Lauren Renaldi v. Geico Insurance Company (2011)

MEMORANDUM OF DECISION RE MOTIONS FOR SUMMARY JUDGMENT (NOS. 108 AND 110)

The plaintiffs and the defendant have filed cross motions for summary judgment on the issue of how much underinsured motorist (UIM) coverage is available after the reduction in the coverage limits on account of payments from the tortfeasors' insurance policy.   Each of the insurance policies before the court are split limits policies—policies that have separate but related coverage limits on a per person and per occurrence basis.   The resolution of this issue necessarily involves a review of the policy language in question, applicable insurance department regulations and consideration of the policy considerations underlying the provision of underinsured motorist coverage and principles of insurance policy interpretation.

FACTS

This underinsured motorist action arises out of a car accident between a car occupied by the plaintiffs, Lauren Renaldi and Mary Renaldi, and a car occupied by a third party.¹  As a result of the accident, the plaintiffs suffered personal injuries.   The third party was insured by Liberty Mutual Insurance Company.   The third party's liability coverage under that insurance contract was limited to $100,000 per person and $300,000 per accident.   Liberty Mutual paid the plaintiff's $100,000 each, thereby exhausting the available per person liability coverage under the third party's insurance policy.

At the time of the accident, the plaintiffs were covered under an insurance policy with the defendant in this action, Geico General Insurance Company.   The plaintiff's sought recovery under the underinsured motorist provision of their insurance policy.   The split limits on the policy are $300,000 per person, and $300,000 per accident.

The underinsured motorist coverage of the plaintiff's insurance policy provides, in relevant part:  “Under this coverage, we will pay damages for bodily injury caused by accident which the insured is legally entitled to recover from the owner or operator of an ․ underinsured motor vehicle ․ arising out of the ownership, maintenance or use of that motor vehicle.”   (Emphasis omitted.)  (Def. Mot. for summary judgment, Ex. D, 18.)   Under that section, the limit of liability provides:  “The limit of liability stated in the declarations applicable to ‘each accident’ is, subject to the above provision respecting each person, the total limit of our liability for all such damages, including damages for care and loss of services, because of bodily injury sustained by two or more persons as the result of one accident.”   (Emphasis omitted.)  Id. The contract further limits the amount of recovery:  “The amount payable under this coverage will be reduced by all amounts:  (a) paid by or for all persons or organizations liable for the injury;  ․” Id., 19.

The plaintiff sought a total amount of $300,000 from the defendant.   The defendant informed them that only $100,000 was available under the underinsured motorist provision of their insurance policy.   This suit ensued.   The plaintiffs and defendant filed cross motions for summary judgment on March 8, 2011, and March 15, 2011, respectively.   The plaintiff's filed an objection to the defendant's motion for summary judgment on March 23, 2011.   The court heard the matter at short calendar on April 4, 2011.

ANALYSIS

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).

The plaintiffs argue that $300,000 is available to them under the underinsured motorist coverage of the policy.   They argue that the $100,000 they have each received from the tortfeasor's insurer should be counted against their individual limit of $300,000 under their underinsured motorist policy.   Reducing that $300,000 per person limit by $100,000 leaves an additional $200,000 each.   That amount totals $400,000.   They concede that their total recovery under the policy is capped at $300,000 per accident under the policy, so they seek the full $300,000.   They further argue that R.C.S.A. § 38a–334–6(d) restrains the limits on coverage the defendant can place on its underinsured motorist policy.²  The plaintiffs further argue that under the defendant's interpretation of the policy language the defendants are taking an impermissible double deduction for the amounts recovered from the tortfeasor.

The defendant argues that $100,000 is available to the plaintiffs under their underinsured motorist coverage.   The defendant argues that since both plaintiff's suffered injury in the same accident, the total amount payable under their underinsured motorist policy is $300,000.   The defendant argues that it is entitled to reduce that amount by the $200,000 already paid to the plaintiffs under the tortfeasor's insurance policy.   That leaves $100,000.

The defendants argue that reduction is provided for in the policy and is allowed under R.C.S.A. § 38a–334–6(d).

“An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract ․ In accordance with those principles, [t]he determinative question is the intent of the parties, that is, what coverage the ․ [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy ․ If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning ․ Under those circumstances, the policy is to be given effect according to its terms ․ When interpreting [an insurance policy], we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result ․

“In determining whether the terms of an insurance policy are clear and unambiguous, [a] court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity ․ Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms ․ As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading ․ Under those circumstances, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy ․ This rule of construction may not be applied, however, unless the policy terms are indeed ambiguous.”  (Internal quotation marks omitted.)  National Grange Mutual Ins. Co. v. Santaniello, 290 Conn. 81, 88–89, 961 A.2d 387 (2009).

The parties both agree that underinsured motorist coverage is available to the plaintiffs, but differ as to the reduction as a result of the payments the plaintiffs already received.   Split limit policies, even if the coverages under each limit are equal require the court to review the respective limits in conjunction with each other.   A comparison of the per person limits in the policies in question establish that the plaintiffs are entitled to make a UIM claim under their policy.   This is so even though the per occurrence limits coverage in these policies are of equal value.   The per occurrence limits comes into consideration only when there is more than one claimant.   These split coverages are necessarily read in conjunction with each other when there are two claimants.

The provision in the contract in question provides:  “The amount payable under this coverage will be reduced by all amounts ․ paid by or for all persons or organizations liable for the injury.”   The contract does not define the term “amount payable” as used in that section.   The plaintiff argues that the “amount payable” is the per person amount, while the defendant argues that the “amount payable” is per accident amount.

The defendant's interpretation is in line with the plain language of the contract.   The plain language is not ambiguous.  “It is a fundamental principle of insurance policy interpretation that the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.”  (Internal quotation marks omitted.)  Jacaruso v. Lebski, 118 Conn.App. 216, 223, 983 A.2d 45 (2009).   The coverage limits under the plaintiff's policy are $300,000 per person and $300,000 per accident.   The “amount payable” under the policy is therefore $300,000 because both of the plaintiff's injuries arise out of a single accident.   Under the policy, that amount is reduced by amounts “paid by or for all persons ․ liable for the injury.”   In this case, the plaintiff's received $200,000 from the tortfeasor's insurer.   The amount of underinsured motorist coverage available to the plaintiffs, therefore, is $100,000.   That figure represents the $300,000 amount payable under the contract, reduced by $200,000 paid to the plaintiffs on behalf of the person liable for the injury.

The plaintiff relies on language from the Supreme Court's holding in Doyle v. Metropolitan Property & Casualty Ins. Co., 252 Conn. 79, 89, 743 A.2d 156 (2000), indicating that a split-limit policy provides greater coverage for the insured than a single-limit policy.   In Doyle, the Supreme Court ruled that “the function of the plaintiff's split underinsured motorist coverage of $100,000 per person and $300,000 per accident is to provide broader coverage for the situation involving multiple claimants.”  Id. In that case, the split-limit policy in question provided $100,000 in coverage per person and $300,000 per accident.  Id., 83.   There, the split-limit policy did provide greater coverage for a single accident involving injures to multiple people.   Here, however, the plaintiffs' policy provides $300,000 in coverage per person and $300,000 per accident.   In this case, the split-limit policy provides less coverage for a single accident involving injures to multiple people.   The court's language in Doyle is therefore unhelpful in this case.

Furthermore, the defendant's interpretation of the underinsured motorist provision comports with the policy underlying underinsured motorist coverage.   “The purpose of underinsured motorist coverage is to protect the named insured and other additional insureds from suffering an inadequately compensated injury caused by an accident with an inadequately insured automobile ․ It has also been stated that the purpose of underinsured motorist insurance is to place the insured in the same position as, but no better position than, the insured would have been had the underinsured tortfeasor been fully insured ․ [U]nderinsured motorist protection is not intended to provide a greater recovery than would have been available from the tortfeasor.”  (Emphasis in original;  citations omitted;  internal quotation marks omitted.)  Fahey v. Safeco Ins. Co. of America, 49 Conn.App. 306, 309–10, 714 A.2d 686 (1998).

Here, if the tortfeasor had carried liability insurance equal to the plaintiffs' underinsured motorist coverage, there would be no UIM claim and the tortfeasor's policy would have made $300,000 in total coverage available to the plaintiffs because both plaintiffs' injuries arose out of a single accident.   If the tortfeasor was not insured at the time of this accident, the plaintiffs would be entitled to recover a total of $300,000 under their UIM coverage.   Under the plaintiffs' proposed interpretation of the policy language, they would be entitled to recover a total of $500,000—$200,000 from the tortfeasor and $300,000 from the defendant's UIM coverage.   That amount would put the plaintiffs in a decidedly better position than if the tortfeasor had carried liability coverage equal to the plaintiffs' underinsured motorist coverage:  $300,000 per person and $300,000 per accident.   Further such an interpretation would in effect deny the defendant of any credit for the sums paid by the tortfeasor.   Such a result would be against the public policy of underinsured motorist coverage.

Finally, the court's interpretation of the policy is consistent with the regulation cited by the plaintiffs, § 38a–334–6(d) of the Regulations of Connecticut State Agencies,.  The regulation provides, in relevant part, that an underinsured motorist policy “may provide for the reduction of limits to the extent that damages have been ․ paid by or on behalf of any person responsible for the injury.”   The policy in question in this case does exactly that:  it allows for the reduction in the amount due to the plaintiffs by the amount they have already received from the tortfeasor's insurer.   The plaintiff argues that “Section 38a–334–6(d)(1)(A) only permits a reduction of [the] [d]efendant's [underinsured motorist] per person coverage for third party liability payments to its insured.”  (Internal quotation marks omitted.)  (Pl. Obj. to Def.'s Mot. for summary judgment, 3, March 23, 2011.)   The regulation does not say that.   It says that the policy “may provide for the reduction of limits.”   The plaintiff does not cite any case law to support its proposition that the regulation only allows policies to provide for reductions to their per person limit and not the per accident limit.   As discussed above, the defendant's interpretation comports with the plain language of the contract and furthers the policy purpose of underinsured motorist coverage.   Nothing in the regulation affects that conclusion.

CONCLUSION

For the above reasons, the plaintiffs' motion for summary judgment is denied.   The defendant's motion for summary judgment is granted.   The underinsured motorist policy in this case allows the defendant to reduce the amount payable under the underinsured motorist coverage by the amount paid to the insured by a person responsible for the insured's injuries.   In this case, the amount payable under that coverage is $300,000, and the tortfeasor's insurer has paid the plaintiff's $200,000.   The available underinsured motorist coverage therefore affords an additional $100,000 of coverage to the plaintiffs based upon the undisputed facts in this case.

Cosgrove, J.

FOOTNOTES

FN1. Except where otherwise noted, these facts are taken from the plaintiff's complaint.   The parties agree for the purposes of this motion that there are no genuine issues of material fact..  FN1. Except where otherwise noted, these facts are taken from the plaintiff's complaint.   The parties agree for the purposes of this motion that there are no genuine issues of material fact.

FN2. R.C.S.A. § 38a–334–6(d) provides:  “Limits of liability. (1) the limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of Section 14–112 of the general statues, except that the policy may provide for the reduction of limits to the extent that damages have been(A) paid by or on behalf of any person responsible for the injury,(B) paid or are payable under any workers' compensation law, or(C) paid under the policy in settlement of a liability claim.(2) The policy may also provide that any direct indemnity for medical expense paid or payable under the policy will reduce the damages which the insured may recover under this coverage.(3) Any payment under these coverages shall reduce the company's obligation under the bodily injury liability coverage to the extent of the payment.(4) This subsection shall not apply to underinsured motorist conversion coverage exception that no payment under a policy providing underinsured motorist conversion coverage shall duplicate payment from any other source..  FN2. R.C.S.A. § 38a–334–6(d) provides:  “Limits of liability. (1) the limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of Section 14–112 of the general statues, except that the policy may provide for the reduction of limits to the extent that damages have been(A) paid by or on behalf of any person responsible for the injury,(B) paid or are payable under any workers' compensation law, or(C) paid under the policy in settlement of a liability claim.(2) The policy may also provide that any direct indemnity for medical expense paid or payable under the policy will reduce the damages which the insured may recover under this coverage.(3) Any payment under these coverages shall reduce the company's obligation under the bodily injury liability coverage to the extent of the payment.(4) This subsection shall not apply to underinsured motorist conversion coverage exception that no payment under a policy providing underinsured motorist conversion coverage shall duplicate payment from any other source.

Cosgrove, Emmet L., J.