Taricani v. Nationwide Mutual Ins. Co.

• Decision Date: 27 May 2003
• Docket Number: (AC 23280)
• Citation: 77 Conn. App. 139,822 A.2d 341
• Court: Connecticut Court of Appeals
• Parties: ANTHONY J. TARICANI, JR., ET AL. v. NATIONWIDE MUTUAL INSURANCE COMPANY.

77 Conn. App. 139

822 A.2d 341

ANTHONY J. TARICANI, JR., ET AL. v. NATIONWIDE MUTUAL INSURANCE COMPANY.

(AC 23280)

Appellate Court of Connecticut.

Argued March 25, 2003.

Officially released May 27, 2003.

Lavery, C. J., and Foti and Peters, Js.

Linda Clough, for the appellants (plaintiffs).

Kristen Schultze Greene, with whom was Michael Feldman, for the appellee (defendant).

Opinion

PETERS, J.

In this state, an insurance policyholder who fails to give an insurer timely notice of an insurable loss does not forfeit his insurance coverage if he can prove that his delay did not prejudice his insurer. Aetna Casualty & Surety Co. v. Murphy, 206 Conn. 409, 417-18, 538 A.2d 219 (1988). The principal issue in this case is whether this rule should be extended to protect a policyholder who has failed to comply with a cooperation clause in the insurance policy. This is an issue of first impression. The trial court declined to extend the rule and granted a motion for summary judgment filed by the insurer. We disagree with the court's reasoning but affirm its judgment in favor of the insurer in light of the factual record in this case.

The plaintiffs, Anthony J. Taricani, Jr., and Bonnie E. Taricani, filed a complaint alleging that the defendant, Nationwide Mutual Insurance Company, had issued to them a business insurance policy that was in effect when a fire destroyed their property at 120 Winthrop Street in New Britain. They further alleged that, in breach of this policy, the defendant wrongfully had refused to pay them for the losses that they had incurred because of the fire.¹

In response, the defendant filed an answer and a special defense in which it claimed that the plaintiffs' recovery was barred by their failure to cooperate with the defendant in its investigation of their claim.² The gravamen of the defendant's position was that, in violation of a cooperation clause in the insurance policy, the plaintiffs had declined to appear for examination under oath for a significant period of time after the occurrence of the fire. On this ground, the defendant filed a motion for summary judgment.

The plaintiffs objected to the defendant's motion. They filed an affidavit alleging the existence of numerous unresolved issues of material fact. These factual issues were relevant, they claimed, because they had no duty to appear for examination until preliminary criminal proceedings concerning their possible complicity in the fire were resolved in their favor.

The trial court, concluding that the defendant was entitled to judgment as a matter of law, granted the defendant's motion for summary judgment. The plaintiffs have appealed. The trial court made the following findings of fact that are undisputed. The plaintiffs' property was destroyed by fire on May 5, 2000. They filed a claim under a business insurance policy issued by the defendant. That policy required the plaintiffs to cooperate in the investigation of a claim and authorized the defendant to examine any insured under oath.

On July 11, 2000, the defendant notified the plaintiffs that they had to appear for examinations of their claims on July 25 and July 26, 2000. The defendant also asked the plaintiffs to produce certain documents by July 20, 2000. At the plaintiffs' request, the defendant agreed to reschedule the oral examinations for August 9 and August 11, 2000.

On July 25, 2000, the plaintiffs informed the defendant that they could not comply with its requests. At that time, the New Britain police department had begun a criminal investigation to determine whether the plaintiffs had committed arson. In conjunction with that investigation, the police had obtained a search warrant and had seized the documents requested by the defendant. They offered to cooperate fully once the police investigation had been concluded.

The defendant nonetheless, by a letter dated August 11, 2000, rescheduled the date of the oral examinations for August 23 and August 25, 2000. It informed the plaintiffs that it needed to conduct a prompt investigation of the plaintiffs' loss "before evidence disappears and memories fade. . . ." Accordingly, it advised the plaintiffs that, if they failed to appear on the scheduled dates, their inaction would be treated as a deliberate breach of a material condition in the policy.

After the plaintiffs' failure to appear, the defendant notified them, by a letter dated September 11, 2000, that their claim for coverage had been denied. The notice stated that the plaintiffs' nonappearance was the reason for the denial of coverage.

Some months later, the criminal investigation was concluded. It exonerated the plaintiffs. The plaintiffs wrote to the defendant on March 15, 2001, indicating their readiness to produce the requested documents and to submit to examinations under oath. On April 10, 2001, the defendant, reiterating the position that it had taken in its September 11, 2000 letter, declined to proceed further.

The plaintiffs then initiated this lawsuit. They claimed that their refusal to submit to examinations under oath was justified by the criminal investigation that was then ongoing. They also challenged the defendant's assertion that there were no undisputed questions of material fact by alleging that the defendant's immediate access to the site and to police and fire reports afforded the defendant a significant opportunity to investigate the circumstances of the fire promptly. They alleged that those facts, if proven, would support their argument that the defendant was not prejudiced by the eight month delay in their personal cooperation with the defendant's investigation.

The trial court nonetheless granted the defendant's motion for summary judgment. It found that the plaintiffs had failed to comply with the policy's cooperation clause by their refusal to submit to examinations under oath in July or August, 2000. It was not persuaded by the plaintiffs' argument that, because the policy did not contain an express time limitation clause, their offer to be examined in March, 2001, demonstrated their compliance with the cooperation clause. It declined to adopt the plaintiffs' claim that their noncooperation was not dispositive if the defendant could be shown to have suffered no prejudice because of the delay in the conduct of the examinations under oath. The plaintiffs' appeal challenges the court's summary judgment in two respects. They maintain that they had substantially cooperated with the defendant's request for examinations under oath and that whatever delay was caused thereby did not prejudice the defendant.

The plaintiffs' appeal is governed by a well established standard of appellate review. "Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law. . . . Our review of the trial court's decision to grant the defendant's motion for summary judgment is plenary. . . . On appeal, we must determine whether the legal conclusions reached by the trial court are legally and logically correct and whether they find support in the facts set out in the memorandum of decision of the trial court." (Internal quotation marks omitted.) Tarnowsky v. Socci, 75 Conn. App. 560, 564, 816 A.2d 728 (2003); see also W & D Acquisition, LLC v. First Union National Bank, 262 Conn. 704, 709, 817 A.2d 91 (2003).

I THE COOPERATION CLAUSE

The plaintiffs' first claim is that the record presents genuine issues of fact about their compliance with the cooperation clause in the insurance policy issued to them by the defendant. Those alleged issues of fact arise, they claim, because they should be permitted to make a factual showing that they substantially complied with the cooperation clause. We disagree.

The plaintiffs acknowledge that, "absent estoppel, waiver or other excuse, the substantial or material breach of the cooperation provisions of the insurance policy by an insured puts an end to the insurer's obligation." Brown v. Employer's Reinsurance Corp., 206 Conn. 668, 675, 539 A.2d 138 (1988); see also O'Leary v. Lumbermen's Mutual Casualty Co., 178 Conn. 32, 38, 420 A.2d 888 (1979). They recognize that, once the defendant raised the issue of violation of the cooperation clause, it was their burden to prove their compliance with the cooperation clause. O'Leary v. Lumbermen's Mutual Casualty Co., supra, 38. They nonetheless claim that their failure to appear for prompt examinations under oath was not a substantial breach of the cooperation clause.

At the outset, we note what the plaintiffs do not claim. They have not characterized the cooperation clause as ambiguous.³ In a similar vein, they have not challenged the timeliness of their receipt of notices sent to them by the defendant or the suitability of the location in which their examinations were scheduled to take place.

The gravamen of the plaintiffs' claim is that they substantially complied with the requirements of the cooperation clause by expressing their willingness to be examined under oath ten months after the occurrence of the fire that destroyed their property. In their view, their delayed agreement to be examined was excused because, while the criminal investigation into the fire was ongoing, they had a right to invoke the privilege against self-incrimination contained in the fifth amendment to the United States constitution. We disagree.

As the trial court noted, numerous cases in state courts, including our own Superior Court, have held that...