Covenant Ins. Co. v. Coon, 14246

• Decision Date: 06 August 1991
• Docket Number: No. 14246,14246
• Citation: 220 Conn. 30,594 A.2d 977
• Parties: COVENANT INSURANCE COMPANY v. Ernestine COON et al.
• Court: Connecticut Supreme Court

Page 977

594 A.2d 977

220 Conn. 30

COVENANT INSURANCE COMPANY v. Ernestine COON et al.

No. 14246.

Supreme Court of Connecticut.

Argued May 30, 1991.

Decided Aug. 6, 1991.

Eugene A. Cooney, Hartford, with whom, on the brief, was Rodd J. Mantell, Waterbury, for appellant (plaintiff).

Kathleen S. Mass, with whom, on the brief, was Vincent R. Falcone, West Haven, for appellee (named defendant).

James J. Carroll, New Haven, for appellee (defendant North River Ins. Co.).

Before PETERS, C.J., and GLASS, COVELLO and SANTANIELLO, JJ. ¹

COVELLO, Justice.

This is an appeal from a judgment of the trial court denying the plaintiff's application to vacate an arbitration award. The issues on appeal are: (1) whether in determining if a vehicle is "underinsured" within the meaning of General Statutes § 38a-336(d), the limit of a tortfeasor's liability insurance is construed to be the policy's per accident limit or per person limit; and (2) whether underinsured motorist coverage under separate policies covering the victim may be "stacked" ² for the purposes of determining if a vehicle is underinsured.

The trial court found the following facts. On December 7, 1985, Ernestine Coon, a passenger in a vehicle owned and operated by Robert Sabo, sustained injuries when the Sabo vehicle was struck by a vehicle owned and operated by Anthony Sacco. The accident was solely Sacco's fault. At the time of the accident, Coon owned an insurance policy issued by North River Insurance Company (North River) with underinsured motorist coverage ³ of $20,000. Sabo owned a policy issued by the plaintiff, Covenant Insurance Company (Covenant) providing underinsured motorist coverage of $50,000. Sacco had liability insurance through Aetna Insurance Company (Aetna) with liability limits of $25,000 per person and $50,000 per accident. Aetna paid Coon $25,000. Because the value of her injuries exceeded $25,000, Coon sought additional recovery from North River and Covenant pursuant to the underinsured motorist provisions of those policies.

Unable to agree that the Sacco vehicle was an underinsured vehicle within the meaning of § 38a-336(d), the parties submitted that issue to arbitration. In order to determine whether the vehicle was underinsured, the arbitrators "stacked" the $50,000 Covenant and the $20,000 North River underinsured motorist limits to arrive at a total underinsured limit of $70,000. They compared the $70,000 coverage thus calculated against the $25,000 available under Sacco's liability insurance. They concluded that because the $70,000 uninsured motorist coverage was greater than the $25,000 liability coverage, the Sacco vehicle was therefore an "underinsured vehicle" within the meaning of General Statutes § 38a-336(d). ⁴ The arbitrators thereafter awarded Coon $45,000 for her injuries above the $25,000 already paid by Aetna; $32,142.86 from Covenant and $12,857.14 from North River.

Covenant and North River applied to vacate the award in Superior Court claiming, not that the award was excessive, but that the Sacco vehicle was not an underinsured vehicle within the meaning of General Statutes § 38a-336(d) and therefore that the underinsured motorist provisions of the two policies were not applicable to Coon's claims. Specifically, they argued that (1) the underinsured motorist limits in the two separate policies should not be stacked in determining whether the Sacco vehicle was underinsured, and (2) the arbitrators should have used the $50,000 per accident liability limit and not the $25,000 per person limit in comparing the tortfeasor's liability insurance coverage with the victim's underinsured motorist coverage. The trial court concluded that, for the purpose of making the comparison required by § 38a-336(d), stacking of the underinsured motorist coverage was permitted and that the $25,000 available to Coon under the Aetna policy represented the liability insurance limits. The trial court therefore denied the application to vacate the arbitration award. Covenant appealed to the Appellate Court. We transferred the appeal to this court pursuant to Practice Book § 4023.

I

Covenant first claims that the arbitrators improperly determined that the Sacco vehicle was underinsured. Specifically, it argues that, in determining whether the Sacco vehicle was underinsured within the meaning of § 38a-336(d), the amount of liability insurance on the Sacco vehicle was the $50,000 per accident limit and not the $25,000 per person limit. We disagree.

Application of § 38a-336 involves two separate inquiries. First, it must be determined whether the tortfeasor's vehicle is an "underinsured vehicle" within the meaning of the statute. Second, after this determination is made and underinsured motorist coverage is found to be applicable, the finder of fact calculates the amount of the award to be paid the victim.

An "underinsured vehicle" is defined in § 38a-336(d) as "a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made...." Thus, § 38a-336 requires that, in determining whether a motor vehicle is "underinsured" the total of all liability insurance coverage available to an individual claimant must be compared to the amount of underinsured motorist coverage in each of the policies against which the victim has a claim. If the total of the liability insurance is less than the uninsured motorist limits of the individual's policy, then the uninsured motorist coverage becomes applicable.

Neither the text nor the legislative history of § 38a-336 addresses directly the circumstance in which the tortfeasor's liability insurance policy has two different liability limits. However, we have previously concluded that in determining the tortfeasor's liability limit for the purposes of the § 38a-336(d) comparison, we must examine the amount "of liability insurance [that is ] available to [the victims ]." (Emphasis added.) American Motorists Ins. Co. v. Gould, 213 Conn. 625, 633, 569 A.2d 1105 (1990). ⁵ Here, even though Sacco had $50,000 per accident liability limits, Coon never had more than $25,000 of this coverage potentially available to her. Thus, it is consistent with our earlier interpretation of § 38a-336 to conclude that the total of the per person limit is the amount of liability insurance available to the claimant, i.e., $25,000.

II

Covenant next claims that, even if the per person liability limit is adopted for the purposes of the § 38a-336(d) comparison, the arbitrators should not have stacked the underinsured motorist coverage from two different policies covering the victim in determining whether the Sacco vehicle was an underinsured vehicle. The plaintiff specifically argues that the arbitrators improperly combined the $20,000 in underinsured motorist insurance available under the North River policy and the $50,000 in underinsured motorist insurance available under the Covenant policy to arrive at the $70,000 total underinsured motorist coverage. We agree.

In the context of determining the final award to be paid the victim, we have said that "[w]hile General Statutes § [38a-336] ... does not specifically address the issue of 'stacking' coverage ... a fair reading of the statute discloses no prohibition against such aggregations." Cohn v. Aetna Ins. Co., 213 Conn. 525, 529, 569 A.2d 541 (1990). In making the initial determination of whether a tortfeasor's vehicle is underinsured, however, § 38a-336(d) states that "an 'underinsured motor vehicle' means a motor vehicle with respect to which the sum of the limits of liability under all ... policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made...." (Emphasis added.) Thus, in making the initial determination whether a vehicle is underinsured, § 38a-336 clearly states that the aggregate of the liability limits under all of the tortfeasor's policies are to be compared with the uninsured motorist coverage limit of the policy against which a claim is made. The statute unequivocally refers to the liability provisions in the plural but the uninsured motorist provisions in the singular. ⁶ Consequently, the analysis directed by § 38a-336 requires a comparison between the aggregate of liability limits available to the victim against the underinsured motorist limits in each single policy against which the victim has a claim.

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