Donald Turano v. Charles Pellaton et al. (2014)

MEMORANDUM OF DECISION

In his amended complaint dated February 14, 2011, (# 130.00) the plaintiff Donald Turano alleges that on April 1, 2010 he entered into a written contract with defendant, Quality Dry Basements, Inc.,¹ to have the basement of his residence located at 154 White Oak Shade Road in New Canaan waterproofed.   The complaint further alleges that, in the course of performing the work required under the contract, the defendant negligently removed a basement stairway, failed to replace the bottom step and failed to warn the plaintiff of the danger.   As a result of that negligence the plaintiff claims that while using the stairway he “slipped, tripped and fell,” sustaining physical and mental injuries.

On December 13, 2010, the court granted the defendant's motion to implead Oak Services, LLC, as a third-party defendant.   In its third-party complaint (# 161.00), the defendant alleges that Oak Services entered into a subcontract to perform the work on the plaintiff's basements and is required by contract and common law to indemnify and hold the defendant harmless from the plaintiff's claims.

On February 14, 2012, the court granted Oak Services' motion to implead Atlantic Casualty Insurance Company as a third-party defendant. (# 165.00) In its third-party complaint, Oak Service alleges that at the time the plaintiff sustained his injuries, Oak Services was covered under a commercial general liability policy issued by Atlantic, but that, despite Oak Services' demands, Atlantic has denied coverage under the policy, refused to defend the defendant and Oak Services and thereby breached its obligations to Oak Services.   Oak Services prays that the court issue a declaratory judgment that Atlantic is obligated under the terms of the policy it issued to defend and indemnify Oak Services and defendant.

Presently before the court is Atlantic's motion for summary judgment dated October 1, 2013 (# 215.00), as to Oak Service's third-party complaint, dated March 27, 2012 (# 165.00), and as to Atlantic's counterclaim, dated January 31, 2013 (# 186.00).   Oak Services filed a memorandum of law in opposition to the motion on November 7, 2013 (# 218.00).   Quality filed a memorandum of law in opposition to the motion on November 8, 2013. (# 219.00.) Atlantic filed a reply memorandum of law on November 12, 2013. (# 221.00.) The motion was heard on short calendar on November 12, 2013.

DISCUSSION

“Summary judgment is a method of resolving litigation when 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 ․ The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried ․ However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury ․ the moving party for summary judgment is held to a strict standard ․ of demonstrating his entitlement to summary judgment.”  (Citation omitted;  internal quotation marks omitted.)  Grenier v. Commissioner of Transportation, 306 Conn. 523, 534–35 (2012).  “[A]ny party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action ․” Practice Book § 17.44.

“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17.45].” (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11 (2008).

“The general principles that guide [a court's] review of insurance contract interpretations are well settled.  [C]onstruction of a contract of insurance presents a question of law ․ 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.”  (Internal quotation marks omitted.)  Lexington Ins. Co. v. Lexington Healthcare Group, Inc., 309 Conn. 1, 9–10 (2013).

“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.” (internal quotation marks omitted.)  National Grange Mutual Ins. v. Santaniello, 290 Conn. 81, 89 (2009).

With respect to insurers “to prevail on [a] motion for summary judgment on a claim ․ for a declaratory judgment that it has no duty to defend in the underlying action, the insurer must establish that there is no genuine issue of material fact either that no allegation of the underlying complaint falls even possibly within the scope of the insuring agreement or, even if it might, that any claim based on such an allegation is excluded from coverage under an applicable policy exclusion.   In presenting countervailing proof, the insurer, no less than the insured, is necessarily limited to the provisions of the subject insurance policy and the allegations of the underlying compiaint.   Therefore, it is only entitled to prevail under a policy exclusion if the allegations of the complaint clearly and unambiguously establish the applicability of the exclusion to each and every claim for which there might otherwise be coverage under the policy.   An insured, in turn, may rebut an insurer's claim that it has no duty to defend him in light of an applicable policy exclusion by showing that at least one of his allegations, as pleaded, states a claim that falls even possibly outside the scope of the exclusion or within an exception to that exclusion.   Unless the allegations of any such underlying claim fall so clearly and unambiguously within a policy exclusion as to eliminate any possibility of coverage, the insurer must provide a defense to its insured.”  Lancia v. State National Ins. Co., 134 Conn.App. 682, 691, cert. denied, 305 Conn. 904 (2012).

In its memorandum of law in support of the motion, Atlantic argues:  (1) The plaintiff, as the owner of the property upon which he sustained his alleged injury, is excluded from coverage because he fits within the exclusion for “contractors.”   Thus, Atlantic cannot be made liable for any claim arising out of the plaintiff's injuries, including the Oak Services' indemnity and defense claims.  (2) The plaintiff's injuries are based upon allegedly negligent conduct, and, thus, the resulting indemnification and defense claims fall outside the scope of the classifications, which are set forth in the insurance policy issued by Atlantic.  (3) Specifically with respect to the plaintiff's alleged mental injuries, claims of this nature are prohibited under the policy's “Mental Injury Exclusion.”  (4) Atlantic cannot be made liable for Quality's claims against Oak Services because, given that said claims sound in breach of contract, contractual indemnification and common-law indemnification, they are not covered under the policy, which only provides for “bodily injury” and “property damage” caused by an “occurrence.”  (5) The policy excludes coverage for claims “arising out of the actions or inactions of independent contractors/subcontractors,” and, thus, because Oak Services was at all times an independent or subcontractor, this exclusion applies to both the plaintiff's claims against Quality and Quality's claims against Oak Services.

I. CONTRACTOR EXCLUSION

The plaintiff alleges in paragraph four of his third amended complaint that he is the owner of the subject premises, and, accordingly that potentially material fact is not in contention.

Atlantic's first claim is that the policy that Atlantic issued to Oak Services, under the heading “Exclusion of Injury to Employees, Contractors and Employees of Contractors,” expressly provides:  “This insurance does not apply to:  ․ (ii) bodily injury to any contractor for which any insured may become liable in any capacity ․” The exclusion defines “contractor” as “any independent contractor or subcontractor of any insured, any general contractor, any developer, any property owner ․ and any and all persons working for and or providing services and or materials of any kind for these persons or entities mentioned herein.”  (Emphasis added;  internal quotation marks omitted.)

Atlantic's contention is that the plaintiff, as the property owner, is an excluded “contractor,” and accordingly not covered under the policy.   The acceptance of this contention would seem to require that the court ignore the heading that this exclusion falls under:  “Exclusion of Injury to Employees, Contractors and Employees of Contractors.”   On its face, this heading seems to envision situations involving employment or, more specifically, where the insured hires or employs a third party to perform services that assist the insured to perform jobs.   The language employed in the heading is not broad enough to encompass the situation of a customer/property owner.   Accordingly, it should follow that everything that falls under this heading should reflect the employment situation.   Indeed, our appellate courts, in somewhat routine fashion, have looked to headings and subheadings in contracts to construe terms that they precede.   See, e.g., Lexington Ins. Co. v. Lexington Healthcare Group, Inc., supra, 309 Conn. 27 (construing the term aggregate limit according to its placement “directly beneath the heading, Healthcare Professional Liability”);  Rund v. Melillo, 63 Conn.App. 216, 221 (2001) (stating “[s]uch an interpretation is easily inferred from the heading of the subcontract ․”);  Nystrom v. Barker, 88 Conn. 382, 385 (1914) (relying on “[t]he words in the heading and body of the contract” to rule out a particular construction of the contract).   Further, there is no provision in the policy that provides that headings are not relevant to the construction of provisions of the policy.

Atlantic relies heavily on the case of Atlantic Casualty Ins. Co. v. Alanis Development Corp., No. 09–C–6657 (N.D.Ill. Jan. 25, 2011), wherein a property owner brought a personal injury suit against a company, which in performing renovations to a building owned by the injured property owner, negligently, it was alleged, failed to secure a portion of the floor or warn the injured party such that he was caused to fall through the floor and into the basement, sustaining injuries as a result.   Atlantic, the insurer of the renovator, brought suit in federal court seeking a declaratory judgment that under an exclusion of the policy it had issued to the renovator defendant, it was under no obligation to defend or indemnify the renovator for claims of the injured property owner.   In Atlantic, interpreting a virtually identical exclusion to the exclusion at issue in this case, the court granted the insurer's summary judgment motion, holding:  “[T]he exclusion makes it clear that the definition of contractor includes property owners regardless of whether they were providing services or otherwise working on the property at the time of the injury.”

However, the court's decision in Atlantic did not state whether the exclusion in question was included under a heading bearing the title “Exclusion of Injury to Employees, Contractors and Employees of Contractors” or a similar heading.   Moreover, it is not clear whether Illinois law, which was applied by the district court, would consider headings relevant to the construction of the policy provisions.   Our Appellate Court stated in Mullen v. Horton, 46 Conn.App. 759, 770 (1997), “while a federal District Court opinion is persuasive authority it is not binding on this court.”   This is particularly so when the decision relied on is applying the law of another state.

Because the court's opinion in Atlantic cannot be reconciled with the import of the heading as herein discussed, the court will not follow that decision.   Accordingly, the court finds that for the purposes of considering the present motion for summary judgment, it cannot be determined as a matter of Connecticut law that the plaintiff/property owner is a “contractor” whose injuries are excluded from coverage under the “Employees, Contractors and Employees of Contractors” exclusion.

II. CLASSIFICATION LIMITATION

Atlantic points out that the policy contains a classification limitation that explicitly limits coverage unless the claim arises out of the classifications identified in the policy declarations.   Atlantic further points out that the classification in this policy was for “Sump Pump Installation, R/A” and “Electrical Work–Within Building.”   Atlantic claims that because the plaintiff's injuries were caused by work done on a staircase, rather than directly by either the sump pump installation or related electrical work, the plaintiff's claim is not covered by the policy.   In response both Quality and Oak Services contend that the actions that led to the plaintiff's injury in fact arose out of the subject classification.   Specifically, Quality and Oak Services allude to the statements of Jean Carvalho, the manager and sole member of Oak Services.   Essentially, Carvalho stated that in waterproofing the plaintiff's basement, it was necessary to remove the bottom step of the basement stairs.   In paragraph nine of his affidavit (# 220.00) Carvalho averred:  “On or about April 16, 2010 I arrived at the Turano home to complete waterproofing services.   I met with ․ Turano in the basement to discuss the work to be done.   I told [him] that a plastic cover would be installed at the top of the interior stairwell ․ and that the rotten bottom step of the stairway would have to be removed to gain access to the cellar floor beneath.”   Moreover, Carvalho testified in a deposition (# 219.00):  “Q. Why did you remove the step?   A. Because we needed to have access to break the floor on that corner of that wall ․ Q. So in order to continue making that channel to place the pipe, it is your testimony that you needed to remove the bottom step;  correct?   A. Yes. Q. Is that typically what you do in homes where they have stairs leading up to the first floor?   A. Yes.” These statements of Carvalho demonstrate that the removal of the step was part of the overall task of waterproofing the plaintiff's basement.   Accordingly, it cannot be said that there exists no issues of material fact that the acts which caused the plaintiff's injury, as alleged, did not arise from what is covered under the policy classification.

III. Exclusion for Mental Injuries

A specific exclusion of the policy, “AGL–073 01/07,” entitled “Mental Injury Exclusion,” provides:  “We do not cover any claim, loss, costs or expense arising out of emotional distress, mental anguish [or various other manifestations of mental injury] ․ unless it arises out of actual physical injury to that person.”  (Emphasis added.)   As the plaintiff has framed, in his third amended complaint, his physical and mental injuries, there is nothing to suggest that the plaintiff's mental injuries did not result from his physical injuries.   Further, it is difficult to imagine that tripping and falling down a staircase could cause one to suffer mental injuries that did not arise out of his physical injuries.   Accordingly, the court cannot find that there are no issues of material fact as to whether the plaintiff is claiming damages for mental injuries not arising out of his physical injuries.

IV. Bodily Injury v. Contractual Obligation

Perhaps the weakest argument advanced by Atlantic in support of its motion for summary judgment is the assertion that the claims at issue arise out of contractual obligations rather than personal injuries.   Atlantic reasons that Quality's claims against Oak Services sound in contract and indemnity which are excluded under the policy rather than bodily injury which is covered.   This argument ignores the fact that its named insured, Oak Services, was alleged responsible for the negligence which caused the plaintiff's injuries as well as the fact that Quality was named as an additional insured under the policy.

Atlantic's argument invites the court to ignore the facts underlying the plaintiff's claim and instead focus exclusively on the causes of action that Quality asserts against Oak Services.   The court finds that, despite the fact that Oak Services has had to answer for its alleged negligent acts by way of a claim by Quality, rather than in response to a claim asserted by the plaintiff himself, in every meaningful respect Oak Services is being sued for its own alleged negligence.  “Section I.,” “1.,” “a” of the policy provides:  “We will pay those sums that the [Oak Services] becomes legally obligated to pay as damages because of bodily injury ․ We will have the right and duty to defend the insured against any suit seeking those damages.”   By virtue of that fact that Quality was added to the policy as an additional insured Atlantic became obligated to defend and indemnify both Oak Services and Quality with respect to the respective claims asserted against those parties.   The court rejects Atlantic's fourth argument in support of its motion for summary judgment.

V. Exclusion for Actions of Subcontractors

Finally, Atlantic argues that the claims at issue are expressly excluded because they arise out of “the actions or inactions of independent contractors/subcontractors.”   This argument fails.   The parties to the insurance policy were Oak Services and Atlantic.   The claims which Atlantic is being asked to defend arise out of the actions of Oak Services itself, and not out of those of a subcontractor.   In effect, Atlantic is asking the court to stretch the exclusion on which it relies so that it provides “excluded from coverage are any claims against the insured arising out of work that it is performing in the capacity of a subcontractor.”   The court finds that the “subcontractor” exclusion relied on by Atlantic is inapplicable to the facts of this case and does not provide a basis for Atlantic to avoid honoring its obligations under the policy it issued.   The court, accordingly, rejects Atlantic's fifth argument in support of its motion for summary judgment.

CONCLUSION

For the reasons stated above, the court denies Atlantic's motion for summary judgment.

David R. Tobin.   J.T.R.

FOOTNOTES

FN1. The plaintiff originally sued Charles Pellaton, the owner of Quality Dry Basements, claiming that Quality Dry Basements was merely a tradename.   The amended complaint alleges that Quality Dry Basements, Inc., is a Connecticut corporation and makes no allegations against Pellaton..  FN1. The plaintiff originally sued Charles Pellaton, the owner of Quality Dry Basements, claiming that Quality Dry Basements was merely a tradename.   The amended complaint alleges that Quality Dry Basements, Inc., is a Connecticut corporation and makes no allegations against Pellaton.

Tobin, David R., J.T.R.