LM Ins. Corp. v. Connecticut Dismanteling, LLC
161 A.3d 562
| Conn. App. Ct. | 2017Background
- Defendant (Connecticut Dismanteling, LLC) purchased workers’ compensation policies from plaintiff (LM Insurance) for Sept. 6, 2011–Sept. 6, 2012 and Sept. 6, 2012–Sept. 6, 2013; post-policy audits substantially increased premiums and plaintiff billed additional $94,612.
- First audit (White) was performed by NEIS (a vendor) for LM; LM’s employee MacBain reviewed and relied on that audit.
- Second audit was performed by MacBain after cancellation of the second policy; MacBain classified employees using default classification code 5403 (demolition) unless employer showed otherwise.
- Defendant disputed employee classifications (arguing four employees were misclassified) and produced limited payroll/records; trial to the court resulted in judgment for plaintiff for $89,447.23 after one misclassification (Alfred) was found and adjusted.
- Defendant appealed, asserting (1) improper admission of the White audit under the business‑records hearsay exception, (2) insufficient evidence to support the judgment, and (3) improper adverse inference for failing to call two witnesses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of White audit under business‑records exception | LM: audit was in LM’s regular course (kept in its files), MacBain could authenticate, Crest Plumbing precedent allows admission of third‑party reports kept by the business | Dismanteling: White was NEIS employee; report is NEIS record not LM’s and thus not admissible under §52‑180; foundational elements not satisfied | Court admitted audit; panel affirmed (followed Crest Plumbing and New England Savings Bank precedent) |
| Foundational proof for business‑records exception | LM: MacBain testified audit was kept in usual course, contemporaneous, provided to LM and shared with defendant | Dismanteling: plaintiff failed to establish statutory foundational elements and hearsay‑within‑hearsay | Issue not preserved on appeal (defendant failed to raise foundational objection below); even if considered, admission proper |
| Sufficiency of evidence for employee classifications and audit accuracy | LM: audits (White and MacBain) were admissible; weight/accuracy for trier of fact; default 5403 applied absent specific proof of clerical/sales duties | Dismanteling: audits inaccurate; several employees misclassified (e.g., Stadt, Brandimarte, Williams) | Findings credited to MacBain were supported by evidence; classifications not clearly erroneous; judgment supported by sufficient evidence |
| Adverse inference for not calling employees as witnesses | LM: court may note failure to rebut plaintiff’s evidence; bench trial—not jury—so §52‑216c inapplicable | Dismanteling: court improperly drew adverse inference for not calling witnesses (one deceased), invoking §52‑216c public‑policy rationale | No improper adverse inference; court properly noted defendant failed to rebut plaintiff’s evidence; Brandimarte’s availability finding was erroneous but did not require reversal |
Key Cases Cited
- Crest Plumbing & Heating Co. v. DiLoreto, 12 Conn. App. 468 (Conn. App. 1987) (third‑party reports kept in a party’s files may qualify as that party’s business records)
- New England Savings Bank v. Bedford Realty Corp., 246 Conn. 594 (Conn. 1998) (business‑records exception is liberally interpreted; proponent need not prove accuracy)
- Calcano v. Calcano, 257 Conn. 230 (Conn. 2001) (witness need not be the entrant of record for admission)
- Connecticut Light & Power Co. v. Gilmore, 289 Conn. 88 (Conn. 2008) (rationale for business‑records exception—reliability of records)
- State v. Malave, 250 Conn. 722 (Conn. 1999) (discussing policy behind §52‑216c and jury susceptibility to judicial instruction)