Allstate Ins. Co. v. Lenda

• Decision Date: 14 September 1994
• Docket Number: No. 11362,11362
• Citation: 34 Conn.App. 444,642 A.2d 22
• Court: Connecticut Court of Appeals
• Parties: ALLSTATE INSURANCE COMPANY v. Benjamin LENDA.

Page 22

642 A.2d 22

34 Conn.App. 444

ALLSTATE INSURANCE COMPANY v. Benjamin LENDA.

No. 11362.

Appellate Court of Connecticut.

Argued Dec. 1, 1993.

Decided May 24, 1994.

Certification Denied Sept. 14, 1994.

Conn.App. 1994.

Stephen E. Goldman, with whom was Raymond T. DeMeo, Hartford, for appellant (plaintiff).

Kathryn Calibey, Hartford, for appellee (defendant).

Before FOTI, LANDAU and FREDERICK A. FREEDMAN, JJ.

FREDERICK A. FREEDMAN, Judge.

The plaintiff, Allstate Insurance Company, appeals from the judgment of the trial court denying its application to vacate an arbitration award. The plaintiff claims that the trial court improperly confirmed the arbitration award because (1) it improperly stacked ¹ the applicable insurance policy benefits of the defendant, Benjamin Lenda, in determining that the tortfeasor's vehicle was underinsured, ² (2) the defendant was no longer legally entitled to recover from the tortfeasor, (3) it failed to allow a reduction in the amount of underinsured motorist benefits awarded to the defendant by the full amount of the tortfeasor's liability coverage paid by the tortfeasor's insurer, and (4) it failed to order a setoff for collateral source recovery pursuant to General Statutes § 52-225a. We affirm in part and reverse in part.

The facts, as stipulated by the parties, are as follows. On May 24, 1989, Lenda sustained personal injuries in a five car collision. He was operating his personal vehicle in the left westbound lane when an eastbound vehicle, operated by Peter Seymour, crossed the center line and struck Lenda's vehicle head-on. The negligence and legal liability for the collision rested solely with Seymour. The only liability insurance available to Seymour was a combined single limit policy with Travelers Insurance Company with coverage of $100,000. ³ Seymour's liability insurance has been exhausted for purposes of this underinsured motorist claim.

At the time of the accident, the vehicle operated by Lenda was insured with Allstate. The Allstate policy was in force and effect at the time of the accident. Lenda's policy with Allstate provided $100,000 in uninsured or underinsured motorist coverage on each of two vehicles. Lenda was the named insured on this policy. Allstate has paid a total of $5000 in basic reparations benefits to or on behalf of Lenda, and is entitled to a credit or setoff in that amount.

Because the parties were unable to agree whether any underinsured motorist benefits were due Lenda, the trial court entered an order compelling arbitration of Lenda's claim for underinsured motorist benefits. After a hearing, the arbitrators found that, in determining the potentially available underinsured motorist coverage, Lenda was entitled to stack the policy's $100,000 in underinsured motorist coverage on both of his vehicles for a total coverage of $200,000. The arbitrators also found that Lenda's damages exceeded the total underinsured coverage available. They did not specify, however, the exact amount of damages. In addition, the arbitrators found that Allstate was entitled to a credit of $73,071.51, the amount paid by Seymour to Lenda, pursuant to a stipulated judgment, for personal injuries, and a credit of $5000 for the reparations benefits paid to Lenda by Allstate. The arbitrators rejected Allstate's claim that the stipulated judgment against Seymour constituted a bar to receiving underinsured motorist benefits.

Allstate thereafter filed an application to vacate, correct or modify the award. Lenda sought to confirm the award. A hearing was held and the trial court concluded that the Seymour vehicle was underinsured and, therefore, the trial court denied Allstate's application to vacate and granted Lenda's motion to confirm. Allstate appealed to this court. Allstate subsequently filed a motion for articulation with the trial court. Pursuant to that motion, the trial court issued an articulation of its decision.

I

Allstate claims that the trial court improperly confirmed the arbitration award after improperly determining that the tortfeasor's vehicle was underinsured. Specifically, Allstate claims that the arbitrators should not have stacked the underinsured motorist coverage for the two vehicles covered by Lenda's policy. We disagree.

"In reviewing compulsory arbitration cases, this court must conduct a de novo review of the arbitrator's interpretation and application of the law...." (Citations omitted; internal quotation marks omitted.) Buell v. American Universal Ins. Co., 224 Conn. 766, 770, 621 A.2d 262 (1993).

We begin our analysis by examining General Statutes § 38a-336. "The application of § 38a-336 ⁴ requires two distinct steps: (1) determining whether a vehicle is in fact underinsured, so that coverage is available; and (2) calculating the amount of the actual award due the victim." Covenant Ins. Co. v. Coon, 220 Conn. 30, 36, 594 A.2d 977 (1991). "Thus, in making the initial determination whether a [tortfeasor's] vehicle is underinsured, § 38a-336 clearly states that the aggregate of the liability limits under all of the tortfeasor's policies are to be compared with the uninsured motorist coverage limit of the policy against which a claim is made. The statute unequivocally refers to the liability provisions in the plural but the uninsured motorist provisions in the singular. Consequently, the analysis directed by § 38a-336 requires a comparison between the aggregate of [the tortfeasor's] liability limits available to the victim against the underinsured motorist limits in each single policy against which the victim has a claim." (Emphasis in original.) Id., at 35-36, 594 A.2d 977. In short, all liability policies applicable to the Seymour vehicle are to be measured against the uninsured motorist portion of the Lenda policy.

The question presented here is whether intra-policy stacking ⁵ is permitted in making the initial determination of whether a motor vehicle is underinsured. To answer this question, we must first examine three decisions of our Supreme Court, Nationwide Ins. Co. v. Gode, 187 Conn. 386, 446 A.2d 1059 (1982), Farm & City Ins. Co. v. Stevens, 215 Conn. 157, 574 A.2d 1300 (1990), and Covenant Ins. Co. v. Coon, supra, 220 Conn. 30, 594 A.2d 977. We conclude that, when read together, although these cases do not permit inter-policy stacking to determine whether a motor vehicle is underinsured, they do permit intra-policy stacking in making such a determination. ⁶

In Gode, the court held that intra-policy stacking was permitted in determining whether a motor vehicle is underinsured. Additionally, the court implied in dicta that, because the singular term policy in General Statutes § 38a-336, (then General Statutes [Rev. to 1989] § 38-175c) could also be interpreted as the plural policies, inter-policy stacking would also be permitted. Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 394-95, 446 A.2d 1059. Later, in Stevens, the court rejected that interpretation and did not permit stacking of the uninsured motorist coverage on the claimant's vehicles with the uninsured motorist coverage on the tortfeasor's vehicle. Farm & City Ins. Co. v. Stevens, supra, 215 Conn. at 161, 574 A.2d 1300. The court, however, reaffirmed that portion of Gode that permitted intra-policy stacking. Id.

Thereafter, in Coon, the court further construed the method by which it is determined whether a motor vehicle is underinsured. In Coon, the arbitrators stacked a policy issued to the claimant and one issued to the driver of the car in which the claimant was a passenger to determine whether the claimant's vehicle was underinsured. Covenant Ins. Co. v. Coon, supra, 220 Conn. at 35, 594 A.2d 977. The court held that, because the statute was not ambiguous, the word policy in General Statutes § 38a-336 could not be interpreted also to mean policies as stated in Gode. Id., at 35-36, 594 A.2d 977. The court overruled Gode only to the extent that it may have permitted inter-policy stacking and specifically prohibited inter-policy stacking in the initial determination of coverage. Id., at 36 n. 6, 594 A.2d 977.

Here, unlike in Coon, Lenda's one policy covered two vehicles. Reading Gode, Stevens, and Coon together, we conclude that in determining whether a motor vehicle is underinsured, intra-policy stacking is permitted. Therefore, the trial court properly stacked Lenda's uninsured motorist coverage under his multiple vehicle policy in determining that Seymour's motor vehicle was underinsured. Here, Lenda's policy covered two motor vehicles for $100,000 each in uninsured motorist coverage for a total of $200,000. The liability limit of Seymour's policy was $100,000. Because Seymour's liability limit is less than Lenda's uninsured coverage, Seymour's motor vehicle was underinsured.

II

Allstate next claims that the trial court improperly confirmed the arbitration award because the insured was not legally entitled to recover from Seymour after having entered into a stipulated judgment. We do not address this issue because Allstate failed to raise it before the trial court.

Allstate initially submitted this issue to arbitration. The arbitrators' decision and award held that Lenda's claim was not barred by the stipulated judgment between Seymour and Lenda. Allstate, however, did not raise this claim in the trial court. "Accordingly, we do not review this claim raised for the first time on appeal. Rydingsword v. Liberty Mutual Ins. Co., [224 Conn. 8, 9-10 n. 1, 615 A.2d 1032 (1992) ]; Cahill v. Board of Education, 187 Conn. 94, 99-100, 444 A.2d 907 (1982). 'Only in the most exceptional circumstances will this court consider a claim that was not raised in the trial court.... Such exceptional circumstances may occur where a new and unforeseen constitutional right has arisen between the time of trial and appeal or where the record supports a claim that a litigant has been deprived of a fundamental constitutional right and a fair trial.... An exception...