City of West Haven v. Liberty Mut. Ins. Co.
| Decision Date | 02 July 1986 |
| Docket Number | N-83-253 (TFGD).,Civ. A. No. N-82-570 (TFGD) |
| Citation | 639 F. Supp. 1012 |
| Court | U.S. District Court — District of Connecticut |
| Parties | CITY OF WEST HAVEN, Plaintiff, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant. |
Peter F. Culver, Keith Bradoc Gallant, Steven G. Mednick, Gallant, Gallant & Culver, New Haven, Conn., for plaintiff.
Harold C. Donegan, Barry P. Beletsky, Sperandeo, Weinstein & Donegan, New Haven, Conn., for defendant.
Plaintiff City of West Haven filed a suit docketed as civil number N-82-570, alleging breach of contract by the defendant insurance company as a result of its failure to defend the city against workmen's compensation and related claims brought against the city by police officers who were city employees. The complaint also alleged breach of contract by failure to indemnify the city for its payments of the awards in the underlying claims. The second count of the complaint sounds in tort, alleging bad faith on the part of the insurance company.
The complaint in civil action number N-83-253 (TFGD), involving identical parties, alleges, as in civ. no. N-82-570 (TFGD), breach of contract by failure to defend and by failure to indemnify. The Court granted a joint motion to consolidate the two cases for trial. The cases were tried to the Court, sitting without a jury, on November 13, 1985. Having reviewed the parties' proposed findings of fact and conclusions of law and the evidence presented at trial, the Court finds that plaintiff is entitled to recovery on the claim alleging breach of contract by failure to defend in both complaints. In all other respects, the Court finds in favor of the defendant. The Court enters the following findings of fact and conclusions of law.
1. The City of West Haven ("West Haven") is a municipal corporation incorporated under the laws of the State of Connecticut and has its principal place of business in the State of Connecticut. At all times relevant to this action, West Haven was an employer within the meaning of the provisions of Connecticut General Statutes ("Conn.Gen.Stat.") Chapter 568 (Workmen's Compensation). West Haven is both a municipality and a municipal employer within the provisions of Conn.Gen.Stat. Ch. 113, sec. 7-433a (). Liberty Mutual Insurance Company ("Liberty Mutual") is a Massachusetts corporation with its principal place of business in a state other than Connecticut.
2. Liberty Mutual issued a workmen's compensation liability insurance policy to West Haven. The policy was in effect at the time the underlying claims by city police officers arose.
3. The policy contains the following relevant provisions:
4. During the policy period or during the renewal period, seven West Haven police officers suffered disability as a result of heart disease or hypertension. All the police officers filed claims with the Workmen's Compensation Commission (the "Commission") alleging injuries covered under the Workmen's Compensation Act, Ch. 568. Some of the claims also alleged recovery under either or both of two sections of Chapter 113, section 7-433a and section 7-433c. All seven of the claims were filed with the Commission prior to August 21, 1979.
5. West Haven has been paying medical expenses or compensation to or for the benefit of each of the seven police officer claimants pursuant to awards made to six of the seven claimants by the Workmen's Compensation Commission. The Court is unaware of the legal basis for the payments made by the city on behalf of the seventh claimant, Officer Speers, whose case had apparently not been acted upon by the Commission at the time of trial.
West Haven also incurred legal expenses for its defense of the underlying claims before the Commission and in the present litigation.
6. West Haven contends that Liberty Mutual refused to defend it in the underlying Workmen's Compensation Commission hearings on the issue of the city's liability to the police officer claimants. Liberty Mutual admitted that it did not defend West Haven. Answer to Plaintiff's Request for Admissions, answer 2(N) (filed June 15, 1983; civ. no. N-82-570 (TFGD)); Answer to Plaintiff's Request for Admissions, answer 2(N) (filed June 6, 1984; civ. no. N-83-253 (TFGD)). Liberty Mutual claims, however, that West Haven never asked for a defense, and that West Haven chose to use its own counsel.
Since neither party offered evidence on this issue, the record does not disclose whether Liberty Mutual refused to defend or whether West Haven failed to ask for a defense, waived its right to a defense, or chose to use its own counsel. The Court cannot conclude that West Haven chose to use its own counsel merely because it was represented by its corporation counsel at the Commission hearings. Corporation counsel would also have represented West Haven if Liberty Mutual had refused to defend.
7. The Court finds that West Haven gave Liberty Mutual timely and sufficient notice of the Commission hearings. Liberty Mutual's witness, attorney Paul Flynn, testified that Liberty Mutual was represented at some of the Commission hearings by attorney Frank Moran and, after his death, by attorney Robert Moran, who is now also deceased. Liberty Mutual is a named party in the captions on at least four of the seven Commission awards. Receipt of the city's timely and sufficient notice by the company is evident from the correspondence between the city's assistant corporation counsel and both the insurance company and the insurance company counsel. Plaintiff's Exhibit 25, Defendant's Exhibits 508, 509. Perhaps most significantly, Liberty Mutual has raised no objection either to the timeliness or the sufficiency of the notice it received from West Haven.
8. Liberty Mutual has not reimbursed West Haven for any payment made to or on behalf of the police officers pursuant to the Commission awards.
9. The stipulations and awards in the underlying Commission hearings do not reveal whether the statutory basis of the awards is Ch. 113 or Ch. 568 or some combination of these two chapters. As stated above, all the claims filed with the Commission alleged at least one alternative theory of recovery in addition to Ch. 568. None of the awards contains an express statement of its statutory basis, although the awards and the incorporated stipulations do occasionally refer to Chapter 568 and to secs. 7-433a and 7-433c of Ch. 113.
10. No evidence was introduced at the trial by either party as to whether or not Liberty Mutual investigated the police officers' claims or attempted to settle them prior to the Commission awards. No evidence was introduced as to when Liberty Mutual first sought legal advice with respect to the claims.
West Haven first asks the Court to hold as a matter of law that the Commission awards were made pursuant to Ch. 568 and are therefore within the workmen's compensation part of the policy, Coverage A. West Haven argues that, even though each claim requested the benefits of both Chs. 113 and 568, no award states that it was made pursuant to either Ch. 113 or to a section of Ch. 113. The stipulations accompanying each claim contain references to the presence or absence of minor children, a fact which is relevant only to awards under Chapter 568. West Haven argues that the eligibility of the claimants for an award under sec. 7-433c does not preclude awards under Ch. 568, allowing the conclusion that the awards were made pursuant to Ch. 568. Plaintiff's Post-Trial Memorandum at 24-5.
The Court is not persuaded by West Haven's arguments. The absence in the awards of any statement of their legal basis leaves open the possibility that the awards were made pursuant to either Ch. 113 or Ch. 568 or some combination of the two chapters. The presence in the stipulations of an item relevant only to Chapter 568 claims is easily explained because the stipulations were drafted before the awards were made, at a time when, presumably, the claimants were operating alternatively under several theories, each of which would justify an award.
West Haven cites Bakelaar v. West Haven, 193 Conn. 59, 475 A.2d 283 (1984), for the proposition that a claimant's eligibility for a sec. 7-433c award does not preclude his receiving an award under Ch. 568. The question in Bakelaar, however, was whether a qualified claimant could elect recovery under sec. 7-433c when his claim was potentially also compensable under Ch. 568. Section 7-433c grants compensation without requiring the claimant to prove, as he must under Ch....
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