327 Conn. 225
Conn.2017Background
- Underlying tort: Sara Socci sued Jeffrey Pasiak for false imprisonment and emotional distress after an attempted robbery at Pasiak’s home; a jury returned a general verdict for Socci and awarded damages.
- Insurer action: Nationwide (insurers) filed a declaratory judgment action seeking a ruling that Pasiak’s umbrella policy excluded coverage under the business pursuits, mental abuse, and workers’ compensation exclusions, and denying indemnification for punitive damages.
- Trial court: Limited the declaratory trial’s scope, admitted transcripts/exhibits from the underlying trial, allowed limited additional evidence, and concluded exclusions did not apply; ruled the insurer was not entitled to a de novo retrial of the underlying facts.
- Appellate Court: Concluded the business pursuits exclusion applied and reversed; remanded for further proceedings.
- Justice Eveleigh (concurring in part and dissenting in part): Agreed insurers could not prevail on mental abuse/workers’ compensation exclusions or on public-policy bar to indemnifying punitive damages, but dissented as to remand — arguing the trial court properly limited discovery and the scope of the declaratory trial and correctly held the business pursuits exclusion inapplicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of business pursuits exclusion | Insurers: Socci’s presence at Pasiak’s business/home in course of employment — injury "arose out of" business pursuits, so exclusion bars coverage | Pasiak: His post-robbery acts to prevent Socci from calling police were personal, motivated to protect a friend, not to further any business | Eveleigh J.: Exclusion ambiguous and, read narrowly, did not apply; trial court correctly found occurrence did not arise from business pursuits |
| Scope of declaratory trial / right to de novo hearing | Insurers: Denied due process because barred from full evidentiary retrial and calling witnesses; seek de novo factfinding | Pasiak: Relitigation of core liability is improper; court may rely on underlying trial record and limit retrial to coverage-specific evidence | Eveleigh J.: Trial court correctly limited scope; insurers had fair opportunity to present exclusion-related evidence; retrial of liability improper |
| Preclusive effect of underlying general verdict (collateral estoppel) | Insurers: Underlying findings should bind coverage determination; insurer entitled to fully develop record | Pasiak: Insurer not in privity and defense under reservation of rights prevents preclusion; general verdict does not identify basis of jury decision | Eveleigh J.: Collateral estoppel did not apply to insurers; general verdict prevents definitive preclusion and relitigation of liability is inappropriate |
| Adequacy of discovery | Insurers: Were unduly restricted from depositions and evidence that could show business motivation or worker-status (workers’ comp threshold) | Pasiak: Plaintiffs failed to specify needed discovery; trial court permitted reasonable discovery and protection where appropriate | Eveleigh J.: No abuse of discretion by trial court; insurers failed to identify specific discovery rulings or proffer additional evidence |
Key Cases Cited
- Heyman Associates No. 1 v. Insurance Co. of Pennsylvania, 231 Conn. 756 (Conn. 1995) (exclusions read narrowly in favor of insured)
- Connecticut Ins. Guaranty Assn. v. Drown, 314 Conn. 161 (Conn. 2014) (ambiguities in exclusions construed for insured)
- Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760 (Conn. 2013) (insurer bears burden to prove exclusion applies)
- Misiti, LLC v. Travelers Prop. Cas. Co. of Am., 308 Conn. 146 (Conn. 2013) (but-for connection insufficient where causal mechanism is unrelated to insured activity)
- New London County Mut. Ins. Co. v. Nantes, 303 Conn. 737 (Conn. 2012) (construction of "arising out of" and rule that exclusions be read narrowly when ambiguous)
- Cambridge Mut. Fire Ins. Co. v. Sakon, 132 Conn. App. 370 (Conn. App. 2011) ("arising out of" requires causal connection but not proximate cause)
- Hogle v. Hogle, 167 Conn. 572 (Conn. 1975) ("arising out of" synonyms: connected with, had its origins in, grew out of)
- Worcester Ins. Co. v. Fells Acres Day Sch., Inc., 408 Mass. 393 (Mass. 1990) (business pursuits exclusion applied where employee duties created risk to children)