Cohn v. Aetna Ins. Co.

Decision Date30 January 1990
Docket NumberNo. 13615,13615
Citation213 Conn. 525,569 A.2d 541
PartiesStuart COHN, Conservator (ESTATE OF Jill COHN) v. AETNA INSURANCE COMPANY.
CourtConnecticut Supreme Court

Winona W. Zimberlin, Hartford, for appellant-appellee (defendant).

Ira B. Grudberg, with whom was Alice S. Miskimin, New Haven, for appellee-appellant (plaintiff).

Before PETERS, C.J., and ARTHUR H. HEALEY, CALLAHAN, GLASS and COVELLO, JJ.

COVELLO, Associate Justice.

This is an appeal from a judgment of the trial court confirming an $855,000 underinsured motorist arbitration award. The dispositive issue is whether coverage for underinsured motorists contained in a business automobile liability policy insuring a number of individually listed motor vehicles may be combined or "stacked" in determining the total amount of coverage available to a single claimant. We conclude that such a result is beyond the reasonable expectations of the parties to the insurance contract and that "stacking" is inappropriate in the context of fleet automobile liability policies. We therefore remand the matter to the trial court with direction to modify the award accordingly.

The relevant facts are as follows. On August 11, 1983, the defendant, Aetna Insurance Company, had in force a business automobile liability policy insuring twenty-two vehicles owned by Joseph Cohn & Sons, Inc. The policy contained an endorsement providing uninsured motorist coverage in the amount of $40,000 for each vehicle. Each vehicle was separately listed on the policy. The policy also contained a separate schedule of premiums for each vehicle that included a $3 or $5 charge per vehicle for the $40,000 of uninsured motorist coverage. Joseph Cohn & Sons, Inc. paid a total of $73 for the uninsured motorist coverage on all twenty-two vehicles. By the express terms of the policy, uninsured motorists were defined so as to include underinsured motorists. 1

On August 11, 1983, the plaintiff's wife, Jill Cohn, while operating one of the insured automobiles, was severely injured in a collision at the intersection of Temple and Grove Streets in New Haven. The parties agreed that the damages suffered by Cohn as the result of her personal injuries were not less than $880,000. Transamerica Insurance Company, insurer of the other vehicle involved in the collision, paid the plaintiff $25,000, which was the full amount of its liability policy.

Unable to agree on the amount of underinsured motorist coverage available under the defendant's policy, the parties submitted the issue to arbitration. The arbitration panel concluded that there was $880,000 of underinsured motorist coverage available under the Aetna policy, having "stacked" $40,000 per vehicle for each of the twenty-two vehicles insured under the policy. The panel further concluded that the damages suffered by Cohn exceeded both the $25,000 limit of the tortfeasor's insurance and the $880,000 available under the Aetna policy. Finally, the panel directed the defendant to pay the plaintiff the sum of $855,000, having given the defendant a credit for the $25,000 paid by the tortfeasor's carrier.

The defendant filed an application in Superior Court to set aside the arbitration award pursuant to General Statutes § 52-418. 2 The trial court, Hodgson, J., confirmed the award and rendered judgment for the plaintiff to recover $855,000 plus interest and costs. The defendant appealed to the Appellate Court and the plaintiff cross appealed. 3 We thereafter transferred the matter to ourselves pursuant to Practice Book § 4023.

This court has, upon several occasions, considered the applicability of "stacking" principles to a variety of factual circumstances. We have recognized the "stacking" of uninsured motorist coverages in situations involving separate and distinct policies that were both applicable to a given claim (interpolicy "stacking"). Safeco Ins. Co. v. Vetre, 174 Conn. 329, 333-35, 387 A.2d 539 (1978); Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 452-53, 370 A.2d 1006 (1976); but see Fidelity & Casualty Co. v. Darrow, 161 Conn. 169, 286 A.2d 288 (1971). We have also sanctioned the "stacking" of uninsured motorist coverage where a number of vehicles insured under one policy were separately described and individual premiums were charged for each vehicle (intrapolicy "stacking"). Dixon v. Empire Mutual Ins. Co., 189 Conn. 449, 453, 456 A.2d 335 (1983); Nationwide Ins. Co. v. Gode, 187 Conn. 386, 394-97, 446 A.2d 1059 (1982); Safeco Ins. Co. v. Vetre, supra.

We have rejected attempts to limit "stacking" principles to different classifications of covered individuals, rejecting the notion that there is a contractual distinction between the "named insured" and vehicle "occupants." Allstate Ins. Co. v. Ferrante, 201 Conn. 478, 484-88, 518 A.2d 373 (1986). We have also uniformly rejected attempts to reduce uninsured motorist coverage through explicit policy language, except within the narrow context of the exceptions permitted under § 38-175a-6 of the Regulations of Connecticut State Agencies. 4 Nicolletta v. Nationwide Ins. Co., 211 Conn. 640, 645-46, 560 A.2d 964 (1989); Allstate Ins. Co. v. Ferrante, supra, 201 Conn. at 483-84, 518 A.2d 373.

While General Statutes § 38-175c, the uninsured motorist statute, does not specifically address the issue of "stacking" coverage, we have repeatedly held that a fair reading of the statute discloses no prohibition against such aggregations. Allstate Ins. Co. v. Ferrante, supra, 201 Conn. at 481-82, 518 A.2d 373; Dixon v. Empire Mutual Ins. Co., supra; Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 394-97, 446 A.2d 1059; Safeco Ins. Co. v. Vetre, supra; Pecker v. Aetna Casualty & Surety Co., supra, 171 Conn. at 447-53, 370 A.2d 1006. The reason for this is the common sense notion that such a result falls within the reasonable expectations of the parties to the insurance contract. As one court has observed: "Stacking is derived from the presumption that when the named insured purchases uninsured motorist coverage on more than one automobile, he intends to buy extra protection for himself and his family, regardless of whether his injury occurs in any one of his insured vehicles or elsewhere." Travelers Ins. Co. v. Pac, 337 So.2d 397, 398 (Fla.App.1976). " ' "This is particularly true when each of the insured vehicles is separately described, the coverage granted under the policy is separately listed for each vehicle, and a separate premium is charged for the coverage afforded to each of the described vehicles." See also Tucker v. Government Employees Ins. Co., 288 So.2d 238 (Fla.1973).' Safeco Ins. Co. v. Vetre, supra, 174 Conn. at 334, 387 A.2d 539." Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 395, 446 A.2d 1059. " 'Where two premiums are paid for two vehicles, whether in one policy or two, total coverage for the named insured is doubled since a person can reasonably expect double coverage when he pays double premiums.' Yacobacci v. Allstate Ins. Co., [33 Conn.Sup. 229, 231, 372 A.2d 987 (1976) ]." Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 396, 446 A.2d 1059.

The notion of "stacking" as an objectively reasonable expectation of the parties does not, however, extend to fleet insurance contracts. In using the phrase "fleet insurance contracts" we specifically refer to any insurance policy designated as a "fleet" or "garage" policy, or any insurance policy covering a number of vehicles owned by a business, a governmental entity, or an institution. See 25 A.L.R.4th 896 (1983).

"It is obvious that an individual who applies for and receives a liability policy covering his two automobiles would expect to collect the coverage he paid for on both automobiles if anything happened to him or a member of his family. On the contrary, it is not credible that a company or an employee of a company having a fleet of ... vehicles would reasonably expect the coverage on the vehicle the employee happened to be occupying at the time of the collision with an uninsured [or underinsured] motorist to be [a multiple of the total number of vehicles in the fleet]...." Linderer v. Royal Globe Ins. Co., 597 S.W.2d 656, 661 (Mo.App.1980). In the present case, the arbitration panel multiplied twenty-two vehicles times $40,000 to determine that there was $880,000 in underinsured...

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