Viejas Band of Kumeyaay Indians v. Lorinsky

• Decision Date: 04 August 2009
• Docket Number: No. 29512.,29512.
• Court: Connecticut Court of Appeals
• Parties: VIEJAS BAND OF KUMEYAAY INDIANS v. Jay LORINSKY et al.

976 A.2d 723

116 Conn.App. 144

VIEJAS BAND OF KUMEYAAY INDIANS v. Jay LORINSKY et al.

No. 29512.

Appellate Court of Connecticut.

Argued March 9, 2009.

Decided August 4, 2009.

Frank J. Liberty, for the appellant (named defendant).

Elizabeth J. Stewart, New Haven, with whom was Michael C. Markowicz, Hartford, for the appellee (plaintiff).

BEACH, ROBINSON and PELLEGRINO, Js.

ROBINSON, J.

The named defendant, Jay Lorinsky, appeals from the judgment of the trial court, rendered after a jury trial, in favor of the plaintiff, the Viejas Band of Kumeyaay Indians (Viejas).¹ On appeal, Lorinsky claims that (1) the court incorrectly concluded that the accidental failure of suit statute, General Statutes § 52-592, permitted Viejas' case to be filed in state court, (2) the evidence was insufficient to support the jury's award of damages and (3) the court improperly denied the defendants' motions for a mistrial and to set aside the verdict. We disagree, and, accordingly, affirm the judgment of the trial court.

The jury reasonably could have found the following facts. Lorinsky was an insurance broker and a representative of First Nations Financial Services, Inc. (First Nations). First Nations was at relevant times a corporation based in Norwich that sold insurance and brokerage services, and Lorinsky was one of its founders and the senior vice president.² Viejas, a federally recognized Indian tribe with more than 330 members, is located in Southern California. Viejas owns a casino, an outlet center and a community bank, among other holdings, and was First Nations' biggest client.

Lorinsky initially was retained by Viejas to procure life insurance coverage for members of the tribe as well as the employees of Viejas' businesses (Viejas employees) in approximately 1995. He later became involved in procuring health insurance for Viejas as well and was selected by the Viejas Tribal Council to be the broker of record on Viejas' health insurance plan in early 2001. As its insurance broker, Lorinsky arranged for life and health insurance³ coverage for Viejas to be provided by The Hartford Life and Accident Insurance Company (The Hartford).⁴ The insurance policies covered both actual tribal members and employees of the tribe's casinos and other businesses under separate policies.

I THE LIFE INSURANCE POLICIES

The Hartford sent Lorinsky a letter dated March 28, 2001, informing him that the premiums on Viejas' group life insurance policies would increase effective May 1 2001. The letter requested that Lorinsky notify Viejas about the new rates, as The Hartford would not be doing so directly. The bills generated by The Hartford for the payment of the life insurance policy premiums were directed to Lorinsky's attention and sent to his office, rather than going directly to Viejas.⁵

The life insurance policy bills were self-administered, meaning that each bill had to be completed by the client. The bills contained the applicable rate, and the client had to fill out the applicable number of employees and dependents during that policy period and multiply that number times the rate provided to calculate the premium amount for each period; the client was then expected to remit payment in that amount to The Hartford. Lorinsky was both the recipient of Viejas' bills from The Hartford and the person who completed them. Once the new rates took effect on May 1, 2001, Lorinsky began altering the bills to make it appear as if the older rates were still in effect before forwarding the invoices to Viejas, who paid The Hartford directly.

On August 16, 2001, Deborah Caul, an account analyst at The Hartford, sent Lorinsky a letter informing him that Viejas' life insurance account showed an underpayment in the amount of $10,480.20 for the months of May through August, 2001, resulting from the May 1 2001 rate change.⁶ This underpayment resulted from Lorinsky's alteration of the bills in an attempt to keep Viejas from paying the rate increase. Caul testified that it appeared that the older bills, containing the original lower rate, had been photocopied and the old dates whited out and new ones written in, making it appear that the lower rates were still in effect.⁷ This happened every month from May, 2001, through January, 2002, where the name of the month and the rate was whited out and the new month was written in, making it appear that the lower rates that had been in effect in April, 2001, were still in effect. The premiums on the policy continued to be underpaid throughout that period.

There was concern about the continued underpayments among employees at The Hartford working on this account in September, 2001, and Caul was advised at that time that she might want to monitor Viejas' next bill to see if the proper amount was paid. There also was discussion in September, 2001, about sending the Viejas account to the collections department.

The Hartford repeatedly contacted Lorinsky about the continued underpayments, including by letter dated October 26, 2001, and Lorinsky was told that October 31, 2001, was the last day for him to contact The Hartford with the money for the rate change and to compensate for the underpayments. On October 31, Lorinsky claimed to Tom Rickis, one of Viejas' account managers at The Hartford, that he had been under the impression that if there were not a large amount of claims, there would be no rate increase, and he alleged that there had not been any claims for the past eighteen months so he did not understand how there would have been a rate increase. The Hartford denied that he was led to believe any of this.

The group life insurance policy was cancelled by The Hartford on November 1, 2001, effective October 1, 2001. In December, 2001, Lorinsky contacted The Hartford and indicated that Viejas wanted its policy to be reinstated and would pay the amounts due on the account. The Hartford determined that Viejas' underpayment of its account from May through November, 2001, totaled $19,168.05,⁸ and after applying Viejas' December payment of $19,461.26 to the underpayment amount, a credit of $293.21 remained, which was applied to Viejas' December bill, leaving it owing a balance of $21,907.50 outstanding for the December premium.

On December 13, 2001, The Hartford sent a letter addressed to Anita Uqualla, tribal treasurer of Viejas, which indicated that it had concluded its review of Viejas' policy for the period May, 2001, through September, 2001, and determined that Viejas had underpaid its premiums in the amount of $13,579.75 for the group life insurance policy. The letter also indicated that The Hartford received payment from Viejas for the October, 2001 premium in the amount of $19,406.56, but because the policy had lapsed as of October 1, 2001, the payment could either be applied to the underpaid premium for the period of May through October, 2001, or be applied to October's receivables after the underpaid premium was received. The Hartford again wrote to Uqualla on February 27, 2002, stating that the full amount of underpayment on the life insurance totaled $25,021.65.

In early 2002, Lorinsky recommended to Viejas that it switch its life insurance from The Hartford to Unum Life Insurance, on the basis of its secured pricing structure that would allow it to maintain the same rates going forward, because he anticipated that The Hartford was going to raise its rates on renewal. As of February 1, 2002, Unum Life Insurance was insuring both the tribal members and the casino employees.

II THE HEALTH INSURANCE POLICIES

In addition to the life insurance policies, Lorinsky also was to procure individual and aggregate stop loss health insurance policies from The Hartford for members of the tribe and Viejas' employees.⁹ On January 11, 2002, Lorinsky was notified by The Hartford that it was missing aggregate stop loss policy payments for the months of December, 2001, and January, 2002, for the tribe's health insurance. On January 11, 2002, Lorinsky notified Viejas' director of finances that its aggregate stop loss policy could be renewed for an annual premium of $25,000, and Viejas issued a check to The Hartford in the amount of $25,000 that day. On January 14, 2002, The Hartford sent Lorinsky a quote for renewal of the aggregate stop loss policy; the annual premium would be $10,500. The Hartford's quote was significantly lower than the $25,000 premium figure that Lorinsky had quoted to Viejas.

The $25,000 check was received by The Hartford on January 17, 2002, and there was confusion as to where it was to be applied; The Hartford was unclear whether it was meant to be applied to the group life insurance program or the aggregate stop loss or the individual stop loss program.¹⁰ Viejas still owed $21,907.50 resulting from the underpayments on the life insurance policies at that point. Lorinsky testified that the money was intended to be applied to the aggregate stop loss balance. Once The Hartford resolved the internal confusion, the money eventually all was applied to the balance due on the life insurance premiums. Payments were still due on the aggregate stop loss insurance policy because there was a shortage on the premium and the rates had not been paid.¹¹ Viejas was under the impression that it had an aggregate stop loss insurance policy in place that covered the Viejas employees as well as an individual stop loss policy; however, on the basis of their underpayments, the aggregate stop loss policy was never properly renewed.

On February 27, 2002, The Hartford advised Lorinsky that Viejas had not yet paid its aggregate stop loss premiums or submitted its December monthly accounting. On March 11 and 20, 2002, The Hartford notified Lorinsky by e-mail that Viejas owed $10,734.90 on its aggregate stop loss policy. The March 20 e-mail stated that The Hartford had cancelled the aggregate stop loss policy as of January 1, 2002, but that the policy could be reinstated if a check for $10,734.90 was sent to The...