Frantz v. U.S. Fleet Leasing, Inc.

• Decision Date: 28 July 1998
• Docket Number: No. 15784,15784
• Citation: 714 A.2d 1222,245 Conn. 727
• Parties: Roger FRANTZ v. UNITED STATES FLEET LEASING, INC., et al. William GRABEK et al. v. UNITED STATES FLEET LEASING, INC., et al. Barbara KELSEY v. UNITED STATES FLEET LEASING, INC., et al.
• Court: Connecticut Supreme Court

Page 1222

714 A.2d 1222

245 Conn. 727

Roger FRANTZ v. UNITED STATES FLEET LEASING, INC., et al.

William GRABEK et al. v. UNITED STATES FLEET LEASING, INC., et al.

Barbara KELSEY v. UNITED STATES FLEET LEASING, INC., et al.

No. 15784.

Supreme Court of Connecticut.

Argued Feb. 17, 1998.

Decided July 28, 1998.

Philip T. Newbury, Jr., Hartford, for appellants (defendants).

Michael Jainchill, with whom, was Kathryn Calibey, Hartford, for appellees (plaintiffs in the first and second cases).

Susan M. Phillips, New London, for appellee (plaintiff in the third case).

Jon S. Berk and Claudia A. Baio, Hartford, filed a brief for Connecticut Defense Lawyers Association as amicus curiae.

Before CALLAHAN, C.J., and BORDEN, KATZ, PALMER and McDONALD, JJ.

PALMER, Associate Justice.

These consolidated appeals require us to determine the proper application of General Statutes (Rev. to 1991) § 38a-336 (a)(2) ¹ to a written request for a reduction in uninsured motorist coverage ² under a commercial fleet automobile liability insurance policy. ³ Specifically, we must decide whether such a request was effective in this case even though the request form did not contain the signatures of all of the named insureds under the policy. We conclude that the reduction request was effective.

The relevant facts and procedural history are undisputed. On September 11, 1992, the plaintiffs Roger Frantz, Barbara Kelsey and William Grabek, ⁴ employees of the Electric Boat Division of General Dynamics Corporation (General Dynamics), and participants in a work van pool program, were injured when an automobile driven by Robert Nowosad (tortfeasor) struck the van in which they were riding. The van, which was owned by the named defendant, United States Fleet Leasing, Inc. (Fleet Leasing), and which was leased to General Dynamics, was insured under an automobile liability insurance policy that had been issued by the defendant Insurance Company of North America (INA) to General Dynamics. The vehicle driven by the tortfeasor was insured under a liability policy that had been issued to the vehicle's owner, John Nowosad (Nowosad), ⁵ with liability limits of $100,000 per accident.

Under the terms of the lease agreement between Fleet Leasing and General Dynamics, ⁶ General Dynamics agreed to maintain liability coverage of at least $1 million on the leased vehicles, as well as collision coverage, and to designate Fleet Leasing as an additional insured under the policy. ⁷ The lease agreement was silent with respect to uninsured motorist coverage. Fleet Leasing, however, relied on General Dynamics to arrange for uninsured motorist coverage in those jurisdictions where such coverage was required, including Connecticut; see General Statutes (Rev. to 1991) § 14-112(a); ⁸ and authorized General Dynamics to designate the level of such coverage. Pursuant to this understanding, a representative of General Dynamics completed and signed a "selection form" for Connecticut uninsured motorist coverage, choosing the minimum amount. ⁹

The INA policy covered approximately 2208 private passenger vehicles that were either owned or leased by General Dynamics and that were located in various states. The policy provided liability coverage of $2 million per accident and, in accordance with General Dynamics' election, a "minimum" level of uninsured motorist coverage. A schedule depicting the minimum level of uninsured motorist coverage required in various states, which appeared in an endorsement to the policy, showed minimum uninsured motorist coverage in Connecticut of $40,000 per accident. ¹⁰ The declarations section of the policy listed General Dynamics as the named insured. The term "named insured," however, was expanded by endorsement to include, subject to certain limitations, various subsidiaries, affiliates and joint ventures of General Dynamics, the United States of America and "any other person or organization for which [General Dynamics] has agreed in writing to provide insurance...." ¹¹

Frantz, Kelsey and Grabek commenced separate actions against the tortfeasor, seeking damages for injuries sustained as a result of the accident. After a trial in July, 1995, the trial court determined that the tortfeasor was solely responsible for the plaintiffs' injuries and rendered judgment in their favor as follows: Frantz, $1,300,000; Kelsey, $750,000; and Grabek, $650,000. Nowosad's insurer paid a total of $100,000, thereby exhausting the liability limits of Nowosad's policy. ¹²

The plaintiffs also commenced these separate actions against Fleet Leasing and INA seeking underinsured motorist benefits under the policy issued by INA to General Dynamics. ¹³ These actions were subsequently consolidated.

The defendants filed a motion for summary judgment as to Grabek's complaint, claiming that: (1) his exclusive remedy was workers' compensation; ¹⁴ and (2) because General Dynamics had elected uninsured motorist coverage of $40,000, the tortfeasor's vehicle was not an "underinsured motor vehicle" within the meaning of General Statutes (Rev. to 1991) § 38a-336 (d). ¹⁵ The court denied the defendants' motion.

Thereafter, the plaintiffs moved for summary judgment, claiming that: (1) under our decision in Nationwide Mutual Ins. Co. v. Pasion, 219 Conn. 764, 594 A.2d 468 (1991), ¹⁶ General Dynamics' election of lower uninsured motorist coverage was invalid because it had not been signed by Fleet Leasing, a named insured, and, consequently, the uninsured motorist coverage under the policy was equal to the liability limit of $2 million; and (2) because the issue of damages had been decided in the earlier action against the tortfeasor, the doctrine of collateral estoppel precluded the defendants from relitigating that issue. The defendants filed cross motions for summary judgment, asserting that General Dynamics' election of reduced uninsured motorist limits was binding because § 1 of No. 93-297 of the 1993 Public Acts, as it amended subsection (a)(2) of § 38a-336 (hereafter P.A. 93-297, § 1[a] ); see footnote 1; clarified existing law and, therefore, applied retroactively to permit any one of several named insureds under the policy to request and obtain such a reduction. The defendants alternatively claimed that even if P.A. 93-297, § 1(a)(2) did not apply retrospectively, our holding in Pasion; see footnote 16; was inapplicable to this case and, thus, the plaintiffs were bound by General Dynamics' election of $40,000 in uninsured motorist coverage. The trial court granted the plaintiffs' motions for summary judgment, concluding that: (1) P.A. 93-297, § 1(a)(2) does not apply retroactively, and, therefore, the plaintiffs were entitled to uninsured motorist coverage of $2 million under our decision in Pasion because Fleet Leasing, a named insured, had failed to submit a written request for a reduction in such coverage; (2) the defendants were collaterally estopped from relitigating the issue of damages; and (3) the defendants were not entitled to a setoff for the social security disability benefits paid and payable to Kelsey. The trial court therefore awarded damages to the plaintiffs in accordance with the judgment that had previously been rendered in their favor against the tortfeasor, subject to applicable credits, setoffs and interest. Following a hearing on the issue of setoffs for workers' compensation and social security disability benefits, the court rendered judgment for the plaintiffs as follows: Frantz, $722,898.95; Kelsey, $407,664.43; and Grabek, $396,824.91. ¹⁷ The defendants appealed from the judgment of the trial court to the Appellate Court, and we granted the plaintiffs' motions to transfer the consolidated appeals to this court pursuant to Practice Book § 4024, now Practice Book § 65-2, and General Statutes § 51-199(c).

The defendants claim that the trial court improperly concluded that Fleet Leasing's failure to submit a written request for reduction of uninsured motorist coverage rendered General Dynamics' election of such coverage ineffective in light of our decision in Pasion. ¹⁸ The plaintiffs assert that the trial court properly determined that Pasion applies to this case. We conclude that General Dynamics' election of $40,000 uninsured motorist coverage was effective and, therefore, the tortfeasor's vehicle was not an underinsured vehicle at the time of the accident. Accordingly, we reverse the judgment of the trial court. ¹⁹

"The standard of review of a trial court's decision to grant a motion for summary judgment is well established. Summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Practice Book § 384 [now Practice Book § 17-49]." (Internal quotation marks omitted.) Peerless Ins. Co. v. Gonzalez, 241 Conn. 476, 481, 697 A.2d 680 (1997). The sole issue that we must decide is whether, as a matter of law, the construction of § 38-175c (a)(2)--recodified at § 38a-336 (a)(2) in the General Statutes as revised to 1991 ²⁰--that we articulated in Nationwide Mutual Ins. Co. v. Pasion, supra, 219 Conn. at 771, 594 A.2d 468, applies to the different factual scenario presented by this case. Consequently, our review is plenary. Charles v. Charles, 243 Conn. 255, 258, 701 A.2d 650 (1997), cert. denied, --- U.S. ----, 118 S.Ct. 1838, 140 L.Ed.2d 1089 (1998).

In Pasion, "we determined that, under § 38-175c (a)(2), a request for a reduction in uninsured motorist benefits by Carlos Londono, who, along with his wife, Alexis, was a named insured on an automobile liability policy issued to the Londonos by Nationwide Mutual Insurance Company, was not binding on a third party who was injured in an accident while riding as a passenger in a vehicle covered under the policy. [Nationwide Mutual Ins. Co. v. Pasion, supra, 219 Conn.] [at] 771. In so holding, we concluded, first, that...