Travelers Ins. Co. v. Kulla

• Court: Connecticut Supreme Court
• Writing for the Court: BORDEN
• Citation: Travelers Ins. Co. v. Kulla, 579 A.2d 525, 216 Conn. 390 (Conn. 1990)
• Decision Date: 21 August 1990
• Docket Number: No. 13885,13885
• Parties: The TRAVELERS INSURANCE COMPANY v. Michael KULLA, Administrator (ESTATE OF Robert KULLA).

Page 525

579 A.2d 525

216 Conn. 390

The TRAVELERS INSURANCE COMPANY v. Michael KULLA, Administrator (ESTATE OF Robert KULLA).

No. 13885.

Supreme Court of Connecticut.

Argued June 7, 1990.

Decided Aug. 21, 1990.

William F. Gallagher, with whom were Cynthia C. Bott, New Haven, and, on the brief, Wilson J. Trombley, Wolcott and Dan Shaban, Waterbury, for appellant (defendant).

Scott B. Clendaniel, with whom were John D. Palermo and, on the brief, Geoffrey Naab, Hartford, for appellee (plaintiff).

Before SHEA, CALLAHAN, COVELLO, HULL and BORDEN, JJ.

BORDEN, Associate Justice.

The dispositive issue in this appeal is whether an insurance policy provision limiting underinsured motorist coverage to liability for damages arising "out of the ownership, maintenance or use of the uninsured motor vehicle," and the regulation on which that provision is based, are contrary to the uninsured and underinsured motorist coverage statute, General Statutes § 38-175c. ¹ The plaintiff, The Travelers Insurance Company, denied underinsured motorist coverage to the defendant, the administrator of the estate of Robert Kulla. The parties submitted the issues of coverage and damages to a panel of arbitrators, which awarded the defendant $200,000 of underinsured motorist coverage. Upon an application to vacate filed by the plaintiff and an application to confirm filed by the defendant, the trial court vacated the award and denied the application to confirm. From that judgment the defendant appealed to the Appellate Court and, pursuant to Practice Book § 4023, we transferred the appeal to this court. We hold that the policy provision and regulation in question are valid, and we affirm the judgment of the trial court.

The following facts are undisputed. On December 17, 1986, Robert Kulla was killed in an automobile driven by Constance Lawlor, who, while intoxicated, lost control of the vehicle, driving it off the side of the road in the town of Prospect. The defendant was appointed administrator of his estate.

The automobile involved in the accident was one of four vehicles owned by Muhamer Kulla, Robert Kulla's father, an insured under the same policy issued by the plaintiff. The vehicle involved had been furnished and made available by Muhamer to Robert for his regular use. The policy provided liability and uninsured motorist coverage in the amount of $100,000 for each of Muhamer's automobiles. At the time of the accident, Robert was an "insured" under the policy because he was a relative of the named insured, Muhamer, and resided in Muhamer's household. Lawlor owned an automobile that was insured by the Maryland Casualty Insurance Company with liability coverage in the amount of $100,000. Each insurance company paid $100,000 of liability insurance to the defendant. The arbitrators apparently arrived at their award of $200,000 by stacking the $100,000 of uninsured motorist coverage relating to the four Kulla vehicles and deducting the $200,000 of liability insurance that the defendant had received under the liability coverages available under Lawlor's vehicle and the policy issued by the plaintiff.

The defendant challenges the trial court's judgment on four grounds, ² but at oral argument in this court, he made clear that all four claims hinge on the validity of his third claim. That claim is that the policy provision limiting underinsured motorist coverage ³ to damages arising out of "the ownership, maintenance or use of the uninsured motor vehicle," is unenforceable because it is contrary to the provisions of General Statutes § 38-175c, as interpreted by this court. Because we disagree with this claim, we need not fully address the defendant's other claims.

The defendant argues that the Lawlor vehicle, not the Kulla vehicle, is the underinsured vehicle in this case, because, as we have interpreted § 38-175c(b)(2) in American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 195-96, 530 A.2d 171 (1987), "underinsured motorist coverage is triggered when the tortfeasor's automobile liability coverage is exhausted." (Emphasis in original.) The defendant's argument focuses not on the language of § 38-175c(b)(2) defining an "underinsured motor vehicle," but on our case law interpreting the trigger for underinsured motorist coverage. Thus, he argues, the trial court failed to consider the exhaustion of Lawlor's liability coverage as the triggering event for such coverage under the plaintiff's policy.

Contrary to the defendant's suggestion, neither DelGreco nor any of our other cases involving underinsured coverage have dispensed with the necessity for determining that the definition of "underinsured motor vehicle" in § 38-175c(b)(2) must first be satisfied in order for a claimant seeking such coverage to prevail. Indeed, in Farm & City Ins. Co. v. Stevens, 215 Conn. 157, 162, 574 A.2d 1300 (1990), we recently rejected a stacking claim because, under the facts of that case, the claimant's position would produce "an untenable result ... not within the contemplation of § 38-175c(b)(2)." We turn, therefore, to the question of whether the Lawlor vehicle was an "underinsured motor vehicle" within the terms of § 38-175c(b)(2).

We recognize that it is possible to consider the Lawlor car as an "underinsured motor vehicle" by applying the terms of § 38-175c(b)(2) literally. Because the liability policy covering Lawlor's car, as well as the Kulla car, applied to this accident, the Lawlor car could be viewed as "a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made under subdivision (1) of this subsection." General Statutes § 38-175c(b)(2). From that premise, the conclusion would follow that the first sentence of § 38-175c(a)(1) would apply to the plaintiff's policy: "Every such policy shall provide insurance, herein called uninsured motorist coverage ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and underinsured motor vehicles ... because of bodily injury, including death resulting therefrom...." (Emphasis added.) Under this reading, since the defendant was legally entitled to recover damages from Lawlor, the owner of an underinsured motor vehicle, the statute would mandate coverage under the plaintiff's policy.

Under this theory, however, the defendant's claim would founder on the second sentence of the policy provision regarding underinsured motorist coverage, and the corresponding regulation, because the decedent's damages did not arise out of the operation of the Lawlor vehicle. The uninsured motorist insurance coverage provision of the plaintiff's policy provides in pertinent part: "We will pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury suffered by the insured and caused by an accident." (Emphasis in original.) ⁴ At issue is the second sentence of this provision: "Liability for such damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle." (Emphasis in original.) The defendant does not dispute that this policy provision is authorized by a regulation of the insurance commissioner regarding uninsured and underinsured motorist coverage. That regulation provides in pertinent part: "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 because of bodily injury sustained by the insured caused by an accident involving the uninsured motor vehicle." (Emphasis added.) Regs., Conn. State Agencies § 38-175a-6(a).

The defendant, recognizing the limiting language of the regulation, therefore argues that, because the public policy of the uninsured motorist statute; General Statutes § 38-175c; is " 'person-oriented' " rather than " 'vehicle-oriented' "; Harvey v. Travelers Indemnity Co., 188 Conn. 245, 248, 449 A.2d 157 (1982); and because the policy provision and the regulation tie coverage to the vehicle rather than permit it to follow the insured, both the policy provision and the regulation upon which it is based are contrary to the statute and unenforceable. ⁵ We disagree. We conclude that the regulation, and thus the policy provision upon which it is based, are valid, and that the "person-oriented" purpose of § 38-175c does not reach as far as the facts of this case.

Although the defendant's reading of § 38-175c(b)(2) has a superficial linguistic appeal, we reject it because it would be contrary to a fundamental purpose of underinsured motorist legislation. " 'The words of a statute should be interpreted in their natural and usual meaning unless such reading would defeat a legislative intent which becomes evident when the statute is read in the light of its history and purpose ... even though such construction may seem contrary to the letter of the statute.' " State v. Delafose, 185 Conn. 517, 522, 441 A.2d 158 (1981), quoting Royce v. Heneage, 170 Conn. 387, 392, 365 A.2d 1109 (1976). Further, statutes must be read with common sense. White v. Burns, 213 Conn. 307, 321, 567 A.2d 1195 (1990).

Certain facts bear repeating. This was a one-car accident. The sole car involved in the accident--the Kulla car--was owned by Muhamer, who furnished it to Robert for his regular use. The Lawlor vehicle was not involved in the accident. The only connection that it had with the accident was that it happened to be owned by the operator of the Kulla vehicle.

This factual situation is simply not the type of situation that underinsured motorist legislation is designed to cover. Had Lawlor not owned a car, and therefore been without...