National Waste v. Travelers Cas. and Sur.

• Citation: 294 Conn. 511,988 A.2d 186
• Decision Date: 19 January 2010
• Docket Number: No. 18380.,18380.
• Court: Supreme Court of Connecticut
• Parties: NATIONAL WASTE ASSOCIATES, LLC v. TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA.

988 A.2d 186

294 Conn. 511

NATIONAL WASTE ASSOCIATES, LLC v. TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA.

No. 18380.

Supreme Court of Connecticut.

Argued December 1, 2009.

Decided January 19, 2010.

Melissa A. Scozzafava, with whom, on the brief, was Eric M. Grant, for the appellant (plaintiff).

Paul G. Roche, for the appellee (defendant).

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

PER CURIAM.

The plaintiff, National Waste Associates, LLC, brought this action for breach of contract and for a declaratory judgment after the defendant, Travelers Casualty and Surety Company of America, declined to provide a defense or to indemnify the plaintiff pursuant to an employment practices liability insurance policy (policy) that the defendant had issued to the plaintiff. The defendant denied the allegations of the plaintiff's complaint and raised three special defenses, which the plaintiff denied. The defendant thereafter filed a motion for summary judgment, and the trial court granted that motion. The plaintiff then filed this appeal.¹ We affirm the judgment of the trial court.

The trial court relied upon the following undisputed material facts when ruling on the defendant's summary judgment motion. The plaintiff purchased employment practices liability insurance from the defendant for the period of February 15, 2007, through February 15, 2009, which generally was to insure the plaintiff against damages and defense costs arising out of claims alleging wrongful employment practices. On May 12, 2007, a former employee brought an action against the plaintiff claiming wrongful discharge. When the defendant declined to provide a defense or to indemnify the plaintiff in connection with that action, the plaintiff commenced the present action.

On November 16, 2007, the defendant filed a motion for summary judgment, arguing that it had no duty to defend or to indemnify under various provisions of the policy including, inter alia, exclusion five. Exclusion five provides: "This [l]iability [c]overage shall not apply to, and the [defendant] shall have no duty to defend or to pay, advance or reimburse [d]efense [e]xpenses for, any [c]laim ... based upon, alleging, arising out of, or in any way relating to, directly or indirectly, any fact, circumstance, situation, transaction, event or [w]rongful [a]ct² underlying or alleged in any prior or pending civil, criminal, administrative or regulatory proceeding, including audits initiated by the Office of Federal Contract Compliance Programs, against any [i]nsured as of or prior to the applicable [p]rior and [p]ending [p]roceeding [d]ate set forth in [the policy declarations]. ..." (Emphasis added.) According to the defendant, the foregoing exclusion applied to bar coverage because the claim alleged in the former employee's action against the plaintiff was "based upon, ar[ose] out of, or relate[d] to, directly or indirectly, the same facts, circumstance, situation, transaction, event or wrongful acts as those that were the subject of administrative proceedings involving the [former employee] that took place prior to the policy's ... prior and pending proceeding date," namely, proceedings brought by the former employee to obtain unemployment benefits. Documents evidencing those proceedings³ and the complaint in the former employee's action against the plaintiff were appended to an affidavit accompanying the defendant's motion. The documents and complaint indicated that the plaintiff's former employee had claimed, both when pursuing unemployment benefits and in the action against the plaintiff, that she wrongfully had been discharged from employment with the plaintiff after resisting the plaintiff's attempt to invade her privacy.

The trial court agreed with the defendant that the unemployment benefit proceedings clearly constituted "administrative proceedings" within the meaning of the policy and, accordingly, granted the defendant's motion for summary judgment.⁴ In so concluding, the court generally considered the purpose and function of "claims-made" insurance policies⁵ such as the one at issue here, and it relied on jurisprudence involving similar policy terms and analogous agency proceedings, and Connecticut courts' repeated characterization of unemployment proceedings as "administrative." The plaintiff claims on appeal that the trial court improperly construed the policy or, alternatively, that the policy phrase "administrative or regulatory proceeding[s]" is ambiguous such that disposition of this case by summary judgment was not appropriate.

Our examination of the record on appeal and the briefs and arguments of the...