Tucker v. Am. Int'l Grp., Inc.

• Decision Date: 28 January 2015
• Docket Number: 3:09 - CV - 1499 (CSH)
• Court: U.S. District Court — District of Connecticut
• Parties: TERI TUCKER, Plaintiff, v. AMERICAN INTERNATIONAL GROUP, INC.; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., A SUBSIDIARY OF AMERICAN INTERNATIONAL GROUP, INC., Defendants.

TERI TUCKER, Plaintiff, v. AMERICAN INTERNATIONAL GROUP, INC.;NATIONAL UNION FIRE INSURANCE COMPANY OFPITTSBURGH, PA., A SUBSIDIARY OFAMERICAN INTERNATIONAL GROUP, INC., Defendants.

3:09 - CV - 1499 (CSH)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

JANUARY 28, 2015

RULING ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

HAIGHT, Senior District Judge

:

Plaintiff Teri Tucker brings this diversity action on an insurance policy issued by the Defendant insurance companies. After extensive discovery, the Defendants move for summary judgment.

I. INTRODUCTION

Plaintiff seeks damages from her former employer's insurers, Defendants American International Group, Inc. ("AIG") and National Union Fire Insurance Company of Pittsburgh, PA ("National Union") (collectively "Defendants"), arising from her unlawful discharge by that former employer in 2003. Plaintiff's suit is based upon an employment practices liability insurance policy issued by Defendants to that employer (herein "2004 Policy" or "the Policy").¹ Specifically, she seeks to collect from Defendants the $4 million judgment entered in her favor in Tucker v. Journal Register East, No. 3:06-CV-307 (SRU) (herein "Tucker I"), an earlier action Plaintiff filed against her former employer, newspaper publisher Journal Register East.² The instant action, in which Plaintiff confronts the Journal Register's insurers, will be referred to as "Tucker II."

Pending before the Court is Defendants' Motion for Summary Judgment [Doc. 97] as to all counts of Plaintiff's Amended Complaint [Doc. 126]. This Ruling resolves that motion.

The factual background of the case has been repeatedly recounted in detail in a series of prior opinions by the Court, including 728 F.Supp.2d 114 (D.Conn. 2010), 745 F.Supp.2d 53 (D.Conn. 2010), 2011 WL 6020851 (D.Conn. Dec. 2, 2011), 2012 WL 314866 (D.Conn. Jan. 31, 2012), 2012 WL 685461 (D.Conn. Mar. 2, 2012), 281 F.R.D. 85 (D.Conn. 2012), and 936 F.Supp.2d 1 (D.Conn. 2013). Familiarity is assumed regarding the facts recounted within those opinions. However, for purposes of the pending summary judgment motion, the Court sets forth the following relevant facts, as established by the record - i.e., pleadings, affidavits, and exhibits - including those newly presented on summary judgment.

II. FACTS

In August 2000, Plaintiff Teri Tucker was hired to supervise the telemarketing departmentof the New Haven Register, LLC, a company wholly-owned by Journal Register East, Inc., whose ultimate parent company is Journal Register Company ("Journal Register").³ On October 16, 2003, she was discharged for alleged misconduct, misuse of the telephone in accepting collect calls. Tucker alleged that Journal Register actually discharged her in retaliation for opposing sexually harassing behavior by a subordinate employee and for refusing to testify falsely in her employer's defense to a sexual harassment complaint regarding the subordinate's behavior.

On November 3, 2003, Tucker's then counsel, Stephen P. Horner, sent a letter (herein "November 3, 2003 Letter") to Kevin Walsh, publisher of the New Haven Register, in which Horner alleged, on behalf of Tucker, that she had been wrongfully discharged and retaliated against in violation of Connecticut's discrimination statutes (Conn. Gen. Stat. § 46a-60), Title VII of the Civil Rights Act, and public policy. Doc. 154-9, Ex. H, p. 2. The letter further asserted that Journal Register had "financial exposure for such violations," which "include[d] the following: (a) reinstatement of [Tucker], or front pay; (b) payment of all lost back wages to [Tucker]; (c) reimbursement for lost fringe benefits; (d) payment of [Tucker's] attorney's fees; and (e) punitive damages." Id., p. 4. Horner also advised Walsh that if Walsh had "interest in resolving [Tucker's] claims," he should contact Horner "within two weeks of the date of this letter;" otherwise, if Horner and Walsh were "unable to resolve this matter, [Tucker] ha[d] authorized [Horner] to file administrative complaints with [the] CHRO and EEOC." Id. The letter concluded with the statement that "[i]n exchange for a severance package," Tucker would be willing to "provide a full release of liability and agree to maintain the terms of the agreement as fully confidential." Id., p. 4-5.As set forth below, Defendants assert that the November 3, 2003 Letter was a "demand letter" which served notice to Journal Register of a claim made against it pursuant to the 2004 Policy. Plaintiff disagrees with that characterization of the letter.⁴

Tucker filed a Complaint with the Connecticut Commission on Human Rights and Opportunities ("CCHRO") and the Equal Employment Opportunities Commission ("EEOC") on or about March 2, 2004. Doc.100-2, Ex. B, ¶¶ 19-20.⁵ On May 13, 2004, Journal Register's broker, Marsh, sent a letter to Keith Zinsley of AIG's Claim Technical Services, Inc., notifying AIG "[o]n behalf of the Insured [Journal Register], and in accordance with the reporting provisions of the [2004] policy, . . . of a claim which has been made against the Insured" by Tucker. Doc. 100-17, Ex. Q. The letter cited and appended the March 2004 CHRO Complaint by Tucker. Id.

AIG acknowledged receipt of Tucker's claim on June 1, 2004 and made a full and expressreservation of rights to Journal Register's broker. Doc. 154, ¶ 41; Doc. 154-24, Ex. W (letter from Meghan McConville, AIG, to Douglas S. Worth, Marsh USA, acknowledging submission of Tucker's claim and reserving all "rights, privileges, and defenses under the policy and available at law or in equity"). At that time, Meghan McConville, in AIG's Corporate D&O Claims Department, instructed Journal Register's insurance broker, Douglas Worth of Marsh USA, Inc., to notify her of "any significant events including, litigation, mediation, arbitration, withdrawal, or settlement within the retention." Id. Four years later, Journal Register, through Marsh, contacted AIG on July 22, 2008, to advise that the "matter [was] now in suit" and "had already proceeded to a jury trial." Doc. 154, ¶ 42; Doc. 154-25, Ex. X, p. 9 ("General Note" on Claim Number 371-031428-001 (Claimant Teri Tucker) by Brian Conlin, AIG, dated July 25, 2008).⁶ AIG issued a denial of coverage on August 18, 2008. Doc. 154, ¶ 43; Doc. 154-26, Ex. Y (August 18, 2008 letter from Japhet Boutin, AIG Domestic Claims, Inc., to Ed Yocum, Esq., General Counsel for Journal Register Company).

On February 28, 2006, Plaintiff filed her claim against Journal Register in Tucker I in this District, No. 3:06-CV-307 (SRU). On July 23, 2008 the jury found in her favor on all counts and awarded her $1 million in compensatory damages and $3 million in punitive damages. Tucker I, Doc. 69. The jury also found that Tucker was entitled to economic damages in an amount to be determined by the court. Id. On July 29, 2008, Judge Underhill entered judgment on the verdict in the amount of $4 million. Id., Doc. 73.

Post-trial, Tucker sought a prejudgment remedy "(PJR") to secure recovery of the judgment.Id., Doc. 75-77. In addition, she filed motions for preliminary injunction, disclosure of assets, and prejudgment and post judgment interest. Id., Doc. 77 & 107. In Tucker's memorandum in support of a PJR, her counsel noted that "[w]hile there are limitations on the amount of punitive damages under Title VII, the likely final judgment ... remains substantial." Id., Doc. 76, p. 4, para. 1.4

Defendant Journal Register opposed Plaintiff's post-trial motions and also filed, inter alia, motions to stay execution of the judgment and for a new trial. Id., Doc. 83 & 89. On February 20, 2009, Judge Underhill granted Tucker's motion for a PJR in the amount of $500,000 and her motion for disclosure of assets to satisfy the PJR. Id., Doc. 129. He specifically found that probable cause existed that a judgment of $500,000 would ultimately be entered for Tucker and that the defendant was not adequately secured by insurance. Judge Underhill, however, denied Tucker's motion to preliminarily enjoin the defendant from disposing of its assets, finding that Tucker had failed to show the existence of "irreparable harm" if the injunction were not granted. Id.

On February 21, 2009, Journal Register filed a voluntary petition for bankruptcy protection under Chapter 11 of the Bankruptcy Code in the Southern District of New York. In re Journal Register Co., et al., No. 09-10769(ALG) (Bankr. S.D.N.Y.2009). Pursuant to § 362 of the Bankruptcy Code, an automatic stay went into effect, thereby barring continuation of judicial proceedings against the debtor and its affiliated debtors to recover claims arising prior to the bankruptcy filing.⁷

Plaintiff commenced the present action ("Tucker II") on September 23, 2009 against insurersNational Union and AIG as the underwriters of the $5 million 2004 Policy issued to Journal Register, under which Plaintiff seeks to recover the $4 million judgment she recovered against Journal Register in her jury trial before Judge Underhill in Tucker I. Specifically, pursuant to her Amended Complaint, Plaintiff seeks compensatory and punitive damages "caused by the defendant insurers' failure to satisfy" the judgment in her favor and "against their insured, Journal Register Company." Tucker II, Doc. 126, p. 1 (¶ 1). As set forth below, Plaintiff alleged that after obtaining the judgment in Tucker I, she became a "subrogee and intended third party beneficiary under the policy . . . who possesses contractual and statutory rights to take legal action directly against the defendants to satisfy her judgment." Id.

On January 5, 2011, Plaintiff's unsecured claim in Journal Register's bankruptcy was reduced to $3 million in exchange for Journal Register's agreement to waive any objections to her claim in bankruptcy court. Doc. 126, p. 17 (¶ 70). With respect to Tucker I, Plaintiff and Journal Register entered into a Stipulated Settlement Agreement (Tucker I, Doc. 142-1) in which she agreed to accept $109,457.00 in exchange...