Lisa Pacowta v. AIG (2012)

MEMORANDUM OF DECISION

The plaintiff Lisa Pacowta was a front seat passenger in a motor vehicle owned and operated by Eric Soltis and was insured by AIG Insurance Company.   The plaintiff sustained personal injuries when the vehicle in which she was a passenger was involved in a motor vehicle accident with a vehicle operated by a Carlton Watson and owned by Edwin Lopez and which was insured by Safeco Insurance Company.   The vehicle operated by Mr. Watson maintained a minimum policy of insurance in the amount of $20,000.00 per person and $40,000.00 per accident.   There were multiple claimants to this policy and the plaintiff was paid the sum of $15,000.00 from Safeco.   It is agreed that the insurance provided by Safeco was exhausted by payments made to the multiple claimants.   Soltis's vehicle which was insured by AIG Insurance Co. maintained with uninsured motorists coverage $100,000.00 per person and $300,000.00 per accident.   The plaintiff Lisa Pacowta was paid $80,000.00 from the AIG policy's underinsured motorists coverage.   The plaintiff was also a named insured under a third policy insurance issued by the defendant, The Travelers Insurance Company which maintained a policy which provided underinsured motorists conversion coverage with limits of $300,000.00.

The defendant Travelers, admits liability and also admits that the plaintiff exhausted the coverage on the vehicle operated by Mr. Watson.   Travelers however claims that the plaintiff has not exhausted the primary underinsured motorists policy on the Soltis's vehicle because she accepted only $80,000.00 of the $100,000.00 maximum coverage.   The plaintiff contends that she is not required to exhaust the limits of coverage under the underinsured motorists coverage condition precedent to making a claim against Travelers.

Both parties have cited numerous cases of which do not direct the court to decide this particular case.   See Aetna Casualty & Surety Co. v. CNA Ins. Co., 221 Conn. 779 (1992);  Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443 (1976);  Young v. Metropolitan Property and Casualty Co., 60 Conn.App. 107 (2000);  and Englehardt v. New Hampshire Insurance Group, 36 Conn.Sup. 256 (1980).   Under the insuring agreements issued in the Travelers policy to provide coverage as follows:

“We will pay damages under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies—have been exhausted by payment of judgments or settlements.”  (Emphasis supplied.)

Under the other insurance provisions contained in the policy of insurance issued by Travelers, the policy states:

“If there is other applicable similar insurance available under one or more policies or provisions of coverage:

B 2 while “occupying” a vehicle not owned by that “insured, or while not occupying any vehicle the following priorities of recovery apply:

FIRST The uninsured/underinsured motorists coverage applicable to the vehicle the insured was occupying at the time of the accident.

SECOND Any policy affording uninsured/underinsured motorists coverage to the “insured” as a named insured.

General Statutes § 38a–336(d) also provides in relevant part:

If a person insured for uninsured and underinsured motorists coverage is an occupant of a non-owned vehicle covered by a policy also providing uninsured and underinsured motorist coverage, the coverage of the occupied vehicle shall be primary and any coverage for which such person is a named insured shall be secondary.

While it is agreed that the coverage was exhausted for the tortfeasor's policy is also apparent that the AIG policy covering the occupied vehicle was not exhausted because it was settled for less than the policy limit.   It is clear that the policy of insurance issued by Travelers requires exhaustion before their coverage becomes available under the provisions of the policy which provides that it “will pay damages ․ only after the limits ․ have been exhausted.”

The plaintiff points out that General Statutes § 38a–336a(c) provides that “if the insured purchases such underinsured motorists conversion coverage, then in no event shall the underinsured motorists coverage be reduced on account of any payment by or on behalf of the tortfeasor or by a third party.”   The issue presented in the present case however, does not involve a reduction in coverage but rather exhaustion of other insurance.   Accordingly since the Travelers policy requires exhaustion judgment is entered in favor of Travelers.

RUSH, J.T.R.

Rush, William B., J.T.R.