Employers Reinsurance Corp. v. Muro, No. 24392

• Decision Date: 21 December 2004
• Docket Number: No. 24394., No. 24393, No. 24392
• Citation: 861 A.2d 1216,86 Conn.App. 551
• Parties: EMPLOYERS REINSURANCE CORPORATION v. Anthony L. MURO, Jr., et al.
• Court: Connecticut Court of Appeals

861 A.2d 1216

86 Conn.App. 551

EMPLOYERS REINSURANCE CORPORATION v. Anthony L. MURO, Jr., et al.

Nos. 24392, 24393, 24394.

Appellate Court of Connecticut.

Argued September 21, 2004.

Decided December 21, 2004.

Thomas P. Willcutts, with whom was Douglas A. Cho, Hartford, for the appellants (defendant Robert LeFebvre et al.).

Christopher B. Weldon, with whom, on the brief, was Darren P. Renner, Stamford, for the appellee (plaintiff).

FOTI, BISHOP and PETERS, Js.

BISHOP, J.

The defendants Robert LeFebvre, Shirley LeFebvre, Louis Palizza, Marie Palizza, Mark Waxenberg and Mary Waxenberg (defendant clients)¹ appeal from the judgment of the trial court rendered after it granted the motion for summary judgment in favor of the plaintiff, Employers Reinsurance Corporation. On appeal, the defendant clients argue that in rendering summary judgment, the court improperly (1) ruled that certain advice from the defendant insurance agent, Anthony L. Muro, Jr., to the defendant clients to sell annuities and life insurance policies was not covered under Muro's professional liability insurance policy, and (2) ruled that Muro's advice to the defendant clients to purchase promissory notes was not covered under the policy because the notes were securities. We agree with the defendant clients' first claim and, therefore, reverse the judgment of the trial court.²

In ruling on the motion for summary judgment, the court found that the following facts were not in dispute. In 1997, 1998 and 1999, Muro was licensed to sell life insurance in Connecticut. During that time, Muro advised the defendant clients to sell all or part of their existing annuities and insurance policies (insurance products), and to purchase promissory notes from World Vision Entertainment, Inc., and Sebastian International Enterprises, Inc., with the proceeds from the sales. Shortly thereafter, the notes became valueless due to the insolvency, liquidation or bankruptcy of World Vision Entertainment, Inc., and Sebastian International Enterprises, Inc.

The defendant clients initiated separate lawsuits against Muro in which they claimed that they incurred losses from the sale of their insurance products and the purchase of promissory notes that later became worthless. Muro sought coverage under the professional liability policy he had purchased from the plaintiff through Midland National Life Insurance Company, Inc. The plaintiff initially defended the actions under a reservation of rights. On May 31, 2002, the plaintiff initiated an action for a declaratory judgment and requested the court to rule that Muro's alleged acts were not covered under the policy. The defendant clients, along with Robert Pitruzzello and Virginia C. Pitruzzello, joined the declaratory judgment action as party defendants. With the action pending, the parties negotiated a partial settlement of their claims against Muro in which they liquidated the amount of the defendant clients' damages, and they agreed that the plaintiff would pay damages to the defendant clients if the court found that Muro's negligent conduct that caused the defendant clients' losses was covered under the terms of Muro's professional liability insurance policy with the plaintiff. As part of their stipulation, the defendant clients agreed not to pursue liability against Muro in his personal capacity. The plaintiff thereafter filed a motion for summary judgment in which it asserted that the claims made against Muro by the defendant clients were not covered under the professional liability policy or, in the alternative, that Muro's actions were specifically excluded from coverage under several policy exclusions. The court granted the plaintiff's motion on June 2, 2003, and rendered judgment for the plaintiff.³ This appeal followed. We initially set forth the applicable standard of review. "In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent.... Our review of the trial court's decision to grant [a] motion for summary judgment is plenary." (Citations omitted; internal quotation marks omitted.) Allstate Ins. Co. v. Barron, 269 Conn. 394, 405-406, 848 A.2d 1165 (2004).

On appeal, the defendant clients claim that the court improperly concluded that Muro's advice to sell the insurance products did not cause them to...