Klass v. Liberty Mut. Ins. Co.

• Decision Date: 11 January 2022
• Docket Number: SC 20451
• Parties: Karl KLASS v. LIBERTY MUTUAL INSURANCE COMPANY
• Court: Connecticut Supreme Court

341 Conn. 735

267 A.3d 847

Karl KLASS

v.LIBERTY MUTUAL INSURANCE COMPANY

SC 20451

Supreme Court of Connecticut.

Argued March 25, 2021

Officially released January 11, 2022^*

John A. Donovan III, with whom, on the brief, were Anthony J. Antonellis, Kathleen C. Schaub and Brendan L. Labbe, for the appellant (defendant).

Michael J. LeMoult, Hamden, with whom were Jon D. Biller and Brianna M. Kastukevich, for the appellee (plaintiff).

Karen L. Dowd, Hartford, and Brian S. Goodman, pro hac vice, filed a brief for the National Association of Public Insurance Adjusters as amicus curiae.

Jason Cieri filed a brief for United Policyholders as amicus curiae.

Robinson, C. J., and McDonald, D'Auria, Kahn, Ecker and Keller, Js.

McDONALD, J.

Connecticut's insurance law provides that, "[w]hen a covered loss for real property requires the replacement of an item or items and the replacement item or items do not match adjacent items in quality, color or size, the insurer shall replace all such items with material of like kind and quality so as to conform to a reasonably uniform appearance." General Statutes § 38a-316e (a) (matching statute). The principal issue in this case is whether a dispute as to the extent of an insurer's replacement obligation under the matching statute is a question properly relegated to the appraisal arbitral process or a question of coverage to be resolved by the court in the first instance before appraisal may proceed. The defendant, Liberty Mutual Insurance Company, appeals from the trial court's judgment granting the application of the plaintiff, Karl Klass, to compel appraisal with regard to such a dispute. We affirm the trial court's judgment.

The record reveals the following undisputed facts and procedural history. In 2018, the plaintiff contacted his insurer, the defendant, to report damage to the roof of his home. The defendant sent a representative to examine the loss, who—consistent with the plaintiff's observation—noticed a few shingles missing from the dwelling portion of the rear slope of the roof. The representative concluded that the missing shingles were consistent with wind damage, a covered loss under the homeowners policy of the plaintiff. The defendant accepted coverage and issued an estimate to replace the rear slopes of both the dwelling roof and the attached garage roof. The plaintiff's contractor inspected the roof and provided an estimate that contemplated replacement of the plaintiff's entire roof, dwelling and attached garage, at nearly double the cost of the defendant's estimate.

As a result of the parties’ different repair estimates, the plaintiff notified the defendant that he was demanding appraisal under his homeowners policy. The policy provides that a dispute as to "amount of loss" is to be resolved by a panel comprised of a disinterested appraiser selected by each party and an umpire selected by those appraisers, effectively an arbitration panel.¹ See Covenant Ins. Co. v. Banks , 177 Conn. 273, 279–80, 413 A.2d 862 (1979) (holding that appraisal clause in insurance policy constituted " ‘written agreement to arbitrate’ " and, thus, was governed by arbitration statutes).

In a written reply, the defendant took the position that the plaintiff was not entitled to invoke the appraisal process in the absence of a "competing" estimate (i.e., one that addressed the claim for which the defendant had accepted coverage). The defendant stated that any dispute regarding the matching of the front and rear roof slopes was a question of coverage rather than an issue for appraisal. Nevertheless, citing its interest in amicably resolving the dispute, the defendant agreed to appoint an appraiser to investigate the loss while reserving its right to contest the appraisal panel's authority to decide an issue of coverage.

The defendant's appraiser thereafter inspected the plaintiff's roof and issued a report concluding that, " ‘given the roof configuration, it is reasonable to conclude that the shingles along the [east facing] (rear) slopes and ridge caps of the residence and garage can be replaced such that a reasonable uniform appearance of the roof covering is maintained.’ " The defendant cited these conclusions in a letter it thereafter sent to the plaintiff denying "coverage" for the front slopes of the plaintiff's roof. The defendant noted that its adjustment of the claim—providing for the replacement of the entire rear slopes of both the dwelling and garage roofs—exceeded the requirements of the matching statute. In light of its denial of "coverage" for the front roof slopes, it contended that there was no valuation issue remaining for the appraisal process.

The plaintiff subsequently filed an application to compel appraisal in the Superior Court pursuant to General Statutes §§ 38a-307 and 52-410, casting the dispute between the parties as one concerning the amount of loss under the subject policy. The defendant filed an objection to the application, characterizing the dispute as one involving coverage, which, as a purely legal issue, must be resolved by the courts before an appraisal can proceed. In support of that proposition, the defendant cited a Second Circuit case, Milligan v. CCC Information Services Inc. , 920 F.3d 146 (2d Cir. 2019). The plaintiff then filed a motion requesting that the trial court order that any purported coverage dispute does not preclude the parties from moving forward with an appraisal, citing Giulietti v. Connecticut Ins. Placement Facility , 205 Conn. 424, 534 A.2d 213 (1987), as support.

The trial court initially issued a summary decision denying the plaintiff's application to compel appraisal, citing Milligan for the proposition that "the issue of coverage [must] be decided before the court makes a determination whether an appraisal is required." The plaintiff filed a motion to reargue and reconsider, contending that the trial court had overlooked controlling precedent—namely, this court's decision in Giulietti —and had misapprehended Milligan . The defendant objected to the plaintiff's motion, arguing that the plaintiff failed to demonstrate that there was some decision or principle of law that had been overlooked that would have controlling effect on the case. The trial court granted the plaintiff's motion to reargue and reconsider, and, following supplemental briefing, issued an order directing the parties to proceed to appraisal. In reaching its decision, the trial court explained that it had misapprehended Milligan and concluded that Milligan simply confirms that appraisers cannot make coverage determinations. In light of that conclusion, the court rendered judgment granting the plaintiff's application to compel appraisal. The defendant appealed from the trial court's judgment to the Appellate Court, and we thereafter transferred the appeal to this court. See General Statutes § 51-199 (c) and Practice Book § 65-1.

The defendant raises three claims on appeal. First, it claims that the trial court improperly granted the plaintiff's motion to reargue and reconsider following its initial denial of the plaintiff's application to compel appraisal. Second, it contends that the dispute between the parties is ultimately a coverage dispute, and, thus, it was improper for the trial court to compel appraisal before the legal issue regarding the coverage dispute was resolved by the court. Finally, to resolve the purported coverage dispute, the defendant asks this court to adopt an interpretation of the matching statute that would limit the scope of replacement to, at most, the rear slopes of the plaintiff's roof.

We conclude that the trial court properly granted the plaintiff's application to compel appraisal. Because that conclusion rests in large part on our determination that the dispute between the parties is an appraisable dispute not involving coverage, we need not address the defendant's claims relating to resolution of coverage disputes.

I

The defendant's contention that the trial court improperly granted the plaintiff's motion to reargue and reconsider merits little discussion. We review the adjudication of a motion to reargue and reconsider for an abuse of discretion; see Weiss v. Smulders , 313 Conn. 227, 261, 96 A.3d 1175 (2014) ; which means that "every reasonable presumption should be given in favor of the correctness of the court's ruling. ... Reversal is required only [when] an abuse of discretion is manifest or [when] injustice appears to have been done." (Internal quotation marks omitted.) Patino v. Birken Mfg. Co. , 304 Conn. 679, 698, 41 A.3d 1013 (2012).

"[T]he purpose of a reargument is ... to demonstrate to the court that there is some decision or some principle of law which would have a controlling effect, and which has been overlooked, or that there has been a misapprehension of facts. ... It also may be used to address [alleged inconsistencies in the trial court's memorandum of decision as well as] claims of law that the [movant] claimed were not addressed by the court. ... [A] motion to reargue [however] is not to be used as an opportunity to have a second bite of the apple [or to present additional cases or briefs which could have been presented at the time of the original argument] ...." (Internal quotation marks omitted.) Hudson Valley Bank v. Kissel, 303 Conn. 614, 624, 35 A.3d 260 (2012) ; see Rider v. Rider , 200 Conn. App. 466, 486 n.14, 239 A.3d 357 (2020).

The trial court did not abuse its discretion in granting the plaintiff's motion to reargue and reconsider. In its initial decision denying the plaintiff's application to compel appraisal, the trial court cited the Second Circuit's decision in Milligan for the proposition that coverage determinations must precede appraisal; Milligan v. CCC Information Services, Inc. , supra, 920 F.3d at 152 ; without responding to the plaintiff's contention that this court stated a different rule in Giulietti and that Milligan should not be interpreted to conflict with Giulietti . The trial court's...