Giglio v. American Economy Ins. Co.

• Decision Date: 04 July 2006
• Docket Number: No. 17480.,17480.
• Citation: 278 Conn. 794,900 A.2d 27
• Court: Connecticut Supreme Court
• Parties: Diane M. GIGLIO v. AMERICAN ECONOMY INSURANCE COMPANY.

900 A.2d 27

278 Conn. 794

Diane M. GIGLIO v. AMERICAN ECONOMY INSURANCE COMPANY.

No. 17480.

Supreme Court of Connecticut.

Argued April 17, 2006.

Decided July 4, 2006.

COPYRIGHT MATERIAL OMITTED

Gregg A. Rubenstein, pro hac vice, with whom were Michael F. Cavolo and, on the brief, Joseph C. Tanski, pro hac vice, Boston, MA, and Charles W. Pieterse, Greenwich, for the appellant (substitute plaintiff).

Christopher P. Kriesen, with whom were Jamie Fine, certified legal intern, and, on the brief, Rodd J. Mantell, for the appellee (defendant).

BORDEN, NORCOTT, KATZ, PALMER and VERTEFEUILLE, Js.

KATZ, J.

The issue in this appeal is the validity of an automobile insurance poliey's exclusion from uninsured motorist coverage for government owned vehicles when the insurance carrier that issued the government's policy is insolvent. The substitute plaintiff, the Connecticut Insurance Guaranty Association (association),¹ appeals from the trial court's judgment rendered in favor of the defendant, American Economy Insurance Company (American Economy), on cross motions for summary judgment. The association contends that the trial court improperly concluded that § 38a-334-6 (c)(2)(C) of the Regulations of Connecticut State Agencies,² under which the exclusion from uninsured motorist coverage is authorized, is valid and does not conflict with the uninsured motorist statute, General Statutes § 38a-336,³ or the public policy embodied in the Connecticut Insurance Guaranty Association Act, General Statutes §§ 38a-836 through 38a-853 (guaranty act).⁴ We conclude that the regulation authorizing the exclusion is valid and, therefore, we affirm the judgment of the trial court.

The following facts and procedural history are undisputed. On December 16, 1996 Diane M. Giglio was operating her vehicle on a public highway in Wallingford, when her vehicle was struck by a police cruiser owned by the town of Wallingford (town) and operated by a Wallingford police officer, Anthony DeMaio. At the time of the collision, the town was insured for liability by Reliance Insurance Company (Reliance) and Giglio was insured by the defendant, American Economy. Giglio's policy covered bodily injury for which she is legally entitled to recover from the owner or operator of an uninsured motor vehicle.⁵ The policy, however, specifically excluded from the definition of "uninsured motor vehicle" any vehicle or equipment "owned by any governmental unit or agency."⁶

Following the collision, Giglio brought an action against the town and DeMaio, alleging that the accident had caused her serious personal injury and damages for which they legally were liable. Following the commencement of that action, however, the town's insurance carrier, Reliance, was declared insolvent by a Pennsylvania court. Giglio subsequently brought an action against American Economy, seeking recovery under her policy's uninsured motorist coverage. She alleged that, because of the insolvency of Reliance, the town's insurance policy no longer was available to compensate her for her losses. Thereafter, the trial court, Wiese, J., granted Giglio's motion to consolidate her action against the town and DeMaio with her action against American Economy. American Economy moved for summary judgment, claiming that Giglio's uninsured motorist coverage did not extend to claims involving a government owned vehicle.

When Reliance was declared insolvent, the association determined that it had become obligated under the guaranty act to pay certain covered claims arising out of and within the coverage of Reliance policies. Accordingly, the association moved to intervene in Giglio's action against American Economy, anticipating that, if American Economy prevailed on its summary judgment motion, Giglio would look to the association to compensate her for her losses. After the trial court, Graham, J., denied the association's motion to intervene, the association reached a settlement with Giglio under which it agreed to pay Giglio's claim for damages in exchange for her withdrawal of the action against the town and DeMaio. Pursuant to the settlement, Giglio also assigned to the association her rights under her uninsured motorist coverage against American Economy. Following its substitution for Giglio as the plaintiff in this action, the association filed an amended complaint seeking recovery of the damages it had paid to Giglio and a declaratory judgment holding American Economy obligated as a solvent insurer to provide uninsured motorist coverage for a claim of bodily injury caused by a municipality whose insurer became insolvent.

In response, American Economy filed two special defenses, claiming that: (1) the association's action is barred because Giglio's policy prohibited the transfer of her rights and duties under the policy without American Economy's written consent, which had been neither sought nor secured; and (2) the tortfeasor who had caused the accident was operating a government owned vehicle, which is excluded from coverage under the policy. The association moved for summary judgment, claiming that the exclusion from coverage in American Economy's policy was not valid.

The trial court, Arnold, J., then considered the cross motions for summary judgment and rendered judgment in favor of American Economy. In so doing, the court concluded that, although Giglio could assign to the association the right she might have to recovery under the uninsured motorist provision of her policy,⁷ that policy did not provide any coverage for Giglio's assigned claim because of its explicit exclusion from the definition of uninsured motorist vehicles any vehicle owned by a governmental unit or agency. As part of its determination, the court concluded that American Economy's exclusion of government owned vehicles was authorized pursuant to § 38a-334-6 (c)(2)(C), and that the regulation itself was valid because it does not conflict with the public policy embodied in the uninsured motorist statute, § 38a-336, or the public policy underlying the guaranty act. The association then appealed from the trial court's judgment to the Appellate Court, and we transferred the appeal to this court pursuant to General Statutes § 51-199(c) and Practice Book § 65-1.

On appeal, the association essentially contends that the trial court improperly concluded that claims related to government owned vehicles that were insured under a policy issued by a now insolvent insurer may be excluded from uninsured motorist coverage. Specifically, the association's contentions distill to two claims: (1) the regulation, § 38a-334-6 (c)(2)(C), is not valid because it conflicts with § 38a-336, the uninsured motorist statute, which does not provide an exemption from mandatory uninsured motorist coverage for government owned vehicles; and (2) the regulation is not valid because it conflicts with the guaranty act.⁸ According to the association, in order to avoid such conflict, the regulation must be interpreted not to apply to government owned vehicles insured by an insurer determined thereafter to be insolvent. We disagree and, accordingly, we affirm the summary judgment rendered by the trial court.

As an initial matter, we set forth the well established standard of review for summary judgment. "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.... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Orkney v. Hanover Ins. Co., 248 Conn. 195, 201, 727 A.2d 700 (1999). Moreover, "[c]onstruction of a contract of insurance presents a question of law for the court which this court reviews de novo." (Internal quotation marks omitted.) Board of Education v. St. Paul Fire & Marine Ins. Co., 261 Conn. 37, 40, 801 A.2d 752 (2002). The association's claims also raise issues of statutory construction. Although our legislature recently has enacted General Statutes § 1-2z, in the present case, neither of the parties claim that the guaranty act in conjunction with the uninsured motorist statute yields a plain and unambiguous answer to the question of whether the regulation authorizing the exclusion from uninsured motorist coverage is valid. Accordingly, our analysis is not limited, and we, therefore, apply "our well established process of statutory interpretation, under which we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. In seeking to determine that meaning, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) DeOliveira v. Liberty Mutual Ins. Co., 273 Conn. 487, 498 n. 7, 870 A.2d 1066 (2005).

We begin our analysis with a review of the applicable statutory and regulatory scheme. Pursuant to General Statutes §§ 38a-336 (a) and 38a-334, all automobile liability policies must provide a minimum level of uninsured motorist coverage for the protection of persons insured thereunder. See footnote 3 of this opinion. Specifically, § 38a-336 (a)(1) provides in relevant part that, "[e]ach automobile liability insurance policy shall provide insurance, herein called uninsured and underinsured motorist coverage, in accordance with the regulations adopted pursuant to section 38a-334...." (Emphasis added.) Section 38a-334 (a), in turn, directs the insurance commissioner to "adopt regulations with respect to minimum provisions to be included in automobile liability...