Americana Art China Co. v. Hartford Casualty Insurance Co. (2013)

MEMORANDUM OF DECISION RE MOTION TO DISMISS OR STAY # 102

The declaratory action subject to the present motion to dismiss arises from an ongoing class action lawsuit (“the underlying class action”) between the plaintiff class representative, Americana Art China Company (“Americana”), and one of the defendants, Foxfire Printing & Packaging, Inc. (“Foxfire”).  The other defendant, Hartford Casualty Insurance Company (“Hartford”), is the purported insurer of Foxfire.   Americana commenced the present action on November 3, 2011, by serving a complaint on the defendants.   The complaint alleges the following facts.   The underlying class action was initiated in November 7, 2008, in the Illinois state court where it was subsequently removed to the United States District Court in the Northern District of Illinois.   See Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., United States District Court, Docket No. 08–cv–6992 (N.D.Ill.).   In the underlying class action, the class plaintiffs alleged that Foxfire sent them “junk faxes” in violation of the federal Telephone Consumer Protection Act;  47 U.S.C. § 227;  the Illinois Consumer Fraud Act and common law.   On October 19, 2011, the district court approved the substitution of Americana for the former class representative, Stonecrafters, Inc., and, on the same day, gave preliminary approval of a settlement agreement between Americana and Foxfire (“the underlying settlement”).

Hartford issued to Foxfire general liability and umbrella insurance policies on June 8, 2003, with renewals providing coverage through June 8, 2009.   Under those policies, Hartford promised to pay sums that Foxfire became legally obligated to pay as damages because of bodily injury, property damage and personal and advertising injury to which the policies applied.   Hartford also agreed to provide, in certain circumstances, a legal defense for Foxfire.   Hartford has, and still does, defend Foxfire in the underlying action, although it has disclaimed any duty to do so and has informed Foxfire it will not provide indemnification under the settlement agreement.

The first two counts of the complaint seek a declaration, under General Statutes § 52–29 and Practice Book § 17–54 et seq., that Hartford is obligated under the bodily injury, property damage and personal and advertising injury coverage provisions to indemnify Foxfire for its liability for any damages caused by the junk faxes.   Count three asserts a conflict of interest in Hartford's representation of Foxfire and seeks a declaration that, due to that conflict of interest, Hartford's reservation of rights was ineffective and it has therefore waived its policy defenses and cannot now disclaim coverage.

Hartford filed a motion to dismiss or stay the action.   The following facts are based on evidence submitted by the parties in relation to Hartford's motion.   The underlying settlement, negotiated without notice to Hartford, provided for a payment of $18,000,000 to the class on the condition that the payment was only recoverable against Foxfire's insurance provider.

Hartford filed a complaint for declaratory action against Foxfire and Stonecrafters in the United States District Court in the Northern District of Illinois (“the Illinois declaratory action”).   Foxfire asserted counterclaims in that action that are nearly identical to the claims in the present action.   After Americana was substituted as a party in the underlying class action, Hartford filed a motion for leave to amend the complaint so it could add Americana as a defendant in the Illinois declaratory action, which is required by Illinois law.   The district court granted Hartford's motion.   After a subsequent motion to file a corrected amended complaint, Hartford served the amended complaint on Americana seven days after the complaint in the present action was served.

There are two pending motions in the Illinois declaratory action.   First, Hartford has filed a motion for summary judgment on all counts of the Illinois declaratory action.   Second, Americana has filed a motion to dismiss the Illinois declaratory action against Americana for lack of personal jurisdiction, and also seeks to dismiss the action in its entirety based on the doctrine of abstention.   In the underlying class action, the district court recently gave approval to the substance of the underlying settlement, although it severed and declined to approve the portion of the settlement regarding attorneys fees.

The court will first address Hartford's motion to dismiss.  “Pursuant to the rules of practice, a motion to dismiss is the appropriate motion for raising a lack of subject matter jurisdiction.”  St. George v. Gordon, 264 Conn. 538, 545, 825 A.2d 90 (2003).  “[T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003).  “When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”   (Internal quotation marks omitted.)  Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009).  “In contrast, if the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss ․ other types of undisputed evidence ․ and/or public records of which judicial notice may be taken ․ the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint ․ Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts] ․ If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits ․ or other evidence, the trial court may dismiss the action without further proceedings ․ If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations ․ or only evidence that fails to call those allegations into question ․ the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Conboy v. State, supra, 292 Conn. 651–52.

Hartford argues that the motion to dismiss should be granted because Americana has no standing to bring the present declaratory action.   Hartford asserts that Americana is not an assignee of Foxfire and is neither a party to nor third-party beneficiary of the insurance contracts between Hartford and Foxfire.   Furthermore, no final judgment has been rendered in the underlying class action that would allow Americana to be subrogated to the rights of Foxfire against Hartford under General Statutes § 38a–321.¹  Because Americana has no rights under the contract, Hartford argues it has no “legal interest” in the declaratory action and therefore no standing to bring such an action.   Americana argues that case law establishes that an injured person has a legally enforceable interest in a coverage dispute between the tortfeasor and its insurer, and that the injured person is in fact a necessary party in a declaratory action for a coverage dispute between the tortfeasor and insurer.   Furthermore, Foxfire's cross claim in the present action moots any issues of standing.

“A case that is nonjusticiable must be dismissed for lack of subject matter jurisdiction.”  (Internal quotation marks omitted.)  Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 86, 952 A.2d 1 (2008).  “[J]usticiability comprises several related doctrines, namely, standing, ripeness, mootness and the political question doctrine, that implicate a court's subject matter jurisdiction and its competency to adjudicate a particular matter.”  (Internal quotation marks omitted.)   Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 254, 990 A.2d 206 (2010).  “If ․ the plaintiff's standing does not adequately appear from all the materials of record, the complaint must be dismissed.”  (Internal quotation marks omitted.)  Burton v. Dominion Nuclear Connecticut, Inc., 300 Conn. 542, 550, 23 A.3d 1176 (2011).

“Standing is not a technical rule intended to keep aggrieved parties out of court;  nor is it a test of substantive rights.   Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented ․ These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury he has suffered or is likely to suffer, in an individual or representative capacity.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 486.  “The requirement of directness between the injuries claimed by the plaintiff and the conduct of the defendant also is expressed, in our standing jurisprudence, by the focus on whether the plaintiff is the proper party to assert the claim at issue.”  Ganim v. Smith & Wesson Corp., 258 Conn. 313, 347, 780 A.2d 98 (2001).

In the absence of a specific statute, a party must demonstrate standing by showing “classical aggrievement,” which “requires a two part showing.   First, a party must demonstrate a specific, personal and legal interest in the subject matter of the decisions, as opposed to a general interest that all members of the community share ․ Second, the party must also show that the [party's] decision has specially and injuriously affected that specific personal or legal interest ․ Aggrievement does not demand certainty, only the possibility of an adverse effect on a legally protected interest.”  Canty v. Otto, 304 Conn. 546, 556–57, 41 A.3d 280 (2012).

Therefore, the first issue to be resolved is whether Americana has a legal interest that could form the basis of classical aggrievement for purposes of standing.   That question was largely answered in Connecticut Insurance Guaranty Assn. v. Raymark Corporation, 215 Conn. 224, 575 A.2d 693 (1990).   In that case, the plaintiff, an entity created by state statute to assume the obligations of insolvent insurance companies, brought a declaratory action against the defendants, a corporation subject to extensive liability and its insurance providers, to determine what obligations of an insolvent defendant the plaintiff was required to assume.  Id., 225–27.   The Supreme Court held that “the trial court erred in rendering a declaratory judgment ․ before some representative of the interests of those having personal injury claims against Raymark, and thus having an interest in the [insurance policies] ․ had been joined in [the] action or notified of its pendency.”  Id., 230.   In arriving at its holding, the Court stated that “an insured person having a claim against an insured tortfeasor has a legal interest in a coverage dispute with the insurer ․” Id., 228.   This legal interest was protected by Practice Book § 390,² which provided in relevant part:  “The court will not render declaratory judgments upon the complaint of any person ․ (d) unless all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof.”

While the context of the discussion in Raymark of an injured party's legal interest in a declaratory judgment is slightly different than the present context,³ other Superior Court decisions have applied Raymark in contexts similar to this one.   In Canal Ins. Co. v. Haniewski, Superior Court, Docket No. 417942 (July 3, 2001, Levin, J.), the plaintiff;  the insurer of the defendant tortfeasor, commenced a declaratory action to determine coverage under the subject insurance policy.   In a motion to reargue a motion for summary judgment, the plaintiff argued that the defendant administrator lacked standing to oppose summary judgment.  Id. After expressing the well-established principles of standing, the court cited Raymark and stated:  “If [the defendant tortfeasor] is ultimately found legally responsible to [the injured party's estate, the estate] may seek to satisfy a judgment in its favor against [the defendant tortfeasor] out of the insurance policy by the plaintiff ․ Therefore, [the injured party's estate] has a specific personal and legal interest in the subject matter of the suit.   Moreover, if the court were to grant summary judgment in favor of the plaintiff;  such a ruling would deny coverage to [the defendant tortfeasor] and remove the insurance policy as a fund from which to satisfy a judgment against [the defendant tortfeasor].   Thus, [the] estate would be specially and injuriously affected.  [The] estate, therefore, satisfies both requirements for standing to object to the motion for summary judgment.”  Id.

Many other Superior Court decisions have recognized an injured party's standing in a declaratory action concerning a coverage dispute between a tortfeasor and its insurer.   See, e.g., Colonial Penn. Ins. Co. v. Patriot General Ins. Co., Superior Court, Docket No. CV950377876 (January 19, 1996, Licari, J.) [16 Conn. L. Rptr. 73];  Wynn v. Commercial Union Ins. Co., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV930135153 (June 13, 1994, Lewis, J.) (12 Conn. L. Rptr. 51);  Aetna Casualty & Surety Co. v. Gentile, Superior Court, judicial district of New Haven, Docket No. CV93353207 (March 22, 1994, Fracasse, J.) [11 Conn. L. Rptr. 144];  Hammond v. Council, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV89010830 (October 25, 1993, Lewis, J.) (10 Conn. L. Rptr. 273).   The Superior Court decisions that did not recognize such an interest failed to acknowledge Raymark or otherwise stated that the interest as a third-party beneficiary did not exist because the underlying liability of the tortfeasor had not been determined.   See, e.g, Hamilton v. Philadelphia Indemnity Insurance Co., Superior Court, judicial district of Danbury, Docket No. CV740077205 (October 14, 2008, Shaban, J.) (46 Conn. L. Rptr. 482);  Rivera v. Great American E & S Insurance Co., Superior Court, judicial district of New London, Docket No. CV116010532S (May 3, 2012, Martin, J.) (rejecting an argument for standing in terms of classical aggrievement and limiting its inquiry to whether the plaintiff is a third-party beneficiary of the insurance policy).

The question remains, however, whether an injured party has a legal interest in a coverage dispute before the liability of the tortfeasor to the injured party has been established by a final judgment.   Although Raymark does not answer this question, it has been addressed in other cases from the lower courts.   A case representative of such a discussion is Century Indemnity Co. v. Northeast Utilities, Superior Court, Docket No. CV980495496S (May 24, 1999, Aurigemma, J.), in which the court, after acknowledging that the plaintiff did not claim status as a third-party beneficiary to the defendants' insurance contracts, held that the plaintiff lacked standing because if it “is not adjudged to be liable to [the tortfeasor] or its liability is limited to its pro-rata share, [the plaintiff] will have no legal interest in insurance coverage provided to [the tortfeasor] by the other insurer defendants.   While there may be some future dispute between [the plaintiff] and the other insurers, none exists now.”   In other words, the plaintiff could not have the court interpret insurance contracts it was not a party to until it had “a colorable claim against the other insurers.”  Id. This court agrees that, in the circumstances such as the case at issue, an injured party's legal interest comes into fruition when the underlying liability of the insured party to the injured party has been established.

While most Superior Court decisions have discussed the requirement that the underlying liability be established as an element of the injured party's standing, this court believes that such an issue is more appropriately considered in the context of “ripeness.”  “[T]he rationale behind the ripeness requirement is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements ․ Accordingly, in determining whether a case is ripe, a trial court must be satisfied that the case before [it] does not present a hypothetical injury or a claim contingent upon some event that has not and indeed may never transpire.”  (Citation omitted;  internal quotation marks omitted.)  Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 86–87, 952 A.2d 1 (2008).   Since ripeness implicates subject matter jurisdiction;  Liberty Mutual Ins. Co. v. Lone Star Industries, Inc., 290 Conn. 767, 812, 967 A.2d 1 (2009);  the court may raise and consider and issue of ripeness sua sponte.  New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 511, 518, 970 A.2d 583 (2009).   For the following reasons, the court finds that the present action is ripe for adjudication.

Appellate authority indicates the issue is properly addressed as one of ripeness.   In Hamilton v. United Services Automobile Assn., 115 Conn.App. 774, 974 A.2d 774 (2009), the plaintiff, a conservator of a victim of a tort, brought a declaratory action against the defendant, an insurance company insuring the tortfeasor, seeking a judgment regarding the defendant's obligations under the insurance policy.  Id., 775.   The underlying action regarding the liability of the tortfeasor was ongoing and no final judgment had been rendered.  Id., 776.   The trial court granted the defendant's motion to dismiss on the grounds that the plaintiff lacked standing as it was not an intended third-party beneficiary, the action was not ripe because it had not been determined that the tortfeasor was liable to the plaintiff;  and the plaintiff cannot avail herself to the tortfeasor's rights against the defendant under § 38a–321 until a final judgment had been rendered.  Id., 779.   On appeal, the Appellate Court immediately proceeded to the ripeness issue:  “[T]his declaratory judgment action is not ripe for adjudication because any claim that the plaintiff may have against the defendant is contingent on her prevailing in the [underlying] action, which has not yet been adjudicated ․ When the plaintiff filed this action, her claim against the defendant was, and still is, a mere possibility.   Until there has been a judicial determination that [the tortfeasor] is liable to the plaintiff, the question of whether the defendant is obligated to provide insurance coverage in this declaratory judgment action is a hypothetical one.”  Id., 782–83.⁴

Superior Court cases that evade Hamilton are unpersuasive.   For example, in Amica Mutual Ins. Co. v. Given, Superior Court, judicial district of Fairfield, Docket No. CV126032451S (April 29, 2013, Radcliffe, J.), the court acknowledged but bypassed Hamilton by stating that “the question posed is not hypothetical, and its resolution not dependent upon findings by the trier of fact,” largely because “the issue presented requires only the construction of the policy provision ․ in light of the stipulation of the parties,” despite the fact that no final judgment had been issued in the underlying action.   Such an analysis, by focusing on the statement in Hamilton that “[u]ntil the evidence is known ․ it is not possible to determine whether the defendant is obligated to indemnify”;  Hamilton v. United Services Auto. Ass'n, supra, 115 Conn.App. 785;  concludes that the reason the issue was not ripe was solely because there was no factual record.   But that analysis ignores the phrase “as well as the jury verdict with respect to those allegation”;  id.;   appearing in the ellipses in the above quotation, which ties into the Hamilton court's central reasoning that a declaratory action is not ripe where “any claim the plaintiff may have against the defendant is contingent on her prevailing in the [underlying] action.”   Id., 782.   A simple stipulation of the parties does not ripen the declaratory action;  it is necessary under Hamilton for there to be an actual establishment of liability through judicial action.   The other cases cited by Americana were issued long before the Hamilton decision and thus had no opportunity to apply its holding.

Viewing the required establishment of underlying liability as an issue of ripeness rather than standing is more coherent conceptually.   Under such an understanding, an injured party has a legal interest in an insurance coverage dispute between the tortfeasor and its insurer.   The injured party thus has standing before the underlying liability is determined.   The reason the injured party cannot act upon that interest is because there is no issue ripe for adjudication as the party's legal interest is still contingent upon the underlying liability.   In contrast, parties like Hartford and Foxfire have standing because they are both parties to the insurance policy.   Those parties may initiate a declaratory judgment before underlying liability has been established because the mere existence of an underlying lawsuit can make an issue between the parties ripe.⁵  In such a situation, the injured parties' interest becomes ripe because the insurer and tortfeasor's act of determining the policy coverage will impact, as explained in Raymark, the legal interest of the injured party.⁶  In other words, before underlying liability is established, the injured party can only defend its legal interest.   After the underlying liability is established, the injured party can initiate its own declaratory action based on its legal interest.

The inquiry now turns to whether the underlying settlement qualifies as an event that makes the dispute relating to Americana's legal interest ripe for adjudication.   Although no Connecticut court has addressed this issue directly, a federal district court decision does provide a useful analysis.   In Tucker v. American International Group, Inc., United States District Court, Docket No. 3:09 CV 1499 (D.Conn. March 28, 2013), the plaintiff brought an action under, inter alia, § 38a–321 to recover a stipulated judgment from the defendant insurers of her employer tortfeasor.   The settlement underlying the judgment, like the underlying settlement in the present action, released the employer from liability but assigned the employer's rights against its insurer.  Section 38a–321, in a manner analogous to the ripeness rule described above, requires a “final judgment” before a judgment creditor has standing to seek to be subrogated to the rights of an insured against an insurer.   See General Statutes § 38a–321.   In Tucker, the court held that “a stipulated judgment may form the basis of an action under Connecticut's direct action statute, [General Statutes] § 38a–321.   An injured party ․ may settle her claims against the insured ․ and thereafter seek recovery for the settled judgment ․ via Connecticut's direct action statute.”  Tucker, supra, Docket No. 3:09 CV 1499.

In so holding, the Tucker court relied on two state court decisions.   First, the court referred to the Supreme Court's decision in Black v. Goodwin, Loomis & Britton, Inc., 239 Conn. 144, 681 A.2d 293 (1996), in which the Court stated that the insurance policy was “plainly one of liability rather than indemnity”;  id., 156 n.13;  and that § 38a–321 provides that “the insurer is absolutely liable whenever there is a loss under the policy, and payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty.”  (Internal quotation marks omitted.)  Id., 156.   As the Tucker court aptly stated, the Black court “suggested, by implication, that when an injured party settles its claims against the insured by releasing the insured in return for the rights to pursue its claims against its insurers, a direct action against the insurer is not precluded.”  Tucker, supra, Docket No. 3:09 CV 1499.   Second, in Steinhoff v. Travelers Indem.   Co. of Illinois, Superior Court, Docket No. CV 558937 (June 18, 2002, Corradino, J.) (32 Conn. L. Rptr. 373), the court applied Black and stated that where an insured and claimant have entered a settlement whereby the insured is released from liability, the injured party is not precluded from recovery from the insurer;  rather “the issue of coverage will be litigated in the direct action suit just as the insurer has a right to raise the issue of fraud and collusion and the reasonableness of the settlement.”  Id., 375.

This court believes that the analysis of the Tucker court and the underlying state decisions apply by analogy to issue of ripeness.   It therefore holds that the underlying settlement ⁷ at issue qualifies as a judicial determination which makes ripe Americana's claims brought in the present declaratory action.   Accordingly, the court must deny Hartford's motion to dismiss because it has failed to demonstrate that Americana lacks standing to bring the action and the declaratory action is ripe for adjudication.

The court will now address Hartford's motion to stay.   Hartford argues that the present action should be stayed because of the essentially identical Illinois declaratory action currently pending in the federal district court of Illinois.   Although Hartford admits that the prior pending action doctrine pertains to motions to dismiss and that it could not be applied to dismiss this action,⁸ it argues that the principles of that doctrine permit the court to exercise its discretion to stay the proceeding.   In response, Americana argues that the present action should not be stayed because:  (1) the present action is the prior pending action;  and (2) the Illinois declaratory action is not identical because the district court in Illinois does not have personal jurisdiction over Americana.

“In the absence of a statutory mandate, the granting of an application or a motion to stay of an action or proceeding is addressed to the discretion of the trial court.”  Voluntown v. Rytman, 21 Conn.App. 275, 287, 573 A.2d 336, cert. denied, 215 Conn. 818, 576 A.2d 548 (1990).  “In the interests of judicial economy, a court may, in the exercise of its discretion, order that the second action be stayed during the pendency of the first action, even though the actions are pending in different jurisdictions.”  Sauter v. Sauter, 4 Conn.App. 581, 584–85, 495 A.2d 116 (1985).  “[T]he prior pending action doctrine permits the court to dismiss a second case that raises issues currently pending before the court.   The pendency of a prior suit of the same character, between the same parties, brought to obtain the same end or object, is, at common law, good cause for abatement.   It is so, because there cannot be any reason or necessity for bringing the second, and, therefore, it must be oppressive and vexatious.   This is a rule of justice and equity, generally applicable, and always, where the two suits are virtually alike, and in the same jurisdiction.”  (Internal quotation marks omitted.)  Bayer v. Showmotion, Inc., 292 Conn. 381, 395–96, 973 A.2d 1229 (2009).   Where the suits are identical, the court must dismiss the second action.  Id., 398.   Where the suits are “virtually alike,” whether to dismiss the action is within the court's discretion.  Id. Whether the actions are identical or virtually alike is determined by examining the pleadings “to ascertain whether the actions are brought to adjudicate the same underlying rights of the parties.”   (Internal quotation marks omitted.)  Id.

At the outset, the court notes that Hartford has sufficiently established that the Illinois declaratory action and the present action are, at least, “virtually alike.”   Hartford has exhaustively demonstrated that the parties in both actions seek to determine the extent of Hartford's obligations under the relevant insurance policies in relation to the underlying class action.   In fact, in the briefs for Americana's motion to dismiss in the Illinois declaratory action, attached as exhibits to its memorandum in opposition to the present motion, Americana admits that the two actions are “identical.”   Whether they are identical is not important to the present inquiry, because any action the court takes is discretionary as Hartford seeks a stay and not an outright dismissal.

Next, Americana's argument that this action is the prior pending action is without merit.   Americana essentially argues that because the date of service of the complaint in this action, November 3, 2011, is earlier than the date of service of the amended complaint in the Illinois declaratory action, November 10, 2011,⁹ that this action is the “first action” for purposes of a prior pending doctrine analysis.   Such a conclusion ignores the reality of the Illinois declaratory action.   Hartford filed its original complaint in the Illinois declaratory action on November 17, 2010, nearly a year before Americana was substituted as the class representative.   After Americana was substituted on October 17, 2011, Hartford was forced to move for leave to amend its complaint to add Americana as a party.   It was not granted leave until November 2, 2011, a day before the complaint in the present action was served, and it filed its amended complaint in a timely fashion.   Moreover, Americana is represented by the same counsel as the previous class representative, Stonecrafters, Inc., and therefore it is safe to assume Americana had sufficient notice of the prior pendency of the Illinois declaratory action.

To hold that the present action is the “first action” would create dangerous precedent and open a potential method for abusive and opportunistic forum shopping, especially in the context of class actions.   Although this court cannot determine on the record before it whether Americana or its counsel was motivated by an improper purpose, the above procedural history makes clear how such a purpose could flourish under Americana's proposed holding.   Hartford, after litigating the Illinois declaratory action for a year and being on the eve of summary judgment, would be deprived of its choice of forum by a last-minute substitution of a class representative that forces Hartford to amend its complaint and gives Americana the opportunity to commence a duplicative action in a forum of its choosing.   The substance of a potential ruling in the Illinois declaratory action would be undermined by the simple change in class representative, which is largely procedural in nature and done mainly for efficiency purposes.   This court cannot open the door for such tactics.   Therefore, for purposes of the present inquiry, the Illinois declaratory action is the first action as it was originally commenced nearly a year before the present action.

Finally, Americana's argument regarding the district court's supposed lack of personal jurisdiction over Americana in the Illinois declaratory action is also unconvincing.   First, Americana has simply referred to the fact that it has filed a motion to dismiss in the Illinois declaratory action and that it is of the opinion that the district court has no personal jurisdiction.   As the court is sure Americana's counsel is aware, parties frequently contest a court's personal jurisdiction when it does in fact exist.   The court cannot conclude that Americana is not subject to the district court's jurisdiction in the Illinois declaratory action on bare assertions and before a decision by the Illinois district court to that effect has been made.   Nor can it do so by reviewing the memoranda submitted by Americana in the Illinois declaratory action and evaluate their merits.   Doing so would essentially have the court determine another court's jurisdiction.   This court is also somewhat perplexed as to how the same court that is hearing the underlying class action lacks jurisdiction over Americana in the Illinois declaratory action.   While it may be possible, that point is irrelevant in the absence of the Illinois district court saying so.   Therefore, any supposed lack of personal jurisdiction over Americana in the Illinois declaratory action will not be considered for the motion to stay until that court grants Americana's motion to dismiss.

The Illinois declaratory action was instituted long before the present action, and Americana can neither claim to be the prior action simply because Hartford was forced to re-file an amended complaint after the substitution of a class representative in the underlying class action, nor can it claim there is a lack of personal jurisdiction in the Illinois declaratory action when there has been no decision to that effect.   Accordingly, the court exercises its discretion and grants Hartford's motion to stay the proceedings in the present action until resolution of the Illinois declaratory action by way of judgment or dismissal of the action in its entirety or against Americana.

For the foregoing reasons, Hartford's motion to dismiss is denied and its alternative motion to stay is granted.

Robaina, J.

FOOTNOTES

FN1. General Statutes § 38a–321 provides in relevant part:  “Upon the recovery of a final judgment against any person, firm or corporation by any person ․ for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment.”.  FN1. General Statutes § 38a–321 provides in relevant part:  “Upon the recovery of a final judgment against any person, firm or corporation by any person ․ for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment.”

FN2. Section 390 was initially recodified as Practice Book § 17–55.   The requirement in that rule placing joinder or notification of interested parties as a condition on judgment has since been eliminated in the 2000 amendments to the rules of practice.   See Practice Book § 17–55.   A similar requirement has been created in Practice Book § 17–56(b), which provides in relevant part:  “All persons who have an interest in the subject matter of the requested declaratory judgment that is direct, immediate and adverse to the interest of one or more of the plaintiffs or defendants in the action shall be made parties to the action or shall be given reasonable notice thereof ․” Notably, this requirement is not a condition on declaratory judgment;  see Practice Book § 17–56(c);  and the Supreme Court has expressly acknowledged that it no longer views such a requirement as implicating subject matter jurisdiction.  Batte–Holmgren v. Commissioner of Public Health, 281 Conn. 277, 289, 914 A.2d 996 (2007)..  FN2. Section 390 was initially recodified as Practice Book § 17–55.   The requirement in that rule placing joinder or notification of interested parties as a condition on judgment has since been eliminated in the 2000 amendments to the rules of practice.   See Practice Book § 17–55.   A similar requirement has been created in Practice Book § 17–56(b), which provides in relevant part:  “All persons who have an interest in the subject matter of the requested declaratory judgment that is direct, immediate and adverse to the interest of one or more of the plaintiffs or defendants in the action shall be made parties to the action or shall be given reasonable notice thereof ․” Notably, this requirement is not a condition on declaratory judgment;  see Practice Book § 17–56(c);  and the Supreme Court has expressly acknowledged that it no longer views such a requirement as implicating subject matter jurisdiction.  Batte–Holmgren v. Commissioner of Public Health, 281 Conn. 277, 289, 914 A.2d 996 (2007).

FN3. In Raymark, the Court discussed whether an injured party must be joined to a declaratory action for an insurance coverage dispute to satisfy the requirement of a Practice Book rule relating to joinder of necessary parties, while in the present matter the court is discussing whether an injured party can initiate a declaratory action for an insurance coverage dispute.   Because in the former scenario the injured party would be able to fully litigate the declaratory action once joined, this court believes Raymark is appropriately applied to the latter scenario..  FN3. In Raymark, the Court discussed whether an injured party must be joined to a declaratory action for an insurance coverage dispute to satisfy the requirement of a Practice Book rule relating to joinder of necessary parties, while in the present matter the court is discussing whether an injured party can initiate a declaratory action for an insurance coverage dispute.   Because in the former scenario the injured party would be able to fully litigate the declaratory action once joined, this court believes Raymark is appropriately applied to the latter scenario.

FN4. This court is bound by the precedent of Hamilton.  Jolly, Inc. v. Zoning Board of Appeals, 237 Conn. 184, 195, 676 A.2d 831 (1996) ( “Although the concerns raised by [a] trial court might ultimately have merit ․ revision of [appellate] precedent is not the trial court's function”).   There are no facts that sufficiently distinguish Hamilton from the facts and procedural posture of the present action, and therefore this court must apply its holding as law.  Potvin v. Lincoln Service & Equipment Co., 298 Conn. 620, 650, 6 A.3d 60 (2010) (“A trial court is required to follow the prior decisions of an appellate court to the extent that they are applicable to facts and issues in the case before it, and the trial court may not overturn or disregard binding precedent”).The court wishes to note, however, that the holding in Hamilton may be impacted by a possible interpretation of certain language in the rules relating to declaratory judgments.  Practice Book § 17–54, which, in setting for the scope of declaratory judgments, provides in relevant part:  “the judicial authority will ․ render declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity;  or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future. ”  (Emphasis added.)   Similarly, Practice Book § 17–55 provides in relevant part that “declaratory judgment may be maintained if ․ the party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights ․” (Emphasis added.)   These rules are based on the statutory authority for declaratory actions found in General Statutes § 52–29, which provides in relevant part:  “The Superior Court in any action or proceeding may declare rights and other legal relations on request for such a declaration, whether or not further relief is or could be claimed ․ “ (Emphasis added.)   Both the Practice Book rules and § 52–29 seem to suggest that declaratory judgment may be given where the rights, powers, privileges or immunities involved are prospective and regardless of whether legal relief is possible or imminent.The question is whether the statutory and Practice Book language requires a finding of ripeness in circumstances such as the present action.   The Supreme Court has stated:  “[W]hile the declaratory judgments may not be utilized merely to secure advice on the law ․ it may be employed in a justiciable controversy where the interests are adverse, where there is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement, and where all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof.”  (Emphasis added.)  Pamela B. v. Ment, 244 Conn. 296, 323–24, 709 A.2d 1089 (1998).   This court is unsure whether, when mentioning “a justiciable controversy,” the Court in Pamela B. was simply stating that the declaratory action needs to be justiciable in its own right or that the declaratory action may be employed (i.e. is justiciable) where there is an underlying justiciable controversy, such as the underlying class action in this case.   If the latter is the proper interpretation, then a declaratory action is ripe when it is used to determine potential rights relevant to an underlying and possibly ongoing action..  FN4. This court is bound by the precedent of Hamilton.  Jolly, Inc. v. Zoning Board of Appeals, 237 Conn. 184, 195, 676 A.2d 831 (1996) ( “Although the concerns raised by [a] trial court might ultimately have merit ․ revision of [appellate] precedent is not the trial court's function”).   There are no facts that sufficiently distinguish Hamilton from the facts and procedural posture of the present action, and therefore this court must apply its holding as law.  Potvin v. Lincoln Service & Equipment Co., 298 Conn. 620, 650, 6 A.3d 60 (2010) (“A trial court is required to follow the prior decisions of an appellate court to the extent that they are applicable to facts and issues in the case before it, and the trial court may not overturn or disregard binding precedent”).The court wishes to note, however, that the holding in Hamilton may be impacted by a possible interpretation of certain language in the rules relating to declaratory judgments.  Practice Book § 17–54, which, in setting for the scope of declaratory judgments, provides in relevant part:  “the judicial authority will ․ render declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity;  or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future. ”  (Emphasis added.)   Similarly, Practice Book § 17–55 provides in relevant part that “declaratory judgment may be maintained if ․ the party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights ․” (Emphasis added.)   These rules are based on the statutory authority for declaratory actions found in General Statutes § 52–29, which provides in relevant part:  “The Superior Court in any action or proceeding may declare rights and other legal relations on request for such a declaration, whether or not further relief is or could be claimed ․ “ (Emphasis added.)   Both the Practice Book rules and § 52–29 seem to suggest that declaratory judgment may be given where the rights, powers, privileges or immunities involved are prospective and regardless of whether legal relief is possible or imminent.The question is whether the statutory and Practice Book language requires a finding of ripeness in circumstances such as the present action.   The Supreme Court has stated:  “[W]hile the declaratory judgments may not be utilized merely to secure advice on the law ․ it may be employed in a justiciable controversy where the interests are adverse, where there is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement, and where all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof.”  (Emphasis added.)  Pamela B. v. Ment, 244 Conn. 296, 323–24, 709 A.2d 1089 (1998).   This court is unsure whether, when mentioning “a justiciable controversy,” the Court in Pamela B. was simply stating that the declaratory action needs to be justiciable in its own right or that the declaratory action may be employed (i.e. is justiciable) where there is an underlying justiciable controversy, such as the underlying class action in this case.   If the latter is the proper interpretation, then a declaratory action is ripe when it is used to determine potential rights relevant to an underlying and possibly ongoing action.

FN5. For instance, there could be a dispute as to whether the insurer has to defend the insured, and whether the insurer is obligated to indemnify may very well determine whether the tortfeasor decides to settle the lawsuit..  FN5. For instance, there could be a dispute as to whether the insurer has to defend the insured, and whether the insurer is obligated to indemnify may very well determine whether the tortfeasor decides to settle the lawsuit.

FN6. The injured party is also protected by Practice Book § 17–56(d), which holds that declaratory actions where a necessary party has not been joined are not binding against that necessary party..  FN6. The injured party is also protected by Practice Book § 17–56(d), which holds that declaratory actions where a necessary party has not been joined are not binding against that necessary party.

FN7. “It is important to emphasize the exact nature of the underlying settlement.   By motion of the parties, the district court severed its approval of the substance of the underlying settlement and its approval of the award of attorneys fees.   It has entered final approval and order of judgment in favor of Americana and the class.   It has approved certain expenses of counsel but has not yet given final approval of attorneys fees.   It has, however, set forth the amount of attorneys fees it would approve.   Because the district court indicated that the underlying settlement is effective regardless of the court's approval of counsel's request of attorneys fees, this court finds no reason to distinguish the underlying settlement from a settlement agreement that has been approved in full..  FN7. “It is important to emphasize the exact nature of the underlying settlement.   By motion of the parties, the district court severed its approval of the substance of the underlying settlement and its approval of the award of attorneys fees.   It has entered final approval and order of judgment in favor of Americana and the class.   It has approved certain expenses of counsel but has not yet given final approval of attorneys fees.   It has, however, set forth the amount of attorneys fees it would approve.   Because the district court indicated that the underlying settlement is effective regardless of the court's approval of counsel's request of attorneys fees, this court finds no reason to distinguish the underlying settlement from a settlement agreement that has been approved in full.

FN8. The prior pending action doctrine only provides a basis to dismiss two competing actions in the same jurisdiction.  Kleinman v. Chapnick, 140 Conn.App. 500, 505, 59 A.3d 373 (2013)..  FN8. The prior pending action doctrine only provides a basis to dismiss two competing actions in the same jurisdiction.  Kleinman v. Chapnick, 140 Conn.App. 500, 505, 59 A.3d 373 (2013).

FN9. This date is referenced in Americana's memorandum in opposition to the motion.   Hartford has only referenced the date the amended complaint was filed with the district court, November 17, 2010..  FN9. This date is referenced in Americana's memorandum in opposition to the motion.   Hartford has only referenced the date the amended complaint was filed with the district court, November 17, 2010.

Robaina, Antonio C., J.