619 A.2d 489 | Conn. Super. Ct. | 1992
The parties' cross applications both to confirm and to vacate an arbitration award raise a question of first impression in this state: Whether a labor union member and business agent provided with a car leased by the union is covered by underinsured motorists coverage issued to the union in its union local name.
Because the court finds that the named insured was a voluntary association that had no separate legal existence distinct from that of its members, like the defendant, who comprised it, the court rules that the plaintiff, Hartford Accident and Indemnity Company, insured the individual members according to its policy of insurance issued to Local 371-United Food Commercial Workers Union. The arbitrator's award of uninsured motorist benefits to the defendant Peter Sena, therefore, is confirmed.
The court will first considers the scope of its review. The court finds that the parties participated in compulsory arbitration pursuant to General Statutes
The pertinent facts are as follows: On March 26, 1989, the defendant, who is a member of and employed by United Food Workers' Union Local 371, was injured in a motor vehicle accident. The accident occurred as a result of a collision between a motorcycle owned and operated by the defendant and an automobile owned and operated by Luis D. Davila. As a result of the accident, the defendant suffered bodily injuries and lost time from his employment.
Following the accident, defendant collected $20,000 from Davila. This amount represented the liability limit available under Davila's insurance policy. At the time of the accident, the defendant's motorcycle was insured by Jefferson Insurance Company. This policy had a maximum limit of $20,000 and the defendant was paid $10,000 under the Jefferson policy. In addition, the defendant's family automobile was insured under a policy issued by Nationwide Mutual Insurance Company. The Nationwide policy had a limit of $50,000 and defendant collected $28,000 under this policy.
The union local had provided the defendant with a vehicle that was insured by the plaintiff, and which had uninsured/underinsured motorist which had uninsured/underinsured motorist coverage in the amount of one million dollars. Following the accident, the defendant sought to recover underinsured motorist benefits from plaintiff pursuant to this policy. On September 6, 1991, the defendant's claim for underinsured motorist benefits was submitted to compulsory arbitration. A three member arbitration panel conducted hearings on September 6 and September 16, 1991. On November 20, 1991, the panel declared the hearings closed, and submitted its findings of fact and award. *339
The panel unanimously found that the defendant had sustained damages in the amount of $100,000, and that the plaintiff was entitled to credits in the amount of $60,000. The credits represented the amounts the defendant had collected from the Davila policy, the policy covering his motorcycle, and the policy issued on his family automobile.
The panel was split, however, on the issue of whether the defendant was entitled to underinsured motorist coverage from the plaintiff. Two panel members found that the defendant was entitled to such coverage and ordered plaintiff to pay $40,000. The remaining panel member found that the defendant was not entitled to coverage under the policy.
On December 16, 1991, the plaintiff filed an application to vacate, modify and/or correct the arbitration award pursuant to General Statutes
The plaintiff's application to vacate contains three counts. Count one asserts that the defendant does not qualify as an insured under the policy issued by the plaintiff, and that the panel majority erroneously found that the defendant was entitled to underinsured motorist benefits. Count two maintains that the defendant had claimed medical bills in the amount of $13,375.75, and that $10,700.60 of that amount was paid by health insurance. Accordingly, the plaintiff alleges in count two that the arbitration panel erroneously failed to reduce the award by $10,700.60. Finally, in count three, *340 the plaintiff contends that the panel erroneously failed to reduce the award by the full amount of underinsured motorist benefits that were available to defendant under the policies issued by Jefferson and Nationwide.
In his application to confirm the award, the defendant counters that the arbitration award should be confirmed because defendant is a member of the noncorporate entity. As a result, the defendant contends that he is insured for purposes of the underinsured motorist coverage under plaintiff's policy, which insures the automobile provided to defendant for his exclusive business and personal use. The defendant further maintains that the plaintiff is not entitled to any credit for medical bills that were paid by the defendant's private insurance carrier.
The court will first turn to plaintiff's contention that the defendant is not entitled to underinsured motorist benefits under the subject policy because the named insured is Local 371-United Food Commercial Workers Union AFL-CIO, and the defendant does not otherwise qualify as an insured pursuant to the terms of the policy. The plaintiff further contends that the defendant cannot qualify as an insured simply because he is a member of the union since the union has a legal identity separate and distinct from that of its membership.
The defendant counters that he is an employee/member of the named insured who has been given an insured vehicle for his exclusive business and personal use. He maintains that a union is an aggregate of individuals within the named insured, or extensions thereof.
The named insured of the subject policy is Local 371-United Food Commercial Workers Union AFL-CIO. The policy contains an Uninsured Motorists Coverage *341 Endorsement CA 21 17(B) that describes additional insureds as follows: "B. WHO IS AN INSURED
"1. You.
"2. If you are an individual, any `family member'.
"3. Anyone else `occupying' a covered `auto' or a temporary substitute for a covered `auto'. The covered `auto' must be out of service because of its breakdown, repair, servicing, loss or destruction.
"4. Anyone for damages he or she is entitled to recover because of `bodily injury' sustained by another `insured.'"
The plaintiff contends that the defendant not only fails to qualify as the named insured, but that he also fails to qualify as an insured under any of the aforementioned designations. The plaintiff maintains that the defendant is not the designated "You" in paragraph one because "You" refers to the named insured, and the plaintiff further contends that paragraph two is inapplicable because it refers to family members of the named insured, if the named insured is an individual. The plaintiff argues that paragraph three does not apply because the defendant was not occupying a covered auto at the time of the accident, and that the defendant does not qualify under paragraph four because he is not seeking to recover for bodily injuries sustained by another insured.
Whether the defendant is a person insured by the policy depends on the nature of United Food Workers Local 371, and whether it has separate and independent legal existence distinct from its members.
"Primarily, the right of possession of the property of a voluntary association is in the association, that is, in its members or their officers and agents." Grand Lodge v. Reba,
Corporations depend for their separate legal existence on a franchise from the state. Persons who associate together for some common nonbusiness purpose without a corporate franchise from the state are merely an aggregation of individuals not a separate legal entity. As epigrammatically expressed by Judge Swift: "Individuals can by no association, agreement, or combination, constitute a corporation." 1 Z. Swift, A System of the Laws of the State of Connecticut", c. 9, p. 225 (1795). Reprint Edition by Orno Press, Inc. 1972.
The plaintiff cites certain provisions of the General Statutes,
"A corporation is a legal entity or person created by special authority from the state or the sovereign. Though it consists of a number of individuals, it has a legal existence apart from any of them. Hence it may sue its own members and be sued by them. It may sue its members and be sued by them. It may own property and incur liabilities with respect to it. . . . The death or retirement of a stockholder . . . does not in any way affect the identity of the corporation." E. Gilmore, Handbook on the Law of Partnerships (1911 Ed.) p. 41. *343
At common law, members of a partnership could not sue the partnership on the theory that they were in effect suing themselves. Statutory enactments in many states have abrogated that common law rule as to partnerships. The same theory, however, was sometimes used as an impediment to suits by a member of a voluntary association against the association itself. Because of the injustice that rule presented in certain factual situations, in some jurisdictions which did not have an express statute permitting such suits such as General Statute
In New York Times Co. v. Newspaper Guild of New York,
In construing the insurance contract to determine if the defendant is an insured under the policy, the court's focus must not be on the blurring that has occurred over the years by enactment of laws that grant some powers to voluntary associations that formerly resided only in corporations. Rather, the court must focus on (1) the *344 clear legal nature of the union local as a named insured and (2) if the local has no separate existence from the individuals who make it up, the individual liability of those persons who make it up, which the policy insures against.
Entitled "Actions by and against voluntary associations, General Statutes
It is also clear from case law that not only are members of an unincorporated association suable, they are also liable individually. Davison v. Holden,
The court will next address the defendant's contention that General Statutes
Section
Diversity of citizenship can sometimes be a grounds for access to the federal courts. Where that is the basis for federal jurisdiction, the federal court in Ketcher v. Sheet Metal Workers' International Assn.,
The analysis the court has made regarding
Under the Connecticut statutory scheme the members of a voluntary association such as the defendant's union are not exempted from individual liability as is the case under the laws of some other state's. Case law from other states reflect differences from Connecticut's statutory scheme. See Ehrlich v. Willenski, 138 F. 425 (E.D. Pa. 1905); 96 Fifth Avenue Realty Corporation v. Greenberg,
A policy of automobile insurance issued to a voluntary association therefore covers and indemnifies the individual members who collectively are the aggregation of persons who make it up. They are entitled as much to its policy coverage for injuries and damages from uninsured or underinsured motorists as they are for indemnity for their individual liability for negligence as a result of a collision involving a vehicle owned or leased in their union local's name. In such a situation the word "You" in the Uninsured Motorist Coverage Endorsement means each and every member of the aggregation of individuals that is Local 371, the named insured.
Generally, an employee of a corporation is not covered under an employer's uninsured motorist's provision unless the employee is specifically designated as an insured. See, e.g., Testone v. Allstate Ins. Co.,
The court finds that the defendant, as a member of a voluntary association who, with other members of this aggregation of persons would be individually liable for any negligent acts carried on by using any motor vehicles leased in that association's name, is just as much an insured person under the provisions of the underinsured motorists provisions of a policy insuring the vehicle as he would be for tort liability claims that might be made against him for its operation.
Uninsured Motorists Coverage Endorsement CA 21 17(D)(a) of the policy issued by the plaintiff, provides, in relevant part, that amounts payable under the uninsured motorist coverage shall be reduced by: "All sums paid or payable under any workers' compensation, disability benefits or similar law. . . ."
The language of this provision is almost identical to the language found in 38-175a-6(d)(2) of the Regulations of Connecticut State Agencies, which expressly authorizes the manner in which an insurer may contractually reduce its liability for uninsured or underinsured motorist coverage. See Streitweiser v. Middlesex Mutual Assurance Co., supra, 377.
The parties stipulate that eighty percent of the defendant's medical expense were paid by insurance and Brian Petronella, and Brian Petronella, the secretary-treasurer of the union, testified that the medical benefits were provided by Local 371 Amalgamated Trust Fund. In addition, the defendant received his full salary while he was absent from work due to his injuries, and Petronella testified that the defendant did not receive any disability insurance benefits. Thus, the defendant did not receive any "sums paid or payable under any workers' *348 compensation disability benefits or similar law." The plaintiff has failed to show that the payment were received by defendant as a result of some requirement of law much less a law similar to the worker's compensation statute. For all of these reasons, the court rules that amounts the defendant received from the union trust fund do not fall within the policy's reduction clause.
The plaintiff raised the issue in the initial complaint whether the arbitration panel erroneously failed to reduce the award by the full amount of underinsured motorists benefits that were available to the defendant under the Jefferson and Nationwide policies. Generally, if an issue is not briefed it is deemed to have been abandoned. State v. Ramsundar,
For all of these reasons, the plaintiff's application to vacate, modify and correct the arbitration award is denied and the defendant's cross motion to confirm is granted.