161 Conn.App. 86
Conn. App. Ct.2015Background
- Employee Sara Socci worked in an office located in defendant Jeffrey Pasiak’s home; she was assaulted by a masked intruder who turned out to be the defendant’s friend, and Pasiak detained her and discouraged her from calling police. Socci suffered PTSD and sued Pasiak for false imprisonment, negligence, emotional distress, and loss of consortium; a jury awarded substantial compensatory and punitive damages.
- At the time, Pasiak had three Nationwide policies: auto (no coverage stipulated), homeowner’s, and a personal umbrella policy. Nationwide defended under reservation of rights and filed this declaratory judgment action contesting duty to defend and indemnify.
- The trial court earlier found Nationwide had a duty to defend under the umbrella and homeowner’s policies but later concluded Nationwide owed no indemnity under the homeowner’s policy; after a bench trial it found Nationwide also owed indemnity under the umbrella policy and entered judgment for Pasiak.
- Nationwide appealed, arguing the umbrella policy’s business pursuits exclusion (excluding occurrences "arising out of the business pursuits or business property of an insured") barred indemnity because Socci was assaulted at the business office while performing work duties.
- The appellate court analyzed the exclusion’s "arising out of" causation standard (broad/expansive) and the definition of "business pursuits" (continuous, profit-motivated activity) and concluded the exclusion applied because Socci’s injuries were causally connected to her presence at the business performing employment duties.
- The appellate court reversed the trial court’s indemnity judgment for Pasiak and remanded with direction to render judgment for Nationwide on the indemnity count; the challenge to duty to defend under the umbrella policy was dismissed as moot because the homeowner’s policy independently supported the duty to defend ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether umbrella policy’s business pursuits exclusion bars indemnity | The tort arose out of Pasiak’s business because Socci was assaulted while performing work at the business office, so the exclusion applies | Pasiak’s actions were personal (to protect a friend), not business-related, so exclusion does not apply | Exclusion applies: "arising out of" is an expansive causation standard and Socci’s injuries were connected to business pursuits |
| Whether insured’s motive (personal vs. business) controls exclusion analysis | Nationwide: motive is irrelevant; causal connection suffices | Pasiak: his protective motive defeats the exclusion | Motive is irrelevant for "arising out of"; courts apply broad causal nexus instead of subjective motive |
| Whether the activity qualifies as "business pursuits" | Nationwide: construction business was continuous and profit-motivated, so qualifies | Pasiak: did not dispute continuity/profit; focused on causation/motive | Activity met Pacific Indemnity test for "business pursuits" (continuous and profit-oriented) |
| Whether trial court misapplied exclusion by conflating elements | Nationwide: trial court misapplied test and required proof of arising-out-to-show-profit-motive | Pasiak: argued trial court properly considered context and motives | Appellate court agreed trial court erred; correct framework separates (1) whether activity is a business pursuit and (2) whether injury arose out of it |
Key Cases Cited
- Vermont Mutual Ins. Co. v. Walukiewicz, 290 Conn. 582 (principles of insurance contract construction; exclusions construed against insurer)
- Pacific Indemnity Ins. Co. v. Aetna Casualty & Surety Co., 240 Conn. 26 (defines "business pursuits"—continuous activity with profit motive; fact-specific inquiry)
- Misiti, LLC v. Travelers Property Casualty Co. of America, 308 Conn. 146 (interpreting "arising out of" as broad causal standard beyond motor-vehicle context)
- New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737 ("arising out of" establishes expansive causation standard)
- Cambridge Mutual Fire Ins. Co. v. Sakon, 132 Conn. App. 370 (applies Pacific Indemnity two-part test; interprets business exclusion broadly)
- Board of Education v. St. Paul Fire & Marine Ins. Co., 261 Conn. 37 ("arising out of" does not require proximate cause; some causal relation suffices)
- Hogle v. Hogle, 167 Conn. 572 (early articulation of "arising out of" as connection/origin/flow-from causation test)