Pecker v. Aetna Cas. & Sur. Co.

• Decision Date: 24 August 1976
• Citation: 370 A.2d 1006,171 Conn. 443
• Court: Connecticut Supreme Court
• Parties: Richard C. PECKER et al. v. The AETNA CASUALTY AND SURETY COMPANY.

Page 1006

370 A.2d 1006

171 Conn. 443

Richard C. PECKER et al. v. The AETNA CASUALTY AND SURETY COMPANY.

Supreme Court of Connecticut.

Aug. 24, 1976.

Michael D. O'Connell, Hartford, with whom, on the brief, was Robert C. Danaher, Hartford, for appellants (plaintiffs).

J. Brooks Johnson, Jr., Hartford, for appellee (defendant).

Before HOUSE, C.J., and LOISELLE, BOGDANSKI, LONGO and BARBER, JJ.

LONGO, Associate Justice.

This appeal is taken by the plaintiffs, Richard C. Pecker and Vernon C. Pecker, from a judgment for the defendant, the Aetna Casualty and Surety Company, hereinafter referred to as Aetna. Judgment was entered after Aetna had demurred to the plaintiffs' complaint and its motion for judgment on the demurrer was sustained by the trial court. As '(a) demurrer admits all facts well-pleaded'; Covino v. Pfeffer, 160 Conn. 212, 214, 276 A.2d 895, 896; see State v. LaSelva, 163 Conn. 229, 230-31, 303 A.2d 721; we treat as admitted the following allegations which appear in the plaintiffs' complaint: On April 30, 1972, the plaintiff Vernon C. Pecker was seriously injured when the motorcycle he was operating was struck by an uninsured motorist. The motorcycle was registered in the name of Lillian D. Pecker, Vernon's mother, and it was insured under a policy issued to her by the Central National Insurance Company of Omaha. At the time of the accident, Vernon was an insured under the family protection coverage provisions of an automobile insurance policy issued to his father the plaintiff Richard C. Pecker, by Aetna. Both the Central National and the Aetna policy included a provision for uninsured motorist coverage in the amount of $20,000. The plaintiffs submitted claims to Central National under its uninsured motorist provision and, after the claims were compromised because of questions as to coverage, they received $18,000 in settlement. As their damages exceeded that sum, the plaintiffs also submitted claims to Aetna under its uninsured motorist provision, but Aetna denied coverage.

The family protection coverage of the Aetna policy included the following relevant provisions: 'Part IV-Family Protection (Damages for Bodily Injury) To pay all sums which the Insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury . . . sustained by the Insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile . . .. Other Insurance . . . (I)f the Insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the Company shall not be liable for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance.'

When Aetna denied coverage, the plaintiffs brought this action for a declaratory judgment that Aetna is liable within the $20,000 monetary limit of its policy to the extent that their damages exceeded $18,000 and that Aetna must submit to arbitration of the claims. In its demurrer to the plaintiffs' complaint, Aetna claimed that under the 'other insurance' clause in its policy the plaintiffs were not entitled to payment from Aetna because primary uninsured motorist coverage up to the statutory minimum of $20,000 was provided by the Central National policy. In ruling on the demurrer, the trial court found that all that is required by state statutes and regulations is that a minimum of $20,000 of uninsured motorist coverage be available to an insured; and it found that, although the plaintiffs had settled their claims for $18,000, the amount 'available' from the primary insurer was $20,000. Therefore, the court concluded that the 'other insurance' clause in the Aetna policy was valid and the plaintiffs were thereby foreclosed from recovering any payment from Aetna. The court sustained the demurrer and when the plaintiffs failed to plead further, judgment on the demurrer was rendered for Aetna. The plaintiffs appealed to this court and the issues raised by their several assignments of error are considered in the opinion.

The courts of many jurisdictions have considered whether 'other insurance' clauses included in uninsured motorist coverage provisions are valid. See annot., 28 A.L.R.3d 551. Following an examination of the decisions of the courts of many jurisdictions, the court in Simpson v. State Farm Mutual Automobile Ins. Co., 318 F.Supp. 1152, 1155-56 (S.D.Ind.), adopted the so-called 'majority view' that 'other insurance' clauses included in uninsured motorist coverage provisions are invalid. The court gave the following reasons for its decision: '(1) Nowhere in any of the statutes . . . does the legislature attempt to fix any maximum limit of recovery; such statutes merely fix minimum requirements. (2) Since the statutes simply provide that each policy of insurance issued must contain uninsured motorist protection in minimum amounts, without qualification except as noted, it follows that any attempt on the part of an insurer to limit the effect of such clauses must be in derogation of the statute. (3) The premium paid with respect to each policy of insurance necessarily includes an amount in payment of the uninsured motorist coverage; it would be unconscionable to permit insurers to collect a premium for a coverage which they are required by statute to provide, and then to avoid payment of a loss because of language of limitation devised by themselves.' Id., p. 1156. Many other courts which have held that 'OTHER INSURANCE' CLAUSES ARE INVALID HAVE also made their decision on the basis, at least in part, of the applicable statutes of their respective jurisdictions; see Sellers v. United States Fidelity & Guaranty Co., 185 So.2d 689 (Fla.); State Farm Mutual Automobile Ins. Co. v. Barnard, 115 Ga.App. 857, 156 S.E.2d 148; Moore v. Hartford Fire Ins. Co. Group, 270 N.C. 532, 155 S.E.2d 128; Harleysville Mutual Casualty Co. v. Blumling, 429 Pa. 389, 241 A.2d 112; Vernon v. Harleysville Mutual Casualty Co., 244 S.C. 152, 135 S.E.2d 841; Bryant v. State Farm Mutual Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817; and, of the courts which have held such 'other insurance' clauses to be valid, at least one court found itself required to do so by the express provision of statutes of the jurisdiction. See Kriby v. Ohio Casualty Ins. Co., 232 Cal.App.2d 9, 13, 42 Cal.Rptr. 509.

The applicable statutes and regulations of this state are as follows: Under § 38-175a of the General Statutes, the insurance commissioner 'shall adopt regulations with respect to minimum provisions to be included in automobile liability insurance policies,' and those regulations 'shall relate to the insuring agreements, exclusions, conditions and other terms applicable to . . . uninsured motorists coverages under such policies' and 'shall make mandatory the inclusion of . . . uninsured motorists coverages.' Every automobile liability policy is to provide uninsured motorist coverage in accordance with those regulations, with limits for bodily injury or death not less than $20,000. General Statutes § 38-175c. ¹ Such policies are deemed to provide coverage in accordance with the regulations. General Statutes § 38-175d. ²

The regulations subsequently adopted by the insurance commissioner to implement the statutory provisions concerning uninsured motorist coverage have the force of statute. Citerella v. United Illuminating Co., 158 Conn. 600, 608, 266 A.2d 382; Hyde v. Connecticut Co., 122 Conn. 236, 240, 188 A. 266. The relevant regulations are as follows: 'Language of policies. Presumption re coverage. The provisions herein required need not be stated in the language or form of these regulations, but the coverage afforded shall be of equal or greater benefit to the insured. Policies affording a coverage to which these regulations apply shall be deemed to afford insurance under such coverage at least equal to that required by these regulations.' Regs., Conn. State Agencies § 38-175a-3. 'Minimum provision for protection against uninsured motorists. (a) Coverage. The insurer shall undertake to pay on behalf of the insured all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle or motorcycle because of bodily injury sustained by the insured caused by an accident involving the uninsured motor vehicle or motorcycle. This coverage shall insure the occupants of every motor vehicle to which the bodily injury liability coverage applies. . . . (d) Limits of liability. The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of § 14-112 of the general statutes, except that the policy may provide for the reduction of limits to the extent that damages have been (1) paid by or on behalf of any person responsible for the injury, (2) paid or are payable under any workmen's compensation or disability benefits law, or (3) paid under the policy in settlement of a liability claim. The policy may also provide that any direct indemnity for medical expense paid or payable under the policy or any amount of any basic reparations benefits paid or payable under the policy will reduce the damages which the insured may recover under this coverage and any...