Robert W. Gatti v. Mary E. Foran–Knell et al. (2011)

MEMORANDUM OF DECISION ON CROSS MOTIONS FOR SUMMARY JUDGMENT

FACTS AND PROCEDURE:

On September 28, 2007 the plaintiff was operating a motorcycle owned by his employer, the intervening plaintiff, Glastonbury Cycle Center, Inc., (hereinafter “Glastonbury Cycle”) when he was struck by a vehicle operated by co-defendant, Mary E. Foran–Knell (also known as the “tortfeasor”).   Plaintiff claims significant injuries, including medical expenses of $38,917.06.   The plaintiff learned that the tortfeasor had motor-vehicle coverage with limits of only $100,000/$300,000 and has, therefore, asserted a claim for underinsured motorist benefits against his employer's insurer, Universal Underwriters Insurance Company, (hereinafter “Universal”).

Universal filed a motion for summary judgment dated April 12, 2011 claiming that the tortfeasor's vehicle is not an “underinsured motor-vehicle” under C.G.S. § 38a–336(d).  Universal relies on an Election of Coverage Form executed by one of Glastonbury's Cycles owners, Gary Moir, on October 31, 2006.   Actually there are two forms.   The first form elects to double coverage for both Moir and his partner and co-owner Bruce Berner to a total of $600,000 in Um/Uim coverage, but the second form reduces all Glastonbury Cycle employee Um/Uim coverage to $20,000/$40,000.   Universal's bodily injury limit is $300,000, thereby reducing the employee's coverage to an amount lower than the policy's liability limits.   The plaintiff was an employee of Glastonbury Cycle at the time of the accident.

The plaintiff filed a motion for summary judgment dated April 25, 2011 claiming in essence that the election to reduce the Um/Uim coverage for employees is illegal in that it did not comply with the requirements of C.G.S. § 38a–336(a)(2).   The claim by the plaintiff is that the form does not place the insured on notice that it is choosing not to purchase valuable insurance;  nor does the form provide an explanation of uninsured and underinsured motorist insurance approved by the insurance commissioner.   Claiming that the form is not effective, the plaintiff wants this Court to order uninsured/underinsured motorist benefits equal to its liability coverage in the amount of $300,000.

The parties filed briefs, and the hearing was held before this Court at short calendar on May 16, 2011.

STANDARD OF REVIEW:

“A trial court may appropriately render summary judgment when the documents submitted demonstrate that there is no genuine issue of material fact remaining between the parties and that the moving party is entitled to judgment as a matter of law.”  Burns v. Hartford Hospital, 192 Conn. 451, 455, 472 A.2d 257 (1984);  Bartha v. Waterbury House Wrecking Co., 190 Conn. 8, 11, 459 A.2d 115 (1983).

A party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact.  Dougherty v. Graham, 161 Conn. 248, 250, 287 A.2d 381 (1971).   To satisfy this burden, the movant must make a showing that it is quite clear what the truth is and that there is no doubt as to the existence of a genuine issue of material fact.  Plouffe v. New York, N.H. & H.R. Co., 160 Conn. 482, 488, 280 A.2d 359 (1971).   The test that has been stated is:  “In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorably to the nonmoving party ․ The test is whether a party would be entitled to a directed verdict on the same facts.”  (Internal quotation marks omitted.)  Cummings & Lockwood v. Gray, 26 Conn.App. 293, 296–97, 600 A.2d 1040 (1991).

ISSUES AND FINDINGS:

Both sides having filed a motion for summary judgment and none claiming an issue of fact, the Court finds that there are no issues of fact, and it falls to the Court to interpret the law as it applies to the facts conceded by both parties.

1. Is Universal Exempt from the Requirements of C.G.S. § 38a–336?

The short answer is Yes.

The Court has reviewed the policy for Glastonbury Cycle which is a dealership that sells and services motorcycles and other vehicles.   In addition to motorcycles the policy covers private passenger vehicles, new trucks, used private passenger vehicles, used trucks, farm tractors, service automobiles, customers' automobiles etc., as shown on page 1–c of the policy.   The Court finds that the policy is a fleet insurance policy because it is an insurance policy covering a number of vehicles owned by a business, governmental entity, or an institution.   See Frantz v. United States Fleet Leasing, Inc., 245 Conn. 727, 729 n.3 (1998).  Frantz, supra, held that a company covered under a commercial fleet policy does not fall within the class of consumers that the legislature sought to protect in enacting C.G.S. § 38a–336.   That court stated that “․ commercial fleet insurance gives rise to a significantly different set of expectations and considerations than personal automobile insurance” and concluded by stating that “ ․ the legislature did not intend to require the written consent of all named insureds on a commercial fleet policy as a necessary prerequisite to a reduction in coverage.”  Id. 739, 741.

“Generally, a garage policy is designed to protect automobile dealers, garage keepers, and owners of auto service stations against loss by reason of injury to other property or persons by the use of their autos.   Such policies are designed to care for the specialized needs of the particular operation.”   State Farm Mutual Insurance Co., v. Royal Insurance Co., 222 Neb. 13, 382 N.W.2d 2, 6 (1986).

The case of McDonald v. National Union Fire Ins. Co., of Pittsburgh, PA. 79 Conn.App. 800 (2003) is instructive.  “The purpose of § 38a–336(a)(2) ․ is to facilitate consumers' decision-making process and to ensure that they give informed consent to reduce coverage.   We do not believe that a company ․ which insures a fleet of vehicles to carry on a large commercial enterprise ․ falls within the class of consumers that the legislature sought to protect when it mandated the [disclosures] ․ under § 38a–336(a)(2).   Consequently, the fact that the informed consent form in the present case did not [meet statutory requirements] does not defeat the election ․ to reduce its underinsured motorist coverage limits to $20,000.”  Id. 807.   This Court notes that McDonald, supra, was decided after the amendment was enacted providing for the current election form.

Accordingly, this Court finds that Universal is exempt from the provisions of C.G.S. § 38–336(a)(2), the policy being a fleet coverage policy.

2. Assuming Arguendo that C.G.S. § 38a–336(a)(2) Does Apply, Was the Form Reducing Employees Underinsured Motorist Coverage to $20,000/$40,000 Adequately Filled Out and Completed?

The short answer is Yes.

The Court has reviewed the transcript submitted by the plaintiff of the deposition of Mr. Moir. This transcript reveals that Mr. Moir may not have understood all the provisions of the election form but he did rely on the counsel of his insurance agent.   Mr. Moir adequately described that he was counseled on reducing the underinsurance benefits for his employees.   He was advised that he would be able to reduce his premium costs.   Moir knowingly acted on this advice.   See Danis v. Saucier et al., CV 03–0519579–S judicial district of New Britain at New Britain, October 27, 2004, 2004 Conn.Super. LEXIS 3139, Cohn, J. [38 Conn. L. Rptr. 177].

CONCLUSION:

This Court concludes that Universal is entitled to an exemption from C.G.S. § 38a–336(a)(2) because it is a fleet policy, and even if it were not so entitled, the co-owner of Glastonbury Cycle signed it and understood it based upon the counsel of his insurance agent.   This is sufficient to conclude that the change to $20,000/$40,000 underinsured motorist coverage for the plaintiff is valid.

Since the tortfeasor's policy exceeds the $20,000/$40,000 policy limit for underinsured motorist coverage of the subject policy, Universal is not obligated to pay underinsured motorist coverage to the plaintiff.

Accordingly, the motion for summary judgment filed by Universal is granted, and the motion for summary judgment filed by the plaintiff is denied.

Rittenband, JTR

Rittenband, Richard M., J.T.R.