Lexington Ins. Co. v. Lexington Healthcare Grp., Inc.

Decision Date18 June 2013
Docket Number18682.,Nos. 18681,s. 18681
Citation309 Conn. 1,68 A.3d 1121
PartiesLEXINGTON INSURANCE COMPANY v. LEXINGTON HEALTHCARE GROUP, INC., et al.
CourtConnecticut Supreme Court

309 Conn. 1
68 A.3d 1121

LEXINGTON INSURANCE COMPANY
v.
LEXINGTON HEALTHCARE GROUP, INC., et al.

Nos. 18681, 18682.

Supreme Court of Connecticut.

Argued Nov. 30, 2012.
Decided June 18, 2013.


[68 A.3d 1123]


Jeffrey R. Babbin, New Haven, with whom were Amber J. Hines, Cheshire, and, on the brief, Michael Menapace, Hartford, for the appellant-appellee in Docket No.
SC 18681 and cross appellant in Docket No. SC 18682 (plaintiff).

Sean K. McElligott, Bridgeport, with whom were Van A. Stark-weather, Manchester, and Brian J. Ladouceur, Jr., for the appellees-appellants in Docket No. SC 18681 (defendant Marion J. Boynton, coadministratrix of the estate of Elizabeth M. Arata, et al.).


Philip J. O'Connor, Hartford, for the appellee-appellant in Docket No. SC 18681 and cross appellee in Docket No. SC 18682 (defendant Nationwide Health Properties, Inc.).

ROGERS, C.J., and NORCOTT, PALMER, ZARELLA and EVELEIGH, Js.

[68 A.3d 1124]



ROGERS, C.J.

[309 Conn. 4]This case requires us to interpret various provisions of a professional liability insurance policy to determine the amount of coverage available when the same general event has given rise to a large number of claimants against the policy. On February 26, 2003, multiple residents of Greenwood Health Center (Greenwood), a Hartford nursing home, tragically died or were injured when the facility was set ablaze by another resident and rescue efforts by staff members fell short. [309 Conn. 5]As a result, thirteen negligence actions seeking damages for wrongful death or serious bodily injury were filed by some of the victims' personal representatives against Greenwood, Nationwide Health Properties, Inc. (Nationwide),1 the owner and lessor of the property housing Greenwood, Lexington Healthcare Group, Inc. (Lexington Healthcare), the lessee of that property, and Lexington Highgreen Holding, Inc. (Highgreen), the operator of Greenwood. This case concerns the amount of liability insurance coverage available for these claims. The plaintiff, Lexington Insurance Company,2 brought this declaratory judgment action against Lexington Healthcare, which is the insured party under a general and professional liability insurance policy issued by the plaintiff, as well as Highgreen, Nationwide and the victims' personal representatives 3 (individual defendants).4 Nationwide and most of the individual [309 Conn. 6]defendants each filed counterclaims in regard to the policy, also seeking declaratory judgments. Following the parties' filing of cross motions for summary judgment, the trial court determined the amount of coverage available under the policy and rendered judgment accordingly.

The plaintiff appeals from the judgment of the trial court determining the available coverage. The plaintiff claims that the trial court misconstrued the policy language pertaining to “related medical incidents” and the endorsement relating to the “[a]ggregate [p]olicy [l]imit,” thereby providing more coverage for the individual defendants' claims than that to which they were entitled. Four of the individual defendants

[68 A.3d 1125]

have cross appealed,5 claiming that the trial court's interpretation of the policy's self-insured retention endorsement resulted in an improper reduction of the available coverage. We disagree with the plaintiff's claim that the trial court misconstrued the policy language concerning related medical incidents, but agree with its claim that the court improperly interpreted the endorsement relating to the aggregate policy limit. We further agree with the individual defendants that the court improperly applied the self-insured retention endorsement to reduce the available coverage. Accordingly, we affirm in part and reverse in part the judgment of the trial court.6

[68 A.3d 1126]

[309 Conn. 7]The following facts and procedural history are relevant to these appeals. The individual defendants, in the underlying actions, each alleged multiple and varying [309 Conn. 8]specifications of negligence against Lexington Healthcare and Highgreen. Some of the individual defendants' claims related to Lexington Healthcare's and Highgreen's choice to admit into Greenwood the individual who had started the fire and, thereafter, their failure to place, supervise and treat her properly and to disallow her from possessing cigarette lighters or smoking cigarettes independently. Other of the individual defendants' claims concerned general safety and emergency failures including, but not limited to: insufficient staffing; inadequate sprinklers, fire extinguishers and smoke detectors; lack of training in fire response and evacuation procedures; neglect to adhere to relevant rules, codes and standards; and a dangerously constructed, equipped and furnished facility. Specific allegations of negligence on the night of the fire also were raised, such as staff members' failures to respond properly to the fire by employing fire extinguishers and by closing particular doors and windows.

The policy issued by the plaintiff to Lexington Healthcare provided both general liability and professional liability coverage for Lexington Healthcare's seven nursing home facilities, one of which was Greenwood. It is undisputed on appeal that only the professional liability coverage is applicable to the individual defendants' negligence claims. As to the amount of coverage available for those claims, the trial court found that: (1) for purposes of applying the policy's $500,000 per medical incident limit for professional liability coverage, the acts, errors or omissions underlying each individual defendant's injuries or death constituted separate medical incidents and did not collectively comprise related medical incidents, in which case a single $500,000 limit would have applied; (2) the total amount of professional liability coverage available under the [309 Conn. 9]policy for all of the individual defendants' claims was the $10 million “[a]ggregate [p]olicy [l]imit” provided via an endorsement to the policy, rather than the $1 million “[a]ggregate [l]imit” for professional liability coverage stated in the policy declarations; and (3) a $250,000 “[s]elf [i]nsured [r]etention per [o]ccurrence” described in another endorsement to the policy applied to reduce the $500,000 per medical incident coverage to $250,000 per medical incident. This appeal and cross appeal followed. The plaintiff argues on appeal that the trial court's first two policy interpretations were improper, while the individual defendants take issue with the court's third interpretation.

“As a preliminary matter, we set forth the applicable standard of review. Summary judgment shall be rendered forthwith if the pleadings, affidavits and 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.... The scope of our appellate review depends upon the proper characterization of the rulings made by the trial court.... When ... the trial court draws conclusions of

[68 A.3d 1127]

law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Ugrin v. Cheshire, 307 Conn. 364, 389, 54 A.3d 532 (2012).

The general principles that guide our review of insurance contract interpretations are well settled. “[C]onstruction of a contract of insurance presents a question of law for the court which this court reviews de novo.... An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract.... In accordance with those principles, [t]he determinative question is the intent of the parties, that is, what coverage the ... [insured] expected to receive and what the [insurer] was to provide,[309 Conn. 10]as disclosed by the provisions of the policy.... If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning.... Under those circumstances, the policy is to be given effect according to its terms.... When interpreting [an insurance policy], we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result....

“In determining whether the terms of an insurance policy are clear and unambiguous, [a] court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity.... Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.... As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading.... Under those circumstances, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.” (Internal quotation marks omitted.) Johnson v. Connecticut Ins. Guaranty Assn., 302 Conn. 639, 643, 31 A.3d 1004 (2011).

We now turn to the claims raised on appeal. Additional facts and procedural history will be provided where pertinent to those claims.

I

The plaintiff claims first that the trial court improperly interpreted the phrase “related medical incidents” as used in the policy, thereby affording greater coverage for the individual defendants' claims than the parties to the policy had intended. According to the plaintiff, the individual defendants' claims arose from “related [309 Conn. 11]medical incidents,” because all of their injuries or deaths stemmed from the same root cause, namely, the admission of the individual who started the fire to Greenwood and the failure to supervise her properly. The plaintiff argues, therefore, that a single policy limit applies to all of the individual defendants' claims...

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