2005 Ct. Sup. 12333, 39 CLR 907
No. X04 CV 03 0103508 SConnecticut Superior Court Judicial District of Middlesex Complex Litigation Docket at Middletown
September 8, 2005
MEMORANDUM OF DECISION
ROBERT E. BEACH, JUDGE.
This case is one of several arising from a motor vehicle accident. The driver of one of the cars involved, Ryan Nichols, died in the accident. The administrator of his estate, Dennis Nichols, has brought an action against, among others, State Farm Mutual Automobile Insurance Co. (“State Farm”), his uninsured/underinsured motorist carrier. In the same car were Lee Trahan, who also died, and Jennifer Stover, who was apparently seriously injured but survived. It is apparently not disputed that Nichols lost control of his car.
State Farm has moved for summary judgment. Its claim, essentially, is that the policy has limits of $500,000 for both automobile liability and uninsured/underinsured motorist (“UM”) coverage. It paid a total of $500,000 to Stover and to the estate of Trahan. State Farm argues that the language of the policy, in turn justified by applicable regulations, provides for a reduction of the limits payable by amounts paid under the liability coverage of the policy. Because it has paid an amount under the liability coverage which is equal to the amount of the UM coverage, then, it claims that there can be no further liability under its policy and summary judgment ought to issue in its favor.
For the purpose of this motion, there are no genuine issues of fact. The applicable policy has been submitted, and it is not disputed that a total of $500,000 has been paid for bodily injury under the CT Page 12334 liability coverage. Each of the liability claimants has released Nichols from any further liability in return for the payments from State Farm. The issue is not whether a genuine issue of fact exists but rather whether summary judgment ought to enter in favor of State Farm.
Analysis of the question whether the application of credits for other payments reduces the applicable UM coverage involves two issues: first, whether the claimed credit, or reduction of UM policy limits or payments, is justified by the policy language and second, whether the policy language is authorized by the applicable regulation. Vitti v. Allstate Ins. Co., 245 Conn. 169
(1998); Allstate Ins. Co. v. Lenda, 34 Conn.App. 444, 452-55 (1994). State Farm argues that the policy language is clear and unambiguous, and fully authorized by § 38a-334-6(d)(1)(C) of the Regulations of Connecticut State Agencies. The plaintiff argues that the language of the policy is ambiguous and thus ought to be construed in favor of the insured, because ambiguous language is construed against the drafter and to further the general policy of UM coverage to place the insured in the same position he would have had had the tortfeasor been insured. Although the general principles are well worn, the narrow issues presented in this case do not appear to have been resolved by any binding authority.
It is relatively easy to resolve the second issue, that is, whether language of the regulation permits the claimed reduction. Section 38a-334-6 reads, in relevant part:
Section 38a-334-6. Minimum provisions for protection against uninsured or underinsured motorists.
(d) Limits of liability.
(1) The limit of the insurer’s liability may not be less than the applicable limits for bodily injury liability . . . except that the policy may provide for the reduction of limits to the extent that damages have been
CT Page 12335
(A) paid by or on behalf of any person responsible for the injury, [or] (C) paid under the policy in settlement of a liability claim.
Subsection (A) may well not be applicable in the circumstances of this case, partly because the “person responsible for the injury” has not been fully resolved but mostly because, in context, “the injury” may well refer to the insured’s injury. Subsection (C), however, quite clearly and specifically allows the reduction claimed in this case.
The plaintiff devotes most of his argument to the proposition that the policy language does not clearly and unambiguously provide for the reduction. The policy, at page 17, states that “[a]ny amount payable under this coverage (UM) shall be reduced by any amount: a. paid to or for the insured for bodily injury under the liability coverage . . .” Because it is not disputed that $500,000 was paid to the passengers in the Nichols car under the liability coverage of the policy, the question is whether there is any ambiguity to the application of “bodily injury” and “paid . . . for the insured.” There is no dispute regarding Nichols’ status as an insured.
I find that there is no ambiguity to the term “bodily injury.” The definitions section of the policy defines “bodily injury” as “bodily injury to a person and sickness, disease or death which results from it.” “Person” means “a human being.” The language does not limit “bodily injury” to bodily injury to the insured, and the court should not rewrite the policy. See, e.g. Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.C., 252 Conn. 479, 478 (2000). The plaintiff’s argument that “bodily injury” refers only to the insured is not supported by the language of this policy. Cf Lowrey v. Valley Forge Ins. Co., 224 Conn. 152 (1992), in which the language “this bodily injury” could plausibly be read to refer back to bodily injury incurred by the insured. Further, language in UM policies that allows reductions in UM coverage for payments attributable to “bodily injury” to those other than insureds has been held upheld. See Allstate Ins. Co. v. Lenda,
CT Page 12336 34 Conn.App. 444, 451-56 (1994).
The final issue is whether the payments under the liability coverage of the policy were made “to or for the insured.” Payments were not made to the insured. We then turn to whether the payments were made for the insured, who, of course, is Ryan Nichols in this case. A liability insurance policy is nothing other than a somewhat specialized and highly regulated indemnification contract. Any payment made to a claimant under a liability policy is made “for” the insured. The plaintiff suggests that other meanings of “for” vie for primacy and that an ambiguity thus exists. There may be other meanings, but the possible existence of other meanings which are not inconsistent with an obvious meaning does not render the obvious meaning ambiguous. Because the language is clear and unambiguous, then summary judgment ought to enter in favor of State Farm.
Several observations are in order. The plaintiff argues with some persuasiveness that the whole idea of UM insurance is to place the insured in the same position that he would have been in had the tortfeasor been insured. A possible result of this decision is that the insured is in fact not in such position. Such policy consideration does not vitiate this decision, however, because:
(1) In the circumstances of this case, it is not at all apparent how the liability situation will be resolved. It is indeed the tragic circumstances of this case that create the legal issues. I of course am not considering for the purpose of the decision who might be liable for the accident, and, to the extent that it matters, I am assuming that there are one or more other tortfeasors. But in the course of time it may turn out that there is no inequity in fact from anyone’s point of view.
(2) Public policy is decided in the first instance by the legislature. The General Assembly has delegated to the insurance commissioner the responsibility to promulgate regulations authorizing deductions from UM coverage. See § 38a-334 of the General Statutes. We look to the language of the statute and the regulations for CT Page 12337 the public policy. Ordinarily, if the clear language of the regulations authorizes a deduction, then that is the expressed public policy of the state. See Vitti supra,
180-85; Lenda, supra; see also Berk and Jainchill Connecticut Law of Uninsured and Underinsured Motorist Coverage, (2d Ed. 2002) § 6.4 at 391 (the issue presented has not been decided by appellate authority and competing policies are at stake: not to be entirely forgotten is the interest of having known, predictable and clearly stated policy limits). Although the general policy urged by the plaintiff is well recognized, the policy is rife with exceptions which have been recognized and upheld by the courts. See, e.g., Vitti, supra, 187 (“[W]e are not persuaded that the insured’s recovery from the insurer must always be identical to that which could be obtained from an adequately insured tortfeasor . . .”).
(3) A very similar issue was addressed and resolved in favor of the insurer in Cochran v. U.S.F.G., 1993 Ct.Super. 1397, 8 CSCR (1993) (Allen. J.).
(4) In some circumstances, there may be an obligation of the insurer to consider the interest of the insured in making payments under the policy. When claimants compete for proceeds of a liability policy which may not be large enough adequately to compensate competing claimants, insurers may undertake to apportion payments in an equitable manner, through interpleader or some other manner. In this case, for example, Stover and the estate of Trahan reportedly arbitrated the question of how the $500,000 policy limit should be allocated between them. It may be appropriate to include the insured in such efforts, where fault for an accident is in doubt and the policy provides for reduction of UM benefits by the amount paid under the liability coverage. In some circumstances such action could perhaps be compelled by a consideration of an implied covenant of good faith and fair dealing. This issue was not presented to me in this case and I don’t decide it.
The motion for summary judgment (#127) is granted and judgment shall enter in favor of State Farm.
Beach, J. CT Page 12338
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