Costantino v. Skolnick, No. 18327.

• Decision Date: 16 February 2010
• Docket Number: No. 18327.
• Citation: 988 A.2d 257,294 Conn. 719
• Court: Connecticut Supreme Court
• Parties: Richard COSTANTINO et al. v. Stanley SKOLNICK et al.

988 A.2d 257

294 Conn. 719

Richard COSTANTINO et al. v. Stanley SKOLNICK et al.

No. 18327.

Supreme Court of Connecticut.

Argued September 8, 2009.

Decided February 16, 2010.

David A. Slossberg, with whom, on the brief, was Brian J. Wheelin, Milford, for the appellant (named plaintiff).

John B. Farley, with whom were Daniel P. Scapellati, Hartford and, on the brief, Brian J. Gedicks, for the appellees (defendant Medical Professional Mutual Insurance Company et al.).

ROGERS, C.J., and NORCOTT, KATZ, PALMER, VERTEFEUILLE, ZARELLA and McLACHLAN, Js.

KATZ, J.

The named plaintiff, Richard Costantino,¹ appeals from the trial court's decision² denying his request for a declaratory judgment that the defendant Medical Professional Mutual Insurance Company doing business as ProMutual and ProSelect Insurance Company (ProMutual), the medical malpractice insurer for the named defendant, Stanley Skolnick, is required to pay the plaintiff offer of judgment interest that exceeds the limits of liability in Skolnick's policy. The plaintiff sought the declaration after the parties had entered into a settlement agreement (agreement) that required ProMutual to pay Skolnick's $1 million policy limit to the plaintiff and under which they stipulated that: (1) the agreement was to be considered a verdict and judgment in favor of the plaintiff for purposes of the offer of judgment statute, General Statutes (Rev. to 2005) § 52-192a;³ and (2) the plaintiff would have been entitled to offer of judgment interest had the case been tried to conclusion.

On appeal, the parties are aligned in their position that the trial court improperly declined to resolve the matter on the basis of the issue presented to it, in light of the stipulations in their agreement and the declaratory posture of the action. They disagree, however, as to whether the pertinent policy provision, which defined damages to include prejudgment interest, can be given effect so as to bar an award of such interest when the total recovery would exceed the policy limit. We conclude that the parties' stipulations did not satisfy the necessary predicate to an award of offer of judgment interest under § 52-192a, namely, a judgment in the plaintiff's favor after a trial. Accordingly we conclude that the trial court properly declined to reach the issue on which the plaintiff had sought a declaration. Therefore, we affirm the trial court's decision.

The record reveals the following undisputed facts and procedural history. In August, 2004, the plaintiff commenced a malpractice action against Skolnick, a general internist, and Skolnick's medical practice, the defendant Darien Medical Group, alleging that Skolnick's negligent failure to properly diagnose and treat the plaintiff had caused him to suffer severe hypertension and end stage renal failure, which ultimately required him to undergo a kidney transplant. The plaintiff, who had been a senior vice president with The Bank of New York, further alleged that these injuries had resulted in his reassignment to a position at substantially reduced compensation and had derailed his promising career. On September 30, 2005, the plaintiff filed an offer of judgment in the amount of $1 million, the limit of liability under Skolnick's malpractice policy with ProMutual. That offer was not accepted within the thirty day period mandated under § 52-192a(a) and, therefore, was deemed rejected as a matter of law.⁴ See footnote 3 of this opinion.

Approximately nineteen months after the filing of the offer of judgment, the plaintiff, Skolnick and ProMutual executed the agreement to settle the case.⁵ Under the agreement, ProMutual was to pay Skolnick's $1 million policy limit to the plaintiff in exchange for the plaintiff's release of all claims against the defendants under the pending action except for a claim against ProMutual for offer of judgment interest. With respect to offer of judgment interest, the agreement provided in relevant part: "The [plaintiff] and [Skolnick and ProMutual] agree that the issue of whether or not [ProMutual is] obligated, under the terms of the policy of insurance that [ProMutual] issued to [Skolnick], for the payment of offer of judgment interest is an issue that needs to be decided by a court of law.

"The [plaintiff] and [Skolnick and ProMutual] have agreed to reserve to the court the question on offer of judgment interest as set forth ... below in the interests of judicial efficiency, in order to avoid a full trial that the parties agree would result in a judgment of at least [$1 million] representing the underlying policy limits in this action....

"[I]t is agreed that if the action were tried to conclusion, the [plaintiff] would become entitled to recover from [ProMutual] the sum certain of [$1 million] plus offer of judgment interest in the amount of $293,000.00. For all purposes under the prejudgment [interest] statute,⁶ this [a]greement shall be considered to be a verdict and judgment in favor of the plaintiff, it being both parties' desire to promote a fair and efficient resolution of the prejudgment ... interest issue without the time and expense to the parties and the judicial system of a long and protracted trial....

"The question reserved to the court is whether, given that a valid offer of judgment was filed by the plaintiff in the amount of [$1 million], and assuming a verdict entered after trial of at least [$1 million] such that offer of judgment interest would be due on the [$1 million] verdict, is [ProMutual] required to pay said offer of judgment interest where, as here, it exceeds the [$1 million] policy limits?"

The agreement further acknowledged that, if the court ruled in the plaintiff's favor, such a decision would obligate ProMutual to pay $293,000 in offer of judgment interest, and, conversely, if the court ruled in ProMutual's favor, such a decision would obligate the plaintiff to release all further claims against ProMutual beyond the $1 million policy payment. The agreement provided that in no event would Skolnick incur any obligation.

In accordance with their agreement, the plaintiff thereafter filed a motion to cite in ProMutual as a party defendant, which the court, Karazin, J., granted. The plaintiff concurrently filed an amended complaint, along with a copy of the agreement, in which he added to his original medical malpractice count against Skolnick a count against ProMutual for a declaratory judgment as to the question reserved in the agreement regarding offer of judgment interest. ProMutual thereafter filed an answer and asserted as a special defense that it was not liable for offer of judgment interest because the policy defines damages to include prejudgment interest⁷ and its agreement to pay the $1 million policy limit had exhausted its obligation under the policy.

ProMutual subsequently filed a motion for summary judgment on the declaratory judgment count, and the plaintiff simultaneously filed a motion for a declaratory ruling.

After argument on the motions, the trial court, J.R. Downey, J., issued a memorandum of decision addressing both motions, making dispositive determinations in favor of ProMutual, but on a different ground than the one raised by the parties. Specifically, the court pointed to the fact that § 52-192a permits an award of offer of judgment interest only "`[a]fter trial'...." The court therefore reasoned that, because the matter had been settled before trial by way of a settlement, § 52-192a did not authorize offer of judgment interest. Although the court recognized that the parties had sought a determination as to the effect of the policy limit on offer of judgment interest, the court concluded that its construction of the statute rendered that determination unnecessary. The parties thereafter unsuccessfully invoked several procedural mechanisms in an attempt to obtain a ruling on the issue not addressed by the trial court. First, the parties filed a joint motion for reargument, specifically directing the trial court to the language in the agreement wherein the parties had stipulated that the agreement was to be treated as a verdict and judgment for purposes of the motions before the court. Judge Downey granted the motion for reargument, but denied the relief requested. Next, after the plaintiff had appealed from the trial court's judgment, ProMutual filed a motion for articulation in the trial court as to the following question: "Are insurance companies and policyholders free to enter into liability insurance contracts that limit the amount the insurer must pay as damages on behalf of the policyholder, including any prejudgment interest that may be assessed against the policyholder?" Judge Downey thereafter issued an articulation stating that he had considered, but not decided, the hypothetical question posed because "the necessary predicate, a trial, had not occurred." The court further explained that reaching this question would have been rendering an advisory opinion, which courts are not inclined to do.

On appeal to this court; see footnote 2 of this opinion; the plaintiff contends, and ProMutual agrees, that the trial court improperly declined to answer the question that the parties had presented to it because that question properly was before the court and did not require it to render an advisory opinion. With respect to the merits of this question, the plaintiff contends that the policy provision defining the limit on damages to include prejudgment interest cannot be given effect because: (1) the offer of judgment statute is mandatory and punitive; and (2) the policy's definition of damages as including prejudgment interest is unenforceable because it is an attempt to circumvent the legislative directive under § 52-192a and the policy's characterization cannot change the actual nature of the interest. As to its view of the merits, ProMutual contends that it cannot be obligated to pay offer of judgment interest because, under the...