Kent v. Middlesex Mut. Assur. Co.

Decision Date13 July 1993
Docket NumberNo. 14641,14641
Citation627 A.2d 1319,226 Conn. 427
CourtConnecticut Supreme Court
PartiesDonald R. KENT, Administrator (ESTATE OF Melissa KENT), et al. v. MIDDLESEX MUTUAL ASSURANCE COMPANY.

Jon S. Berk, with whom was Claudia A. Baio, Hartford, for appellant (defendant).

Susan M. Cormier, with whom were Leonard I. Shankman and, on the brief, Wesley W. Horton, Hartford, for appellees (plaintiffs).

Before BORDEN, BERDON, NORCOTT, KATZ and PALMER, JJ.

PALMER, Associate Justice.

This case requires us to decide whether General Statutes (Rev. to 1989) § 38-175c 1 entitles an insured to aggregate the underinsured 2 motorist coverage for two vehicles covered under one automobile liability insurance policy if the insured had paid an actuarially appropriate single premium for the underinsured motorist coverage and the policy language expressly excludes the aggregation of coverage. This issue was referred initially to an arbitration panel pursuant to the terms of the policy. A majority of that panel determined that, in the circumstances of this case, the underinsured motorist coverage on the two vehicles could not be aggregated, or "stacked." 3 The trial court subsequently granted the application of the plaintiffs, Donald and Kristine Kent as administrators of the estate of Melissa F. Kent, to vacate the award of the arbitration panel. The defendant, Middlesex Mutual Assurance Company, appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). We reverse the judgment of the trial court.

The parties stipulated to the following facts. The plaintiffs are the named insureds on an automobile liability policy issued by the defendant. On October 13, 1990, the decedent, an insured within the policy's coverage for underinsured motorist benefits, was killed in an automobile accident caused by the negligence of an underinsured third party. The decedent's estate recovered $20,000 from the liability insurer of the negligent driver, thereby exhausting the coverage limits of the tortfeasor's policy. At the time of the accident, the plaintiffs were covered by an automobile insurance policy issued by the defendant on the plaintiffs' two vehicles. Under that policy, the defendant agreed to pay all sums that the insureds would be legally entitled to recover as damages from the owner of an underinsured vehicle due to any injuries sustained by an insured as a result of an accident arising out of the use of the underinsured vehicle. The policy provided underinsured motorist limits in the amounts of $100,000 per person and $300,000 per accident. The defendant concedes that the damages resulting from the fatal injuries sustained by the decedent exceed $200,000. 4 Throughout these proceedings, the plaintiffs have contended that the coverage of $100,000 per person is properly aggregated for each of the two insured vehicles so that the defendant is obligated to provide underinsured motorist coverage of $200,000 per person. The defendant has argued, to the contrary, that stacking is not mandated because the insureds had paid a single, actuarially appropriate premium for underinsured motorist benefits in the amounts of $100,000 per person and $300,000 per accident. The defendant relies also on the language of the declarations page of the policy and the insurance application form, which specifies that the maximum benefit available is $100,000.

A majority of the arbitration panel determined that the defendant's policy provided underinsured motorist coverage in the amount of $100,000 per person and concluded that the plaintiffs were not entitled to any additional payment. The plaintiffs subsequently filed an application to vacate the arbitration award. The trial court concluded that the arbitrators had improperly determined that the plaintiffs were not entitled to aggregate their underinsured motorist coverage for the purpose of determining the total available amount of such coverage, and therefore vacated the award. The defendant claims that the trial court improperly applied the principles of intrapolicy stacking to this case and seeks reinstatement of the arbitrators' award. The gravamen of the defendant's argument is that the plaintiffs, who received the benefit for which they had paid, could not reasonably have expected aggregated coverage.

A

We must consider again the applicability of intrapolicy stacking principles to specific facts and circumstances. See Cohn v. Aetna Ins. Co., 213 Conn. 525, 530, 569 A.2d 541 (1990); Dixon v. Empire Mutual Ins. Co., 189 Conn. 449, 453, 456 A.2d 335 (1983); Nationwide Ins. Co. v. Gode, 187 Conn. 386, 394-97, 446 A.2d 1059 (1982); Safeco Ins. Co. v. Vetre, 174 Conn. 329, 333-35, 387 A.2d 539 (1978). We have repeatedly held that General Statutes (Rev. to 1989) §§ 38-175a 5 and 38-175c, 6 and § 38-175a-6(a), 7 now § 38a-334-6, of the Regulations of Connecticut State Agencies, which mandate that automobile liability insurance polices include underinsured motorist coverage, do not prohibit the stacking of underinsured motorist coverage for more than one passenger automobile. Covenant Ins. Co. v. Coon, 220 Conn. 30, 35, 594 A.2d 977 (1991); Cohn v. Aetna Ins. Co., supra, 213 Conn. at 529, 569 A.2d 541; Nicolletta v. Nationwide Ins. Co., 211 Conn. 640, 645-46, 560 A.2d 964 (1989); Allstate Ins. Co. v. Ferrante, 201 Conn. 478, 481-82, 518 A.2d 373 (1986); Dixon v. Empire Mutual Ins. Co., supra, 189 Conn. at 452-53, 456 A.2d 335; Nationwide Ins. Co. v. Gode, supra; Safeco Ins. Co. v. Vetre, supra, 174 Conn. at 332-33, 387 A.2d 539; see also Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 448-53, 370 A.2d 1006 (1976). Indeed, we have found stacking to be available when the insured has paid separate premium motorist coverage afforded to each vehicle. Nationwide Ins. Co. v. Gode, supra; Safeco Ins. Co. v. Vetre, supra, 174 Conn. at 333-35, 387 A.2d 539; see also Pecker v. Aetna Casualty & Surety Co., supra, 171 Conn. at 447, 370 A.2d 1006. "The reason for this is the common sense notion that such a result falls within the reasonable expectations of the parties to the insurance contract"; Cohn v. Aetna Ins. Co., supra; because an insured who " 'pay[s] a double premium [can reasonably] expect double coverage....' " Yacobacci v. Allstate Ins. Co., 33 Conn.Sup. 229, 231, 372 A.2d 987 (1976); 8 see Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 396, 446 A.2d 1059. We have noted that "[t]his is particularly true when each of the insured vehicles is separately described, the coverage granted under the policy is separately listed for each vehicle, and a separate premium is charged for the coverage afforded to each of the described vehicles." (Internal quotation marks omitted.) Cohn v. Aetna Ins. Co., supra, 213 Conn. at 530, 569 A.2d 541, quoting Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 395, 446 A.2d 1059. Moreover, once it has been established that an insurer is obligated to stack the underinsured motorist coverage in the policy, as it is when separate, additional premiums have been paid for coverage on two vehicles, the insurer may not reduce its liability for such aggregated coverage even through explicit policy language, except within the narrow context of the exceptions permitted under § 38-175a-6(d) of the Regulations of Connecticut State Agencies. 9 Cohn v. Aetna Ins. Co., supra; Nicolletta v. Nationwide Ins. Co., supra; Allstate Ins. Co. v. Ferrante, supra, 201 Conn. at 483-84, 518 A.2d 373; Nationwide Ins. Co. v. Gode, supra, 187 Conn. at 397-400, 446 A.2d 1059. In the present case, the defendant argues that it is not liable to pay the aggregate amount of the underinsured coverage and that the plaintiffs had no reasonable expectation that coverage would be aggregated because the policy provides that such stacking is not permitted and the insureds were charged and paid a single actuarially appropriate premium for underinsured motorist coverage on their own vehicles. For the following reasons, we agree with the defendant.

B

On the basis of the testimony at the arbitration hearing and a review of the policy documents and stipulated facts, a majority of the arbitrators found that the plaintiffs could not have had an objectively reasonable expectation of stacked coverage. With respect to the testimony, the plaintiffs 10 professed no expectation of stacked coverage. Instead, they candidly admitted that they simply were seeking to "obtain good coverage" and "save a few dollars." As the panel concluded, their testimony "provide[d] no basis for a finding of any expectation regarding stacking of [underinsured motorist] coverage."

The policy documents also fail to support the claim that the parties reasonably expected stacked coverage, for, as the arbitrators found, the policy "unambiguously provide[d] uninsured/underinsured motorist coverage of $100,000 per person and no more." 11 Specifically, the named plaintiff signed the application for insurance immediately following the statement: "I understand and acknowledge that the limits of UNINSURED or UNDERINSURED MOTORIST COVERAGE are applicable ONCE per claim regardless of the number of vehicles or operators on the policy now or in the future." In addition, the automobile policy issued by the defendant to the plaintiffs provided in part:

"LIMIT OF LIABILITY

The maximum limit of our liability for Uninsured Motorists Coverage in any one accident is the amount of Uninsured Motorists Coverage limits shown in the Declarations. This is the most we will pay regardless of the number of:

1. Covered persons

2. Claims made;

3. Vehicles involved in the accident; or

4. Covered autos." (Emphasis in original.)

Moreover, the declarations page of the insurance policy specified the limits of coverages and premiums due. Although separate premiums are listed for each of the two vehicles insured by...

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