223 Conn. 22 | Conn. | 1992
The principal issue in this appeal is whether an insurer, who provides underinsured motorist coverage, may limit its liability by taking credit for a personal payment made by an underinsured tortfeasor to an insured. The defendant insured, Jill E. Huntley, was seriously injured when her car was struck by an automobile operated by Michael R. Panus. After he had exhausted the limits of his liability policy, Panus personally paid the defendant the sum of $50,000 pursuant to a settlement agreement. The defendant’s insurer, the plaintiff, Lumbermens Mutual Casualty
The parties agreed to the following facts. On May 25, 1989, the defendant was driving home when an automobile driven by Panus crossed over into her lane and struck her vehicle head-on. On April 18, 1991, in her suit against Panus, the trial court rendered a judgment of $1,000,000 in favor of the defendant. Panus was insured by Allstate Insurance Company, which paid the full $100,000 limit of its policy to the defendant. Panus, himself, then paid an additional $50,000 to the defendant.
The defendant’s underinsured motorist policy issued by the plaintiff provided coverage up to $300,000. Following Panus’ personal payment, a dispute arose between the defendant and the plaintiff as to whether the plaintiff could reduce its liability to the defendant by $50,000, the amount of the tortfeasor’s personal payment, in addition to the $100,000 reduction for the amount paid by the tortfeasor’s liability carrier. The defendant’s insurance policy provided: “Any amounts otherwise payable for damages under this [underinsured] coverage shall be reduced by all sums: 1. Paid because of the ‘bodily injury’ by or on behalf of persons or organizations who may be legally responsible.”
Pursuant to the terms of the policy, the parties submitted to arbitration the sole legal issue of whether General Statutes (Rev. to 1989) § 38-175c, now reorganized and recodified as General Statutes § 38a-336 (b) and (d),
The trial court denied the plaintiffs application to vacate the arbitrators’ award. Relying on American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 530 A.2d 171 (1987),
On appeal, the plaintiff claims that the trial court improperly upheld the arbitrators’ decision that the tortfeasor’s personal payment could not be deducted from its payment of underinsured motorist coverage to the defendant. The plaintiff argues that the setoff of the tortfeasor’s payment is warranted both by
In reviewing compulsory arbitration cases, this court must conduct a de novo review of the arbitrators’ interpretation and application of the law. American Universal Ins. Co. v. DelGreco, supra, 191. The defendant argues that § 38-175a-6 (d) (1) of the regulations, to the extent that it allows for the setoff, is inconsistent with the language and intent of § 38-175c (b) (1), which requires an insurance carrier to pay its insured “after the limits of liability under all bodily injury liability bonds or insurance policies . . . have been exhausted . . . .” The defendant contends that the legislature, in amending § 38-175c to include subsection (b) (1), impliedly repealed § 38-175a-6 (d) (1) of the regulations.
We begin our analysis with the history and relationship between § 38-175c and § 38-175a-6 (d) (1) of the regulations. Section 38-175C, which provides that all automobile liability policies must include uninsured motorist coverage, was first enacted in 1967 and did not prohibit the reduction of uninsured motorist cover
In 1979, § 38-175c was amended to include subsection (b) (1), which requires an insurance carrier to provide underinsured motorist coverage “after the limits of liability under all bodily injury liability bonds or insurance policies . . . have been exhausted . . . .” The legislative history indicates that § 38-175e was amended solely for the purpose of providing underinsured motorist coverage. Public Acts 1979, No. 79-235; 22 S. Proc., Pt. 5,1979 Sess., p. 1354; 22 H.R. Proc., Pt. 16,1979 Sess., p. 5341.
With this background in mind, we approach the issue of whether the plaintiff is entitled to a credit for the tortfeasor’s payment. First, as we noted above, the sole reason for amending § 38-175c to include subsection (b) (1) was to provide for underinsured motorist coverage and not to prohibit an insurance carrier from reducing underinsured motorist coverage when appropriate. The obvious purpose of the language of § 38-175c (b) (1) on which the defendant relies—namely, that the insurer must pay its insured “after the limits of liability . . . have been exhausted”—is to trigger the point at which the underinsured motorist policy takes effect.
Second, although this is a question of first impression, our conclusion that an underinsured motorist carrier may limit its liability by taking credit for a tortfeasor’s personal payment to the insured is supported by our previous analysis and interpretation of both General Statutes § 38-175c and § 38-175a-6 (d) of the regulations. In Wilson v. Security Ins. Co., 213 Conn. 532, 538-39, 569 A.2d 40, cert. denied, 498 U.S. 814, 111 S. Ct. 52, 112 L. Ed. 2d 28 (1990),
Furthermore, the legislature is presumed to be aware of the judicial construction placed upon its enactments. Nationwide Ins. Co. v. Gode, 187 Conn. 386, 395 n.7, 446 A.2d 1059 (1982).
The judgment of the trial court is reversed and the case is remanded to the trial court with the direction to grant the application to vacate the arbitration award.
In this opinion the other justices concurred.
The plaintiff appealed to the Appellate Court and we transferred the appeal to this court in accordance with Practice Book § 4023 and General Statutes § 51-199 (c).
General Statutes (Rev. to 1989) § 38-175c, now reorganized and recodified as General Statutes § 38a-336 (b) and (d), provides in pertinent part:
“(a) Every [automobile liability insurance] policy shall provide insurance,*25 herein called uninsured motorist coverage ....
“(b) (1) An insurance company shall be obligated to make payment to its insured up to the limits of the policy’s uninsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured’s uninsured motorist coverage, exceed the limits of the insured’s uninsured motorist coverage.
“(2) For the purposes of this section, an ‘underinsured motor vehicle’ means a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made under subdivision (1) of this subsection.”
Section 38-175a-6 (d) of the Regulations of Connecticut State Agencies provides in pertinent part that an insurance policy “may provide for the reduction of limits to the extent that damages have been (1) paid by or on behalf of any person responsible for the injury.”
See footnote 10, infra.
The defendant also claims that if the plaintiff is entitled to reduce its payment to her by the amount of the tortfeasor’s payment, the plaintiff should be allowed credit for the tortfeasor’s cash payment of $31,000 only, and not for his promissory note of $19,000. The record clearly indicates, however, that both parties stipulated to the fact that the tortfeasor had paid the sum of $50,000 to the defendant. Having never submitted this issue of fact for arbitration, the defendant cannot raise the issue for the first time on appeal.
General Statutes (Rev. to 1989) § 38-175a, now reorganized and recodified as General Statutes § 38a-334, provides in pertinent part: “The insurance commissioner shall adopt regulations with respect to minimum provisions to be included in automobile liability insurance policies .... Such regulations shall relate to the insuring agreements, exclusions, conditions and other terms applicable to the bodily injury liability, property damage liability, medical payments and uninsured motorist coverages under such policies . . . .”
Portions of § 38-175a-6 (d) of the Regulations of Connecticut State Agencies were subsequently amended, but the language of subsection (d) (1) was not changed. The amended regulations went into effect February 1, 1975.
Senator James J. Murphy, Jr., explained during the Senate proceedings that this bill requires “that once the liability insurance of the so-called responsible or negligent party has been exhausted, if there is additional coverage under one’s uninsured motorists plan, then payment under that program would be triggered and allow for the greater recovery for the insured . . . .” 22 S. Proc., Pt. 5, 1979 Sess., p. 1354. Representative Silvio A. Mastrianni noted during the proceedings in the House of Representatives that the bill “requires coverage be provided against the underinsured motorist.” 22 H.R. Proc., Pt. 16, 1979 Sess., p. 5341.
“Since underinsured motorist coverage, as defined in General Statutes § 38-175c, can be determined only by reference to and in comparison with the insured’s uninsured motorist coverages, and since claim is made against an insured’s uninsured motorist coverage after it is determined that the at-fault party is underinsured, the regulations which apply to uninsured motorist coverage must equally apply to underinsured motorist coverage. Nationwide Ins. Co. v. Gode, 187 Conn. 386, 399-400, 446 A.2d 1059 (1982).” (Internal quotation marks omitted.) General Accident Ins. Co. v. Wheeler, 221 Conn. 206, 210-11, 603 A.2d 385 (1992).
To support her position, the defendant relies primarily on our holding in American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 530 A.2d 171
“Regulations issued by the insurance commissioner to implement the statutes governing uninsured motorist coverage are presumed valid and have the force and effect of a statute.” Dugas v. Lumbermens Mutual Casualty Co., 217 Conn. 631, 641, 587 A.2d 415 (1991); Travelers Ins. Co. v. Kulla, 216 Conn. 390, 399, 579 A.2d 525 (1990); Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 449, 370 A.2d 1006 (1976). The rule disfavoring implied repeal of a statute applies to the repeal of a regulation issued pursuant to a statute, especially when the regulation has been approved by the legislative regulation review committee, as in the instant case. Dugas v. Lumbermens Mutual Casualty Co., supra.