial Ins. Co., 334 S.C. 529, 514 SE.2d 327 (1999), the court stated that "[t]he policy issued to BLG, a tavern, is not illusory. The Owners,' Landlords,' and, Tenants' portion of the policy initially provides liability coverage for an occurrence arising out of use of BLG's premises. Exclusion (h) however, specifically precludes coverage for bodily injury ` by reason of the selling, serving or giving of any alcoholic beverage.' [Emphasis added.] Other coverage, however, remains intact. For instance, the policy provides liability coverage for a patron who slips and falls at the tavern. The policy even provides coverage to an intoxicated patron who slips and falls at the tavern, so long as the slip and fall was not the result of the service of alcohol. See Excelsior Ins. Co. v. Pomona Park Bar Package Store, 369 So.2d 938 (Fla. 1979).
"The dram shop exclusion in BLG's policy with First Financial is almost identical to other liquor liability exclusions in insurance policies covering establishments which distribute alcoholic beverages. These exclusions have been uniformly found unambiguous and upheld in numerous jurisdictions . . . and we have found no authority to the contrary.
In support of that proposition, the South Carolina Supreme Court cited to the following cases: " Williams v. U.S. Fidelity [Guaranty] Co., 854 F.2d 106 (5th Cir. 1988); Hartford Ins. Co. of Southeast v. Franklin, 424 S.E.2d 803 (Ga.Ct.App. 1992); Morrison on Behalf of Morrison v. Miller, 452 So.2d 390 (La.Ct.App. 1984); Mitcheson v. Izdepski, 585 N.E.2d 743 (Mass.App.Ct. 1992); Sheffield Ins. Co. v. Lighthouse Properties, Inc., 763 P.2d 669 (Mont. 1988); New Hampshire Ins. Co. v. Hillwinds Inn, Inc., 373 A.2d 354 (N.H. 1977); U.S. Fidelity [Guaranty] v. Griggs, 491 A.2d 267 (Pa.Super.Ct. 1985); Abe's Colony Club, Inc. v. CW Underwriters, Inc., 852 S.W.2d 86 (Tx.Ct.App. 1993); [ Fraternal Order of Eagles v. General Accident Ins. Co.] 792 P.2d [178] (Wash.Ct.App. 1990); Kelly v. Painter, 504 S.E.2d 17] (W.Va. 1998)."
"First Financial chose to exclude from coverage bodily injury and property damage by reason of the distribution of alcoholic beverages by BLG. The language in the policy clearly and unambiguously reflects this exclusion. Accordingly, the exclusion should be enforced." (Citations omitted.) Id., 536-37.
Although not interpreting the exact same liquor liability exclusion, available Connecticut authority at the time of the underlying lawsuit upheld similar liquor liability exclusions. In Wentland v. American Equity, Superior Court, judicial district of New Britain, Docket No. CV 00 0504557 (March 11, 2002, Berger, J.) ( 31 Conn. L. Rptr. 603), the injured third parties sought a declaratory judgment that the insurance company breached its contractual duties to defend and indemnify. The insurance company moved for summary judgment arguing that it "has no duty to defend its insured because the alleged negligent acts fall under the liquor liability exclusion provision of the insurance policy." Id., 603. The court held that "because the `allegations of alcohol' are integral to and inseparable from the allegations negligence, the liquor liability exclusion applies as a matter of law." Id., 605. See also Enfield Pizza Palace v. Ins. Co. of Greater N.Y., 59 Conn.App. 69, 755 A.2d 931 (2000) (upholding trial court's declaratory judgment that the insurance company did not have a duty to defend or indemnify because of the liquor liability exclusion); Penn-America Insurance Co. v. LTJ Corp., Superior Court, judicial district of New Britain, Docket No. CV 95 0468305 (July 23, 1996, Arena, J.) (granting insurer's motion for summary judgment and stating that the liquor liability exclusion was unambiguous and the insurer had no duty to defend in the underlying action); see also Hermitage Ins. Co. v. Walters, 882 F.Sup. 31 (D.Conn. 1995) (subsection (h)(1) is applicable and precludes coverage). The interpretation of the insurance contract at issue is a question of law. First Financial would be under a duty to defend its insureds if the facts stated in the plaintiff's complaint brought the injury within the coverage of the policy. In the present case, the plaintiff has not alleged that the liquor liability exclusion was ambiguous. As noted, at the time of the underlying lawsuit, several jurisdictions held that the liquor liability exclusion was unambiguous and did not impose a duty on an insurance company to defend or indemnify an insured for claims brought by third parties for negligent supervision or reckless service of alcohol. As a result, First Financial did not have a duty to defend or indemnify the Cafe and Flanagan in the underlying action, case #2. Therefore, the direct action statute does not apply and the plaintiff cannot recover from First Financial. Since the plaintiff cannot prevail against First Financial, he cannot claim legal malpractice against the defendant for not winning the motion for summary judgment in case #2. Furthermore, the argument that the defendant could have changed the law regarding liquor liability exclusions by raising public policy and illusory claims or obtaining a complete version of the insurance policy are too speculative to establish that the defendant would have prevailed in the underlying lawsuit.
Subsequently, the trial court case was reversed in Wentland v. American Equity Ins. Co., supra, 267 Conn. 592. The court states therein that the defendant, the insurance company, did not include within the insurance policy the "broader liability exclusion known as an `absolute liquor' exclusion, which states that `the policy does not provide coverage for bodily injuries arising out of or in connection with the manufacturing, selling, distributing, serving or furnishing of any alcoholic beverages.'" Thus, it appears that the exclusion clause in the present case would still deny coverage for the plaintiff's claims irrespective of the Supreme Court decision in the Wentland case.
The plaintiff further alleges that the defendant committed malpractice when it failed to allege that First Financial's failure to warn or procure adequate coverage for the Cafe and Flanagan. The plaintiff, however, has not cited any case law nor has research revealed any such authority that permits an injured third party to sue an insurer for failing to advise an insured that it did not have adequate coverage. There are no genuine issues of material fact as to whether the plaintiff could have maintained a direct action against First Financial. The defendant is entitled to judgment as a matter of law because the plaintiff cannot prove that as a matter of law he would have won the underlying lawsuit against First Financial.
Claims Against R.J. Vicino
The plaintiff argues that the defendant's failure to oppose a motion to strike in case #2 against R.J. Vicino caused the plaintiff to lose his opportunity to pursue the collection of his judgment against R.J. Vicino. The plaintiff sought to enforce his judgment against First Financial and R.J. Vicino pursuant to the direct action statute § 38a-321. That statute grants a judgment creditor "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." (Emphasis added.) The language of the direct action statute, however, does not provide the judgment creditor with an action against the insurance agency. Furthermore, the plaintiff has not provided this court with any case law permitting an injured third party to sue an insurance agency under the direct action statute. Therefore, the plaintiff cannot pursue his right to enforce a judgment against R.J. Vicino under this statute.
To establish malpractice, the plaintiff alleges in his complaint that the defendant did not properly prosecute case #2 because as to R.J. Vicino the defendant, inter alia, "failed to allege, claim, or argue" that he "sold the wrong type of insurance policy"; "failed to advise the Farside Cafe and/or Karen Flanagan that they should purchase comprehensive general liability insurance and liquor liability insurance to cover claims such as the plaintiff's claim"; "failed to adequately explain the type of coverage the Farside Cafe and/or Karen Flanagan were purchasing;" "failed to warn the Farside Cafe and/or Karen Flanagan regarding the limitations of the insurance coverage that was purchased"; "failed to identify the type of coverage that should have been purchased by Farside Cafe and/or Karen Flanagan, such as liquor liability insurance"; failed to advise, explain and sell Farside Cafe and/or Karen Flanagan comprehensive general liability insurance and liquor liability insurance to cover claims such as the plaintiff's claim." (Emphasis in original.) As such, the plaintiff argues that the defendant should not have permitted the motion to strike to enter against R.J. Vicino.
The plaintiff also alleges that the defendant breached a duty to him by not alleging these claims against First Financial in the underlying action, case #2.
In Estate of William Ridgaway, Jr. v. Cowles Connell, Superior Court, complex litigation docket at Middlesex, Docket No. X04 CV 03 0103516 (October 14, 2004, Quinn, J.), the court granted the defendant insurer's motion to strike and held that "[w]hile there is no appellate guidance on third-party beneficiary status as it impacts insurance contracts and the claims of injured parties, there are unreported Superior Court cases which carefully analyze these issues. They conclude that an injured party is not, without more, a third-party beneficiary of the insurance contract between the tortfeasor and the insurance company." Id. Furthermore, "four appellate courts have not addressed whether CUTPA remedies based on CUIPA violations may be sought by injured third parties who are not the insured. And the majority of superior court decisions hold that a CUTPA claim for unfair claims settlement practices by an insurance company may not be brought by a third party." Id.
The court then discussed the public policy concerns of permitting an injured third party to bring negligence claims against the tortfeasor's insurance company, and its agents or brokers. "It is undisputed that there was no contract of insurance between the plaintiffs and the defendants. There is no claim in the complaint of a statutory duty owed to the plaintiffs by the defendants. The court concludes that no duty arises by common law. The court declines to find such a duty of care to these plaintiffs arising from the conduct of brokers and agents to procure insurance for Silk, LLC. To do so would subject insurance companies, brokers and agents to any and all claims of personal injuries brought by patrons and customers of an insured establishment, should a dispute arise over coverage . . . The defendants' responsibilities should not extend to such results." Id.
To establish a claim for negligence against R.J. Vicino in case #2, the plaintiff must show that he is a third-party beneficiary of the insurance contract between the Cafe and First Financial or that R.J. Vicino owed him a duty. If the plaintiff is not a third-party beneficiary or owed a duty, the defendant cannot establish the alleged negligence claims contained in the complaint that the plaintiff alleges that the defendant should have made in case #2. In the present case, the plaintiff is neither a third-party beneficiary of the Cafe's insurance contract with First Financial nor did R.J. Vicino, as insurance agent for First Financial, owe the plaintiff a duty of care. Therefore, the defendant is entitled to judgment as a matter of law on the malpractice claims concerning R.J. Vicino.
CONCLUSION
The motion for summary judgment is granted because there are no genuine issues of material fact and under the applicable principles of substantive law, the plaintiff could not have prevailed in case #2 because the exclusion clause precluded coverage of his claims and as a result First Financial had no duty to defend or indemnify its insureds. The defendant is entitled to judgment as a matter of law because the plaintiff cannot show that but for the negligence of the defendant, he would have been successful in the underlying lawsuit. CT Page 12831