State Farm Ins. Co. v. Organek
| Decision Date | 30 January 2018 |
| Docket Number | Civ. No. 3:16CV00474(SALM) |
| Parties | STATE FARM INSURANCE COMPANY v. HEIDE ORGANEK and JOHN ORGANEK |
| Court | U.S. District Court — District of Connecticut |
Plaintiff State Farm Insurance Company ("State Farm") brings this action seeking "[a] declaration that the claims made in the Complaint in the Underlying Action do not give rise to a duty on the part of State Farm Insurance Company to defend or indemnify M&A Pizza Restaurant, LLC, Jonathan Prue, or Jarrett C. Toth under Section II of the policy issued by State Farm Insurance Company[.]" Doc. #35 at 9. Defendants John Organek and Heidi Organek (the "Organeks") bring a counterclaim seeking "[a] declaration that the claims made in the Counterclaim and the Underlying Complaint give rise to a duty on the part of State Farm Insurance Company [to] indemnify the defendants, M&A Pizza Restaurant, LLC, Jonathan Prue, and/or Jarrett C. Toth, under the applicable provisions of the policy issued by the plaintiff[]" and "[a]n order that the plaintiff pay to the defendants, Heidi Organek and John Organek, those sums that its insureds have become legally obligated to pay as a result of the motor vehicle collision of July 23, 2013." Doc. #42 at 5.
State Farm and the Organeks consented to the jurisdiction of a Magistrate Judge on September 12, 2017, see Doc. #51, and the case was reassigned to the undersigned on September 19, 2017, see Doc. #52.1 The case was set down for a trial to the Court on January 10, 2018. In advance of the trial, State Farm and the Organeks each filed proposed findings of fact and conclusions of law, see Doc. ##61, 62, written arguments in support of their respective positions, see Doc. ##60, 63, and replies to the other party's arguments, see Doc. ##65, 66. State Farm filed objections to the Organeks' proposed findings of fact and conclusions of law. See Doc. #67. The parties also submitted a joint trial memorandum. See Doc. #59.
The trial to the Court was held on January 10, 2018. See Doc. #72. The parties did not call any witnesses, and the parties' three joint exhibits and nine Stipulations of Fact were entered into evidence by agreement of the parties.
Having considered all of the evidence presented at trial,the Court finds that State Farm has proven by a preponderance of the evidence that the claims made in the Complaint in the Superior Court action do not give rise to a duty on the part of State Farm to defend or indemnify M&A Pizza Restaurant, LLC ("M&A Pizza"); Jonathan Prue ("Prue"); and/or Jarrett C. Toth ("Toth").
1. Prue was employed as a delivery driver at a pizza restaurant called "DP Dough" prior to his employment with M&A Pizza. See Exh. 102a at 6-8. DP Dough was located a few doors down from M&A Pizza in Storrs, Connecticut. See id.
2. During the period of his employment with DP Dough, Prue became familiar with an owner/manager of M&A Pizza, whom he knew as Nick. See id. at 7, 12-13.
3. While working for DP Dough, Prue occasionally made deliveries for M&A Pizza. See id. at 8, 13
4. Prue was not happy with the amount of hours he was working at DP Dough. See id. at 7.
5. Prue approached M&A Pizza about working for them. See id. at 9-10, 14; Exh. 102b at 18.
6. Prue was hired by M&A Pizza as a delivery person. See Exh. 102a at 8-9. Prue's first week of work consisted of three days of six to eight hour shifts, and his second week was four days of six to eight hour shifts. See id. at 8. 7. Prue stopped working for DP Dough when he was hired by M&A Pizza. See id. at 9, 14.
8. Prue did not work at any other job while he worked for M&A Pizza. See id. at 13.
9. Prue did not make any deliveries on the side while working for M&A Pizza. See id. at 13-14.
10. Prue's relationship with M&A Pizza did not have a pre-established ending date. See id. at 11.
11. M&A Pizza paid Prue $8.00 per hour, plus delivery fees and tips. See id. at 14; Exh. 102b at 19.
12. On July 23, 2013, Prue was delivering a pizza for M&A Pizza when he was involved in an automobile accident with the Organeks. See Doc. #59 at 2, Stipulations of Fact and Law2 Nos. 3, 4.
13. At the time of the accident, Prue was operating a vehicle owned by Toth. See Joint Stip. No. 3. Toth was not associated with M&A Pizza. See Joint Stip. No. 5.
14. The accident occurred about two weeks after Prue stopped working for DP Dough, and began working exclusively for M&A Pizza. See Exh. 102a at 8, 13; Exh. 102b at 21.
15. The Organeks obtained a judgment against M&A Pizza in Connecticut Superior Court for personal injuries the Organeks sustained in the July 23, 2013, accident. See Joint Stip. No. 7.
16. Judgment entered in the Superior Court action on the underlying counts alleging vicarious liability as to M&A Pizza for the actions of its agent, servant and/or employee, Prue. See Joint Stip. No. 8.
17. At the time of the accident, M&A Pizza had a general liability policy ("Food Shop Policy") issued by State Farm. See Joint Stip. Nos. 1, 2. The Food Shop Policy had a policy number of 97-BF-L944-9 and effective dates of May 1, 2013, through May 1, 2014. See Joint Stip. No. 1.
18. The Food Shop Policy was in full force and effect on July 23, 2013. See Joint Stip. No. 2.
19. The Food Shop Policy includes Form CMP-4000 with endorsements CMP-4100 (Businessowners Coverage Form), CMP4207.1 (Amendatory Endorsement), CMP 4765 (Exclusion Empl. Non-Owned Auto Liab.), among other endorsement forms. See Exh. 101.
20. The policy contains the following insuring agreement:
21. "Section II—Exclusions" sets forth the following relevant exclusions to coverage otherwise provided by the insuring agreement:
22. "Section II—Who Is An Insured" provides the following relevant definition of an insured:
23. The policy provides the following relevant definitions:
The parties stipulate that State Farm issued M&A Pizza the Food Shop Policy, which was in full force and effect at the time of the accident. See Joint Stip. Nos. 1, 2. Under the policy, State Farm agreed to "pay those sums that the insured becomes legally obligated to pay because of bodily injury [or] property damage[.]" Exh. 101 at 000024 (internal quotation marks omitted). State Farm concedes that unless an exception to the Food Shop Policy applies, "State Farm would have to indemnify M&A Pizza Restaurant, LLC, for the underlying judgments obtainedby the Organeks." Doc. #66 at 2. Accordingly, the Court finds that M&A Pizza had insurance coverage through the Food Shop Policy at the time of the accident.
In an insurance coverage action such as this, the insured bears the initial burden of proving coverage. See Nationwide Mut. Ins. Co. v. Pasiak, 173 A.3d 888, 896 (Conn. 2017). Once coverage has been established, "the insurer bears the burden of proving that an exclusion to coverage applies." Id. The insurer must prove an exclusion applies by a preponderance of the evidence. See Conn. Car Rental, Inc. v. Patla, 677 A.2d 967, 971 (Conn. App. 1996) (); see also Franklin Credit Mgmt. Corp. v. Nicholas, 812 A.2d 51, 57 n.7 (Conn. App. 2002) (). As noted above, the parties agree that there was insurance coverage. Therefore, the burden shifts to State Farm to prove by a preponderance of the evidence that Prue's accident was excluded from coverage under the Food Shop Policy.
State Farm argues that Prue's accident was excluded from coverage by the Food Shop Policy's Auto Exception, which, inrelevant part, excludes "'[b]odily injury' or 'property damage' arising out of the ownership, maintenance, use or entrustment to others of any aircraft, 'auto' or watercraft owned or operated by or rented or loaned to...
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