Imperial Cas. and Indem. Co. v. State

• Decision Date: 11 August 1998
• Docket Number: No. 15737,15737
• Parties: IMPERIAL CASUALTY AND INDEMNITY COMPANY v. STATE of Connecticut et al.
• Court: Connecticut Supreme Court

Page 1230

714 A.2d 1230

246 Conn. 313

IMPERIAL CASUALTY AND INDEMNITY COMPANY v. STATE of Connecticut et al.

No. 15737.

Supreme Court of Connecticut.

Argued April 22, 1998.

Aug. 11, 1998.

Gregory T. D'Auria, with whom were Carolyn K. Querijero, Assistant Attorneys General, and, on the brief, Richard Blumenthal, Attorney General, for appellants (defendants).

Mark R. Kravitz, with whom were John F. Conway and, on the brief, Bonnie L. Patten, New Haven, for appellee (plaintiff).

Before BERDON, NORCOTT, KATZ, McDONALD and PETERS, JJ.

BERDON, Associate Justice.

This appeal arises out of a declaratory judgment action filed by the plaintiff, Imperial Casualty and Indemnity Company, with respect to a controversy between it and the defendants, the state of Connecticut and various individual employees of the state police department, regarding insurance coverage to be provided by the plaintiff under two policies that it issued to the defendants. The plaintiff sought a declaration as to whether it was obligated, under the terms of each of the two policies, to provide a defense for the defendants in ten underlying federal court actions that had been instituted against the defendants by various third parties. ¹ The trial court rendered summary judgment in favor of the plaintiff with respect to nine of the eleven counts of the plaintiff's complaint that related to only one of the two policies--the policy that provided coverage for the period extending from July 30, 1986, through July 30, 1989 (1986-89 policy)--finding that the plaintiff was not obligated to provide the defendants with a defense under the terms of that policy. Subsequently, after a trial, the court determined that the plaintiff did have a duty to provide the defendants with a defense under the terms of the other policy, which provided coverage for the period extending from July 30, 1984, through July 30, 1986 (1984-86 policy). Both the plaintiff and the defendants appealed from the judgment of the trial court to the Appellate Court. ² We transferred the appeals to this court pursuant to Practice Book § 65-1 and General Statutes § 51-199(c). On April 8, 1998, the plaintiff withdrew its appeal and only the defendants' appeal remains. We reverse in part the judgment of the trial court.

The following facts are not in dispute. On July 30, 1984, the plaintiff issued to the state the 1984-86 policy, which was entitled "Law Enforcement Professional Liability Insurance Policy." On July 30, 1986, it issued to the state a second policy, the 1986-89 policy, which bore the same title as the earlier policy and, after twice being renewed, provided coverage through July 30, 1989. In 1989 and 1990, ten lawsuits seeking damages and injunctive relief were filed in the United States District Court for the District of Connecticut against various state police officers, alleging that the officers had engaged in illegal wiretapping during the 1984-86 and 1986-89 policy periods. Specifically, each of the federal complaints alleged that members of the Connecticut state police department had engaged in violations of federal penal statutes, including the antiwiretapping provisions of the Omnibus Crime Control Act of 1968, 18 U.S.C. §§ 2510 through 2521.

After the pleadings were closed in the declaratory judgment action, the plaintiff moved for summary judgment on all eleven counts of its complaint, claiming that it was not obligated to provide the defendants with a defense in the underlying federal actions because the complaints alleged intentional acts that were not within the coverage of either the 1984-86 or the 1986-89 policy. The trial court agreed with the plaintiff with respect to the 1986-89 policy, but determined that the complaints did state claims that were within the coverage provided by the 1984-86 policy. Consequently, the trial court rendered summary judgment on counts three through eleven of the plaintiff's complaint, which pertained to conduct that occurred during the 1986-89 policy period. ³

In this appeal, the defendants claim that summary judgment improperly was rendered because the 1986-89 policy expressly provides coverage for intentional acts that result in covered injuries, such as the acts alleged in the underlying federal complaints. Alternately, the defendants claim that even if the express provisions of the 1986-89 policy can be considered ambiguous with regard to whether injuries resulting from intentional acts are covered, any ambiguity in the policy language must be resolved in favor of coverage. As a result of their interpretation of the policy and the broad nature of an insurer's duty to defend, the defendants argue that the plaintiff is obligated to provide them with a defense in the underlying federal actions. The plaintiff argues, conversely, that the 1986-89 policy language expressly excludes from the scope of its coverage intentional acts such as those alleged in the underlying federal complaints. Therefore, the plaintiff argues, it is under no duty to provide a defense for the defendants with respect to intentional conduct alleged to have occurred during the 1986-89 policy period. We conclude that the language of the 1986-89 policy must be interpreted to include coverage for damages arising from intentional acts when the result is a covered injury. Consequently, the plaintiff is obligated to provide the defendants with a defense to the allegations contained in counts three through ten of the underlying federal complaints.

I

As a preliminary matter, we note that the plaintiff objects to the defendants' claim on appeal that the 1986-89 policy provides coverage for intentional acts because, the plaintiff argues, the defendants conceded in the trial court proceedings that the policy does not cover intentional acts and, therefore, they should not be allowed to raise this claim on appeal. In their opposition to the plaintiff's motion for summary judgment before the trial court, the defendants did not argue specifically that the contract covered all types of intentional acts. Instead, they argued that the plaintiff was obligated to provide them with a defense in the underlying actions because: (1) the defendants might be found liable on the basis of negligence and the policy covers negligent acts; (2) the defendants might be found to have had a good faith basis for their conduct and not to have intended to injure anyone, such that their conduct might not constitute a wilful violation of a penal statute so as to be excluded from the policy's coverage; and (3) the term "occurrence" as used in the policy need not be defined by the court at the summary judgment stage but should be defined only after further fact-finding occurs. Presumably, because the defendants did not contend specifically that the policy provided coverage for intentional conduct, the trial court stated in its memorandum of decision that the defendants had conceded that such coverage did not exist. ⁴

On appeal, the theories advanced by the defendants as a basis for their argument that the plaintiff is obligated to provide them with a defense under the 1986-89 policy are, in some respects, different from the theories relied on at trial. The defendants argue on appeal that the duty to defend exists because the allegations in the underlying complaints potentially state claims for covered injuries as follows: (1) the defendants may be found liable in federal court on the basis of conduct other than intentional conduct, i.e., on the basis of negligent conduct; (2) even if the policy was construed not to cover intentional acts, the policy does not define what constitutes an intentional act and should not be interpreted as excluding coverage for all intentional acts, but only those committed with an intent to cause injury; and (3) the policy definitions of "occurrence" and "personal injury" are internally inconsistent and must be interpreted against the insurer to provide coverage for intentional acts. The plaintiff's objection relates primarily to the third theory of liability.

The plaintiff is correct in its assertion that, ordinarily, "we ... review a case on the theory upon which it was tried and decided in the trial court"; Lashgari v. Lashgari, 197 Conn. 189, 196, 496 A.2d 491 (1985); and do not address on appeal issues that have not been raised in the trial court. Grody v. Tulin, 170 Conn. 443, 447-48, 365 A.2d 1076 (1976). This practice is in accord with Practice Book § 60-5, ⁵ which provides in part that this court is not bound to consider a claim "unless [the claim] was distinctly raised at the trial or arose subsequent to the trial." The application of § 60-5 is discretionary, however, and in exceptional circumstances, even claims not properly raised below will be considered. Generally, "[s]uch exceptional circumstances may occur where a new and unforeseen constitutional right has arisen between the time of trial and appeal or where the record supports a claim that a litigant has been deprived of a fundamental constitutional right and a fair trial." (Internal quotation marks omitted.) Berry v. Loiseau, 223 Conn. 786, 828-29, 614 A.2d 414 (1992). In addition, in some instances we may overlook the procedural error and consider a question not properly raised below, "not by reason of the appellant's right to have [the claim] determined but because, in our opinion, in the interest of the public welfare or of justice between the parties," the question ought to be considered. Kavanewsky v. Zoning Board of Appeals, 160 Conn. 397, 401, 279 A.2d 567 (1971).

An example of a case in which we chose to overlook a party's failure altogether to raise an important claim is Genovese v. Gallo Wine Merchants, Inc., 226 Conn. 475, 628 A.2d 946 (1993). In Genovese, the plaintiff failed to advance his claim under General Statutes § 31-51bb both in the trial court and initially before this court. We, on our own initiative and in the interests of achieving justice, raised the...