Wentland v. American Equity Ins. Co.

• Citation: 267 Conn. 592,840 A.2d 1158
• Decision Date: 17 February 2004
• Docket Number: (SC 16802).
• Court: Supreme Court of Connecticut
• Parties: RUSSELL WENTLAND ET AL. v. AMERICAN EQUITY INSURANCE COMPANY KIMBERLY BLEAU v. AMERICAN EQUITY INSURANCE COMPANY AMANDA KISZKA v. AMERICAN EQUITY INSURANCE COMPANY

267 Conn. 592

840 A.2d 1158

RUSSELL WENTLAND ET AL. v. AMERICAN EQUITY INSURANCE COMPANY

KIMBERLY BLEAU v. AMERICAN EQUITY INSURANCE COMPANY

AMANDA KISZKA v. AMERICAN EQUITY INSURANCE COMPANY

(SC 16802).

Supreme Court of Connecticut.

Argued October 28, 2003.

Officially released February 17, 2004.

Sullivan, C. J., and Borden, Palmer, Vertefeuille and Zarella, Js. Michael S. Taylor, with whom were Wesley W. Horton and, on the brief, Andrea Merkle, certified legal intern, for the appellants (plaintiffs).

Daniel P. Scapellati, with whom was James V. Somers, for the appellee (defendant).

Opinion

BORDEN J.

The dispositive issue in this appeal is whether the defendant insurer had a duty to defend certain actions brought against its insureds alleging injuries resulting from the insureds' service of alcohol, where the insurance policy contained a clause excluding claims for which the insureds may be liable by reason of "causing or contributing to the intoxication of any person . . . ." The plaintiffs appeal¹ from the judgments of the trial court, granting the defendant's motions for summary judgment and denying the plaintiffs' cross motions for summary judgment. The plaintiffs claim that the trial court improperly granted the defendant's motions for summary judgment because the underlying complaints did not allege that the injuries resulted from "intoxication," but merely from the "consumption of alcohol," thereby falling outside of the policy's liquor liability exclusion. We reverse the judgments of the trial court. The plaintiffs, Kimberly Bleau, Amanda Kiszka, and Russell Wentland, the administrator of the estate of the decedent, Marci L. Wentland,² who are assignees of the insureds of the defendant, American Equity Insurance Company, brought these consolidated actions against the defendant for breach of its duty to defend and to indemnify its insureds, and accordingly, for declaratory judgments that the defendant had a duty to defend and to indemnify. The defendant moved for summary judgment, claiming that it had no duty to defend any of the actions. The plaintiffs also moved for summary judgment, claiming the contrary. The trial court granted the defendant's motions, denied the plaintiffs' motions, and rendered judgments for the defendant accordingly.

The procedural history of these cases is as follows. The plaintiffs each brought a separate action, which were later consolidated, against Seneco Corporation and Antonio Senese³ (Seneco), for damages sustained as a result of an automobile accident. The complaints alleged, among other things, that Seneco negligently had furnished alcohol to the driver of an automobile, who was less than twenty-one years of age. Seneco notified its insurer, the defendant, of the claim, but the defendant refused to defend the action on the basis of a liquor liability exclusion in Seneco's policy. Subsequently, the parties stipulated to a judgment in favor of the plaintiffs, whereby it was agreed that satisfaction of that judgment would be sought against the defendant.

The plaintiffs then each commenced a separate action, which were also later consolidated, against the defendant, claiming that the defendant had breached its duties to defend and to indemnify Seneco. The parties filed cross motions for summary judgment; the plaintiffs claimed that the defendant had breached its duty to defend and, consequently, its duty to indemnify, and the defendant claimed, to the contrary, that it had no duty to defend the underlying actions. On the basis of the liquor liability exclusion in Seneco's policy, the trial court held that the defendant had no duty to defend. Accordingly, the trial court granted the defendant's motions, denied the plaintiffs' motions, and rendered judgments for the defendant.

For the purposes of this appeal, the following facts, as alleged in the plaintiffs' complaints, are undisputed. On March 15, 1997, Bleau, Darlene Rodriguez and the decedent, who were all less than twenty-one years of age, went to a bar called "The Stadium" in Bristol. The Stadium, which was owned by Seneco, consisted essentially of two areas: a regular bar area where adult patrons could purchase alcoholic beverages; and a "juice bar" for patrons less than twenty-one years of age. In addition, The Stadium contained several common areas, including a dance floor and a billiards room, which were used by both adult and minor patrons. Adults who intended to purchase alcoholic beverages were required to wear paper wristbands to distinguish them from minors.

While at The Stadium that evening, Rodriguez consumed alcoholic beverages that had been provided to her by adult patrons of the bar. Subsequently, as Rodriguez was driving home during the early morning hours of March 16, 1997, with Bleau and the decedent as passengers, she lost control of her vehicle and collided head-on with a vehicle operated by Kiszka. As a result of the collision, Bleau, Kiszka and the decedent were injured, with the decedent's injuries being fatal.

Bleau, Kiszka, and Wentland, as administrator of the decedent's estate, each brought a separate action against Seneco, claiming, among other things, that Seneco was negligent because it had failed to prevent Rodriguez from consuming alcohol.⁴ The complaints, which were alike in all material respects, alleged that Rodriquez had lost control of her vehicle as a result of her "consumption of alcohol" at The Stadium.⁵

Following the commencement of the underlying actions, Seneco forwarded copies of the complaints to the defendant, requesting a defense under its commercial general liability insurance coverage. Seneco's insurance policy provided that the defendant "will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury' or `property damage'. . . [and] defend any `suit' seeking those damages." The defendant, however, refused to defend Seneco because of a liquor liability exclusion in Seneco's policy. That exclusion provided in relevant part: "This insurance does not apply to . . . `[b]odily injury' or `property damage' for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages."

Subsequently, the trial court, Shortall, J., approved stipulated judgments in favor of the plaintiffs against Seneco.⁶ The stipulations released all claims against Seneco, providing that satisfaction of the judgments would be sought only against the defendant. In addition, Seneco assigned to the plaintiffs all the tort and contract rights that it may have had against the defendant.

Following Seneco's declaration of bankruptcy, the plaintiffs each brought a separate action against the defendant, which subsequently were consolidated. The matter was subsequently heard on cross motions for summary judgment. The defendant argued that it had no duty to defend because the alleged negligent acts were not covered by Seneco's policy. According to the defendant, the "unambiguous language" of the policy's liquor liability exclusion barred "coverage for incidents related to Seneco's sale or service of alcohol." The plaintiffs argued, to the contrary, that the allegations in the complaints fell outside the exclusion, particularly their claim that Seneco had failed to warn the minors of the consequences of accepting alcohol. The trial court, Berger, J., denied the plaintiffs' motions for summary judgment, granted the defendant's motion for summary judgment, and rendered judgments in favor of the defendant. Additional facts will be presented as necessary.

On appeal to this court, the plaintiffs claim that the trial court improperly granted the defendant's motion for summary judgment because the allegations in the complaints fell outside of the liquor liability exclusion. Specifically, the plaintiffs argue that the language "[c]ausing or contributing to the intoxication of any person," which was contained in the exclusion, encompasses something more than merely being under the influence of alcohol, and operates to preclude coverage only if the injuries resulted from a person's "intoxication," not merely a person's "consumption of alcohol." In that regard, the plaintiffs contend, because the complaints alleged that the plaintiffs' injuries resulted from Rodriguez' "consumption of alcohol," as opposed to her "intoxication," the language of the exclusion did not operate to bar the duty to defend, and the defendant, therefore, breached its duty to defend the insureds in the present case.⁷ The defendant argues for a broader reading of the exclusion, namely, that the exclusion operates to preclude the duty to defend for any claims related to the insureds' sale or service of alcohol. In that regard, the defendant claims that it did not have a duty to defend the insureds because all of the plaintiffs' underlying claims were dependent upon the insureds' sale or service of alcohol. We agree with the plaintiffs, but we remand the case for consideration of other issues discussed herein.

Construction of a policy of insurance presents a question of law, over which our review is de novo. Security Ins. Co. of Hartford v. Lumbermens Mutual Casualty Co., 264 Conn. 688, 700-701, 826 A.2d 107 (2003). "It is beyond dispute that an insurer's duty to defend, being much broader in scope and application than its duty to indemnify, is determined by reference to the allegations contained in the complaint. . . . The obligation of the insurer to defend does not depend on whether the injured party will successfully maintain a cause of action against the insured but on whether he has, in his complaint, stated facts [that] bring the injury within the coverage." (Citation omitted; internal quotation marks...