General Acc. Ins. Co. v. Wheeler

• Decision Date: 18 February 1992
• Docket Number: No. 14314,14314
• Citation: 221 Conn. 206,603 A.2d 385
• Court: Connecticut Supreme Court
• Parties: GENERAL ACCIDENT INSURANCE COMPANY v. Matthew WHEELER et al.

Page 385

603 A.2d 385

221 Conn. 206

GENERAL ACCIDENT INSURANCE COMPANY v. Matthew WHEELER et al.

No. 14314.

Supreme Court of Connecticut.

Argued Oct. 30, 1991.

Decided Feb. 18, 1992.

J. Kevin Golger, with whom, on the brief, was George L. Holmes, Fairfield, for appellant (plaintiff).

Stephen A. Finn, Stamford, for appellees (defendants).

Before SHEA, GLASS, COVELLO, BORDEN and BERDON, JJ.

BERDON, Associate Justice.

The sole issue raised in this appeal is whether an insured, where there is more than one tortfeasor responsible for the accident, may recover under his or her underinsured motorist policy before first exhausting the liability insurance policies of all the tortfeasors. We conclude that an insured is required to exhaust the liability insurance coverage of only one tortfeasor in order to recover underinsured benefits.

The parties presented their claims on the basis of the following stipulated facts. The defendant, Matthew Wheeler (insured), a resident of the household of his father, James Wheeler, was insured by the plaintiff, General Accident Insurance Company, under an automobile liability policy covering two vehicles owned by James Wheeler. Because the limits for the underinsured coverage on each vehicle were $300,000, the insurance policy provided the insured with total effective underinsured coverage of $600,000.

On September 6, 1985, the insured sustained personal injuries when he was pinned between a parked vehicle and a moving vehicle owned and operated by Michael Norkowski. At the time of the accident, Norkowski was insured under an automobile liability policy in the amount of $20,000, which was paid in full to the insured pursuant to a settlement.

As a result of the accident, the insured instituted a civil suit against the city of Danbury and two of its police officers, which was still pending at the time of this appeal. The insured alleges that the police officers' negligence was a proximate cause of his injuries because they positioned their unattended police vehicle in such a manner that its headlights blinded the vision of drivers coming in the opposite direction. In the police report, Norkowski stated that he had been blinded by the headlights of the police vehicle. In the Danbury action, the defendants have insurance available to them under an automobile liability insurance policy and a general municipal liability policy, each of which provides coverage limits of one million dollars. The defendants in that action indicate that some of the allegations made by the insured are being defended under the automobile liability policy and the others under the municipal liability policy.

After the settlement with Norkowski, the insured made a demand to the plaintiff for underinsured motorist arbitration. Pursuant to the terms of the insurance policy, all the issues of coverage and damages were submitted to a three member arbitration panel. After reviewing evidence and hearing argument, the majority of the panel found in favor of the insured as follows: (1) It is only necessary to exhaust the policy or policies of one tortfeasor before proceeding with arbitration; (2) the insured had exhausted Norkowski's insurance policy; (3) the insured sustained damages in the amount of $395,000; (4) the plaintiff shall receive a credit of $20,000 paid to the insured under Norkowski's insurance policy; (5) the plaintiff shall pay to the insured the net sum of $375,000; and (6) "[a]n insurer may require the insured to hold in trust all rights against any defendants in the Danbury action pursuant to § [38-175a-6(e) of the Regulations of Connecticut State Agencies] for the payment it shall make."

The plaintiff filed an application in Superior Court to set aside the arbitration award pursuant to General Statutes § 52-418 ¹ on the ground that the insured must first exhaust the limits of the liability policies of all the tortfeasors. The insured filed a cross application to confirm the award pursuant to General Statutes § 52-417. ² The trial court denied the plaintiff's application to vacate the award and granted the insured's cross application to confirm the award. The plaintiff appealed to the Appellate Court and we transferred the appeal to this court in accordance with Practice Book § 4023.

General Statutes § 38-175c, ³ now reorganized and recodified as General Statutes § 38a-336(b) and (d), ⁴ obligates insurance companies to pay the underinsured motorist coverage "after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted." General Statutes (Rev. to 1987) § 38-175c(b)(1). An underinsured motor vehicle is defined 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 under subdivision (1) of this subsection." General Statutes § 38-175c(b)(2). On the basis of § 38-175c(b)(1), the plaintiff claims that the insured, prior to his right to recover for underinsured coverage, was not only required to exhaust the liability policy of Norkowski, but also the liability policies of the city of Danbury and the police officers to the extent that they were liable as joint tortfeasors.

Section 38-175c(b)(1) is ambiguous as to the question of whether the insured must exhaust all of the underlying liability policies pertaining to one or all tortfeasors. In construing the statute, we approach this question according to "well established principles of statutory construction designed to further our fundamental objective of ascertaining and giving effect to the apparent intent of the legislature." Texas Refining & Mfg. Co. v. Commissioner, 202 Conn. 583, 589, 522 A.2d 771 (1987).

Our analysis begins with the relationship between uninsured and underinsured motorist coverage. The underinsured coverage was adopted as a piggyback provision to the uninsured coverage in 1979. Public Acts 1979, No. 79-235. "Since underinsured motorist coverage, as defined in General Statutes § 38-175c, can be determined only by reference to and in comparison with the insured's uninsured motorist coverages, and since claim is made against an insured's uninsured motorist coverage after it is determined that the at-fault party is underinsured, the regulations which apply to uninsured motorist coverage must equally apply to underinsured motorist coverage." Nationwide Ins. Co. v. Gode, 187 Conn. 386, 399-400, 446 A.2d 1059 (1982).

Our conclusion that the insured merely needs to exhaust the liability policies of one tortfeasor is supported by the regulations of the insurance commissioner. Not only is the commissioner obligated to adopt regulations with respect to the minimum provisions to be included in the policy of insurance issued in this state; General Statutes § 38a-334; we presume that these regulations are "an accurate reflection of the legislative intent articulated in the statute's more general language." AFSCME v. New Britain, 206 Conn. 465, 470, 538 A.2d 1022 (1988). ⁵ This presumption is further underscored by the Uniform Administrative Procedure Act, General Statutes § 4-166 et seq., which provides for legislative oversight through the legislative regulation review committee prior to approval of the regulations. General Statutes § 4-170.

Section 38-175a-6(a) of the Regulations of Connecticut State Agencies provides in pertinent part that the "insurer shall undertake to pay on behalf of the insured all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured [or underinsured] motor vehicle because of bodily injury sustained by the insured caused by an accident involving the uninsured [or underinsured] motor vehicle." (Emphasis added.) The regulations envisioned the requirement that the insurance coverage of only one tortfeasor be exhausted. This conclusion is further confirmed by § 38-175a-6(e), which authorizes that the insurer may, in its policy, "require the insured to hold in trust all rights against third parties or to exercise such rights after the insurer has paid any claim, provided that the insurer shall not acquire by assignment, prior to settlement or judgment, its insured's right of action to recover for bodily injury from any third party." If the insured were required to exhaust the liability policies of all tortfeasors before resorting to the underinsured provision of the policy, this regulation would be superfluous.

In McAllaster v. Bruton, 655 F.Supp. 1371 (D.Me.1987), the federal district court, in construing General Statutes § 38-175c(b)(1), held that the plaintiff was only required to exhaust the policies of one of two joint tortfeasors, in order to trigger the right to proceed under the underinsured motorist provisions of his policy. The court based its decision in part on the insurance regulation, § 38-175a-6(e), which grants the insurer permission to include in its policy the right to be reimbursed if the insured recovers from the joint tortfeasor. Id., 1379. Although the interpretation of our state statute by a federal court is not binding upon us, it may be persuasive authority. See Gionfriddo v. Avis Rent A Car System, Inc., 192 Conn. 301, 305, 472 A.2d 316 (1984). ⁶

Likewise, other jurisdictions have held that under similar statutes, the insured was not required to exhaust the policies of all joint tortfeasors. See, e.g., Mulholland v. State Farm Mutual Automobile Ins. Co., 171 Ill.App.3d 600, 617, 122 Ill.Dec. 657, 527 N.E.2d 29 (1988); Motorist Mutual Ins. Co. v. Tomanski, 27 Ohio St.2d 222, 223, 271 N.E.2d 924 (1971).

Public policy also supports our conclusion that an insured needs to exhaust the liability policies of only one tortfeasor before he may recover under his underinsured motorist...