Cynthia Lula v. Andrew Dixon et al. (2013)

MEMORANDUM OF DECISION RE DEFENDANT INVESTMENT CAPITAL PARTNERS LTD.'S MOTION FOR SUMMARY JUDGMENT WITH RESPECT [TO] DEFENDANT'S CROSS CLAIM (No. 143)

The principal question presented by the Motion For Summary Judgment now before the Court is whether a cross claim defendant, Andrew Dixon, has a contractual duty to defend the cross claim plaintiff, Investment Capital Partners, Ltd. (“Investment Capital”), in the underlying action.   For the reasons set forth below, the answer to this question is Yes.

The underlying action is a slip-and-fall case brought by the first-party plaintiff, Cynthia Lula, against Dixon, Investment Capital, and a third defendant not involved in this motion.   Lula alleges in her Amended Complaint that on February 9, 2009, she fell on snow and ice “on the premises known as 78 Rebeschi Drive, North Haven.”   The First Count of her Amended Complaint is directed against Dixon, who she claims owned, possessed, and maintained the premises.   The Second Count is against Investment Capital, who she also claims owned, possessed, and maintained the premises.

Investment Capital subsequently filed a cross claim against Dixon.   The cross claim consists of three counts.   The First Count alleges that Lula's injuries were caused by the “active and primary negligence” of Dixon.   The Second Count alleges that Dixon has contractually agreed to defend and indemnify Investment Capital.   The Third Count alleges that Dixon contractually agreed to provide insurance coverage for Investment Capital.

On March 14, Investment Capital filed the Motion For Summary Judgment now before the Court.   The Motion is directed to Investment Capital's cross claim against Dixon.   It proceeds on two grounds.   First, the Motion argues that Investment Capital “did not have possession and control over the area where the plaintiff claims to have sustained her alleged injuries.”   Second, the Motion argues that Dixon has contractually agreed to defend and indemnify Investment Capital.  (The Third Count of the cross claim is not mentioned.)   The Motion was argued on July 1, 2013.

Investment Capital's initial argument, that it did not have possession and control of the premises, is the subject of much conflicting factual evidence submitted by the parties with respect to the exact location of Lula's fall.   The Court cannot find that there is no genuine issue as to any material fact as to this locational issue, and the Motion cannot succeed on this ground.

Investment Capital's second argument arises from a written contract, entitled “Management Agreement” (“Agreement”), signed by the parties on April 11, 2009 and submitted by Investment Capital with its Motion.   Two provisions of the Agreement are of particular significance here.

In § 1 of the Agreement, Dixon employs Investment Capital “to manage the property (hereinafter called the ‘Premises') known as 78–98 Rebeschi Drive upon the terms and conditions hereinafter set forth, for a term of one (1) year beginning on the 1st day of February 2009, and ending on the 31st day of January 2010.”

In § 4(1) of the Agreement, Dixon agrees “[t]o indemnify, defend and save [Investment Capital] harmless from all suits in connection with the Premises and from liability for damage to property and injuries to or death of any employee or other person whomsoever.”

Investment Capital's Motion claims the right to both indemnification and defense under § 4(1).   At argument, however, Investment Capital conceded that its claim for indemnification was premature.   Its right to indemnification will exist only if and when liability is found.   At this point in the litigation, Investment Capital is actively contesting liability.

Investment Capital's right to defense under § 4(1) of the Agreement is obviously more concrete.   Investment Capital has been sued by Lula, and the first-party litigation against it is actively proceeding.

Dixon has two arguments against its alleged duty to provide a defense under § 4(1) of the Agreement.   Neither argument is persuasive.

Dixon's first argument is that he has no obligation to defend a suit involving a February 9, 2009 fall because the Agreement was not signed by the parties until April 11, 2009.   Section 1 of the Agreement is explicit, however, in stating that the one-year term of the Agreement begins on February 1, 2009.   “It is competent for the parties to agree that a written contract shall take effect as of a date earlier than that on which it was executed, and when this is done, the parties will be bound by such agreement.”  Brewer v. National Surety Corp., 169 F.2d 926, 928 (10th Cir.1948).

Dixon's second argument is that he has no obligation under § 4(1) to defend Investment Capital against Lula's first-party suit because that suit is not “in connection with the Premises.”   Dixon reasons that, because the location of Lula's fall is a matter in dispute, the determination as to whether Lula's suit is “in connection with the Premises” cannot be made until the location of the fall is decided by the factfinder.   This argument, however, confuses the duty to defend with the duty to indemnify.

It is true that, for indemnification purposes, the precise meaning of the phrase “in connection with the Premises” is “uncertain” and must ultimately be determined in light of the factfinder's decision and the evidence submitted at trial.   See Arrowood Indemnity Co. v. King, 304 Conn. 179, 192, 39 A.3d 712 (2012).

It is well-established, however, that the duty to defend is broader than the duty to indemnify.  “[T]he duty to defend must be determined by the allegations set forth in the underlying complaint itself, with reliance on extrinsic facts being permitted only if those facts support the duty to defend.”  Misiti, LLC v. Travelers Property Casualty Co., 308 Conn. 146, 161, 61 A.3d 485 (2013).   It would make no sense to postpone the duty to defend until the suit was over and the time for defense had passed.

In this case, as mentioned, Paragraph 2 of the amended complaint in the first-party action specifically alleges that the first-party plaintiff fell “on the premises known as 78 Rebeschi Drive.”   Under these circumstances, for purposes of the duty to defend, the suit is “in connection with the Premises.”

For the reasons set forth above, the Court decides the Motion as follows.

1. With respect to the First Count of the Cross Claim, the Motion is denied without prejudice.

2. With respect to the Second Count of the Cross Claim, the Motion is granted as to the duty to defend and denied without prejudice as to the duty to indemnify.

3. No argument having been made with respect to the Third Count of the Cross Claim, the Motion is denied as to that count without prejudice.

Jon C. Blue

Judge of the Superior Court

Blue, Jon C., J.