Daniel Frederick v. Northfield Insurance Company (2013)

MEMORANDUM OF DECISION

PROCEDURAL POSTURE

This insurance coverage dispute was brought under the Connecticut direct action statute (C.G.S. § 38a–321) and was tried to the court on September 10–12, 2013.   Northfield Insurance Company issued a commercial general liability policy (No. CP520929) (hereinafter, the “Policy”) to Cynthia Font dba Aserrin Tree Service (“Aserrin”).   On August 14, 2006, Daniel Frederick sustained serious bodily injuries while assisting Aserrin in the cutting and removal of trees from a job site in Amenia, New York. Frederick was hurt when a tree he had first cut fell on top of him as he moved in its path.   He later sued Aserrin and Leonard Swirda (owner of Aserrin—Plaintiff Exh. 9, at 4), and received a five million dollar ($5,000,000.00) default judgment following a hearing in damages on May 23, 2011.   Defendant's Exhibit J. Frederick here claims the Northfield policy obligates the defendant to satisfy that Judgment which Northfield denies.

THE POLICY

The Policy has a per occurrence limit of one million dollars ($1,000,000.00).   Defendant's Exh. 1, at NF0005.   The insuring agreement provides, “We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ ․ to which this insurance applies.”   Exh. 1 at NF0014, Sect. 1–1a.   Various provisions, however, contain exclusions barring coverage for persons injured while performing work on behalf of Aserrin.   These exclusions are here each considered.

I. Workers' Compensation and Employer's Liability Exclusion

The Policy specifically states, “This insurance does not apply to ‘any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.”   Exh. 1, at NF0015.   The Employer's Liability exclusion excludes coverage for “bodily injury to ․ (1) [A]n ‘employee of the insured arising out of and in the course of:  (a) Employment by the insured;  or (b) Performing duties related to the conduct of the insured's business ․’ “ Id.

The “Definitions” provide “employee” does not include a temporary worker.   (Sect.V, # 5, Exh. 1–NF0025) and “temporary worker” means “a person who is furnished to you to substitute for a permanent ‘employee’ on leave or to meet seasonal or short-term workload conditions.”  (Sect.V, # 19, Exh. 1–NF0028).

II. Independent Contractors Exclusion

The Policy excludes coverage for “bodily injury. or medical expense arising out of ․ [t]he operations of any independent contractor for or on behalf of any insured.”   Excl. B, NF0033.

III. Non–Employee Labor Exclusion

This exclusion is directed to bodily injuries to or medical expenses incurred by “any person who participates in the course of work performed by you, who is not employed, subcontracted or being compensated in any way by you.   Exh. 1, NF0046.

IV. The Contracted Persons Exclusion

The Policy provides the insurance does not apply to “bodily injury” or “medical expense” sustained by any person who is:

1.  Contracted with you or with any insured for services;  or

2.  Employed by, leased to or contracted with any entity that is:

A.  Contracted with you or with any insured for services;  or

B. Contracted with others on your behalf for services.   Exh. 1, NF0047.

Each of the above exclusions was in effect on the date of the Plaintiff's accident.

On January 29, 2007, and again on August 11, 2008, Lee E. Laursen, the Defendant's Director of Major Case Liability–Specialty Claims, advised the insured in writing that Northfield had determined there was not coverage for the injuries or damages sustained by Frederick because such injuries or damages:

Were to an employee of Aserrin Tree Service and arose out of and in the course of employment by Aserrin Tree Service, or while performing duties related to the conduct of Aserrin Tree Service's business;  or

Were to a person who was participating in the course of work performed by Aserrin Tree Service, but who was not employed, subcontracted or compensated by Aserrin Tree Service;  or

Were sustained by a person who was contracted with Aserrin Tree Service.

Exhs. 2 and 7—NF0193 and NF0197.¹

Both Plaintiff and Defendant have maintained their positions throughout trial.   The Defendant seeks a declaratory judgment that the Policy provides no coverage.

THE LAW

It is a well established principle of insurance law that “policy language will be construed as laymen would understand it and not according to the interpretation of sophisticated underwriters, (sic) and that ambiguities in contract documents are resolved against the party responsible for its drafting;  the policy-holder's expectations should be protected as long as they are objectively reasonable from the layman's point of view.”  Hartford Casualty Ins. Co. v. Litchfield Mutual Fire Ins. Co., 80 Conn.App. 364, 371–72 (2003), citing Israel v. State Farm Mutual Automobile Ins. Co., 259 Conn. 503, 508–09 (2002).   Whether the language is ambiguous is itself a question of law ․ The interpretation and construction of a written contract presents only questions of law, (sic) within the province of the court ․ so long as the contract is unambiguous and the intent of the parties can be determined from the agreement's face.  Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 495 (2000).   A contract is unambiguous when its language is clear and conveys a definite and precise intent.  United Illuminating Co. v. Wisvest–Connecticut, LLC, 259 Conn. 665, 670 (2002).   The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity.  Id. Although ambiguities are to be construed against the insurer, when the language is plain, no such construction is to be applied.  Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 268 (2003).

The rule in Connecticut is that an insurance policy, like any other contract, must be given a reasonable interpretation and the words used are to be given their common, ordinary and customary meaning.  Izzo v. Colonial Penn Ins. Co., 203 Conn. 305, 309 (1987).   The determinative question is the intent of the parties, that is, what coverage the ․ [insured] expected to receive and what the [insurer] was to provide, (sic) as disclosed by the provisions of the policy ․ [w]hen the words of an insurance contract are ․ susceptible of two (equally responsible) interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted ․ [T]his rule of construction favorable to the insured extends to exclusion clauses.  (Citations omitted;  internal quotation marks omitted.)  Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 267 (2003), citing to Heyman Associates No. 1 v. Ins. Co. Of Pennsylvania, 231 Conn. 756, 769–70 (1995).   When the language of an insurance policy is clear, courts cannot indulge in a forced construction ignoring provisions or so distorting them as to accord a meaning other than that evidently intended by the parties.   (Citations omitted;  internal quotation marks omitted.)  Id., at 770–71.   The mere fact that the parties advance different interpretations of the contractual language employed does not necessitate a conclusion that the language is ambiguous.  United Illuminating Co. v. Wisvest–Connecticut, LLC, supra., at 670.

ADJUDICATION

Edward Lesinsky, an employee of the insured, testified at deposition that, on the date of the incident, Frederick (Plaintiff) was not an employee but was “looking for a job” and was on the scene “just there helping.”   Plaintiff Exh. 1, at 5–6.   He thought Frederick and Swirda, Aserrin owner, “were seeing if they could work out a way where maybe he can get a job” and that the Plaintiff had been on the scene two (2) days in a row when the accident occurred.   Id., at 13.   Cynthia Font (wife of Swirda and co-owner of the insured business) testified Frederick was not working for Aserrin at the time of the incident but “was looking for a job and thought he'd come and see what it was like.”   Plaintiff Exhibit 8, at 11–12.   Swirda testified Frederick was not working for him on the date of the accident but was on scene watching the work of the tree company as part of his obligation as a recent parolee to actively seek employment.   Plaintiff Exhibit 9, at 5–7.   Despite such testimony, the first three (3) filed complaints described Frederick as an “independent contractor” on the accident date.   See, Def. Exh. 5, Complaint of 7/2/08, Paras. 3, 4, and 11;  Def. Exh. 6, Complaint of 7/28/08, Paras. 4, 5, and 12 of First and Second Counts;  Def. Exh. 11, Complaint of Nov. 9, 2011, Paras. 4 and 11.   At trial, the Plaintiff testified he was never employed as an independent contractor by Aserrin and that it was a “mistake” not to delete the references therein to his being an “independent contractor” on the date of accident.   Frederick testimony on 9/11/13.   Relevant too is that, as late as 5/23/11, at an uncontested Hearing in Damages which resulted in a Judgment of five million dollars ($5,000,000.00) (Defense Exh. 10, p. 25), counsel represented Frederick was, on the date of accident, working for Aserrin as an independent contractor.   Defendant's Exh. 10, at 5. The contracted persons exclusion by its plain terms excludes coverage for bodily injuries and medical expenses suffered by any person contracted to provide services to the named insured.   Def. Exh. 1, at NF0047.   More specifically, the Policy excluded coverage for “bodily injury ․ or medical expense arising out of ․ [t]he operations of any independent contractor for or on behalf of any insured.”   Def. Exh. 1, at NF0033.   See, e.g., Colony Ins. Co. v. Walker, No. 3:09–CV–2091, 2010 U.S. Dist. LEXIS 83318, at 9–10 (D.Conn., Aug 16, 2010), Eginton, J. Courts have interpreted independent contractor exclusions similar to that included in this policy to bar claims by injured workers.   With reference specifically to the exclusion in the Northfield policy before the court, a New York court concluded “the plain meaning of the Contracted Persons exclusion invoked by Northfield is that the policy does not provide coverage for bodily injury to any person employed by any entity that is contracted with any insured for services.”   New York Univ. v. Arma Scrap Metal Co., Inc., 2013 N.Y.Misc. LEXIS 236, at *16.²  Thus, if the Plaintiff were an independent contractor (as claimed in multiple complaints and at the Hearing in Damages), the Policy provides no coverage.   At trial here, the gentleman denied he was an independent contractor as did Swirda deny the same.   Pleadings aside, neither party offered any “evidence” regarding Frederick's status as an independent contractor except for the Plaintiff's denial at trial.

The Defendant's position is that Frederick is estopped from denying he was working as an independent contractor at the time of injury because he has pleaded the same in multiple complaints (all of which he testified he reviewed).   In fact, the Plaintiff's last filed complaint of Nov. 9, 2011, states Mr. Frederick was “working as an independent contractor ․ on a job clearing trees of a significant size from a private home in Amenia, N.Y.” Exh. 11, Paras. 4, 11.   In his Revised Special Defenses to the defendant's counterclaim of July 2, 2012, the Plaintiff, while asserting he was not an “employee,” “non-employee laborer,” or “independent contractor,” (Rev. Fourth, Fifth and Seventh Special Defenses—Exh. 14), nevertheless asserts the Plaintiff was on the scene because “directly contacted by a representative of ATS (Aserrin Tree Service) to fill a short-term work need.  Id. The Defendant asserts these statements constitute judicial admissions because factual allegations contained in pleadings on which the case was tried and irrefutable because they remain in the case (citing to Ferreira v. Pringle, 255 Conn. 330, 345 [2001] ).   There is ample support for this position.   See i.e., Webster Bank v. Zak, 259 Conn. 766, at 777 (2002), which provides “[T]he vital feature of a judicial admission is universally conceded to be its conclusiveness upon the party making it, i.e. the prohibition of any further dispute of the fact by him, and any use of evidence to disprove or contradict it” (internal quotation marks omitted).   As Professor Wigmore has stated, a judicial admission is an “express waiver” which has the effect of a confessory pleading and is a substitute for evidence, (sic) in that it does away with the need for evidence.”   9 Wigmore, Evidence (3d.   Ed.) § 2588.   Judicial admissions differ from evidential admissions with regard to their legal effect.   Judicial admissions dispense with the production of evidence by the opposing party as to the fact admitted and are conclusive upon the party making it.   Legal (or evidentiary) admissions “are only evidence to be accepted or rejected by the trier.”   C. Tait & J. LaPlante, Connecticut Evidence (2d Ed.1988) § 6.5, p. 132.   The court concludes the above-referenced pleadings constitute evidentiary admissions.

The policy's Non–Employee Labor Exclusion (Def. Exh. 1 at NF0046) clearly provides no insurance is applicable to “bodily injury” or “medical expenses” for any person who “participates” in the work performed by the insured, which person is “not employed, subcontracted or being compensated by” the insured.   Id. Mr. Frederick consistently denied at trial that he was employed by the insured or that he was subcontracted by the insured or that he was in any way compensated by the insured.³  Similarly, there were earlier filed affidavits by Cynthia Font, Leonard Swirda, and the Plaintiff stating Frederick was never an employee of Aserrin, was not an independent contractor for the business, was never compensated in any way by Aserrin, and that there was no business relationship between Frederick and Aserrin.   See Exhs. to Defendant's Motion for Summary Judgment dated April 30, 2013 (which motion was not decided).   See also Pl. Exh. 9 (recorded statement of Swirda) and Pl. Exh. 1 (recorded statement of Swirda's co-worker Edward Lesinsky) to same effect.

Frederick's trial testimony—on September 11, 2013—was that he primarily “watched” the work being done by Swirda and Lesinsky.   He testified he was not there to work (although, on cross examination the same day, he told defense counsel he was “looking for work” and that Swirda told him there were no openings then but that he would call him if circumstances changed.   Though the Plaintiff testified Swirda called him a week or so later, he was not specifically asked (by either party) the purpose of that call.   He did, however, drive himself to Amenia, New York (location of job site), on Friday, August 14, 2006;  on that day, he watched the activities of Swirda and Lesinsky, drove to get lunch for the three of them, and took a ride with Swirda to deliver logs.   Test., 9/11/13.   On Monday, the date of the accident, he again drove himself to the worksite and arrived, he testified, when all that Swirda had remaining to do, was to cut one tree whose branches had already been removed.   Frederick testified that Swirda “asked me to assist with the work” of cutting down the remaining tree and told Frederick to “grab the saw and cut the tree” as he (Swirda) held the tree with the grapple hook.   Frederick proceeded to cut the tree, put the chainsaw down, and, as the remainder of the tree trunk fell from the grapple hook, it fell on top of him.   Although the Plaintiff suggested he was an “employee” in his discovery responses, assuming arguendo he was, he would have been covered by a workers' compensation policy—which this Policy clearly was not.   Under the Policy's Liability Exclusion (Def.Exh. 1, NF0015), there was no coverage for bodily injury to an “employee” who sustained bodily injury “arising out of and in the course of employment by the insured” or “performing duties related to the conduct of the insured's business ․” Id., at Sect. 2e(1)(2).   Nor was the Plaintiff a “temporary worker” because not “furnished to the insured to substitute for a permanent ‘employee’ on leave to meet seasonal or short-term workload conditions.”   Def. Exh. 1, NF0022, at 19.   See Also Nationwide Mut. Ins. v. Allen, 83 Conn.App. 526, 540 (2004).

The Policy provides a Non–Employee Labor exclusion which excludes coverage for bodily injury or medical expenses for any person “who participates in the course of work performed by you, who is not employed, subcontracted or being compensated in any way by you.”   Def. Exh. 1, NF0046.   The Policy defines a “volunteer worker” as someone “who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed by you.” # 20 at NF0028.   Under this definition, Frederick was a “volunteer worker.”   He was not a direct employee of Aserrin;  he was not an independent contractor;  he was not, under the Policy, a “temporary worker.”   No evidence was offered to substantiate any payment to Frederick.   The uncontrovertible evidence at trial and by deposition was that Aserrin's other employee Lesinsky—was, on the date of the accident, not in the immediate vicinity of Swirda when Swirda required someone to assist in the cutting of the remaining tree to be cut.   He called out to Frederick to cut the tree and Frederick volunteered to do so—in the course of which he sustained devastating injuries as a result of his running in the same direction the tree was falling.

In an earlier filed memorandum of law, counsel for Frederick relied on Pupello v. Super Gym, Inc. et. al., 45 Conn. L. Rptr. 345 (2008), to support the argument that Frederick was not acting in the capacity of a volunteer when injured and thus the “volunteer worker” exclusion was not applicable. that case, the plaintiff and his brother were working out at the defendant gym when the gym owner informed them that a bay door on the premises was jammed and that he was unable to close it by himself both because he had a recent eye injury and because the task required the use of a ladder and the defendant was afraid of heights.   When the plaintiff and his brother offered to help, the defendant directed the plaintiff to cut two cables so as to shut the bay door;  as the plaintiff cut the second cable, the overhead door suddenly broke loose and caught his hand in the track of the door.   The plaintiff sued the gym and the defendant brought a third-party complaint against their insurer, Essex Insurance Company, for failure to defend and indemnify them.   Essex then moved for summary judgment claiming the policy afforded no coverage because the plaintiff was, when injured, volunteering his services and there was no coverage under the policy for volunteers.   Specifically, the exclusion there read:

[W]henever the word “employee” appears above, it shall also mean any member, associate, leased worker, temporary worker or any person or persons loaned to or volunteering their services to you.

The Pupello court concluded that, while “[t]here is little doubt that in a lay sense, the plaintiff did ‘volunteer’ to fix the door as a gesture of friendship and/or accommodation, the question was whether the plaintiff volunteered within the meaning of the policy exclusion.”  Id., at *3 Despite the fact that exclusion clearly provided an “employee” was “any person or persons loaned to or volunteering services to you,” the court based its denial of the motion for summary judgment on its view the Essex policy drafters “did not have this lay understanding of ‘volunteering’ in mind, but rather a situation in which a person ‘stands in the shoes' of an employee or serves as a regular ‘volunteer’ such as a hospital candy striper, an unpaid intern at a law firm, (or a gym, for that matter) and the like.”  Id. The court then noted that the only reference to “volunteering” in that policy was the single reference just noted.   That is not so, however, since as the court noted in footnote 1, a separate policy section defined “volunteer worker” as “a person who is not your ‘employee’ and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary, or other compensation by you or anyone else for their work performed for you.”   The court continued:

Although it is probable that a “volunteer worker,” as defined in this section, and “one who volunteers services as used in the exclusion are one and the same (emphasis added), the court's decision is not dependent on this identity of meaning.   Still, the definition implies a relationship that is more than something that occurs in passing, and this plaintiff, unlike a “volunteer worker,” was not assigned ‘duties' by any of the defendants.

This court is not persuaded.   Nothing within the Essex policy there supports a conclusion the drafters of that language did not have in mind a lay understanding of volunteering but in fact intended a situation in which someone “stands in the shoes” of an employee or serves as a regular volunteer.   In fact, Pupello and his brother agreed to help the gym owner only after the owner told them about the jammed bay door and that he was unable to close the door himself for the just referenced reasons.   Once the two men agreed to help, the defendant owner directed the plaintiff to cut two cables in order to shut the door.

In the matter before this court, Swirda, unable to locate Lesinsky who was otherwise engaged, directed the plaintiff to cut down the tree and Frederick complied.   He (Frederick) was, as the Northfield policy provided, a “volunteer worker” who was donating his time and work, acted at the direction of Swirda, was engaged in precisely the duty Swirda directed him to perform, and was not paid or otherwise compensated by the insured.   As a volunteer worker, the Non–Employee Labor exclusion precludes coverage.⁴

JUDGMENT

The plain language of the Northfield policy excludes coverage for the Plaintiff's claims.   Northfield Insurance Company was without any obligation either to defend the claim in view of the Complaint's allegations Mr. Frederick was an independent contractor when injured or to indemnify him for injuries and damages sustained.

A Declaratory Judgment enters for Defendant as does Judgment for Defendant on its counterclaim.

SO ORDERED this 19th day of November 2013.

Sheedy, J.T.R.

FOOTNOTES

FN1. The Plaintiff's first filed Complaint—dated July 2, 2008—alleged in Paragraphs 3, 4, and 11 that he was working as an independent contractor for Aserrin Tree Service when he was injured..  FN1. The Plaintiff's first filed Complaint—dated July 2, 2008—alleged in Paragraphs 3, 4, and 11 that he was working as an independent contractor for Aserrin Tree Service when he was injured.

FN2. The ordering of headnotes in the cited opinion defies explanation, but see first full paragraph on left of p. 6 of the court's decision..  FN2. The ordering of headnotes in the cited opinion defies explanation, but see first full paragraph on left of p. 6 of the court's decision.

FN3. To be sure and as previously herein considered, there was substantial evidence to the contrary—specifically, multiple pleadings characterizing his status as an independent contractor who was at work when the injury occurred and Frederick's responses to earlier filed interrogatories (See.Def.Exh. 15) in which the gentleman stated he was at work for the insured to provide general assistance in tree removal and would be compensated for hours worked..  FN3. To be sure and as previously herein considered, there was substantial evidence to the contrary—specifically, multiple pleadings characterizing his status as an independent contractor who was at work when the injury occurred and Frederick's responses to earlier filed interrogatories (See.Def.Exh. 15) in which the gentleman stated he was at work for the insured to provide general assistance in tree removal and would be compensated for hours worked.

FN4. Though not raised by the Defendant here, the Policy also includes there is no coverage for “personal” and advertising injury to a ‘volunteer worker’ of any insured arising out of and in the course of “performing duties related to the conduct of the insured's business.”   NF0047, “Limitation—Personal and Advertising Injury,” at A2.Additionally, the Policy includes as insureds “volunteer workers only while performing duties related to the conduct of your business ․” NF0022, Sect. 2, 2a.   That provision is rendered nugatory by language which follows and excludes employees and “volunteer workers” for bodily injury claims.   Id., at 2a(1)..  FN4. Though not raised by the Defendant here, the Policy also includes there is no coverage for “personal” and advertising injury to a ‘volunteer worker’ of any insured arising out of and in the course of “performing duties related to the conduct of the insured's business.”   NF0047, “Limitation—Personal and Advertising Injury,” at A2.Additionally, the Policy includes as insureds “volunteer workers only while performing duties related to the conduct of your business ․” NF0022, Sect. 2, 2a.   That provision is rendered nugatory by language which follows and excludes employees and “volunteer workers” for bodily injury claims.   Id., at 2a(1).

Sheedy, Barbara J., J.T.R.