134 Conn.App. 140
Conn. App. Ct.2012Background
- The Connecticut Insurance Guaranty Association (CIGA) was sued to determine coverage under a Medical Inter-Insurance Exchange policy for medical malpractice claims against Health Specialists and its physicians.
- From 2000–2001, Health Specialists was insured under Exchange; Exchange provided defense without reservation of rights.
- In 2006 Exchange denied coverage based on exclusion (i), which excludes injury arising solely from acts of certain professionals where a premium is shown for paramedicals; Bourget’s name was not on the declarations page.
- A 2007 settlement required Health Specialists to pay the policy limit and Susan Drown to waive direct collection from Health Specialists’ assets; underlying case against Health Specialists was dismissed.
- Exchange insolvent in 2008; CIGA became obligated to pay covered claims under the guaranty act, but only to the extent of the insolvent insurer’s policy and limits.
- The trial court granted summary judgment for defendants, holding exclusion (i) did not apply and that CIGA was estopped; the association appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether exclusion (i) unambiguously excludes coverage | Association: exclusion (i) applies; Bourget’s exclusion should bar coverage | Drown/Health Specialists: exclusion is ambiguous and not strictly applicable | Exclusion (i) unambiguously excludes coverage |
| Whether exclusion (i) is ambiguous by using 'solely' with multiple physicians | Association: 'solely' creates ambiguity in multi-physician claims | Holden/Bourget readings support broader coverage | Exclusion (i) not ambiguous; applies even with multiple physicians |
| Whether the association was estopped from enforcing policy provisions due to Exchange’s defense breach | Estoppel applies because Exchange breached its duty to defend | Estoppel not available; claims not within policy coverage | Exclusion (i) controls; estoppel does not override policy limits; reassessment favors association per ruling |
| Whether the underlying claims were 'covered claims' under the guaranty act | Court should treat claims as covered under the insured policy | Claims fall outside coverage due to exclusion (i) | Underlying claims are not 'covered claims' under §38a-838(5) |
| Whether Johnson v. Connecticut Ins. Guaranty Assn. controls the interpretation of exclusion (i) | Johnson supports ambiguity in exclusion (i) with declarations-page context | Johnson distinguishable on facts; not controlling here | Johnson not controlling; exclusion (i) unambiguous within this policy |
Key Cases Cited
- Auto Glass Express, Inc. v. Hanover Ins. Co., 293 Conn. 218 (2009) (insurance policy ambiguous readings resolved in insured’s favor when warranted)
- Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527 (2002) (interpretation of exclusionary language and modifiers standards)
- Hammer v. Lumberman’s Mut. Casualty Co., 214 Conn. 573 (1990) (exclusions define scope; coverage not illusory from exclusions)
- Johnson v. Connecticut Ins. Guaranty Assn., 302 Conn. 639 (2011) (ambiguous exclusion tied to declarations page context; not controlling here but guiding analysis)
- Connecticut Ins. Guaranty Assn. v. Fontaine, 278 Conn. 779 (2006) (limits and purpose of guaranty act; association’s liability mirrors insolvent insurer)
- QSP, Inc. v. Aetna Casualty & Surety Co., 256 Conn. 343 (2001) (broad interpretation of coverage vs. exclusion boundaries)
- Valentin-Rivera v. New Jersey Property-L-Liability Ins. Guarny Assn., 2011 WL 1085559 (N.J.Sup.App.Div. 2011) (non-control but similar exclusion interpretation across jurisdictions)