Cohn v. Pacific Employers Ins. Co.

• Decision Date: 30 January 1990
• Docket Number: No. 13764,13764
• Court: Connecticut Supreme Court
• Parties: Stuart COHN, Conservator (ESTATE Of Jill COHN) v. PACIFIC EMPLOYERS INSURANCE COMPANY.

Page 544

569 A.2d 544

213 Conn. 540

Stuart COHN, Conservator (ESTATE Of Jill COHN) v. PACIFIC EMPLOYERS INSURANCE COMPANY.

No. 13764.

Supreme Court of Connecticut.

Argued Nov. 1, 1989.

Decided Jan. 30, 1990.

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

Jesse M. Frankl, with whom was Jean Molloy, Glastonbury, for appellee (defendant).

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

COVELLO, Associate Justice.

This is an appeal from a judgment following a ruling of the trial court, Corradino, J., that concluded that the defendant's insurance contract was inapplicable to the plaintiff's claim. The principal issue is whether an "excess" or "umbrella" insurance policy provides coverage to third party claimants injured through the acts of uninsured or underinsured motorists. We conclude that neither the language of this policy nor the provisions of General Statutes § 38-175c ¹ require such a result, and therefore, find no error.

The relevant facts are undisputed. On August 11, 1983, the defendant, Pacific 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. 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. Despite the exhaustion of the limits of two other policies available to Jill Cohn that were primary to the PEIC umbrella policy and that provided underinsured motorist coverage, the total sums paid were insufficient to The plaintiff, the conservator of his wife's estate, made a timely demand for payment under the PEIC umbrella policy, claiming that the policy provisions were applicable to a situation where the responsible tortfeasor was an underinsured motorist. PEIC denied the claim. On April 30, 1986, the plaintiff brought suit, alleging a breach of the insurance contract. PEIC filed a motion to strike the complaint as revised in its entirety, on the ground that the insurance contract did not provide coverage under the circumstances described in the complaint.

                Employers Insurance Company (PEIC), had in force an "Excess Blanket Catastrophe Liability Policy," (umbrella policy) insuring Joseph Cohn & Son, Inc.  (insured), a New Haven commercial painting contractor.   The PEIC umbrella policy provided blanket coverage of $5,000,000, this sum to be available, however, only in the event of the exhaustion of the coverage provided by three other specifically identified policies.   One of these underlying policies was the insured's automobile liability policy that provided coverage for each of twenty-two vehicles. 2  The insuring agreement 3 stated that "PEIC will indemnify [213 Conn. 543] the insured for ultimate net loss in excess of the retained limit hereinafter stated which the Insured shall become legally obligated to pay as damages because of A. personal injury or B. property damage or C. advertising injury...."  (Emphasis added.)
                compensate Jill Cohn's estate for her injuries and losses. 4
                

The trial court, Corradino, J., granted the motion to strike, concluding that: (1) the umbrella policy's language was unambiguous; (2) the umbrella policy did not provide underinsured motorist protection; and (3) the umbrella policy was not an "automobile liability policy" within the meaning of General Statutes § 38-175c and therefore, as a matter of law, the policy was not required to provide uninsured motorist coverage. The plaintiff declined to plead over, and on May 15, 1989, the trial court, Quinn, J., rendered judgment for the defendant. The plaintiff appealed to the Appellate Court. We thereafter transferred the matter to ourselves pursuant to Practice Book § 4023.

On appeal, the plaintiff first argues that the trial court erred in concluding that the language of PEIC's umbrella policy was not ambiguous. Specifically, he contends that paragraph 3(e) of the "Conditions" section of the umbrella policy renders the policy ambiguous as to its nature and the scope of its coverage. Therefore, the plaintiff argues, according to well established principles of insurance contract construction, the policy must be interpreted in the light most favorable to the plaintiff; i.e., so as to provide underinsured motorist coverage to Jill Cohn. See, e.g., Cody v. Remington Electric Shavers, 179 Conn. 494, 497, 427 A.2d 810 (1980); Dickinson v. Maryland Casualty Co., 101 Conn. 369, 378-79, 125 A. 866 (1924). We do not agree.

Paragraph 3(e) of the policy states, "[a]s this policy is excess insurance, the insured warrants that coverage under the uninsured motorist laws will be maintained during the policy period. It is agreed that the Named Insured shall promptly reimburse PEIC for any amount of ultimate net loss paid on behalf of any Insured as respects any payment made under an uninsured motorist law, or any similar law."

This language is neither ambiguous nor does it broaden the scope of the policy's coverage. Rather, it describes as a condition to the policy's issuance, the circumstances under which the insured would be liable to the carrier. First, it contains the insured's representation that uninsured motorist coverage would be maintained during the policy period. Clearly, if paragraph 3(e) was providing uninsured motorist coverage, as the plaintiff contends, it would not be necessary to include a representation that uninsured motorist coverage would be maintained during the policy period as such coverage would already exist within the four corners of the very same policy. Second, paragraph 3(e) mandates that the insured must promptly reimburse PEIC for any loss that PEIC may have to pay by reason of any uninsured/underinsured motorist law. In other words, it is the insured who is agreeing to pay PEIC for any uninsured/underinsured motorist claims, and not vice versa, as the plaintiff contends. Nowhere does PEIC agree to provide uninsured or underinsured coverage. Where the terms of a policy are clear and unambiguous, they will be given their plain and ordinary meaning. Aschenbrenner v. United States Fidelity & Guaranty Co., 292 U.S. 80, 85, 54 S.Ct. 590, 592, 78 L.Ed. 1137 (1934); Beach v. Middlesex Mutual Assurance Co., 205 Conn. 246, 249, 532 A.2d 1297 (1987); Horak v. Middlesex Mutual Assurance Co., 181 Conn. 614, 616, 436 A.2d 783 (1980); Weingarten v. Allstate The plaintiff next argues that the umbrella policy, in describing those insured, refers to "any person while using, with the permission of the Named Insured, any automobile...." Since the policy contains a reference to an automobile and provides coverage for personal injuries and property damage that could conceivably flow from an automobile accident, the plaintiff contends that the umbrella policy must also be an automobile liability policy. Since it is an automobile liability policy, the plaintiff argues that the policy must provide uninsured motorist coverage as required by General Statutes § 38-175c. While we agree that § 38-175c requires that there be uninsured motorist coverage in automobile liability policies; see footnote 1 supra; we disagree that this is an automobile liability policy within the meaning of § 38-175c.

Ins. Co., 169 Conn. 502, 509-10, 363 A.2d 1055 (1975).

"Whether an insurance contract is a liability policy or an indemnity policy depends upon the intention of the parties, as evidenced by the phraseology of their agreement.... The chief difference between a liability policy and an indemnity policy is that under the former a cause of action accrues when the liability attaches, while under the latter there is no cause of action until the liability has been discharged, as by payment of the judgment by the insured." 6A J. Appleman, Insurance § 4261, and see the cases cited therein. Page one of the policy contains the "Insuring Agreement." ⁵ It establishes the obligations as between the parties to the insurance contract. The first paragraph states the "PEIC will indemnify the insured for ultimate net loss in excess of the retained limit ... which the insured shall become legally obligated to pay as damages because of ... personal injury or ... property damage or ... advertising injury...." (Emphasis added.) In its simplest terms, the insuring agreement provides that the parties have entered into an indemnification contract intended to reimburse the named insured should it become liable to third parties for a loss that was greater than the coverage limits of the underlying policies. Liability beyond these terms will not be extended by implication. Miller Bros. Construction Co. v. Maryland Casualty Co., 113 Conn. 504, 513, 155 A. 709 (1931); Ryiz v. Federal Ins. Co., 5 Conn.App. 179, 182-83, 497 A.2d 1001 (1985); see also Plainville v. Travelers Indemnity Co., 178 Conn. 664, 674, 425 A.2d 131 (1979).

The entire orientation of this contract, as evidenced by its unequivocal language, is to indemnify the insured rather than to assume direct liability to injured third parties. To the extent that there may be similarities in the environment of underlying automobile policies vis a vis excess...