Middlesex Ins. Co. v. Quinn, 14575

• Decision Date: 30 March 1993
• Docket Number: No. 14575,14575
• Citation: 225 Conn. 257,622 A.2d 572
• Court: Connecticut Supreme Court
• Parties: MIDDLESEX INSURANCE COMPANY v. James J. QUINN III et al.

Page 572

622 A.2d 572

225 Conn. 257

MIDDLESEX INSURANCE COMPANY v. James J. QUINN III et al.

No. 14575.

Supreme Court of Connecticut.

Argued Jan. 5, 1993.

Decided March 30, 1993.

John F. Wynne, Jr., New Haven, for appellant (named defendant).

Frederick M. Vollono, Wallingford, for appellee (plaintiff).

Stewart M. Casper, Stamford, filed a brief for the Connecticut Trial Lawyers Ass'n as amicus curiae.

Before PETERS, C.J., and BORDEN, KATZ, FRANCIS X. HENNESSY and MENT, JJ.

KATZ, Associate Justice.

The dispositive issue in this appeal is whether the defendant, James J. Quinn III, is a covered person under the terms of an automobile liability insurance policy issued by the plaintiff, Middlesex Insurance Company (Middlesex), to the defendant's father, James J. Quinn, Jr. ¹ Following the trial court's judgment vacating an arbitration award of $83,333 rendered in favor of the defendant, the defendant appealed to the Appellate Court, which affirmed the judgment of the trial court. Middlesex Ins. Co. v. Quinn, 27 Conn.App. 573, 609 A.2d 1008 (1992). We granted the defendant's petition for certification to appeal ² to decide whether Connecticut's public policy precludes an insurer from excluding from underinsured motorist coverage, a relative of the named insured who resides in the named insured's household and who owns a car. We affirm the judgment of the Appellate Court.

The Appellate Court opinion sets forth the following undisputed facts. "On February 12, 1984, while driving a car he owned, the defendant was injured in a collision in New Haven. The defendant recovered $20,000 from the tortfeasor, the full amount of liability insurance available. The defendant's car was insured for $100,000 bodily injury liability and $20,000 uninsured motorist coverage.

"At the time of the collision, the defendant lived with his father, whom [Middlesex] insured under two automobile liability policies covering five vehicles. Each of these vehicles was insured for $20,000 in uninsured motorist coverage. The defendant sought to aggregate these amounts and to collect $100,000 from [Middlesex]. [Middlesex denied coverage on the basis that he is not a covered person as defined in the policy. ³ ] When [Middlesex] ... refused to arbitrate the dispute, the defendant sought an order compelling arbitration. The trial court, Purtill, J., issued such an order, which [the Appellate Court] subsequently upheld. See Quinn v. Middlesex Ins. Co., 16 Conn.App. 209, 547 A.2d 95, cert. denied, 209 Conn. 817, 550 A.2d 1085 (1988).

"On February 1, 1991, the arbitration panel, in a two to one decision, awarded the defendant $83,333, with the plaintiff receiving $16,666.67 credit for the amount the tortfeasor had paid. The majority found that the policy's definition with respect to resident relatives [who own a car] is invalid and that the defendant is therefore a covered person under the plan. The dissent determined that the defendant is not a covered person and that our law does not require that he be covered under the circumstances of this case. On February 19, 1991, [Middlesex] moved to vacate the arbitration award. The defendant subsequently moved to confirm it. On June 7, 1991, the trial court vacated the award and denied the motion to confirm." Middlesex Ins. Co. v. Quinn, supra, 27 Conn.App. at 575, 609 A.2d 1008. The defendant appealed to the Appellate Court, which affirmed the judgment of the trial court. Id., at 583, 609 A.2d 1008. This appeal followed.

The defendant claims that public policy precludes an automobile insurer from excluding from underinsured motorist coverage a resident family member who owns a car and that the defendant is, therefore, entitled to underinsured motorist benefits under the Middlesex policy issued to his father. ⁴ The defendant's argument is based upon the principle of public policy that an insurer may not reduce its liability for underinsured motorist coverage by contract except to the extent that the relevant regulations expressly authorize. Lowrey v. Valley Forge Ins. Co., 224 Conn. 152, 156, 617 A.2d 454 (1992). Because no regulation expressly provides for exclusion from coverage of a resident of an insured's household who owns a car, the defendant contends that Middlesex cannot exclude the defendant from underinsured motorist benefits. We disagree.

The Middlesex policy issued to the defendant's father is an automobile liability policy that provides underinsured motorist coverage, in addition to other coverage. Under the section labeled "Liability Insurance," the insurer will "pay damages for bodily injury or property damage for which the law holds you responsible because of a car accident involving a car we insure." The policy also covers "[a]nyone using, with your permission, a car described on the declarations page, or any additional, replacement or substitute...." Under the section labeled "Uninsured Motorist Insurance," the policy promises to "pay the damages you're legally entitled to receive from the owner or operator of an uninsured motor vehicle because of bodily injury. We'll pay these damages for bodily injury you suffer in a car accident while occupying a car or, as a pedestrian, as a result of having been struck by an uninsured motor vehicle." Additionally, the policy provides uninsured motorist benefits to "[a]nyone occupying, with your permission, a car we insure...." The "Definitions" section at the beginning of the policy, which applies to both liability and underinsured motorist insurance, states that "You, your, yourself ... means a member of the family who is a resident of the household and who doesn't own a car...."

Because the defendant owns his own automobile, he is clearly not an "insured" under the unambiguous definition of an insured in the policy. The defendant does not argue to the contrary. ⁵ The defendant maintains, however, that this definition of limited coverage violates public policy. We find the defendant's argument unpersuasive.

Our underinsured motorist insurance statute, General Statutes § 38a-336, formerly § 38-175c, requires that "[e]ach automobile liability insurance policy shall provide insurance, herein called uninsured motorist coverage ... for the protection of persons insured thereunder...." (Emphasis added.) ⁶ The accompanying regulation § 38a-334-6(a) of the Regulations of Connecticut State Agencies provides that the "insurer shall undertake to pay on behalf of the insured all sums which the insured shall become legally entitled to recover...." ⁷ (Emphasis added.)

Unlike the automobile liability statutes, ⁸ the uninsured motorist statute does not require automobile insurance policies to provide underinsured motorist benefits to any particular class or group of insureds. ⁹ See Indiana Lumbermens Mutual Ins. Co. v. Vincel, 452 N.E.2d 418, 424 (Ind.App.1983). The legislature did not specifically define "insured" in the context of underinsured motorist coverage. Rather, the statute requires that underinsured motorist coverage must be provided "for the protection of persons insured thereunder." (Emphasis added.) General Statutes § 38a-336(a)(1). Thus, "persons insured" in this statute refer to persons specified as insureds in the liability portion of the policy. There would be no violation of public policy, therefore, unless the insurance policy specifically were to limit underinsured motorist coverage in such a way as "to [preclude] persons who would otherwise qualify as insureds for liability purposes." Indiana Lumbermens Mutual Ins. Co. v. Vincel, supra.

If the legislature intended to mandate coverage for all resident relatives of the named insured irrespective of whether they own a vehicle, it could have expressly so provided. In the absence of clear direction from the legislature, we decline to extend public policy to require insurers to cover family members who own vehicles. Presumably, the legislature has left such coverage to be provided by the policies on the vehicles owned by those family members.

This conclusion is consistent with our previous analysis and interpretation of § 38-175c, now § 38a-336, in Harvey v. Travelers Indemnity Co., 188 Conn. 245, 449 A.2d 157 (1982), and Smith v. Nationwide Mutual Ins. Co., 214 Conn. 734, 573 A.2d 740 (1990). In Harvey v. Travelers Indemnity Co., supra, we held that the plaintiff, an insured under his mother's automobile liability policy, was entitled to underinsured motorist benefits under that policy, even though he was occupying his father's uninsured automobile when he was injured. We concluded that the public policy embodied in § 38-175c directs that an insured's geographical location at the time of the injury is "irrelevant to recovery under the statutorily mandated coverage." Id., 188 Conn. at 250, 449 A.2d 157. Underinsured motorist coverage attaches to the insured person, not the insured vehicle. Id. We held that an insurance contract's exclusion to the contrary violated the public policy underlying uninsured motorist coverage in Connecticut because the statute requires every automobile liability policy to provide uninsured motorist coverage for the protection of persons insured thereunder. Because the plaintiff was an insured under the liability section of his mother's policy, the policy's exclusion of the plaintiff from uninsured motorist benefits violated public policy.

In Smith v. Nationwide Mutual Ins. Co., supra, the plaintiff was a passenger in an automobile owned by the driver when it was involved in a one car accident. The plaintiff sought uninsured motorist benefits under a policy issued to the driver's father. The plaintiff argued that "once a policy provides liability coverage to an insured, the underinsured motorist coverage therein is coextensive with the liability coverage." Id., 214 Conn. at 736, 573 A.2d 740. The liability coverage section of that policy provided that " '[w]e will pay damages for bodily injury or property damage for which any covered person...