Nationwide Mut. Ins. Co. v. Pasiak
| Decision Date | 21 February 2023 |
| Docket Number | SC 20617 |
| Citation | 346 Conn. 216,288 A.3d 615 |
| Parties | NATIONWIDE MUTUAL INSURANCE COMPANY et al. v. Jeffrey S. PASIAK et al. |
| Court | Connecticut Supreme Court |
David J. Robertson, with whom was Keith M. Blumenstock, Bridgeport, and, on the brief, Justin R. Bengtson, for the appellants (named defendant et al.).
Robert D. Laurie, West Hartford, with whom, on the brief, were Andrew P. Barsom and Heather L. McCoy, West Hartford, for the appellees (plaintiffs).
Robinson, C. J., and McDonald, D'Auria, Mullins, Ecker and Alexander, Js.
This case comes to us for the second time following lengthy litigation of a declaratory judgment action brought by the plaintiffs, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company, against the defendant Jeffrey S. Pasiak.1 The action concerned whether the plaintiffs were obligated to indemnify the defendant, a business owner, under a personal umbrella insurance policy for liability arising from his false imprisonment of his company's employee at her workplace. Following a trial to the court in 2012, the trial court issued a memorandum of decision, concluding that the plaintiffs had a duty to indemnify the defendant. The plaintiffs appealed the decision to the Appellate Court, which reversed the judgment of the trial court on the basis that the claim fell within the business pursuits exclusion of the insurance policy. See Nationwide Mutual Ins. Co. v. Pasiak , 161 Conn. App. 86, 89, 101–102, 127 A.3d 346 (2015). This court subsequently reversed the judgment of the Appellate Court and concluded that the case must be remanded to the trial court to allow the plaintiffs to conduct appropriate discovery and for a trial de novo to determine whether the plaintiffs met their burden of proving that the business pursuits exclusion bars coverage as a matter of fact. See Nationwide Mutual Ins. Co. v. Pasiak , 327 Conn. 225, 229–30, 270, 173 A.3d 888 (2017) ( Pasiak I ). Following a trial de novo, the trial court found that the plaintiffs satisfied their burden of establishing, by a preponderance of the evidence, that the false imprisonment arose out of the defendant's business pursuits and that the business pursuits exclusion bars coverage. The trial court rendered judgment for the plaintiffs, concluding that they have no obligation to indemnify the defendant. The defendant now appeals from that judgment, claiming, among other things, that the trial court applied an incorrect standard on remand.
Our decision in Pasiak I , as supplemented by the facts found by the trial court in the trial de novo, sets forth the following relevant facts and procedural history. See id., at 230–37, 173 A.3d 888. The defendant owned Pasiak Construction Services, LLC (Pasiak Construction), which had its sole office in the defendant's home in Stamford. The Pasiak Construction office was a room on the second floor of the home, across the hall from the defendant's bedroom and next to a bathroom. The office had three desks, including a computer workstation. The defendant maintained a homeowners insurance policy and an umbrella insurance policy through the plaintiffs at the time of the incident. He did not hold any commercial liability insurance for his business. Pasiak Construction employed Sara Socci as a part-time office manager with working hours of 9:30 a.m. to 2:30 p.m., four days per week. Socci worked out of the office in the defendant's home and would help with both the defendant's business tasks and personal tasks. Socci worked exclusively for the defendant, whom she considered to be her boss. The defendant would regularly stop by the office to work with Socci in the morning. One day in May, 2006, Socci was working at her desk when an individual entered the office wearing a mask and carrying a gun. The individual demanded that Socci show him to the defendant's safe and open it. Socci had no knowledge of the safe or its combination. The individual became enraged, and he bound, gagged, and blindfolded Socci and forced her down on the floor of the bedroom. He put a gun to her head and told her he would kill her and her family if she did not open the safe.
After the individual made approximately forty-five minutes of continuous threats, the defendant returned home and was attacked by the individual at the top of the stairs. The defendant was eventually able to unmask the individual, revealing his identity to be Richard Kotulsky, a longtime friend of the defendant. When the defendant asked about Socci's whereabouts, Kotulsky led him to the bedroom, where the defendant made Kotulsky untie Socci. Kotulsky and the defendant went into the office, and the defendant insisted that Socci join them, notwithstanding her reluctance because of Kotulsky's threats. Socci joined them in the office, where a discussion revealed that Kotulsky was motivated to rob the defendant because he was upset with the defendant for his purported affair with Kotulsky's girlfriend and because he needed money to cover his debts. The defendant was upset that Kotulsky tried to rob him and, in his words, "tried to ruin his business." The defendant and Kotulsky reached some degree of resolution of their dispute and spoke amicably.
Despite Socci's requests to leave, the defendant prevented her from leaving. Kotulsky begged Socci and the defendant not to call the police. The defendant asked Kotulsky to leave the room, and Socci informed the defendant of the extent of Kotulsky's threats to her and her family. The defendant continued to refuse to let Socci leave or to call the police. The defendant brought Kotulsky back into the room, where Kotulsky apologized to Socci, and Socci then assured him she would not tell the police about the incident. Kotulsky then left. Following Kotulsky's exit, Socci resigned from Pasiak Construction and informed the defendant that she could no longer work for him because she was terrified that Kotulsky would return. The defendant remained fearful that Socci would call the police and that Kotulsky would be harmed by his arrest. Socci testified that she remembered the defendant having been worried about her ruining his business. Socci testified that she did not try to leave because she was afraid that the defendant would tell Kotulsky and that Kotulsky would harm her and her family. The trial court also noted that she felt intimidated because the defendant and Kotulsky were each twice as large as she was.
The defendant and Socci eventually decided to talk to Denise Taranto, who was a former coworker of Socci and a close friend of the defendant. Socci left her belongings in the defendant's home, and the two traveled in the defendant's car to meet with Taranto in Greenwich. Along the way to Greenwich, Socci and the defendant stopped at a donut shop and a material supply yard. At the supply yard, the defendant spoke with several of the yard's employees for a few minutes. The two also drove by several construction sites that Pasiak Construction was serving. Upon their arrival in Greenwich, Taranto came out to the defendant's car and spoke with Socci and the defendant. After learning of the events that transpired, Taranto advised the defendant and Socci to call the police. The defendant and Socci then returned to the defendant's home, where Socci gathered her belongings and returned home. Socci's experience, from arrival at work to departure, approximated her regular work schedule, and she was paid in full by Pasiak Construction for that pay period. Socci, her husband, and a friend later returned to the defendant's home, at which point the defendant called the police.
After being charged with kidnapping in the second degree and witness tampering, the defendant pleaded guilty under the Alford doctrine2 to charges of interfering with an officer and threatening in the second degree. Socci and her husband subsequently commenced a tort action against the defendant, alleging false imprisonment, negligence, intentional, reckless and negligent infliction of emotional distress, and loss of consortium. The plaintiffs provided the defendant with an attorney to defend him in the Socci action but notified him that they were reserving their right to contest coverage.
The plaintiffs then commenced the present action, seeking a declaration that they had no duty to defend or indemnify the defendant in the Socci action. The trial court concluded, by way of summary judgment, that the allegations of the complaint were sufficiently broad to obligate the plaintiffs to provide the defendant with a defense under his homeowners and umbrella insurance policies, but the court deemed it improper, at that juncture, to determine the plaintiffs’ duty to indemnify.
Socci and the defendant proceeded to trial in the tort action, in which the jury awarded Socci $628,200 in compensatory damages and $175,000 in punitive damages. The jury also awarded Socci's husband $32,500 in compensatory damages. The plaintiffs then filed a second motion for summary judgment in the declaratory judgment action regarding their duty to indemnify the defendant. The plaintiffs argued, among other things, that the defendant's policies did not cover his liability for the Socci action because coverage was barred under the policy exclusion for business pursuits. The plaintiffs also claimed that indemnification for the punitive damages contravened public policy.
The trial court thereafter issued its memorandum of decision. Relevant to this appeal, the court concluded that the plaintiffs were entitled to summary judgment under the homeowners insurance policy—which did not cover injury for emotional distress unless caused by a physical injury—but not under the umbrella insurance policy—which covered "personal injury," defined to include false imprisonment. It also rejected the plaintiffs’ public policy argument.
After the trial court clarified that its decision on the motion for summary judgment was not a final judgment...
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