Anastasia v. Gen. Cas. Co. of Wis.

• Decision Date: 05 February 2013
• Docket Number: No. 18766.,18766.
• Citation: 307 Conn. 706,59 A.3d 207
• Court: Connecticut Supreme Court
• Parties: Theresa ANASTASIA v. GENERAL CASUALTY COMPANY OF WISCONSIN.

307 Conn. 706

59 A.3d 207

Theresa ANASTASIA

v.GENERAL CASUALTY COMPANY OF WISCONSIN.

No. 18766.

Supreme Court of Connecticut.

Argued Oct. 25, 2012.

Decided Feb. 5, 2013.

Enrico Vaccaro, Hamden, for the appellant (plaintiff).

Jon Berk, Hartford, for the appellee (defendant).

ROGERS, C.J., and PALMER, EVELEIGH, HARPER and BEACH, Js. ^*

EVELEIGH, J.

The primary issue in this appeal is whether an insurer is entitled to a reduction of its limits of liability for uninsured and underinsured motorist coverage (underinsured motorist coverage) by an amount equal to the sum of punitive damages paid to the insured. The trial court concluded that the defendant, General Casualty Company of Wisconsin, was entitled to such a deduction. The plaintiff, Theresa Anastasia, appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to General Statutes § 51–199(c) and Practice Book § 65–2. We affirm the judgment of the trial court.

The following undisputed facts are relevant to this appeal. The plaintiff and her husband, Peter Anastasia, held an insurance policy issued by the defendant that provided underinsured motorist coverage up to a maximum of $250,000. The plaintiff's husband was operating an automobile that was traveling in an easterly direction on Shadyside Lane in Milford with the plaintiff, the owner of that automobile, as a passenger. A car owned by Mark Mitsock and operated by his wife, Donna Mitsock (tortfeasor), was proceeding in a westerly direction on Shadyside Lane when it suddenly crossed the center line and collided head-on into the plaintiff's automobile. The tortfeasor allegedly attempted to evade responsibility for the accident by fleeing the scene. When apprehended, she was intoxicated with a blood alcohol level of 0.407, a level that is more than five times the legal limit.

As a result of the accident, the plaintiff and her husband suffered multiple significant injuries. At the time of the accident, the limit of the Mitsocks' liability coverage was $100,000 per person and $300,000 per accident. The plaintiff and her husband brought an action against the Mitsocks for compensatory damages, common-law punitive damages and exemplary damages under General Statutes § 14–295.¹ Following extensive pretrial proceedings,mediation and settlement negotiations, the parties entered into a settlement agreement. The total settlement amount, as it pertained to the plaintiff, was for $415,000. One hundred thousand dollars was paid to the plaintiff, pursuant to the Mitsocks' liability policy, to settle the plaintiff's negligence claim for compensatory damages, and $315,000 was paid personally by the Mitsocks to the plaintiff to settle her claim for common-law punitive damages and exemplary damages predicated pursuant to § 14–295 on the alleged reckless conduct of the tortfeasor.² The court, Lager, J., approved the settlement agreement.

At the time of the collision, the motor vehicle driven by the tortfeasor was “underinsured” as defined by the plaintiff's insurance policy and by General Statutes § 38a–336 because the $100,000 coverage limit of the tortfeasor's policy was lower than the $250,000 underinsured motorist coverage limit of the plaintiff's policy. The plaintiff therefore submitted a timely claim for underinsured motorist coverage to the defendant, which the defendant denied in light of the plaintiff's recovery under the settlement agreement. Thereafter, the plaintiff brought this action seeking underinsured motorist coverage under her policy.³

The defendant filed a motion for summary judgment, claiming that it was entitled to a setoff equal to the amount of the entire settlement, to which the plaintiff objected. The trial court granted the motion and rendered judgment in favor of the defendant. This appeal followed.

On appeal, the plaintiff claims that the trial court improperly granted the defendant's motion for summary judgment because the trial court improperly concluded that the defendant could reduce its underinsured motorist coverage liability by an amount equal to the punitive damages received by the plaintiff. Specifically, the plaintiff claims that the policy language is ambiguous and incongruous with the requirements of § 38a–334–6 of the Regulations of Connecticut State Agencies. The plaintiff also claims that allowing an insurer to reduce its liability on the basis of punitive damages received by an insured contravenes the public policy underlying underinsured motorist coverage. In response, the defendant claims that the trial court properly granted the motion because the insurance policy language is unambiguous and is substantially congruent with the regulation. We agree with the defendant and, accordingly, affirm the judgment of the trial court.

We begin by setting forth the standard of review governing this appeal. “The standards governing our review of a trial court's decision to grant a motion for summary judgment are well established. 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.... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.... Finally, the scope of our review of the trial court's decision to grant the plaintiff's motion for summary judgment is plenary.” (Internal quotation marks omitted.) DiPietro v. Farmington Sports Arena, LLC, 306 Conn. 107, 115–16, 49 A.3d 951 (2012).

Our resolution of the plaintiff's claims revolves around our interpretation of the regulation and the language of the plaintiff's insurance policy. “Interpretation of an insurance policy, like the interpretation of other written contracts, involves a determination of the intent of the parties as expressed by the language of the policy.... Unlike certain other contracts, however, where absent statutory warranty or definitive contract language the intent of the parties and thus the meaning of the contract is a factual question subject to limited appellate review ... construction of a contract of insurance presents a question of law for the court which this court reviews de novo.” (Internal quotation marks omitted.) Vitti v. Allstate Ins. Co., 245 Conn. 169, 174, 713 A.2d 1269 (1998). “The Connecticut rule of construction of insurance policies is well settled. If the terms of an insurance policy are of doubtful meaning, that permissible construction which is most favorable to the insured is to be adopted; but if they are plain and unambiguous the established rules for the construction of contracts apply, the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning, and the courts cannot indulge in a forced construction ignoring provisions or so distorting them as to accord a meaning other than that evidently intended by the parties.” (Internal quotation marks omitted.) Id., at 176, 713 A.2d 1269.

In Connecticut, insurers are required by statute to provide underinsured motorist coverage to their policyholders. According to General Statutes § 38a–334 (a),⁴“[t]he Insurance Commissioner shall adopt regulations with respect to minimum provisions to be included in automobile liability insurance policies.... Such regulations shall relate to the insuring agreements, exclusions, conditions and other terms applicable to the bodily injury liability, property damage liability, medical payments and uninsured motorists coverages under such policies....” (Emphasis added.) Additionally, § 38a–336 (a)(1)⁵ provides that each automobile liability insurance policy shall provide uninsured and underinsured motorist coverage, in accordance with the regulations adopted by the insurance commissioner pursuant to § 38a–334. Section 38a–334–6 of the Regulations of Connecticut State Agencies has been promulgated by the insurance commissioner pursuant to § 38a–334 and provides minimum coverage that insurers must provide when issuing underinsured motorist policies. The regulation provides in relevant part: “The insurer shall undertake to pay on behalf of the insured all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle because of bodily injury sustained by the insured caused by an accident involving the uninsured or underinsured motor vehicle....” Regs., Conn. State Agencies § 38a–334–6 (a). The regulation also allows an insurer to limit its underinsured motorist liability. Specifically, relevant to the present case, the regulation permits an insurer to limit its liability “to the extent that damages have been ... paid by or on behalf of any person responsible for the injury....” (Emphasis added.) Id., § at 38a–334–6 (d)(1)(A).

We have previously concluded that “an insurer may not, by contract, reduce its liability for ... uninsured or underinsured motorist coverage except as [§ 38a–334–6] of the Regulations of Connecticut State Agencies expressly authorizes.” Allstate Ins. Co. v. Ferrante, 201 Conn. 478, 483, 518 A.2d 373 (1986). “In order for a policy exclusion to be expressly authorized by [a] statute [or regulation], there must be substantial congruence between the statutory [or regulatory] provision and the policy provision.” (Internal quotation marks omitted.) Lowrey v. Valley Forge Ins. Co., 224 Conn. 152, 156, 617 A.2d 454 (1992). Substantial congruence...