Buell v. American Universal Ins. Co.

• Citation: 224 Conn. 766,621 A.2d 262
• Decision Date: 02 March 1993
• Docket Number: No. 14488,14488
• Court: Supreme Court of Connecticut
• Parties: Debra BUELL v. AMERICAN UNIVERSAL INSURANCE COMPANY.

Page 262

621 A.2d 262

224 Conn. 766

Debra BUELL v. AMERICAN UNIVERSAL INSURANCE COMPANY.

No. 14488.

Supreme Court of Connecticut.

Argued Oct. 2, 1992.

Decided March 2, 1993.

Steven D. Ecker, with whom, on the brief, was Howard A. Jacobs, New Haven, for appellant-appellee (plaintiff).

Stephen G. Murphy, Jr., New Haven, for appellee-appellant (defendant).

Before BORDEN, BERDON, NORCOTT, FRANCIS X. HENNESSY and MENT, JJ.

BERDON, Associate Justice.

This appeal, which is the companion case to Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758, 621 A.2d 258 (1993), presents the following issues: (1) whether the trial court properly allowed the defendant, American Universal Insurance Company (American), which provided underinsured motorist coverage, to limit its liability to the insured by taking credit for a liability payment made to another claimant; (2) whether the trial court abused its discretion by awarding the insured statutory interest on the arbitration award from the date of the award; (3) whether the trial court properly ruled that the plaintiff, Debra Buell, had exhausted all applicable bodily injury policies, thereby entitling her to underinsured motorist coverage; and (4) whether the trial court properly ruled that American was not entitled to take credit for a $2500 settlement payment made to Buell.

The following facts are undisputed. On April 9, 1986, Buell was operating her automobile on Route 1 in East Haven. She was accompanied by a passenger, Pearly Nivens. Buell's automobile was stopped at a traffic light in front of an automobile operated by Joan Lozier, when a third vehicle, operated by Patricia Vorio, collided with Lozier's vehicle. Lozier's vehicle, in turn, collided with Buell's vehicle. Buell, who was injured in the accident, brought suit against Lozier and Vorio, alleging that both were negligent.

Vorio was insured by Aetna Casualty and Surety Company (Aetna) under a policy that provided $50,000 single limit liability coverage. The coverage available under the Aetna policy was divided between Buell, who received $29,000, and Nivens, who received $21,000. Lozier was insured by American under a policy that provided $100,000 liability coverage. Buell received $2500 and Nivens received $3500 under Lozier's policy with American.

Buell, who was also insured by American, made a demand for arbitration under the terms of her policy, which provided a total of $100,000 underinsured motorist coverage. ¹ The arbitration panel concluded that Vorio's negligence was the proximate cause of the accident, and that no credible evidence had been introduced to show that Lozier had been negligent. The majority of the arbitrators found that Buell had suffered $78,000 in damages. They reduced that amount by the $29,000 payment made by Aetna and by the $2500 payment made by American, arriving at a total award of $46,500.

American sought to vacate the arbitration award pursuant to General Statutes § 52-418. ² Buell in turn sought to confirm the arbitration award pursuant to General Statutes § 52-417 ³ and filed a motion for an award of interest under General Statutes § 37-3a ⁴ from the date of the arbitration award.

The trial court modified the award, holding that it should be further reduced by the $21,000 payment made to Nivens. The court also held, however, that the award should not be reduced by the $2500 payment made to Buell under Lozier's policy. As modified, the total award amounted to $28,000. In addition, the court awarded interest on the award from the date of the arbitration. Buell appealed from the judgment of the trial court to the Appellate Court and American filed a cross appeal. We transferred the appeal and cross appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c).

I

We first address Buell's claim that the trial court improperly determined that American's policy permitted it to reduce the amount of her award by taking credit for the $21,000 payment made to Nivens by Aetna. "In reviewing compulsory arbitration cases, this court must conduct a de novo review of the arbitrator's interpretation and application of the law. American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 191, 530 A.2d 171 (1987)." Lumbermens Mutual Casualty Co. v. Huntley, 223 Conn. 22, 26, 610 A.2d 1292 (1992). In assessing the merits of this claim, we are guided by our holding in the companion case, Stephan v. Pennsylvania General Ins. Co., supra, which presented the very same issue. The policy language in this case is similar to the policy language in Stephan and provides: "The limit of liability shall be reduced by all sums: (1) Paid because of the 'bodily injury' by or on behalf of persons or organizations who may be legally responsible. This includes all sums paid under Part A...." Here, as in Stephan, the policy provides that the insurer may limit its liability by payments made because of "the bodily injury," not "a bodily injury" or "any bodily injury." We conclude that this phrase refers only to the claimant's bodily injury and not to the bodily injuries of others. Accordingly, the policy did not permit American to reduce the damages owed to Buell by taking credit for the payment to Nivens. Moreover, because the policy does not permit the insurer to take credit for this payment, we need not go further to determine whether General Statutes § 38a-336(b) or § 38-175a-6(d) of the Regulations of Connecticut State Agencies would permit the credit.

II

In its cross appeal, American claims that the trial court improperly awarded interest to Buell from the date of the arbitration award pursuant to General Statutes § 37-3a. ⁵ As we noted in Stephan v. Pennsylvania General Ins. Co., supra, 224 Conn. at 765, 621 A.2d 258, "[w]hether interest should be allowed as an element of damages is primarily an equitable determination and a matter within the discretion of the trial court.... Middlesex Mutual Assurance Co. v. Walsh, 218 Conn. 681, 701-702, 590 A.2d 957 (1991)." (Internal quotation marks omitted.) In determining whether to award interest, the trial court must determine whether the money involved is "payable"; General Statutes § 37-3a; see White Oak Corporation v. Department of Transportation, 217 Conn. 281, 302, 585 A.2d 1199 (1991); and whether the money was "wrongfully" withheld. White Oak Corporation v. Department of Transportation, supra. Only upon a showing of a clear abuse of discretion will we overturn the trial court's award of interest. Chmielewski v. Aetna Casualty & Surety Co., 218 Conn. 646, 676, 591 A.2d 101 (1991). American argues that the trial court abused its discretion by awarding interest in this case because American was placed into receivership on the date that the arbitration award was made. This fact and others were before the court when it exercised its discretion to allow interest on the award. American has not demonstrated that the trial court abused its discretion in this case.

Because this decision increases the net award to Buell by reinstating the arbitrator's original award of $46,500 in place of the trial court's award of $28,000, and because the award of interest is a matter of discretion to be decided by the trial court, we remand this case to the trial court to determine the amount upon which interest should run. Stephan v. Pennsylvania General Ins. Co., supra.

III

In its cross appeal, American also claims that the trial court improperly ruled that Buell had exhausted all applicable bodily injury policies so as to be entitled to underinsured motorist coverage. We recently decided this issue in General Accident Ins. Co. v. Wheeler, 221 Conn. 206, 603 A.2d 385 (1992). There, we held that under the provisions of General Statutes § 38a-336(b) and (d), an insured is required to exhaust the "liability bond or insurance policies" of only one tortfeasor in order to be eligible to pursue underinsured motorist benefits. Id., 214. In the present case, it is undisputed that Vorio's policy with Aetna had been exhausted. ⁶ Following our reasoning in General Accident Ins. Co. v. Wheeler, supra, we conclude that the trial court correctly held that Buell had exhausted all applicable bodily injury policies, thereby entitling her to underinsured motorist coverage.

IV

American's final claim in its cross appeal is that the trial court improperly ruled that it was not entitled to take credit for the $2500 payment that Buell received under Lozier's policy with American. We conclude that American was entitled to deduct the $2500 payment from the total damages owed to Buell.

The policy at issue in this case specifically provided that "no one will be entitled to receive duplicate payments for the same elements of loss." In this case the "element of loss" is Buell's bodily injury from the accident. The $2500 payment, which was made in settlement of Buell's suit against Lozier, served two purposes--to avoid litigation of the claim against Lozier and to compensate Buell for her bodily injuries. As a result, if American were not permitted to deduct the $2500 payment made by Lozier's insurer, Buell would receive duplicate payments for her bodily injury. Accordingly, the plain language of the policy permits American to deduct the $2500 payment to prevent duplicate recovery.

Buell argues that even if the policy permits the reduction, it is not permitted by General Statutes § 38a-336(b) ⁷ and § 38-175a-6(d) of the Regulations of Connecticut State Agencies ⁸ because it is not a payment made "by or on behalf of any person responsible for the injury."

We have previously held that § 38-175a-6(d)(1) permits an insurer who provides underinsured motorist coverage to limit its liability by taking credit for a personal payment made by a tortfeasor to the insured. Lumbermens Mutual Casualty Co. v. Huntley, supra, 223 Conn. at 30, 610 A.2d 1292. The trial court in this case concluded, however, that because the arbitrators had determined that Lozier was not at...