Nat. Grange Mut. Ins. Co. v. Santaniello

• Citation: 290 Conn. 81,961 A.2d 387
• Decision Date: 13 January 2009
• Docket Number: No. 17961.,17961.
• Parties: NATIONAL GRANGE MUTUAL INSURANCE COMPANY v. Felix C. SANTANIELLO et al.
• Court: Connecticut Supreme Court

961 A.2d 387

290 Conn. 81

NATIONAL GRANGE MUTUAL INSURANCE COMPANY v. Felix C. SANTANIELLO et al.

No. 17961.

Supreme Court of Connecticut.

Argued October 20, 2008.

Decided January 13, 2009.

John H. Van Lenten, with whom was John P. Clifford, Jr., Hartford, for the appellants (named defendant et al.).

John W. Lemega, Hartford, with whom, on the brief, was Elizabeth M. Festa, for the appellee (plaintiff).

ROGERS, C.J., and NORCOTT, KATZ, PALMER and VERTEFEUILLE, Js.

NORCOTT, J.

In this appeal, we consider the relationship between general garage operations insurance coverage and a specific dealer plate endorsement with respect to the coverage of dealer plates affixed to a recently sold used car. The named defendant, Felix C. Santaniello, and the defendant Felix R. Santaniello, administrators of the estate of Elizabeth Santaniello, appeal¹ from the declaratory judgment rendered in favor of the plaintiff, the National Grange Mutual Insurance Company, declaring that it had no duty to defend or indemnify the defendant insureds, Carbone's Auto Body, Inc. (Carbone's), and Nikolas Topintzis, in a wrongful death action brought against them by Felix C. Santaniello and Felix R. Santaniello.² On appeal, the defendants claim that the trial court improperly concluded that the garage insurance policy (policy) that the plaintiff had issued to Carbone's did not provide liability coverage for a 1993 Plymouth Voyager (Voyager) operated by Topintzis because: (1) its dealer plate coverage had been deleted by subsequent endorsement; and (2) the garage operations provision of the policy does not extend to the sale of used cars. We affirm the judgment of the trial court.

The record, including the trial court's findings in its memorandum of decision, reveals the following facts and procedural history. On May 20, 2003, Topintzis purchased the Voyager from Carbone's for $320. Because Carbone's had not yet obtained the title to the Voyager from its wholesaler, Tony March Buick, Inc., Topintzis could not register it in his own name and operated it pursuant to a loaner agreement that he had entered into with Carbone's on that date.³ Pursuant to that agreement, the Voyager was equipped with dealer plates, numbered DD 929, which the state had issued to Carbone's pursuant to General Statutes § 14-60(a).⁴ Six days later, on May 26, 2003, Topintzis was operating the Voyager on Interstate 91 heading southbound, and was involved in an accident that injured Felix C. Santaniello and killed Elizabeth Santaniello. Thereafter, the defendants commenced a wrongful death action against Topintzis and Carbone's in the Superior Court for the judicial district of New Britain.

The policy at issue herein was issued by the plaintiff to Carbone's on January 9, 2003, with an effective date of December 12, 2002. According to the trial court's memorandum of decision, the "policy .. . originally insured three rather than four sets of dealer plates for [Carbone's]. Although the application for insurance sought coverage for four sets of dealer plates, the plaintiff learned from Mitchell Marcus, the insurance agent with whom it worked, that the fourth plate would be permanently affixed to a 2000 International truck [a flatbed tow truck].⁵ Since the policy separately listed and insured the truck, there was no reason for the policy to cover a fourth dealer plate and it accordingly did not do so....

"On or about February 2, 2003, the plaintiff deleted coverage of the three dealer plates with the consent or authorization of Carbone's.⁶ ... The court credits the testimony of Jeffrey Burns [an underwriter for the plaintiff] that this deletion meant that there was no longer any separate coverage for dealer plates under the policy.

"Carbone's received notice of this deletion shortly after February 10, 2003, when Marcus mailed to Carbone's the plaintiff's notice of change in policy, along with a covering memo[randum].⁷ To be sure, Carbone's already had notice of this change because, as the court has found, Carbone's requested or at least authorized it.⁸

"An inspection conducted on or about February 27, 2003, revealed that, notwithstanding this deletion of coverage with Carbone's approval and knowledge, Carbone's was using `four dealer plates ... as floaters ... primarily on vehicles being towed.' Carbone's was thus not relying on a mistaken belief that the plaintiff was insuring one remaining dealer plate. Instead, Carbone's was still using all four plates despite its request to delete coverage for three such plates and the notice it received that the plaintiff had done so. Further, Carbone's was no longer paying, and the plaintiff was accordingly not receiving, a premium for any dealer plates."⁹

Accordingly, the plaintiff brought this action seeking a declaratory judgment that it had no obligation to defend or indemnify Topintzis and Carbone's in the wrongful death action.¹⁰ In the first count of the amended complaint, the plaintiff claimed that the Voyager was not a "covered auto" under the relevant policy provisions. In the second count, the plaintiff claimed that Carbone's had materially misrepresented the nature of its business when it applied for the policy, which would bar coverage thereunder.

After a two day trial, the trial court concluded that the Voyager was not covered under the policy because: (1) the dealer plate endorsement was not in effect at the time of the accident; and (2) the Voyager was not a "covered auto" under the "garage operations" provision of the policy because the sale and lease of used cars is not a use commonly "in connection with," or "necessary or incidental," to Carbone's "repair shop" operations.¹¹ Accordingly, the trial court rendered a declaratory judgment concluding that the policy did not provide coverage. This appeal followed.¹²

Before turning to the defendants' specific claims on appeal, we begin with the well established legal principles applicable to insurance coverage disputes, as well as the appropriate standard of review. "[C]onstruction of a contract of insurance presents a question of law for the court which this court reviews de novo.... An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract.... In accordance with those principles, [t]he determinative question is the intent of the parties, that is, what coverage the ... [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy.... If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning... . Under those circumstances, the policy is to be given effect according to its terms.... When interpreting [an insurance policy], we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result....

"In determining whether the terms of an insurance policy are clear and unambiguous, [a] court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity.... Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.... As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading.... Under those circumstances, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.... This rule of construction may not be applied, however, unless the policy terms are indeed ambiguous."¹³ (Internal quotation marks omitted.) Zulick v. Patrons Mutual Ins. Co., 287 Conn. 367, 372-73, 949 A.2d 1084 (2008); see also id., at 378, 949 A.2d 1084 (not considering evidence of insured's subjective intent with respect to desired scope of coverage because policy was clear and unambiguous).

Finally, a trial court's resolution of factual disputes that underlie coverage issues is reviewable on appeal subject to the clearly erroneous standard. See Holy Trinity Church of God in Christ v. Aetna Casualty & Surety Co., 214 Conn. 216, 222, 571 A.2d 107 (1990) (whether insureds were engaged in demolition "activities excluded by the policies is a factual question, to which the ordinary rules of appellate review apply"); ACMAT Corp. v. Greater New York Mutual Ins. Co., 88 Conn.App. 471, 481-83, 869 A.2d 1254 (sufficiency of evidence to prove existence of insurance policy), cert. denied, 274 Conn. 903, 876 A.2d 11(2005). Such a "finding of fact will not be disturbed unless it is clearly erroneous in view of the evidence and pleadings in the whole record.... [A] finding is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." (Citation omitted; internal quotation marks omitted.) Echavarria v. National Grange Mutual Ins. Co., 275 Conn. 408, 417-18, 880 A.2d 882 (2005) (whether notice of cancellation of policy was sent subject to clearly erroneous review). Thus, "[i]t is well established that [i]t is within the province of the trial court, when sitting as the fact finder, to weigh the evidence presented and determine the credibility and effect to be given the evidence. ... Credibility must be assessed ... not by reading the cold printed record, but by observing firsthand the witness' conduct, demeanor and attitude.... An appellate court must defer to the trier of fact's assessment of credibility because [i]t is the [fact finder] ... [who has] an opportunity to observe the demeanor of the witnesses and the parties; thus [the fact finder] is best able to judge the credibility of the...